The hon. Gentleman has virtually made two speeches, given his 20 interventions, so I am sure that he will understand if I reply to the points that have been made rather than giving way.
My hon. Friend the Member for Birmingham, Edgbaston said—I paraphrase—that it would be to the Government’s lasting shame if they do not do what they can to create the conditions in which Birmingham can succeed. It is our intention to create the conditions in which all our great cities, and all our great counties and metropolitan unitary areas of our country, can succeed. We want a devolution deal that will give opportunities to all areas of our country.
My hon. Friend the Member for Birmingham, Northfield (Richard Burden) talked about a particular issue in his constituency: school crossing patrols. I congratulate him on his campaign. I will not run down his campaign in the way that we heard the Secretary of State disappointingly has done. My hon. Friend has found a positive way forward to try to keep children in his constituency safe, and he should be congratulated on that, as should Birmingham city council.
My hon. Friend the Member for Hammersmith (Mr Slaughter) told us that in just nine months the council has set up a hospital unit to defend hospital services, saved Sulivan primary school, invested in affordable housing, funded police officers, backed the voluntary sector, cut the proposed Tory rent rise, taken action on food poverty, saved the local theatre and backed cycling—I have to say that it could soon be my favourite council, second only to Corby borough council. My hon. Friend made a powerful case for the great things that Labour councils are doing against a background of higher cuts than in Conservative and coalition areas across the country.
Having claimed that those with the broadest shoulders should bear the greatest burden, why have Ministers done the very opposite in local government? Since 1948 local government has been funded largely through a grant according to need, a principle that existed through successive Labour and Tory Governments. The idea behind it is very simple: not all areas of the country are the same; they have different needs; and it is good for our economy and our society to give the people of every area a fair chance of a good life. Decent local services provide the basis of that, so that whether a looked-after child is growing up in Newham, Newcastle or
Northamptonshire, their needs will be met. The Government have argued that the old way of doing that, which strove for fairness, lacked incentives.
The Labour Government introduced the local authority business growth incentive scheme. The next Labour Government will let combined authority areas keep 100% of business rate growth. Incentives have a role to play, but it was wrong to freeze the grant at 2013 levels and engineer a complete shift away from redistribution. The ability of areas to take up the incentives and to replace lost grant with income from them varies enormously. We know that for all sorts of reasons, in the short term, from one year to the next, the chances of generating growth in some areas is much greater than in others. To compound the unfairness, the incentives being funded are from top-slicing the grant—a further raid on the resources of councils with the greatest needs. So when the Minister replies, will he say why he thinks it is right that the spending power of Wokingham will soon overtake that of Newcastle and Leeds, which have much greater needs?
On current trends, revenue support grant will disappear entirely by 2019-20. There is a real question about the future viability of local authority services, including statutory services. We can already see the impact of the cuts—for example, the impact of the cuts to social care on the national health service. A Labour Government will end the bias against areas with the greatest needs by ensuring that the funding we have is distributed more fairly. That means a settlement that works for all authorities in all areas of the country. That will include the new homes bonus, which was criticised by hon. Members, including the hon. Member for Newton Abbot (Anne Marie Morris). It takes money away from the most disadvantaged communities and gives it to areas where new homes would have been built anyway. That is the point. The new homes bonus is top-sliced from one year to the next. It is no basis for planning ahead.
We say to every area that a fair long-term approach will be best for every local council. That is why we are committed to longer-term funding settlements and multi-year budgets, so that local authorities can plan ahead, push ahead with reform and shift from high-cost ways of doing things towards investment in preventing problems, rather than paying for them later. There has to be a better way forward than taking a huge amount of resources from the poorest areas of our country.
At the same time, we will devolve significant powers and resources to all areas of our country—not just small-time agreements with a small number of cities, but large-scale devolution across our country. We will introduce a new model of decision making and new local accountability structures, like the local public accounts committee. Labour will put devolution at the very heart of the next Labour Government, with a new English regional cabinet committee.
Today we affirm our commitment that a Labour Government will move quickly towards fair funding. We reject the deeply unfair funding changes that this Government have imposed on local councils. Taking most from the areas with the greatest need is wrong and we will vote against the motion.
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