30th September 2015
Thank you for coming to our annual State of the City event today. It’s an important opportunity for us to take a step back from day to day issues, and look at our city in context. How are we doing, what are our challenges – and above all how are we working together to meet them?
As we gather here today, there is a difficult truth facing us – our desire to do good for the city has never been so far from our ability to deliver it.
My Labour Group, my Cabinet and I have dedicated huge amounts of effort and energy over the last 4 ½ years to shield residents from the worst of austerity, using everything we have to keep the economy and our sense of self belief going.
But that shield is now very dented, and there is more to come.
Right now we face a battle to preserve a commitment to delivering social justice at a time when the Chancellor, in his Comprehensive Spending Review, is sharpening the axe.
We are at a dangerous time for the city, where the next round of spending cuts risk being so severe they could undo decades worth of work helping the disadvantaged and the elderly.
The benefits safety net we once thought was there to help our must vulnerable pick themselves up and recover their pride has gone.
The support we are able to give to children and their parents, in their formative years, is severely reduced.
The money we use to ensure our elderly are not left lonely, at risk and reliant on hospital stays has being reduced, and is about to all but disappear as the Revenue Support Grant traditionally relied upon by councils to fund day to day services looks set to be eradicated.
Put simply, when it comes to what councils can do, the money has gone, but needs have not. In fact they have increased. Local government has already faced cuts of more than 40%, and the Government is determined to reduce public expenditure from 43% to 36% of GDP. That will have a profound impact on what councils will be in the future, and what we will be able to deliver. And the complexity of local government finance is lost on most people in our city, who often have little idea that council tax only constitutes 11% of the Council’s budget.
The council has lost £150m so far as a result of unfair and disproportionate Tory cuts, but the story does not end at the civic centre.
The Government’s welfare reforms, which already feel like they punish those who try to succeed, will mean Newcastle residents lose £148m annually by 2020-21.
We are not through the worst of the pain yet, and we will never recover to be the same all-encompassing organisation we were before. We are witnessing a fundamental rethink of how councils provide services, and indeed even if they should provide all of them.
With the council budget we will have to agree next year, and the Comprehensive Spending Review the government will announce this November, Newcastle expects to lose around £100m in cuts and new spending burdens over the next three years.
When the city has made similar savings over the past five years, we’ve seen services go altogether and justifiable outcrys over reductions in grass cutting, street sweeping, swimming pools or libraries. So far our focus for dealing with government cuts has been to reduce the ‘visible’ services that the council provides.
But now the people who don’t march are the ones who are going to be forced to take more and more of the pain, as a direct result of Government spending cuts.
Those who need the state to help them, either to help them pay for food, or to actually send someone round and make sure they have ate face a potentially difficult future. Cuts will now start to impact on the vulnerable, in a way that we have been able to avoid up until now.
In this city, we are asking ourselves again, what can we do to ensure those at risk of being left behind are given the best chance to do more than just survive.
Already, we have a track record of refusing to cower in the face of a challenge.
One of the most depressing things about the austerity seen in the last parliament was that it choked off growth and that the recovery took longer as a result.
To counter that, we borrowed to invest, making sure developments such as the Stephenson Quarter continued, providing jobs in construction, getting us ready for jobs at the recovery and sending a signal that Newcastle will not stop in the bid to create more and better jobs.
But the economy is not yet at full strength, and in the next few years we may see further economic turbulence. If the Chancellor does not take heed now, the spending review might mean local government does not have the capacity to intervene again.
To help where we can, we have developed an Active Inclusion Newcastle partnership, a group which responds to the growth in demand for information, advice and support in areas such as financial inclusion and housing services.
That sounds like the sort of dryly titled council entity that exits in the background, but what it does has a vital impact on the lives of thousands.
As a result of government cuts, for example,
Newcastle has the UK’s largest foodbank,
45,000 residents have been affected by welfare reform
and more than 13,000 of our economically active residents are out of work.
The scale of poverty and disadvantage and the change in the emphasis of the role of the welfare state from meeting basic needs to reducing welfare dependency has seen pressure like never before.
As a result, the inclusion unit provided advice to 26,950 people and accommodated 1,127 households.
Because of this partnership, 4,192 cases of homelessness were prevented, 8,901 residents supported to secure £24m of benefits hidden to them, and 3,857 residents were given advice to provide relief from excessive debt.
Look also at what we have done in the Council Tax Reduction Scheme. In 2013 the Government abolished council tax benefit and cut the money available for local schemes. Despite losing more than £8m to help families meet their bills, we maintained a system which says if you are in the need the council will help meet the majority of your cost to us, as long as you make a small contribution.
Delivering social justice though is not just a job for the council. We only have to look at the Syrian refugee crisis to see how this city unites in the face of a challenge.
As the pictures of those escaping Isis became ever worse, the city stood together to say our commitment as a City of Sanctuary is more than just a slogan. From across Newcastle people came together on a Saturday morning to plan how we will house, feed, clothe and educate those who we proudly say we will take in.
Elsewhere, we see the responsibility of “delivering for all being” met across the city.
The Newcastle business community has a role to play in how its corporate social responsibility programmes capital investment programmes and employment practices can contribute to improving quality of life in the city.
The voluntary and community sector has already shown how it can do more with less, now it needs to show further how it can play a role in unlocking social capital and the potential for citizens to become more involved in shaping their own neighbourhoods.
And the wider public sector has an interest in how it can sustain social justice through greater collaboration across all sectors.
The fight to preserve social justice will not be an easy one, but we have a potentially powerful weapon. Our battle for a substantial devolution package in which the government matches the ambition of the region is nearing its final stage.
Here, we have placed people, jobs and growth at the centre of our demands. Too often, devolution is pictured in terms of businesses or buildings. So let me say clearly today that our devolution deal would fail if it did not deliver social justice at its heart.
The current work programme has made a start nationally in getting hard to reach families and individuals into work. But it is a blunt instrument, it has left many behind, it can measure success without worrying about its regional record and it has failed those furthest away from the labour market.
That is because it is run from Whitehall. We cannot afford for future employment programmes to face the same failings.
In skills and young people we want the responsibility to set out how we will train the region’s workforce to match the region’s needs, so the work force has the skills needed for the future.
We already see great efforts here by our trade unions, who work tirelessly to seek to retrain and redeploy their members and bring about job security in the process. With control of skills funding we can add to that work.
And in the wider sphere of public service reform, we see that too often people get left behind when Whitehall’s departmental approach struggles to deal with people with cross cutting needs. There are better ways to work more closely together, and the decision around how we do that should be taken here in the region, so we meet the needs of the individual not some distant government target.
Dealing with people in relation to what government department they fit into is no longer a model that works as austerity cuts deep.
Right now, the region’s ability to co-ordinate a response to the problems it sees here is limited because those different organisations talk to government first. That is wrong, the people dealing with the consequences of failure should be first in the queue when it comes to directing limited resources.
It has been said before of politicians that the best way to judge them is to look at the enemies they have made. In the fight for social justice I will proudly say that this my colleagues and I have picked the right battles.
In the Syrian refugee crisis we did not ignore the pleas for help when bigots would have had us turn away.
In fighting for the funds to do the job, we speak out against a chancellor hooked on austerity even as we batter down the door to the Treasury demanding devolution.
In the region itself, we look at those who say it has always been done this way and we say not any more, we pick our fights for reform because we want social justice to prevail, even if the money is not there to defend that cause.
In the city we do not pretend that our commitment to social justice is for the good times only. We know the test of our beliefs is when times are hard, that it is exactly when the pressure is on that we see our strength.
In creating jobs we have shown we are prepared to act,
in defending the vulnerable we continue to fight their cause,
and in standing up for social justice, we continue to position Newcastle as the example for others to follow.
The Comprehensive Spending Review is a chance to renew your relationship with local government and bring about a much needed correction to the way essential services are funded in Newcastle and across the north.
As you will know, Newcastle, as a city and a council, has faced a difficult five years as a result of disproportionate and unfair spending cuts. The city has lost £151m in government funding over this period, a figure entirely out of proportion with that lost by many other councils in the south of England.
Newcastle has been hit hard by changes to the council funding formula which appear to have been made without any consideration whatsoever to the impact on areas of higher deprivation.
The city was then hit again by a resource equalisation process which perversely sees councils with a higher tax base protected while others suffer further, and hit once more by a system which now seems designed to prevent consideration of adult and child care needs.
The council’s ability to respond to these challenges is limited by the fact that council tax here accounts for just 11 per cent of our overall budget. This situation is simply unsustainable.
It is time you as Chancellor acknowledged that a commitment to austerity without consideration of local need will push councils to the edge of a fiscal cliff.
Once past this point, the knock on effect will be felt by other public sector services, including the NHS and the police, services already facing their own financial pressures.
The threat is particularly severe in child care and protection. The numbers of looked after children in the region have increased and are considerably higher than less deprived areas. The North East has seen a 30% increase in the number of looked after children since 2009 while funding for children’s social care has been cut by over 40%.
The attached formal submission shows what could be achieved in Newcastle through the Comprehensive Spending Review. Issues of particular importance include:
New Homes Bonus
There is an urgent need to reform the New Homes Bonus. The current system funds the bonus through a top slice of local government resources, regardless of need, meaning councils such as Newcastle lose out. Newcastle is a net loser from the scheme and will continue to be so due to the way in which the top slice is removed from the scheme. In 2012/13 the council would have had to build an additional 251 homes to avoid incurring a loss in funding from the scheme.
As just one example, in 2014/15 Newcastle built 654 more properties than Wokingham but were net losers by £3.1m due to the way core funding is cut and the reward allocated.
In previous years we have faced up to both cuts in funding and rising cost pressures. Now it has become apparent that there is a third factor hitting council finances in the form of new burdens imposed on local government by a Government who are happy to tell councils what to do but provide little in the way of funding to achieve those aims.
For example, the Summer Budget saw moves towards a National Living Wage and pay awards, but with no indication as to how the public sector will fund this. On the National Living Wage alone, meeting our care obligations will cost the council £20m a year.
Clearly, the situation as it is cannot go on. If the Government fails to address these and other issues raised in this submission, the result will be to reaffirm the view in the North East that this is austerity for the sake of austerity. The time has come to allow Newcastle the chance to grow, in a way which sees no one left behind.
We have worked hard over the last four years and during the recession to protect jobs, investing in the city so we were ready to take advantage of the upturn and secure a better future for Newcastle.
However, despite all of our success, continued cuts to public sector budgets put that potential for economic prosperity at risk and threaten to dismantle the support network available to the most vulnerable.
I urge you to think again about the scale of the cuts to local government and would ask that Newcastle is finally treated fairly in the allocation of Revenue Support grant.
This year I walked with over 10,000 people through the streets of Newcastle City Centre, celebrating Pride.
Like many people attending, I marched because I believe equal rights are for all, and that we all have a duty to safeguard those rights.
This is the eighth year that that the City of Newcastle has hosted Northern Pride with over 28,000 people joining in the celebrations. It has now become the largest free festival in the country for lesbian, gay, bisexual and Transgender people and their friends, families and allies.
The sky over central station was lit up in the colours of the rainbow to provide a warm welcome to those visiting Newcastle. A wide range of events and activities took place as part of the celebrations, including, film screenings, gallery exhibitions and concerts which adds to the vibrancy of our city.
Pride is organised by community volunteers, who commit their time and energy to host a festival that brings together people from all communities and cultures. Entertainment is on offer for both families and people of all ages which delivers huge benefits to our local economy.
We can learn so much from events like these. Pride is not only a time to celebrate it is also a time to remember those who have protested, campaigned and struggled in the past to gain both acceptance and equal rights.
It is an opportunity to reflect how laws which once oppressed have gradually been replaced by laws which empower. From equalising the age of consent, improving adoption and fostering rights to most recently legalising same-sex marriage.
The vigil that I attended to close Pride remembers those who still face prejudice or violence each day because of who they are and who they love. Things are changing, but we need to continue to tackle ignorance, intolerance and hatred so that all people, everywhere, are accepted without exception.
I strongly believe that we should do everything that we can to make this world a place where everyone can be safe and be proud of who they are. Until that time I will continue to walk with those who fight oppression and tackle injustice.
Rebalance, reform and renewal at the core of devolution – Nick Forbes speech to the Core Cities Cabinet
Today we come together as Core City leaders and mayors to set out a vision of how we can make our country a better, fairer and more successful place. Today we launch our Devolution Declaration.
We’ll talk this morning not just about what we want from the new Government but what we can offer. The difference we can make to our country together.
You will hear today about our version of the ‘three rs’ – rebalance, reform and renewal.
The UK is one of the most centralised states in the world. Canada for example, holds ten times more tax receipts at a local level than the UK, Germany six times.
This has made the UK the country in Europe with the greatest regional economic disparity.
It’s not good for regions, for cities, for our residents or the country. Now is the time to do more.
Today we’ll set out how we can rebalance and grow our economy to create more jobs and eliminate the deficit, reform public services to improve outcomes and renew democracy.
You’ll also hear from a variety of experts from think tanks and academia that will set out some of the key challenges facing the city devolution agenda. As a Vice-Chair of Core Cities UK, I am proud of the role we have played in the great debate about the future of our country.
We have helped turn the UK’s cities from a problem to an opportunity, from a peripheral element in the debate about devolution, to a fundamental element of the solution.
And, while Westminster debates, local communities take action. In every one of the Core Cities, new partnerships are being created – between authorities, between the public and private sectors, and above all within communities.
The Devolution Declaration is our vision of a modern state for a stronger Britain.
But we’re also clear that devolution isn’t just about grand constitutional settlements. It’s about people.
It’s about finding better solutions for the citizens who struggle to make sense of the support available to them from a myriad of centrally-directed agencies and departments.
It’s about the business that wants to recruit skilled labour from their local communities.
It’s about finding a solution to the big public service challenges which face our communities – from the crisis in health and social care, to the need to improve bus services, to support for people suffering from poor mental health.
It’s about reducing poverty, addressing the deep seated inequalities in health, wealth and wellbeing which blight our communities.
The challenge is nothing less than the creation of a modern state – fit for today’s local and global challenges. A state that works for people not against them.
As people grow increasingly distant from Westminster politics and distrustful of politicians of all parties, they are more keen than ever on local solutions.
The last five years have seen unparalleled cuts to public services. More has been cut from local government than central government. More has been cut from the cities than from other, more prosperous areas. We’ve been forced into false economies which cut one part of the public sector – only to see higher costs emerge in other services.
As core city leaders we have fronted–up some of the most damaging implications, explained them to our communities, and won their support for radical reforms.
This experience tells us that a crisis in public services can only to averted through radical new approaches, delivered locally. Devolution is not just a constitutional issues – it’s a necessity if we’re to deliver the “bolder, better, braver” approach to public services, the only solution we have to continued austerity.
There’s increasing evidence that a place-based approach to spending and budgeting can save money, create a smarter state and improve outcomes.
We saw progress under the last Government. As well as the much heralded, Northern Powerhouse, the last few months of the coalition administration saw Manchester’s local authorities given control over their NHS budgets, a host of city deals and a massive change of policy direction on bus re-regulation.
The period at the start of any new government creates a window for long-term thinking. We need to move from sporadic and piecemeal devolution of short-term, inefficient funding, towards a more fundamental transfer of long-term responsibility for our local economies – rebalancing, reforming and renewing Britain through action in our cities, our communities.
The new man at the top of DCLG, Greg Clark has built a credible relationship with the core cities, through the deals we’ve done so far. While our politics differ, we know him as an honest and principled support of devolution.
Without him the modest steps we have already taken would not have been possible. In my home city, I can show you the jobs and investment that have createdas a result of the deal that Greg and I did for Newcastle.
His appointment creates an opportunity to re-set the relationship between central and local government. The core cities will be constructive partners in that process – pathfinders for a new national settlement to rebalance power and rekindle our democracy. So – in our focus on rebalance, reform and renewal – we as core cities are stepping up demonstrate our commitment to a fourth “r” word: responsibility.
Both the Prime Minister and the Chancellor have already made encouraging noises on city devolution. Earlier this week during a visit to Stockton, the PM talked about the need to ‘driver power’ out of London to the regions.
And as well as getting its own minister, Northern Powerhouse was also mentioned in George Osbourne’s acceptance speech on election night.
But we need more than warm words. Today our message to the new government is clear.
Seize this opportunity and commit to work constructively with core cities to create a better future for our country.
Today, March 16, is Devo Day, a chance for all of us to have a conversation about what devolution can achieve in Newcastle and across the North East.
Devolution means giving cities and their regions more freedoms over their own affairs, unfettered by interference by central Government. It also means working to empower local communities to do more for themselves.
It may seem like a bit of a distraction at a time when services are closing and people are losing their jobs, but for me it is the only way we can begin to fully meet the challenge of austerity and build a city that we can all be proud of.
Devolution can be a multi-faceted, complex and dense topic, and not the kind of thing you hear discussed often at bus stops and in pubs. But at its heart is a simple argument. Local decisions about local issues should be taken locally – not 300 miles away in an increasingly remote Whitehall.
Did you know for example, that 95 per cent of the taxes collected in Newcastle – e.g. income tax, business rates, VAT, road tax – go straight to the Government?
Some of that money does come back to us, with strings attached, but we often have to bid for it in competition with other areas. And even Council Tax – the one tax raised and spent locally – is increasingly being spent on priorities determined by national, rather than local, government.
All the evidence from Europe and across the World shows that countries that give their cities more freedoms to grow and spend money raised locally perform better and are more successful. So devolution isn’t a narrow political debating point – the scale of powers and responsibilities we can take on locally will determine how fast we grow our economy, build the houses we need and create the next generation of jobs.
Devolution also gives us the opportunity to ‘join up’ public services making sure that we cut down on duplication and waste. Our Newcastle Supporting Families programme is a trailblazer for this approach, co-ordinating interventions between public agencies and reducing long term costs to the state.
Newcastle and the other ten UK Core Cities have produced a graphic that aims to give you some practical examples of how devolution will make a difference to your life. How it can improve transport, help build more housing and create jobs. You can take a look at it here.
I’d urge you to sign up to the Core Cities’ Modern Charter for Local Freedom.
And I’ll also be talking about the issue via social media throughout the day, using the hashtag #DevoNE on the council’s Twitter account @NewcastleCC.
As thousands of youngsters celebrated ‘good’ A-level and GCSE results across the city last summer, a significant minority didn’t achieve or dropped out of formal education for whatever reason.
According to recent official figures, the city has the highest number of NEETS (Not in Education, Employment, or Training) amongst all core cities in the UK. 18 per cent of 16 to 24 year olds are not in further education, employment or training and the picture gets worse when examining the most disadvantaged neighbourhoods of the city. Recent data leaked indicates that almost 10% of 16 to 18 –year olds are NEETS. Economic analysis reveals that the biggest percentages can be found in Walker, Benwell, Scotswood, Byker, Westgate and South Heaton. In both Walker and Byker, riverside wards of the city, more than 17% are classified as NEETS.
The independent Children’s Board trust implies there’s clearly a ‘’social divide’ when it comes to youngsters taking part in learning and training after the age of 16, a point re-affirmed by lead expert, Professor Robin Simmons and his colleagues at Huddersfield University.
According to the newly published report, the NEET group of youngsters are mainly defined by chaotic lifestyles; family breakdown, poor attendance at school; lower levels of prior educational attainment: learning disabilities; behavioural problems; informal caring duties for disabled parents; youth crime and workless families. In other words, vulnerable young people living in our most deprived communities. According to a recent report by Newcastle’s CSV many of these youngsters, especially living in the Walker area, lack the ‘self-confidence’ to stay on at school or attend college.
Clearly, as the Trust Board rightly points out, there needs to be a ‘’stronger, integrated partnership approach to NEET reduction with key stakeholders ‘’. Put simply, the City Council, secondary schools, academies, the ‘Third Sector’, and Newcastle College need to be working more closely than ever before to tackle the city’s biggest social problem. Most of these youngsters want paid work or get onto a meaningful apprenticeship scheme . This idea of a free market in post-16 education where schools, colleges and other post-16 providers compete against each other for learners is fast becoming discredited and costly according to Professor Simmon’s in his recent book, ‘Education, Work and Social Change’ (2015), and fails to meet the significant number of disaffected young people who want to access the jobs market.
Furthermore, we need more detailed localised empirical research into why many youngsters across the city don’t access training or educational opportunities beyond the age of 16, and more so why a significant minority won’t attend school even at primary level, which clearly restricts their employment ‘life chances’. That’s why Newcastle Councils recent policy decision to establish a Learning Challenge scheme with other partners is to be warmly welcomed. This project is designed to run alongside a North East Local Enterprise Partnership initiative to raise standards and attainment across the region.
The city-wide challenge will be co-ordinated by the Council in partnership with ’’our family of schools, businesses and further and higher education’’. The Council is fully committed on improving results from youngsters who come from disadvantaged backgrounds and reducing the number of NEETS which we all recognise is unacceptably high. There’s a clear need to close the gap in achievement between the most deprived children and their better-off peers, which is particularly evident between key stage two and key stage four. It will run in tandem with the Government backed NELEP plan to raise attainment across the schools and college network. It’s important to ensure that as many young people as possible get on and acquire good vocational and academic qualifications. It’s worth noting that the Ofsted ratings across Newcastle’s schools and college are well above the national average, but not all young adults are benefiting from this improvement. The attainment gap between children who are eligible for free school meals and youngsters who come from better off backgrounds is much higher than the national average. That’s why the Newcastle Learning Challenge’s remit will be to get to the bottom of why this is and what we can all do to solve it.