By Mark Smulian
30 March 2011
Complaints about the impact of cuts on public services should be made to local councils, Chancellor George Osborne has told the Treasury select committee.
He said this was the right place for decisions on service cuts and closures, though he had sought to ensure the ‘burden’ was spread nationally.
In an evidence session yesterday on last week's Budget, Conservative MP Mark Garnier asked him: ‘Large sections of society feel they are not in this together. I have had a group of angry police at my surgery and members of the Women’s Institute protesting against library cuts. What have you done to spread the pain as fairly as possible?’
The chancellor said the effects of cuts and tax changes were ‘pretty evenly spread across the income deciles’.
It would ‘have been extremely tempting for me to be a control freak, but it's for local councillors to make those decisions [on services]’.
Asked whether the Big Society simply meant using the voluntary sector to fill gaps left by public spending cuts, he replied: ‘I think the attempt to run the country from the centre was not a great success and that councillors know what is best for their area.
‘There have been strikingly different results between councils having to make quite similar cuts.’
Another Conservative MP, Jesse Norman, asked what would be done to seek ‘flexibility and transparency’ in Private Finance Initiative deals that had proved poorvalue for the public sector.
Osborne said: ‘It is quite clear that a lot of contracts were entered into without high regard on the public sector’s part for their value for money, though the contractors have done pretty well out of them.’
He said the Queen’s Hospital project in Romford, Essex, would be used as a test bed to see what renegotiation was possible, and if successful would provide ‘a template’ to work from.
Committee chair Andrew Tyrie quizzed the chancellor on his decision to resurrect the concept of enterprise zones to encourage urban regeneration.
These were last used in the 1980s and provide exemptions from some tax and planning requirements for businesses that invest in these areas.
Osborne admitted: ‘Opinion is very divided but evidence from the 1980s is that if you go into these with local authority support and co-operation your stand a greater chance of success.
‘The lesson of the 1980s is that you have to be in lock step with the local authority, and now the local enterprise partnership.
‘I did not see how these zones would do harm and thought they could do some good.’
