Local Government Funding: Birmingham

Tuesday 13th December 2016 Westminster Hall

16:30

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

I beg to move,

That this House has considered local government funding for Birmingham.

It is an absolute pleasure to serve under your chairmanship today, Ms Dorries. I asked for this debate because social care services in Birmingham are on the brink of collapse. Public libraries and parks are likely to become a thing of the past and children’s services, which we are supposed to be improving, are braced for swingeing cuts. This is no less than political vandalism; some people in our city are set to experience the most severe and catastrophic consequences of deliberate Government policy.

The core spending power of Birmingham is set to reduce by 5% at a time when some Tory-led authorities have received funding increases of almost 8%. Last February, the Secretary of State announced a hardship fund of transitional money worth £300 million for councils facing the sharpest reductions in grant, but not one penny went to Birmingham. It went to places such as Conservative-led Bromley, Conservative-led Kingston upon Thames, Buckinghamshire and Oxfordshire. How exactly does the Minister justify that state of affairs?

[Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)]

This is not the first year that Birmingham has experienced such a situation. There is a pattern and, on top of that, the councils that get a higher percentage increase also have a lower dependency on core funding. Birmingham is therefore being hit disproportionately year after year.

[Steve McCabe]

My right hon. Friend has anticipated a point that I will make later about council tax, but she is absolutely right: this situation is not new and there is a pattern.

The simple truth is that we are suffering from a legacy of unfairness in our city. Part of that dates back to the 2014-15 and 2015-16 settlements, and as a result the chickens are now coming home to roost on the Minister’s watch. Birmingham, the second city in the country and home to more than 1 million people, is also the second-hardest-hit by Government cuts in the whole country. How is that fair?

Most people would expect a Government Minister to acknowledge the special factors in Birmingham that ought to be taken into account: most of our properties, as I think my right hon. Friend the Member for Birmingham, Edgbaston (Ms Stuart) indicated, are in council tax bands A, B and C, which means that we have a lower council tax base than many other places. We are therefore more heavily affected by the withdrawal of Government grant and raise proportionately less from council tax or precept rises. We suffer from classic big-city issues. Infant mortality is almost 8%—almost double the national average—and life expectancy for men and women is eight and five years shorter respectively when we compare the most affluent and poorest areas. Birmingham is ranked No. 1 in the country when it comes to the total number of fuel-poor households. We should consider Birmingham’s predicament in that context.

This year we expect a £30 million shortfall in the social care budget; that is after the council has followed the Minister’s advice and slapped an extra 2% social care council tax precept on our long-suffering residents. Because extra funding from the social care precept is skewed towards more affluent areas until resources from the improved better care fund become available, we estimate that Birmingham will be disadvantaged to the tune of £98 million in terms of social care come 2017-18. An obvious crumb of comfort that the Minister could offer today would be to say that he will meet us to consider how resources from the better care fund could be used now to recognise the fact that social care spending pressures are being experienced now.

It is not just council services that are teetering on the edge of disaster as a result of deliberate decisions by the Government. Our police have suffered successive cuts to personnel and resources. Just the other day, the chief constable admitted that more than 170,000 calls to 101 went unanswered because of staff shortages. Our NHS is crippled by bed-blocking, rising waiting lists and the spectre of deficits, as well as a sustainability and transformation plan designed to further reduce access to some services.

I have no doubt that, at some point, the Minister will quote his estimate of the city council’s spending figure, as his officials did when they briefed the press earlier today. It is all very well to quote big-sounding numbers from spreadsheets, but what experience does he have of taking an enterprise that is responsible for over 1 million people and slashing its budget by more than £750 million? That is what the Government have done to Birmingham. Health visitors warn that the budget cuts are putting safeguarding at risk. Children’s centres are to be cut so severely that only those who can pass through the super-deprived gateway can expect any help or support. Nurseries, despite the Government’s care offer, are bracing themselves for closures and a massive reduction in services.

The council has almost halved its workforce. More than 12,000 jobs have been lost—those are real people and real jobs. Homelessness prevention services have had to be cut by so much that rough sleeping in Birmingham has quadrupled. On 29 November, a homeless man froze to death on the streets of our city on one of the coldest nights of the year. The Secretary of State for Communities and Local Government, the right hon. Member for Bromsgrove (Sajid Javid), who is not exactly unfamiliar with the city, said at the time:

“I think one person homeless is one person too many so you have always got to do more.”

As the Minister knows, the relentless period of cuts means that we have now reached the stage at which the council has to reconsider the Supporting People budget. I am sure he knows that the sole purpose of that budget was to fund accommodation-related support, particularly supported housing. In 2009, it was his Government who removed the ring fence on the Supporting People budget. We are talking here about homeless young people aged 16 to 25—about care leavers. Elsewhere in this building today, the Minister for Vulnerable Children and Families is telling Members about his seven principles for childcare, which he describes as the heartbeat of his plans. How will that work if there is no supported accommodation for those young people?

[Mr Jim Cunningham (Coventry South) (Lab)]

I congratulate my hon. Friend on securing this debate and I have every sympathy for what he says, because Coventry has experienced the same thing. Importantly, it was only some weeks ago that a private Member’s Bill was approved in this House and we were being assured that homeless people would be found accommodation. However, we never got a price tag put on that.

[Steve McCabe]

My hon. Friend makes a good point and he is exactly right. It is difficult to see how the Government can say they are doing a great job with the homelessness reduction legislation if its effect will be to impose more duties on local authorities that are unable to fund their existing proposals for Supporting People.

I am concerned about young people, older people with support needs, those with learning disabilities or mental health needs, and the victims of domestic violence. If there is a cut in budgets for Supporting People, all that help is at risk. It will lead to a reduction of provision and a further reliance on the costly unregistered and unregulated sector. Is that what the Minister wants? I commend the Birmingham pathway model for under-25s to the Minister. I understand that it is seen as a national exemplar and has been used to inform the work of his Department in establishing a framework for all other services for single homeless people. Why would he want to stand by and see it close down?

The Minister might want to remind me of the council’s failings and suggest that its members should put their own house in order, rather than complain to the Government. I acknowledge that Birmingham is under scrutiny. We have had: an independent review of education and the appointment of a Government commissioner for education; an independent review of children’s services and the appointment of a children’s services commissioner; and the Kerslake report into the structure and functioning of the council itself, and the appointment of a Government improvement panel to oversee the implementation of the recommended changes. How many meetings has the Minister had with those commissioners and members of the improvement panel since being appointed to his post? Does he consult them weekly or fortnightly? What is the frequency of the contact? Surely he cannot be defending this dire approach to our city’s future without reference to his own appointed experts. Would that not be tantamount to a dereliction of duty on his part?

We want a fundamental re-evaluation of spending needs to determine the funding levels of different local authorities, and we want a fair system, not a skewed or fixed one. We want recognition of some of the unique problems that confront Birmingham and an offer of some transitional support while that re-evaluation takes place. I can try to be helpful to the Minister, if he is in any kind of listening mode. I am not simply calling on him to give the city council more money. I am open to discussions, as are a number of my colleagues—any place, any time—to see what kind of partnerships, innovative approaches and pilot schemes might be available to help to ease the plight of our city and its people. As I have indicated, the Minister might like to consider bringing forward resources from the better care fund to recognise that pressures are being experienced now. I am open to suggestions about how that extra funding might be distributed. My concern is that those in desperate need get help. If the Minister has set his face against giving any extra money to the city council, I will accept an alternative approach to boosting the overall social care resource if he is ready to make that offer.

The Birmingham Social Housing Partnership has made a proposal to Government to pilot a locally administered co-investment model for supported housing, which would make possible the squeezing out of transactional costs. If agreed, it could be part of a national pilot for the delivery of supported housing. Can the Minister offer any comfort on that front today?

If we do not see some improvement in the financial situation facing our city, I predict dire consequences: the abandonment of the elderly, vulnerable and homeless; the full-scale closure of libraries, public parks and play areas; the second city reduced to a wasteland; and a breakdown of the social consensus on which the very basis of our community exists. Our city has had an extremely raw deal. I beg the Minister to treat these warnings seriously.

16:45

[Jack Dromey (Birmingham, Erdington) (Lab)]

It is a privilege to serve under your chairwomanship, Ms Dorries.

I congratulate my hon. Friend the Member for Birmingham, Selly Oak (Steve McCabe) on securing the debate, not least because, as he said in his powerful speech, but two weeks ago a young man froze to death on the streets of Birmingham. Who are the young homeless? One in 10 young people in Birmingham over the past five years have suffered from homelessness. Half of those in homeless accommodation are young people. I, for one, object sometimes to the caricature of those young homeless people as somehow being druggies, drunks and dropouts. I remember when we organised, here in the House of Commons, the first ever Youth Homeless Parliament, and there were Brummies here from the YMCA and St Basils. We saw quintessentially middle-England young people whose lives had spiralled downwards and who had ended up homeless on the streets.

The Secretary of State said, as my hon. Friend the Member for Birmingham, Selly Oak mentioned, that one young homeless person dying on the streets was “one too many”. He went on to say that we always have to do more. That is why, only yesterday, co-ordinated by St Basils, the charity for homeless people in Birmingham, 14 organisations supporting the homeless in Birmingham wrote to the Government calling for a fair settlement for Birmingham. They praised Birmingham City Council for having protected, thus far, the most vulnerable from the biggest cuts in local government history, and said that, thus far, Birmingham City Council had managed to protect the Supporting People budget, unlike many other local authorities. However, they went on to say that it was now becoming increasingly difficult, concluding that there was a social and financial line that should never be crossed. But that is exactly what is happening.

Only today, Alan Fraser, the chief executive of the YMCA in Birmingham, has warned that further cuts to the city council’s budget, with particular reference to Supporting People, will

“massively increase the risks of these deaths happening again.”

He is right.

The chief executive of Birmingham City Council, Mark Rogers, in a powerful interview, today said something similar, saying that the risks of more people dying were “massively increased” because of the cuts. He is right. That is why it is wrong that the great city of Birmingham—Britain’s second city—has been hit by a combination of the biggest cuts in local government history on one hand, and grotesquely unfair treatment on the other. Mark Rogers, a man who is normally cautious in the way he expresses himself, said in the interview:

“We are fast reaching the point where there could be catastrophic consequences for some people.”

That is little wonder, in circumstances where the council’s employee headcount has halved since 2008 from 24,000 to just over 12,000. The council will, by the end of this financial year, have made £800 million of cuts since the era of austerity, which, I stress again, was the biggest in local government history; the council lost 50% of its grant from central Government. Eligibility for social care has been restricted so that only those with substantial or critical needs now receive help.

What we are seeing increasingly in Birmingham—this is heartbreaking—are those 15-minute flying visits to people in need of care, who previously were able to count on something very different and much better. Another £28 million has just gone from the adult care budget. The combination of what is happening in the health service and in the council has led to a £150 million black hole in the city’s finances this year. This is a tough year but, on the current trajectory, things will get even worse in the next financial year, with a further £113 million reduction to the city council’s budget on top of the previous £800 million.

Mark Rogers talks about cuts to youth services. Birmingham used to pride itself on being an exemplar city with its programmes for young people. There were dozens of youth services, but there are now just two left. Birmingham had 40 advice centres in 2010; now there are just four. There is also an increasing impact on children’s centres. Half have gone and, as my hon. Friend said, only those in what are sometimes described as super-deprived communities get the support that people were previously able to count on through the excellent Sure Start children’s centres.

On the very survival of some nursery schools, I took the heads of our four nursery schools in Erdington—Castle Vale, Osborne, Marsh Hill and Featherstone—to meet the Minister with responsibility for nurseries, the hon. Member for Gosport (Caroline Dinenage), and they waxed lyrical, as do the people who use those nursery schools, about how they have made a difference to children’s lives. The best way of achieving social mobility is addressing what happens at the ages of two, three and four. I heard powerful stories, including from the grandad who said, “He never used to open his mouth. He was only in the nursery school for nine months, and now he never stops talking.” I heard how the kids have come on and about the support being given to the parents. The idea that some of those nursery schools, which are in a deprived community, now face closure as a result of the continuing budget cuts is absolutely unthinkable.

On the one hand, my hon. Friend the Member for Birmingham, Selly Oak is right that in the past we said that the council had to up its performance, but on the other hand, the argument that this is all due to the council is completely false because of the sheer scale of what has happened. Indeed, in a stark warning today, the chief executive said that the imposition of large cuts is not simply a response to the 2008 banking crisis:

“Deficit reduction enabled first the coalition and then the straight Tory government to pursue a straight Tory objective of a smaller state.”

He is right, and it is not just that; it is the grotesque unfairness of approach.

After we went to see the Minister and had a good hearing, the nursery school heads were utterly dismayed to see that the outcome of the funding formula review was that Birmingham got less but—surprise, surprise—Maidenhead got more. Overall, Buckinghamshire is being treated twice as fairly as high-need Birmingham. The scale and unfairness is simply wrong.

The previous Secretary of State, the right hon. Member for Tunbridge Wells (Greg Clark), a man with whom we had good discussions, admitted to the Members of Parliament for Birmingham earlier this year that there had been an unfairness of approach. We were led to believe that it might be put right but, as my hon. Friend the Member for Birmingham, Selly Oak said, the £300 million fund overwhelmingly went to leafy, Tory shires. Not a single penny went to Birmingham, despite the sheer scale of the cuts that have been taking place.

As Members of Parliament for the city, we wrote to the Chancellor in advance of the autumn statement to make a series of proposals—I will not repeat what my hon. Friend has already said—including bringing forward the better care fund, greater investment in health and, crucially, a fair local government settlement. As Members of Parliament, we stand ready to engage with the Government on the next stages, but it cannot go on like this, with the Government seemingly oblivious to the sheer scale of what is happening and the sheer scale of the consequences for our city. That is why this debate is so important in asking that the Government hear the city’s case before the local government settlement.

I am proud to represent my Erdington constituency, and I always say that it may be rich in talent but it is one of the poorest in the country. It is a stark statistic that a person who gets on the train at New Street and gets off at Gravelly Hill or Erdington is likely to live seven years less than a person who continues on to Four Oaks in the leafy shires of Sutton Coldfield. That cannot be right. When such appalling statistics and discrepancies show the sheer scale of what is happening in the city, it cannot be right that our nursery schools and children’s centres are at risk—I stress again that they are vital to giving kids the best start in life.

Home-Start supports struggling families locally, and its services are desperately needed. I have seen its outstanding work first hand, but it is now living from hand to mouth. As a consequence of what has happened to the Supporting People programme, the financial security of New Oscott retirement village and the Ralph Barlow house, which look after those in the twilight of their years and those who are vulnerable for one reason or another, is being fundamentally undermined. The Members of Parliament for Birmingham appeal to the Government to hear the case of Birmingham and to recognise that the sheer scale cannot continue because of the serious implications. The time has come for fair treatment of a great city.

16:55

[Jess Phillips (Birmingham, Yardley) (Lab)]

As always, it is a pleasure to serve under your chairship, Ms Dorries—everyone has said something different. I have just come out of the debate on Aleppo, and a Government Member who served in the armed forces stressed that perhaps we would not be so ready with some of our suggestions had we seen some of the things that he had seen. I express exactly the same sentiment here. If some of those in the Department for Communities and Local Government, including the Secretary of State, the right hon. Member for Bromsgrove (Sajid Javid), had seen some of the things that I have seen in my work with the homelessness services in the city of Birmingham, they would not have made the decisions that they have made in the past six years and are continuing to make.

The people who use those services rely on them for their lives. Compare that with the money we spend on other things. I have seen people’s lives saved. These people are not just about managing; they are surviving. Without the refuges, without the St Basils youth homelessness service and without Sifa Fireside—I invite the Minister to sit and eat breakfast with me every morning at Sifa Fireside—we are condemning these people to death with a cut of £5 million to £10 million in Birmingham City Council’s budget for those services.

I am not shroud-waving. I am an expert—I know we do not like experts any more—and I know what even half the proposed budget cut to our current Supporting People services will mean. It will basically mean that the services cannot function any more. There are 4,000 victims of domestic violence in the city of Birmingham. Already, every single day, hundreds of people in our city are turned away from specialist services. We are about to start turning away many more.

On average, there are 97 homelessness applications in our city every single day. We used to have services all across the city where people could go to get help and advice, which reduced the number of homelessness applications. I set up some of those services. Birmingham & Solihull Women’s Aid used to provide specialist support in each of our neighbourhood offices so that there was a specialist, not a checkbox, there when a victim of domestic violence came in needing support for their housing. Those specialists have been gone for about two years; the centres they were housed in no longer exist.

My hon. Friend the Member for Birmingham, Selly Oak (Steve McCabe) began his powerful comments on the subject of social care. I put in a freedom of information request to every single council in the UK, asking how much they spent weekly on adult social care in care homes. In Birmingham, the spend is £436 per week. That is £100 less than it costs the care homes in my constituency to care for the people who need adult social care, so the poorest people in our country are paying a top-up fee. In Buckinghamshire, the weekly cost provided by the council is £615; in Richmond, it is £805.

Yesterday, I asked the Care Minister, the Under-Secretary of State for Health, the hon. Member for Warrington South (David Mowat), do the nans and grandads, the aunts and uncles, the mums and dads in Buckinghamshire and Richmond matter more than my nan and grandad, than my mum and dad? Because that is what those figures tell me—and that is post-precept. Those figures show an already widening gap, where some people matter and some people don’t. That is what is being created all around the country.

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

How does my hon. Friend think the situation will now unfold, given that the funding gap in social care in our city grows to something like a quarter of a billion pounds by 2020-21? Never has a social care system had to withstand this kind of pressure. The situation that she describes is only the beginning.

[Nadine Dorries (in the Chair)]

Order. Mr Byrne, you really should know better than to walk into a debate and intervene as soon as you walk in, without even hearing the opening speeches. You also should address the Chair, not the individual Member.

[Jess Phillips]

I could not agree more with my right hon. Friend. There is a huge gap, and it is widening. Care homes in my constituency often get a bad name when we see “Panorama” documentaries about how awful care homes are, but the ones in my constituency are largely not for profit. Yardley Great Trust and Grey Gables have both told me that given the situation with the social care budget, the simple fact is that they will have to close their doors. Where do the people go who live there?

The social care budget problems will not be solved in Birmingham by a further increase in the precept. It is a sticking-plaster on an enormous wound and it will simply put a burden on those who are just about managing, when the percentage of their income that goes on council tax is far higher than for those at the highest end of society. I am not sure why I should be asking those who are just about managing, to pay that price. Perhaps we could ask Andy Street.

What my FOI request revealed about the social care budget is its clear and stark unfairness. Since I came to this House, I have heard an awful lot of Government Members talking about the stark unfairness in schools and education funding—“They are getting loads more money,” and so on. Those calls have been answered by the Government; incidentally, it has meant staff reductions in my constituency, and in my own children’s school. My son’s class will now have 33 children, exceeding the legal limit. I have watched Ministers stand at the Dispatch Box and say, “It isn’t fair that children in Knowsley get this much.” Well, I am here to speak up for the old people of Birmingham. My children are paying the price because this Government are righting a perceived unfairness in education funding. I am asking for my unfairness to be righted, and for social care disparities to be addressed today. The problem is not going away; it is a problem now, and it must stop.

What I would say about all the different people sent into Birmingham City Council—rightly so; I am sure that all of us, as Members of Parliament across the country, have seen our councils do good and bad things and got annoyed at them—is that it seems like moving the deckchairs while Rome burns. Nothing has changed for the end users, the citizens. I ask the Minister to look at the figures—Richmond with its £805 a week, Birmingham with its £400, Coventry with even less and Wolverhampton with £350—and tell me that he thinks that is okay.

17:05

[Mr Roger Godsiff (Birmingham, Hall Green) (Lab)]

Thank you, Madam Chairperson. I congratulate my hon. Friend the Member for Birmingham, Selly Oak (Steve McCabe) on securing this debate and making such an excellent case on behalf of the people of Birmingham. I also congratulate my hon. Friends the Members for Birmingham, Erdington (Jack Dromey) and for Birmingham, Yardley (Jess Phillips) on adding to it with their comments.

Madam Chairperson—

[Nadine Dorries (in the Chair)]

Order. Mr Godsiff, it is appropriate to call me “Ms Dorries” in here, just to save you all tying yourselves up in knots.

[Mr Godsiff]

I apologise, Ms Dorries. I feel frantic that my city faces a shortfall in its budget next year of £150 million. That could well lead to the closure of children’s centres, leisure centres and libraries and, as has been said, cuts to care services. I feel doubly affronted that the Government have a transition fund of £300 million, yet not one penny has gone to Birmingham. Furthermore, 83p in every pound of that £300 million has gone to Tory shire counties. That is not fairness; that is great injustice.

Reference has been made to what the chief executive of Birmingham City Council said in his front-page interview with The Guardian today. He said that Birmingham faces a “catastrophic” situation if nothing is done, and that youth services in Birmingham are virtually non-existent. Birmingham is the youngest city in the country. It has a huge population of young people, many of whom are Muslim. What does the Minister think the effects will be if youth services in Birmingham cease to exist? Where will those young people go? The Government are rightly concerned about radicalisation among young people, but if they do not have centres to go to where they have the opportunity to mix with young people from other communities, play with them and enjoy life with them, they will be more and more vulnerable to the small percentage of people within their communities who seek to radicalise them.

Birmingham has had more arrests under the Prevention of Terrorism Act 2005 than any city in the country. Only this week, two people in Birmingham were given long sentences for funding the Brussels bombing attacks. If the Minister wants to prevent young people from becoming radicalised, he must give them not only hope but facilities. If a city such as Birmingham has virtually no youth services, as the chief executive said, I fear the consequences.

I am sure that the Minister is an honourable man, but I remember that the Tory Secretary of State Nicholas Ridley said in the 1980s that local councils needed only two meetings a year—one to hand out the contracts, and the second to review them—and that local government did not really need to exist. I very much hope that the Minister will give some assurance that he does believe in local government and that he does believe that Birmingham City Council has the problems that have been outlined today; because if he does not, there will be consequences, and the people of Birmingham will know exactly who is to blame.

17:10

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

I am grateful for the opportunity to take part in this debate. I congratulate my hon. Friend the Member for Birmingham, Selly Oak (Steve McCabe) on securing it, on making such a detailed, determined and effective speech on behalf of his constituents and on defending his city as he did. I also acknowledge the contributions of my right hon. Friends the Members for Birmingham, Edgbaston (Ms Stuart) and for Birmingham, Hodge Hill (Liam Byrne), and my hon. Friends the Members for Birmingham, Erdington (Jack Dromey), for Coventry South (Mr Cunningham), for Birmingham, Yardley (Jess Phillips), and for Birmingham, Hall Green (Mr Godsiff), who supported my hon. Friend the Member for Birmingham, Selly Oak today and who each sought to defend and make the case for the people of Britain’s second city.

My hon. Friend the Member for Birmingham, Selly Oak set out the scale of the cuts that have hit Birmingham —some £90 million in 2016-17 in total. After Liverpool, Birmingham is the local government area hit hardest by the Government’s funding cuts: some £750 million has been cut from its budget since 2010. He went on to point out very powerfully the failure of the Conservatives to ensure any transitional funding at all for Birmingham in last year’s settlement. Conservative-led Surrey got £12 million and Hampshire got £19 million; those are just two examples, alongside the others he mentioned, of areas that benefited from the transitional funding package, while his city—one of the biggest and most significant local authority areas in the UK—got nothing at all.

I will come back to some of my hon. Friend’s opening remarks, but let me first dwell on the contribution of my hon. Friend the Member for Birmingham, Erdington. He referenced the impact of local authority cuts on homelessness in Birmingham, and particularly on young people suffering homelessness. He noted the work of 14 charities in Birmingham that support their Members of Parliament today in demanding a better settlement for Birmingham and in praising the efforts of the council to protect the most vulnerable in challenging times.

[Mr Jim Cunningham]

I do not want to detract from the bigger issue of Birmingham, but I am sure that my hon. Friend knows that other local authorities in the west midlands are experiencing exactly the same cuts to public services—youth services, libraries, teachers, education budgets, social services, you name it.

[Mr Thomas]

My hon. Friend widens the debate to the impact of cuts in funding on local authority areas throughout the west midlands. He could also have widened it to underline the cuts in funding that all English local authorities have suffered since 2010. In that context, Thursday’s local government finance settlement will be particularly important, not only for Birmingham and for local authorities in the west midlands but for the whole of England.

If he will forgive me for saying so, my hon. Friend interrupted my praise for the contribution of my hon. Friend the Member for Birmingham, Erdington, who underlined a number of points made by my hon. Friend the Member for Birmingham, Selly Oak about the need for further improvements in areas for which the council is responsible. He said quite rightly that that is absolutely no justification for the scale of cuts that various local government Ministers have demanded of Birmingham’s public services.

My hon. Friend the Member for Birmingham, Yardley made particularly powerful points about the impact of local authority funding cuts on the many victims of domestic abuse in Birmingham. She backed up the comments of my hon. Friends the Members for Birmingham, Selly Oak, and for Birmingham, Erdington on the impact of homelessness in Birmingham and the lack of available support. She underlined the significance of Birmingham’s social care funding crisis, which we will particularly need to focus on when the local government finance settlement is debated on Thursday. She went on to widen the debate from services directly funded by local authorities to other public services. She spoke about the impact on children in our schools of the real-terms cuts in schools funding. My hon. Friend the Member for Birmingham, Selly Oak referenced the impact of other aspects of the funding cuts on the national health service and the police.

My hon. Friend the Member for Birmingham, Hall Green made a series of important points about the impact on youth services, which, when they exist, can offer alternatives to crime and radicalisation. He underlined the concern expressed by my hon. Friend the Member for Birmingham, Selly Oak about the scale of the cuts in youth services that Birmingham City Council has had to push through because of the loss of funding.

Before the debate, we had the chance to read some of the comments made to the media by the chief executive of Birmingham City Council, Mark Rogers. It is impossible for anybody who has read his comments to doubt the veracity of my hon. Friends’ contributions today. He spoke about the

“catastrophic consequences for some people”

in the city of Birmingham of years of cuts that have forced it to slash funding for key services for vulnerable people. He said that the council had

“just two youth centres”

left and that the

“youth service has all but gone.”

The article also states that, according to Mr Rogers,

“homelessness prevention services had been cut by so much that rough sleeping had quadrupled”.

Understandably, he is worried about the impact of cuts in funding on social care and about how fewer elderly people are now eligible for care at home. He is expecting to have to implement £113 million of cuts in 2017-18, on top of the cuts that have been made since 2010. In the context of the much-debated social care crisis, which many Members on both sides of the House have underlined to the Government, the fact that Birmingham is having to look at taking almost £30 million out of its adult care budget will be profoundly worrying to anyone who knows people who are elderly, in need of care or vulnerable in other ways.

We already know from the letter that Ministers sent to councils last year with the details of their funding settlement that the Government increasingly expect councils such as Birmingham to increase council tax by as much as 20% by 2020. Across the country, that is equivalent to an increase in average band E of about £300 a year by 2020. Effectively, the people of Birmingham are being expected to pay 20% more in council tax while getting dramatically lower levels of service. Will they get better street cleaning? Will their bins be emptied more regularly? Will they have a better chance of seeing the elderly people they love get better care? Sadly, the brutal truth is that the quality of services is going down as the Government seek to continue to cut funding.

We are told that Ministers are no longer talking about austerity, but the brutal reality of the cuts in funding that Ministers are still making is that public services will continue to decline. We hope for something different when the local government finance settlement is announced on Thursday.

17:19

[The Parliamentary Under-Secretary of State for Communities and Local Government (Andrew Percy)]

I begin with an apology on behalf of the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Nuneaton (Mr Jones), who is unable to be here to respond to the debate because of a personal issue. It is a pleasure to serve under your chairmanship, Ms Dorries, and to respond to a Westminster Hall debate for the first time as a Minister. I congratulate the hon. Member for Birmingham, Selly Oak (Steve McCabe) on securing this debate and for the passionate way he presented the issues facing Birmingham, as did, indeed, other Members who took part in the debate.

We should remind ourselves of the context in which local government operates. Many of the decisions that have been taken by Birmingham City Council have been taken locally and independently of central Government, although that is not to pretend that the Government have not had a role to play through challenging funding settlements, about which we have been quite honest over the years. We have been absolutely clear that, as councils account for a quarter of public spending, they, too, need to play their part in deficit reduction. No Member present went into the most recent general election offering more money for local government—that was accepted across the various parties.

We have tried to provide local authorities with a fair and sustainable financial settlement. Fundamentally, we have provided councils with a financial settlement that is broadly flat in cash terms, moving from £44.5 billion in 2015-16 to £44.3 billion in 2019-20. Over the course of this Parliament, council core spending will see a decrease of just 0.4% in cash terms. As a result, councils will have almost £200 billion to spend on local services. Birmingham’s average core spending power per dwelling will remain significantly higher than that for many other metropolitan authorities. We must remember that £1,983 per dwelling compares with £1,767 for other local authorities, and is higher than in Manchester and Leeds, which have had to manage similar issues.

Like many other Members, the hon. Member for Birmingham, Selly Oak raised the issue of social care, which is undoubtedly a massive challenge for the country given the changing demographics. The hon. Member for Birmingham, Hall Green (Mr Godsiff) asked whether I personally care about local government. I spent 10 years as a local councillor when some of the difficult decisions we are now facing started to be made. Over that period, which was not when we were in government but under a different Government, we saw councils start to change their intervention criteria substantially due to rising pressures. This is not an issue that has developed overnight. We have to be honest that it is a massive challenge for the country to deal with.

The hon. Member for Birmingham, Selly Oak, along with others, mentioned NHS funding. It is at a record level, although I do not for a moment pretend that that will necessarily deal with all the issues relating to the demographic shift—the increasing pressures, the increasing number of people going through the system, the cost of treatment, the number of people living with long-term conditions, and all the rest of it—that is putting huge pressure on the social care and health system. I do not for a moment want to pretend that the issues we are discussing are solely related to local government funding, or that they have developed overnight.

The Government are providing Birmingham with £77 million of new support for social care by 2019-20. Over the four-year period, assuming the social care precept is taken up, the figure will be £149 million, but of course I must put that in the context of changing demography and increasing demand. Many other countries in the west are trying to deal with the same issues. We have also delivered to Birmingham, and local government generally, guaranteed budgets to councils for 2016-17 and for every year of the Parliament. Birmingham is among the 97% of councils to have signed up to that. We are looking to have 100% retention of business rates by the end of the Parliament.

The hon. Member for Birmingham, Selly Oak mentioned the independent improvement panel. We have to put many of the decisions that are currently being taken in Birmingham in the context of a failure to deliver on the budgets that we passed and outlined. I welcomed the contribution of colleagues who said that they understood some of the challenges to have resulted from budgetary issues and management in Birmingham. The hon. Gentleman asked whether the Government had met the independent improvement panel. As it happens, I met one of its members yesterday, as Councillor Nick Forbes, the Labour leader of Newcastle City Council, was taking part in the independent financial review. As this is not my policy area, I have not met the other members of the panel, but I assure the hon. Gentleman that DCLG officials are meeting them regularly, and the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Nuneaton, has done so on several occasions as well.

[Steve McCabe]

I do not want to interrupt the Minister, and I appreciate that this is not his specific policy area, but when Ministers or departmental officials have met the improvement panel, have they heard the panel tell them that it is worried about the level of resources available in Birmingham?

[Andrew Percy]

The hon. Gentleman will understand that I have not been in the meetings so I cannot comment on their content. Needless to say, because I was meeting Councillor Forbes yesterday to discuss another matter, I had a brief conversation with him about the issues in Birmingham, but I cannot comment beyond that.

I could list lots of the other investment the Government are putting into Birmingham through local growth deals, which are having a significant impact and transforming people’s lives, but I want to respond to as much of the debate as possible rather than discuss overall investment in the region. The hon. Member for Birmingham, Yardley (Jess Phillips) made a powerful case about transition funding, which was also mentioned by other Members. Birmingham did not get transition funding for the simple reason that it had benefited from the 2015-16 change. The shire counties were the authorities hardest-hit by that change, so the transition funding was naturally focused on them.

The hon. Lady also mentioned school funding. I represent the third-worst—sometimes worst—funded education authority. If she wants to come to Goole in my community, she will also see very high levels of deprivation and huge challenges, but ones that we have to address with many hundreds—

[Jess Phillips]

Do your schools have 33 kids in their classes?

[Andrew Percy]

Yes, some of them do. We have funding differences of many hundreds of pounds below the national average, let alone our neighbouring authorities. Nobody owns one particular community. I grew up in one of the poorest cities in the country and attended one of the worst comprehensive schools, and for many years I taught in some of the toughest schools in the country, let alone in the city. I understand the challenges as well as the hon. Lady, as do others on the Government Benches. Some of her comments were a little divisive, trying to set Tory-run shires against Labour-run metropolitan areas. There are huge challenges in many areas. Deprivation and poverty do not necessarily respect local government boundaries.

A couple of points were made about homelessness, which is of course a massive challenge. I cannot comment on the specifics of the funding decisions that have been made in Birmingham, but the Government do take the issue seriously, which is why we have supported the Homelessness Reduction Bill introduced by my hon. Friend the Member for Harrow East (Bob Blackman). Homelessness is at half its 2003 peak. Birmingham has received nearly £1.1 million in homelessness prevention funding for 2016-17, and we are investing £500 million in seeking to tackle homelessness.

In the short time remaining, I say to Members who represent Birmingham that the Government see solving the issues there as a partnership. It is important that the decisions that need to be taken on financial management in Birmingham are taken. As I have said, other local authorities and metropolitan boroughs have, with less spending power per dwelling, dealt with the very challenging settlements for local government. We want to assist Birmingham in doing the same. We have to wait for the independent financial review, which should conclude in the middle of January, to report so that we can consider matters further.

We are determined to try to get Birmingham, like many of the metropolitan councils, into a position where the budgets that are set are realistic, so that people know what services are being delivered. Plenty of other local authorities, many with much lower funding per dwelling, are not reducing services in the way described today. Key to that is having a budget that is viable and realistic, which is what we hope will come out of this process.

Question put and agreed to.

Resolved,

That this House has considered local government funding for Birmingham.

17:31

Sitting adjourned.