16:00 - The House divided: - Ayes: 190 / Noes: 329 - Question accordingly negatived.
The Minister for the Northern Powerhouse and Local Growth (Jake Berry)
I hope you will bear with me a moment, Mr Speaker, because this is the first time that I have had the opportunity to speak in a debate with you in the Chair as Speaker. As the MP for an adjoining constituency and a fellow Lancastrian, I congratulate you on the amazing start you have made as Speaker. You have restored gravitas to the office of Speaker and you are doing an excellent job.
I beg to move an amendment, to leave out from “House” to the end of the Question and add:
“welcomes the Government’s provisional local government finance settlement, which will deliver the biggest year-on-year real terms increase in councils’ spending power for a decade; recognises the pressures on adult and children’s social care as well as critical local government services, and welcomes the additional £1.5 billion available for social care in 2020-21; notes that the Government has listened to calls for a simpler, up-to-date, evidence based funding formula and has committed to consult on all aspects of the formula review in spring 2020; further welcomes the Government’s ambition to empower communities and level up local powers through a future Devolution White Paper; and welcomes the Government’s progress on this agenda already with the £3.6bn Towns Fund and eight Devolution Deals now agreed.”.
As we entered a new decade, this country voted emphatically for a new Government and a new approach. People discarded the politics of division and deadlock that had beset the previous Parliament for so many years. It was the people who gave a new mandate to my right hon. Friend the Prime Minister to drive forward his vision for our nation—a vision that will see communities levelled up and opportunity spread equally throughout the country, just as talent is already spread. We will level up every single nation of the United Kingdom and drive forward our Government’s agenda.
What have we heard today from the Labour party and the Opposition spokesman? They have learned nothing from their December drubbing—nothing from the people of Redcar in the north-east, nothing from the people of Heywood and Middleton in Greater Manchester and nothing from the people of the Don Valley in Yorkshire. Each of those areas, which had been Labour—[Interruption.] I know that Labour Members do not want to talk about the general election, which was the worst Labour performance for a generation, but we have a mandate and I intend to set out what that mandate means, in line with our amendment. Each of those areas, which had been Labour for a generation, rejected the politics that we heard from the Opposition today.
Let us not forget—although I bet he wishes we would—that the hon. Member for Denton and Reddish (Andrew Gwynne) was the general election campaign co-ordinator for the Labour party. Like a Japanese soldier emerging out of the jungle decades after they have lost the battle, he has chosen to return to Labour’s failed policies of division and deadlock. We heard him pit urban areas against rural areas, towns against cities and local government against national Government. It is absolutely clear that only the Conservative party—
Jake Berry
I will give way in a moment.
It is absolutely clear that only the Conservative party has a mandate to unite our nation as we move forward from a decade of recovery to a decade of renewal.
Ms Brown
I am really grateful to the right hon. Gentleman for giving way. Can he let me know where the Secretary of State is while we are discussing local government finance? I am grateful to see the right hon. Gentleman in his place, giving us a speech, but I would quite like to hear from the organ grinder what is going to happen with local government finance.
Jake Berry
Well, I am not the organ grinder, as she has pointed out, so I must be the monkey. We have a broad team, and given that a lot of the claims made by the hon. Member for Denton and Reddish relate directly to the north of England, I think that as the Minister for the Northern Powerhouse I am the most appropriate Minister to respond to this debate.
Sir Desmond Swayne (New Forest West) (Con)
My right hon. Friend’s mandate extends to God’s own county of Hampshire, where we are very much looking forward to the fair funding review on the grounds that we get to spend £1,650 per person, but we look north to the local authorities that have been enumerated today that have an additional £500 per person. We spend—
Mr Speaker
Order. Sir Desmond, you are usually very good and ask the shortest of questions and make the briefest of interventions. I do not know what has gone wrong but I am sure the Minister will have a grasp of what you were saying.
Jake Berry
As my right hon. Friend knows, the fair funding review is under development, so we are unable to say today whether Hampshire will benefit more than any other area of the country, but his point about having a fair funding review that makes sure that we accurately reflect need throughout the country is absolutely right.
Alicia Kearns (Rutland and Melton) (Con)
I am confused on that exact point. The new funding formula has not been published, yet the Labour Front-Bench team claim to know exactly what it is going to be. They also claim that the shires are going to benefit, yet Leicestershire and Rutland are the worst funded in the country, so the idea that the shires will do best out of this is most inaccurate. Does my right hon. Friend agree?
Jake Berry
I do agree. I wonder how much attention the hon. Member for Denton and Reddish pays to his horoscope, because that prediction that has as much accuracy as the figures he has gone through today. Of course, the LGA itself said—in what was an extraordinary intervention from its chairman—that the figures were based on an old formula. It acknowledged that a new formula was being worked on and that therefore no further predictions could be made from those figures.
Richard Graham (Gloucester) (Con)
I am grateful to my right hon. Friend for giving way; the Opposition spokesman refused seven times.
Gloucester City Council provisionally gets 1.4%, compared with 6.3% for the country as a whole and 3.4% for all second-tier councils. While my right hon. Friend is doing the consultation, will he look closely at whether second-tier councils, particularly city councils with small amounts of space with which to benefit from the new homes bonus, could be given special consideration? Also, could he raise the council tax referendum limit from 2% to 3%? That would help us to raise funds locally.
Jake Berry
I will get on shortly to the issue of council tax referendum limits. We continue to engage with colleagues across our local government family, on both sides of the political divide. If we have not engaged directly with Gloucester yet, I will ensure that we do so as part of our discussions.
Building on the mandate given in December to my right hon. Friend the Prime Minister, I want to set out how we will unite and level up our nation. We will devolve more power, money and influence back to communities across England. We will restore opportunity to our towns through our £3.6 billion towns fund, and we will work with every single local authority to make sure that they are the engines for economic growth in their community. This will be supported by the most generous financial settlement for a decade, while always ensuring that they have the resources to support the most vulnerable in society.
This Government are proudly the father and mother of English devolution to our regions. In the past three years, we have seen the creation of powerful metro Mayors in Liverpool, Cambridgeshire and Peterborough, Sheffield, Manchester, Newcastle North of Tyne, the West of England, the West Midlands and Tees Valley. Together, those mayoral combined authorities have access to £6.35 billion of investment funding, more than £1 billion of the transforming cities fund, and £1.5 billion of the adult education budget.
We understand, however, that it is not possible to measure how well devolution is working simply by looking at how much money is being received. The real power of devolution comes through putting power back in the hands of local people, and that is why devolution works.
Tim Farron (Westmorland and Lonsdale) (LD)
I am fully supportive—as we were during the coalition—of the Government’s plans to devolve power to the regions of England and to local authorities. Does the right hon. Gentleman agree, though, that if this is about local people making local decisions, they should not be forced to accept a Mayor or, if they are a rural community, a particular urban-type structure in order to get those powers?
Jake Berry
I am sure the hon. Gentleman will welcome the recent discussions that have taken place with local authority leaders across Cumbria. I know that he has influence over his own local authorities, and I am heartened by the open-hearted and open-handed way in which they have approached those discussions. My right hon. Friend the Prime Minister has been clear that we should seek mayoral combined authorities across the entirety of the north of England. It is my view that if we want to truly empower communities, a powerful, locally elected, singularly accountable individual is the best way of doing it. I hope that we will shortly be able to progress further devolution deals and discussions across Cumbria.
As I have said, devolution does work. It is already paying dividends, with funding and metro Mayors delivering programmes that local people want. The hon. Member for Denton and Reddish might want to listen to this. I am sure that the completion of the A6 relief road to Manchester airport in Greater Manchester has assisted him and his constituents to get around the north-west of England. I know it helps me. It was done by the Labour Mayor for Greater Manchester, Andy Burnham.
In Liverpool, we are supporting new rolling stock on Merseyrail. That is important to me—I went to school on those trains and did not know that 35 years later people would be going to school on the same trains. There is a new train maintenance and technology training academy and the largest rolling stock modernisation facility in the country, creating hundreds of new high-quality, high-skilled jobs, in co-operation and collaboration with Steve Rotheram, the Labour Mayor of Liverpool. In the west midlands, the extraordinary Andy Street is investing £207 million to extend the West Midlands Metro system, re-opening railway lines and stations. That is all being done by metro Mayors.
Of course, those decisions could have been made in Whitehall but, I think as everyone knows, the process would have been slower, they would not necessarily have reflected local priorities, and crucially, picking up on the hon. Gentleman’s recent comments, they would have lacked the local democratic legitimacy of decisions made by single accountable elected individuals. It is precisely because devolution works that we intend to go further and faster. We will unleash the potential of all of our regions, delivering on the priorities of this people’s Government to level up everywhere.
Mr Betts
May I begin by thanking the Minister for his continued support for devolution to the Sheffield city region and south Yorkshire? I think we have just about got there. That is very welcome.
The Select Committee on Housing, Communities and Local Government has in the past commented on the fact that, so far, devolution has been about powers being transferred to mayoral combined authorities in certain areas. Initially, the Government were going to allow 100% business rate retention, which would have meant more money and more powers to local government across the country. Will the Government have another look at that proposal, to see whether all councils should now benefit from devolved powers?
Jake Berry
I am very pleased that we are making such good progress in south Yorkshire. The hon. Gentleman and I, along with many colleagues across the House, welcome that. He is correct to say that mayoral combined authorities have retained their 100% business rate retention for next year. Following the successful pilots, including in areas such as Lancashire—the hon. Member for Blackburn (Kate Hollern) and I have benefited from that—any further business rate retention will be part of the spending review process.
Devolution is particularly pertinent to areas such as south Yorkshire. Every deal so far has been bespoke, but as part of our ambition to level up powers we have written to every existing regional Mayor and asked them to take on new powers so that they can truly drive the ambition for the region. I am delighted to tell the House that one of the first to respond was Ben Houchen, the Mayor for Tees Valley. Not only has he made the Tees fly again, by saving Tees Valley airport; he is also making his economy fly again, by working with the Government on a suite of new powers to unleash the full potential of Teesside and everyone who lives there. In addition, the Government are talking to Cumbria, West Yorkshire, East Riding, Hull, County Durham and Lancashire about their ambitions for change in their areas.
Already, 50% of communities in the north have, to coin a phrase, taken back control through devolution. More areas want to be part of our devolution revolution, and we will ensure that they get that opportunity. Later this year, the Government will publish their devolution White Paper, setting out the Government’s ambition for full devolution across England. Through this White Paper, we will work with everyone in our local government family to ensure that they are truly empowered to be partners in growth.
As this Government unite and level up cities, towns and coastal and rural areas across our country, we acknowledge that our town centres are absolutely at the heart of a growing economy. They are the ground on which local jobs are created and small businesses are nurtured, and they inject billions of pounds into the local economy. That is why, through our £3.6 billion town deal fund, we are directly intervening in local communities. We are working with local areas and councils on more than 200 investment plans that have the potential to transform their economies.
The local Member of Parliament is able to sit on the town deal board in each and every one of our town deal areas. That ensures that Members of Parliament from across this House, whichever party they represent, have the opportunity to be an active part of the conversation in driving local growth in their communities. This is a new approach that I cannot recall previous Governments taking. It is about drawing on the talents of every single Member of this House with a town deal.
I now want to briefly mention the hon. Member for St Helens North (Conor McGinn)—this will probably ruin his career. He attended his first town board meeting on 23 January. He then approached me just outside the Division Lobby, fizzing with enthusiasm.
Mr Kevan Jones
On a point of order, Mr Speaker. I might be wrong but I thought this debate was entitled “Local Government Finance”. My hon. Friend the Member for Denton and Reddish (Andrew Gwynne) on the Front Bench made a very good speech about finance, but we have heard very little about it from the Minister, who has talked instead about devolution and other things to do with local government. Could I have some advice, please?
Mr Speaker
I think if we look in detail at both speeches, we will see that they are around the finance package and the delivery of different projects. I think there is an interconnection there, but I am sure that if we did drift too far the Minister would come straight back into line. For the moment, I am more than happy.
Jake Berry
I suggest to the right hon. Member for North Durham (Mr Jones) that he read page 8 of the Order Paper. The Government’s amendment says that the Government will set out the devolution White Paper and mentions
“the £3.6bn Towns Fund and eight Devolution Deals now agreed.”
He is a very experienced Member of this House, so I am surprised that he has not yet learned to read the Order Paper in the morning.
Mr Speaker
Order. The right hon. Member for North Durham (Mr Jones) has done exactly what he wanted to, Minister, which was to get you riled. That is why his experience is best ignored at times.
Jake Berry
Well, we are having fun.
As I was saying, the hon. Member for St Helens North approached me outside the Division Lobby, fizzing with excitement. He is embedded on his town board, and is putting aside political differences to work closely with this Government, challenging us on our towns fund and ensuring that he can deliver real benefits for his community.
It is only because this Government had the determination to deliver the will of the British people and we have now left the European Union that we can seize the opportunities that lie ahead. We will drive devolution, and level up our communities and nations, while at the same time beginning an era of new investment in public services. Back in 2010 we were forced to make some difficult decisions, but we had inherited the highest deficit in the nation’s history and an economy struggling to recover from the worst recession in 70 years. The public purse was overstretched, the overdraft limit had been reached and the credit card was maxed out. In truth, there was no money left and the economy was on the brink. It is exactly because we took those difficult decisions that we can now bring forward our ambitious plans and aims for local government finance for the months and years ahead. I am determined that local government will receive the resources it needs to support its communities, and continue to innovate and deliver cost-effective services for its residents. This year will see a spending review in which we will move forward with a longer-term settlement, providing the sector with the certainty and confidence it needs to properly plan for the future.
As the shadow Secretary of State mentioned, we also plan to review the formula used to distribute money between local authorities in order to ensure that we can use the resources in the most efficient and effective way. I will say more about that later. However, I briefly want to address why the Government brought forward a one-year funding settlement for local government. In advance of leaving the European Union, it was right that we sought rapidly and urgently to bring stability and certainty to our local government sector. This meant carrying out a one-year spending review at record pace, followed by a post-election local government finance settlement, which we published as soon as we could after the election. Building on that settlement, we now have a series of bold and ambitious plans for a local government finance settlement in the financial year 2020-21 that has been devised in close collaboration with colleagues across the local government sector.
Under these proposals, core spending power for local authorities in England will increase from £46.2 billion to £49.1 billion in 2020-21. This equates to a 6.3% increase in cash terms, or a 4.4% increase in real terms—the largest increase for a decade. The shadow Secretary of State spoke at some length about adult social care, and this Government are steadfast in our commitment to protecting the millions of people who rely upon those essential services. That is why we propose to inject an additional £1 billion of new funding into the social care grant, with £150 million used to equalise the distributional impact of the adult social care precept, and continue the £410 million of the previous year’s allocations. Overall, that means that local authorities will have access to £6 billion across adult and children’s social care next year. However, our commitment to boosting social care and investment spans much further than just that one-year settlement, which is why we pledged to maintain the £1 billion of new funding to the social care grant for the duration of this Parliament, enabling local authorities to continue with long-term planning and driving improvements in the essential core services.
It was deeply irresponsible for the shadow Secretary of State to scaremonger about the figures from the LGA. He knows that those figures are at best an estimate and that they are based on old formulas, including the old area cost adjustment, which we are changing. If we thought it worked, we would not be doing the fairer funding review, so he should think on before he scares some of the most vulnerable people in society with stories about cuts and figures that are not based on the true formula.
The shadow Secretary of State claims to be a great champion of local government, so I will give him the opportunity to intervene on me in a moment. I wonder whether he can recall what he was doing on the evening of 10 February 2016—would he like to intervene? He cannot remember. I can remember. I was in the Aye Lobby with my colleagues, voting for the social care precept, enabling local councils to prioritise social care. He was in the No Lobby, voting against more money going to councils to finance social care. That one measure alone has raised an estimated £7 billion for adult social care since it was introduced. Perhaps when he is lecturing Government Members about support for adult social care, he should recall what he was doing when local authorities and the vulnerable in society needed him; he was pursuing narrow, party political lines and voting against the social care precept.
Andrew Gwynne
If we are throwing accusations about, perhaps the Minister can tell me what the social care funding gap in Tameside Metropolitan Borough Council is this year, and how much the social care levy raises.
Jake Berry
I am not throwing accusations around. I suggest the hon. Gentleman checks Hansard because whatever the funding gap may be, it would have been much bigger if he and his colleagues had got their way. He voted against more funding for social care, and I suggest he remembers that when he is giving out the lectures.
In addition to helping councils address the complexity around the delivery of social care, I recognise that councils in rural communities face some unique challenges. The services they provide are often delivered over a long distance, to disparate communities. That is why we are proposing to continue the rural services delivery grant at £81 million—the highest ever to date. This funding will continue to support residents in rural counties— including Labour-controlled Cumbria, which is a beneficiary of it and which I am sure welcomes the funding, given the challenges it faces around rurality—and people who live far from local services so rely on them being delivered by their council.
We have consulted widely on negative revenue support grant, and have concluded that eliminating negative RSG through business rates income, at a cost of £152.9 million, is the right thing to do. This will deliver on the Government’s long-term commitment to the principle of sustainable growth incentives in the funding settlement.
The new homes bonus is a very important part of how we fund local councils. It rewards councils that do the right thing by building new houses to help tackle our housing crisis. We want to ensure that they continue to be incentivised, which is why we will provide £907 million of new homes bonus allocations this year.
Council tax for the average dwelling went up by 112% under the last Labour Government. That’s right—Labour doubled people’s local council tax. Of course, in Wales they have managed to triple it, but they only doubled it here in England. That is why this Government have made a commitment to give local residents the final say on excessive council tax increases. We are determined, in a way that no Labour Government ever were, to protect the interests of hard-working taxpayers while granting local authorities the flexibility they need to raise resources to meet their needs. For this reason, we propose to continue with the council tax referendum limits.
Jake Berry
If we double the council tax that is paid by local people, then I will start to take lectures from the hon. Gentleman about what we should do. He should remember his own record. He entered Parliament in 2005 and was here when all this was happening; perhaps he would like to recall that.
Taken as a whole, this protection will mean that we see the lowest average council tax rise since 2016, ensuring that taxpayers continue to receive the breadth and quality of services that they enjoy today without, as they had under former Labour Administrations, the imposition of crippling tax hikes and rocketing monthly bills.
As we look towards future settlements, the Government intend to conduct a full multi-year spending review. We are already putting more money in this year, but the spending review will give us the opportunity once again to look at pressures in the round and provide councils with the certainty they need. We have committed to a fundamental review of business rates. As part of that work, we will need to consider carefully the link between the review and retention by local councils. We will of course continue to discuss that and the future direction with our partners in local authorities.
Everyone in this House wants to refresh the way we allocate funding, so that it reflects the most up-to-date needs and resources of local areas. That is key work to achieve the agenda set out by the Prime Minister, because dealing with local government finance is part of levelling up our entire country. We have made good progress with the review of relative needs and resources—or the fair funding review, as it is known—and I want to take this opportunity to thank Members on both sides of the House, some of whom have made constructive contributions to the process. The direction of the review has been welcomed by many, including many in local government, but now we have to deliver a sustainable approach, and we look forward to continuing to work with the whole sector.
The review is a large and complex project. Expectations are high on all sides, which is why we are committed to sharing emerging results with local government as soon as possible. We plan to share significant elements for technical discussions in the coming weeks and months. That will include formulas in the review that represent a majority of local government spending. However, I should remind Members that needs formulas represent only a small aspect of the review. As the LGA pointed out, it is simply not possible to predict the overall outcome for individual local authorities or groups of authorities and therefore the extent to which funding may move between authorities. Of course, we will need to consider the review in the context of the outcome of the planned spending review. We look forward to working with colleagues and sharing those results with the sector and the House shortly. I also look forward to updating the House once we have finalised proposals for our new and exciting settlement for local government. Finally—
Jake Berry
I have more—I can keep going.
I welcome the subject of today’s debate, because it gives us an opportunity to look at the exciting programme that this Government have for devolution, levelling up and supporting our towns. However, it would be remiss of any Member not to take this opportunity to thank everyone who works in local government. I often feel that being a councillor is a thankless task, and I want to ensure that they hear a clear message from this House today that, on a cross-party basis, we thank them and support them in their work. Of course, councils are not just run by locally elected politicians. They have fantastic officers who support the work of the council and local communities. [Interruption.] While the Labour party seems to think it is funny that I want to thank people who work in local authorities for their work, Conservative Members think that it is important to do so.
Jake Berry
I will not; I am concluding.
Let me finish by thanking our councillors and our officers, as well as the Opposition for calling this important debate and giving us an opportunity to discuss the Government’s exciting agenda.
Several hon. Members rose—
Mr Jones
I will give way in a minute.
They don’t, because, for example, in County Durham over 50% of our properties are in band A, so, no matter how much we put up the council tax, we will not—unlike more affluent areas, with larger numbers of Ds, Cs and even Gs in some cases—be able to bridge the gap that has resulted from the withdrawal of core funding.
Mr Jones
Yes, but I have to say that in the hon. Gentleman’s area, North Yorkshire, the ability to raise council taxes is a lot better than in County Durham and others. I am not talking about a metropolitan council; I am talking about County Durham. In Surrey—Woking—and other areas in the south, the core spending has not been reduced at all. So the hon. Gentleman should be shouting from the rooftops about the unfairness of the current formula.
The other issue—
Mr Jones
I will give way in a minute; I know the Minister gets very excited when I make speeches.
The other issue is the ability of local councils to raise finance through, for example, the distribution of business rates. To be fair to County Durham, it is trying some ambitious plans for economic development to get business rates up, but Durham’s ability to raise extra funding through business activity is not at all comparable with that of, for example, the City of Westminster.
Jake Berry
I just wonder if I could recommend to the right hon. Gentleman’s reading the Government’s December 2018 fairer funding review consultation, in which we specifically deal with the point he has raised about differing council tax bases. So it is not correct to say that this is not dealt with in the fairer funding review. The relevant paragraph is 3.2.2 on page 50 of the December 2018 consultation document.
Mr Jones
The Minister says that, but then he actually has a situation such as the following one, based on the funding figures put out at the moment—I accept we have not had the final decision. Under the formula for public health funding—and I supported public health funding going back to local councils—County Durham was forecast to lose £19 million, or 35% of its budget, whereas Surrey will increase its budget by £14 million. I am sorry, but that just cannot be right when comparing the two areas in terms of deprivation and health needs. The Minister may say what he likes, but in the past 10 years that has been the direction of travel. If he levels it up and changes it suddenly as Northern Powerhouse Minister, he will have my 100% support, but I doubt whether he will be able to do that. The promises that he and others have made to northern councils are going to be very limited.
On the point about need, there are two areas with which all local councils have been struggling—adult social care and looked-after children. Again, to work on the basis that need for all councils in those areas is the same is to start from the wrong premise. For example, since 2010 demand for children’s social care has increased by £7.2 billion but central Government support has halved. That has pushed demand on to local councils, which have had to make very difficult decisions. As my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) said, these services are not optional—they must be provided, by law. If we look at the national figures, in 2010, 54 children per 10,000 of population were in social care. By 2019, that had risen to 65—an increase of 20%. If we look at the figures for the north-east, the figure is 101 children in care per 10,000 of population. In the south-east of England, the figure is 53, and in Surrey there are only 37 children in care per 10,000 of population.
The demand on councils such as County Durham and others in the north-east, and in other urban areas, is far greater than it is on Surrey. Demand for statutory services, which councils have to provide, is going up and they are very costly. At the same time, core funding from the Government is being taken away from some areas and redistributed to areas such as Surrey, which is not just flatlining but receiving an increase in funding. I am sorry, but that just cannot be fair.
I said at the start of my speech that the direction of travel has been pork barrel politics of the worst type, doling out money to people who vote Conservative in certain parts of the country. The problem for the Conservative party is that the pork barrel has got bigger. The big test will be whether the Government can actually spread that around the country and meet all the pledges they have made. I doubt whether they can, because this has not just happened in local government funding. On fire and police, the direction of travel has not just been cuts, but moving revenue collection to local taxpayers. For example, the Government announced an increase in the amount of money going into policing, but that has been moved on to local taxpayers. Councils like Durham County Council are less able, because of their council tax base, to raise that type of financing.
I do not like using the phrase “fairer funding formula review”, because I do not think it is that at all. I doubt whether the new system will be, either. A lot of promises have been made and we shall have to wait and see whether they will actually be met. I will work with anyone to ensure that County Durham gets a fair hearing. I am sad that my new Conservative colleagues are not here today to join me in demanding fairer funding for County Durham, but I will certainly press the case for County Durham to receive the fair funding deal it wants.
I will end with a point raised by the Minister. I came from local government. I was a councillor for 11 years. I respect, and am very grateful for, the work done by councillors of all parties. They are remunerated at a very low level for the amount of work they do. However, I find it a bit difficult to take it from this Government, who have demonised certain people in local government over the past few years and used them as scapegoats for decisions that have been taken—[Interruption.] The Minister says codswallop, but I remember—as I am sure we will witness again in the next few weeks in the local government elections—the Government using the issue of pay and so on in local government to argue that local councils were being profligate. Those are diversionary tactics to remove attention from the core issue, which is that the Government have decimated local government over the past 10 years. We shall wait and see happens in the review, but I shall continue to make the case to ensure that the people of County Durham get the funding and services they require from what is a very good council, and to ensure that the Government have a formula funding that is not only fair but equal across the country, and recognises need.
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Luke Hall)
I want to start by thanking all Members who have contributed to the debate. It has been a lively and, at times, fiery debate, but certainly a constructive one, and we had some genuinely important issues to discuss.
I would like to congratulate all Members who made their maiden speeches today. The hon. Member for Jarrow (Kate Osborne) gave a passionate speech about the industrial heritage and history of her community and the inspiration that Ellen Wilkinson provided. I congratulate her on what she said about fighting for the principles she believes in and for health services, children’s services and workers’ rights. From her maiden speech, her constituents will be assured that she will be a passionate and doughty champion for them in this House.
My hon. Friend the Member for North Norfolk (Duncan Baker) talked about his 14,000 majority, which I am sure all of us are jealous of. He started his speech by explaining that it would be a love letter to North Norfolk, and it certainly was. He talked passionately about his work on both the town council and the district council. He mentioned that he was nicknamed “a young Norman” during the campaign; I am sure that that will follow him in the House. He talked passionately about his late stepfather, who built up a business and was an inspiration to him. I am sure that everyone who heard his speech agrees that his stepfather would be proud of him.
My hon. Friend the Member for Keighley (Robbie Moore) talked about the beautiful rural and urban landscapes in his constituency and the unanimous support in the House for the Timothy Taylor’s beer produced there. He talked about how local government must be representative. From his speech, we will all be reassured of the excellent representation he will provide in this House as a Member of Parliament, and I know that he will succeed in putting Keighley and Ilkley on the map.
My hon. Friend the Member for Orpington (Mr Bacon) talked passionately about his predecessors and the big shoes that he had to fill. He was right to pay tribute to Jo Johnson, a hard-working local MP, and to mention his belief that his constituency is the best place to live in the country, although I am sure that there will be 649 other opinions on that. He also talked about the importance of the fair funding review. I am sure that we will come on to talk about that, but I know that we will all benefit from his 22 years of local government experience, and we are grateful for his contribution this afternoon.
Local government has a unique and far-reaching role to play in our communities. It delivers services that we rely on day in, day out, and debates on the funding of the sector and the challenges and opportunities ahead for it are some of the most important that we have in the House. We will provide the funding for social care, education, transport, housing, health and local growth to flourish, and that is why core spending power for local government will increase from £46.2 billion to £49.1 billion in 2020-21—a 4.4% real-terms increase across the sector.
A number of Members talked about the pressures facing adult and children’s social care. My hon. Friend the Member for Mid Dorset and North Poole (Michael Tomlinson) gave an important speech about the pressure on social care in his constituency and the unique challenges faced by parts of the country with high levels of internal migration. The Chairman of the Housing, Communities and Local Government Committee, the hon. Member for Sheffield South East (Mr Betts), was right to talk about the importance of cross-party discussions on this matter getting under way and how the work that he and the Committee have done on ways to make progress could be an example for talks. The right hon. Member for North Durham (Mr Jones) talked about the pressure on social care, and my hon. Friend the hon. Member for Thirsk and Malton (Kevin Hollinrake) highlighted the importance of cross-party work and support.
It is absolutely true that councils face pressures on adult and children’s care services—that is something we are hearing from the sector and from councils across the country. This settlement, when it is put before the House, will address that. We have given almost £6 billion of dedicated funding across social care. That includes the extra £1 billion grant for adult and children’s social care, on top of the continuation of existing social care grants worth £2.5 billion.
It is not just about the grant funding that we have provided. Councils are paying for their services through locally raised revenue. That is why we have proposed a 2% adult social care precept, which will enable councils to raise a further £500 million for social care. That will help local authorities to meet rising demand and recognises the vital role that social care plays in supporting the most vulnerable adults and children in our society.
I will touch on the fair funding review in a minute, but it is worth saying that, as part of the initial consultation, we have developed a new formula for children and young people’s services that uses world-leading research and up-to-date data from a strong evidence base for assessing relative needs and then distributing the funding accordingly.
As part of the injection of £14 billion into primary and secondary schools over the next three years, a package of £700 million was provided for supporting children with special educational needs and disabilities. One of the best ways to improve outcomes for children is to remove the need for them to enter the care sector in the first place. That is why we have committed to a further year of the troubled families programme in 2020-21. In addition to the resource injection in social care through the settlement, the NHS’s contribution to the better care fund—the purpose of which is to increase health and social care integration—will increase by 3.4% in real terms, in line with the additional investment in the national health service in 2020-21. However, we of course want to think about the long term, and that is why we are committed to fixing the crisis in social care once and for all to give people the dignity and security they deserve. We will seek to reach across the Floor and build cross-party consensus to ensure that we do have a long-term solution.
One of the other main themes of this debate has been the fair funding review. We heard from the hon. Member for Luton South (Rachel Hopkins), from my hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill) about his long experience in local government and the importance of simplifying the formula, and from my hon. Friend the Member for Ruislip, Northwood and Pinner (David Simmonds) about delivering the formula. I think we should be clear that the sector has asked us for a simpler, up-to-date, evidence-based funding formula, and that is what we are going to deliver.
The figures we have heard this afternoon are pure speculation. They use out-of-date cost adjusters and out-of-date population data, and they are pure speculation. It is worth saying that this should be a completely evidence-based review. It is being developed hand in hand with leading academics; it is not a simplistic exercise. I understand why hon. Members have raised it today, but this is not about north versus south, rural versus urban or Labour versus Conservative. It is about developing a needs-based formula that takes into account deprivation, rurality and other cost drivers; that is weighted appropriately and adjusted for the costs of delivering services in different areas; that is balanced with the resources available to different authorities to fund those services; and, of course, that is considered against any transitional arrangements the Government may wish to make. It is simply not possible to predict the overall outcome for individual authorities or groups of authorities based on one or couple of these formulas.
Ultimately, this review should be a collective endeavour with our colleagues in local government, and it is underpinned by real analytical rigour. Very soon, in the next few weeks—we hope to do so by the end of this month—we will share the emerging results with the sector, and we will go to full consultation in the spring. I will keep Opposition Front Benchers fully informed about the progress of that. It is hugely important that we deliver this cross-party to make sure that it works for all of the communities that we represent in this House.
A number of colleagues spoke about the importance of delivering for rural communities. Again, we heard from my hon. Friend the Member for Mid Dorset and North Poole about the pressures on his areas. It is important to note that we will maintain the rural services delivery grant at its highest ever level of £81 million in the coming year. It will be distributed using the same methodology as last year, which distributes funding to the top quartile of local authorities on the super-sparsity indicator.
This will form part of the fair funding review, which will include factors such as rurality and sparsity, but also the other geographical factors that affect the cost of delivering services across the country, and it will take account of them in a robust manner. In the December 2018 consultation, we set out the initial proposed approach to the area cost adjustment, which will include the adjustment for additional service costs associated with sparsity, isolation or market size. For example, if an authority has longer journey times from service points to households, they will have to pay their staff for more hours in order to deliver the equivalent level of service. That will be reflected in the review.
The hon. Member for West Ham (Ms Brown) raised the importance of tackling homelessness last week, and she did so again today with passion and vigour. I have met the Mayor of Newham to discuss funding, and I would be very happy to visit Newham with her and the Mayor to look at this issue and talk about it in greater depth.
A number of colleagues raised the importance of policing and the work we are doing to tackle this issue. This is a clear priority for this Government: 20,000 more police officers on the streets, with 6,000 in the coming year. It is also why we have launched the £25 million safer streets fund, which will support areas disproportionately affected by crimes such as burglary and theft to implement well-evidenced measures tackling security, street lighting and other issues that affect their communities.
This is a settlement that injects significant new resources into protecting the most vulnerable adults and children in our care. It maintains grant funding and increases core funding in line with inflation, and it does all of this while protecting council tax payers from excessive increases that they neither want nor often can afford.
It is clear that everybody across this House wants to see local government not just properly funded, but able to adapt, innovate and improve the services it provides for residents for generations to come. Through the reforms that we have outlined this afternoon, that is exactly what we will deliver: a 4.4% real-terms increase across the sector; an extra £1 billion for social care; over £900 million for new homes bonus allocations; and the highest ever rural services delivery grant, at £81 million.
I look forward to further discussing these issues when we meet in this place next week to debate the most comprehensive and generous settlement for a decade.
Question put (Standing Order No. 31(2)), That the original words stand part of the Question.