Housing, Communities and Local Government: Departmental Spending
(4 years, 5 months ago)
Commons ChamberRead Hansard Text Read Debate Ministerial Extracts
Madam Deputy Speaker (Dame Rosie Winterton)
Before I call Clive Betts, I give notice that, again, there is time pressure on the debate, so I am likely to introduce an immediate three-minute time limit because we must finish by 5 pm.
Mr Clive Betts (Sheffield South East) (Lab)
First, I will look at the covid crisis and how local government has responded to it. I think I speak for every Member of this House when I say that local councils, collectively across the piece, whatever their party, have responded magnificently. We do things virtually these days, so perhaps a virtual round of applause for local councils from Parliament would not go amiss.
What local councils have done is deliver social care; rehouse rough sleepers; work with the voluntary sector to help vulnerable people; administer the business grants scheme that the Government introduced; get the director of public health working at a local level on testing, tracking and tracing; and, of course, keep essential services, such as refuse collection, up and running for our constituents. They have done all that against the background of austerity. Local councils have had bigger cuts to their funding than any other part of the public sector in the past 10 years. The National Audit Office figures show an 80% cut in grants and an almost 30% cut in spending power over that 10-year period. Of course, the councils in the poorest areas have, by and large, had the largest cuts in grant, because they had the largest grants in the first place.
Despite that situation and despite the fact that they have had to try to prioritise social care spending for both adults and children, councils have kept services going. When we look at some of the cuts that they have had to make in other services, we see that it was nearly 50% on housing services, 50% on health and safety, and 20% in five years in real terms in public health grants. Those services—housing, health and safety and public health—are exactly the sorts of services that have been required to deliver in response to covid. None the less, they have stepped up to the mark and done extremely well.
What have the Government done in response? I think that we have had a change of language from Ministers, which is a bit concerning. On 16 March, the Secretary of State said that the Government would do whatever was necessary to support these efforts—very similar words to the ones that were used in relation to the health service.
Lilian Greenwood
I will be very brief. Did my hon. Friend share my sense of déjà vu when councils were promised “whatever funding is needed”? Nottingham City spent £8 million on fire safety improvement post-Grenfell and it did not receive a single penny from central Government, despite exactly the same sort of comments being made at the time.
Mr Betts
That leads into another area. The Select Committee has just produced a report about cladding and other such issues. We have challenged the Government to produce funding through that report, so I am sure that we will take up that issue as well.
The change came when the Secretary of State appeared before the Select Committee. Suddenly, he was saying that they had asked councils to do things, but that they would be fully compensated for the things that they had been asked to do. Then there was a very general list. The Public Accounts Committee and the Select Committee, as well as the Local Government Association, have been trying to get more information on that. There is still a lack of clarity about precisely what will be funded. That is important, and quite different from the national health service, which seems to be given, rightly, “everything that it takes”—the commitment given to local councils.
We have had tranches of money—£2.16 billion then £500 million—given to councils to cover both extra costs and lost revenue, which is just as important for many councils as the extra costs they have incurred. However, the LGA is saying that by the end of June, according to the returns that went to the Ministry, the costs were £4.8 billion against the £3.7 billion received—a gap of £1 billion. The Government said they would give some help with lost income by compensating councils for 75% of the amount after the first 5% of losses, which is welcome, and somehow apportioning the lost revenue from council tax and business rates. There are two questions to ask about this. The Government have already included loss of income in the £3.7 billion compensation, so will the commitment to cover 75% be reduced? I see the Minister shaking his head; it would help if that was explained very clearly indeed.
Matt Rodda (Reading East) (Lab)
Will my hon. Friend give way on that point?
Mr Betts
Normally I would give way, but Madam Deputy Speaker is looking askance at me, so I think I had better move on.
The second question is can the Government not bring forward a bit sooner the apportionment of losses from council tax and business rates? Waiting until the spending review introduces an extra element of uncertainty.
I have another question about compensation for losses in the leisure sector. Many authorities—about 60, I think—of all political persuasions do not provide leisure services directly; instead, they provide them through arm’s length arrangements. Sheffield does it through Sheffield International Venues and has some magnificent facilities, including Sheffield Arena and Ponds Forge, which is an international-class swimming pool, and lots of community facilities. What we need is an assurance that income losses for councils in that situation will be treated the same as income losses for councils that provide the services directly. That is an important point for many councils up and down the country.
It still feels like local government is on a life support machine, waiting for the next bit of revenue to trickle down from the next ministerial statement, rather than having the certainty that they need to plan. Many councils are now looking at making cuts and emergency budgets and talking openly about section 114 notices. Yes, okay, the Ministry has said, “Come and see us before you issue a 114 notice,” but that is too late. We do not want councils to reach the point where they are thinking about a 114 and planning for it. We want them to have the certainty of getting funding so they are not driven into that position.
This is not just about funding for this year; it is about funding for next year as well. Many councils, including Sheffield Council, have reserves to see them through this year, but using them will just postpone the problem to next year. Also, many councils had plans for efficiency savings, which have been put on hold as managerial expertise is put into dealing with the current crisis. Efficiency measures that have had to be put to one side for the time being are another loss for councils that needs to be recognised properly.
Let us have more certainty that all the costs that local authorities incur in covid-related matters will be covered by the Government. Let us have another discussion with the LGA and consider whether it is fair that councils should have to stand even 25% of income losses. Let us have an assurance that arm’s length arrangements for leisure will be covered. Let us bring forward the commitment on council tax and business rates to before the spending review. Let us not get to the point of discussions about section 114 notices by providing certainty of funding.
Finally, there is the future. What local authorities need is a proper long-term sustainable financial settlement.
The covid crisis offers a watershed, a turning point, an opportunity to change things, but I want to put down five markers for the Government, drawing on the Select Committee’s report in 2019. First, we want at least a multi-year settlement, to give that certainty. The last four-year settlement was welcome. I understand why it has not been repeated in the current crisis, but it is certainly needed.
Secondly, we need a recognition that local authorities need a significant real-terms increase in their funding. The Local Government Association’s calculation of an £8 billion gap, even before covid came along, has to be recognised. Thirdly, if we really are to end austerity, it is not just about funding local councils so they do not have to make more cuts; it is about giving them the money to restore many of the essential services they have had to cut.
Fourthly, we have to devolve to councils the power not merely to spend but to raise resources in the first place. If we do that, however, we must recognise that some councils are less able to raise resources than others, so if we devolve more spending arrangements to councils, we will need a fall-back position—a central fund for councils to deal with the equalisation problem.
Finally, let us have a proper, cross-party, long-term funding agreement for social care. The two Select Committees proposed a solution with a social care premium three years ago. Let us reactivate that. Giving councils that direct source of funding for social care will also release funding for other essential services. I say to the Minister: think of MPs here today arguing for extra funding as allies in the battle with the Treasury to get the money that councils need to fight the covid crisis, but to fight it in a way that does not produce extra cuts to essential council services already devastated by 10 years of austerity.
Madam Deputy Speaker (Dame Rosie Winterton)
We will start with a time limit of four minutes.
Jack Brereton (Stoke-on-Trent South) (Con)
I echo many of the comments made by the hon. Member for Sheffield South East (Mr Betts): local government has done remarkable work to help our communities get through coronavirus, and I am thankful for the emergency financial support provided to local councils by the Department. Stoke-on-Trent has received more than £16 million as part of this, and it is very welcome. Under the Conservative leadership of Councillor Abi Brown, the council has managed its finances very well—I know other areas of the country have not had such responsible leadership—but we will still have costs locally that are not fully met by this emergency funding, and I am concerned about the implications of what might be required to meet these in-year pressures.
This is especially significant in areas such as Stoke-on-Trent that have higher levels of multiple deprivation and need. I know the Minister fully recognises these challenges and is well attuned to the further support necessary. Stoke-on-Trent is the 12th highest local authority in terms of the proportion of neighbourhoods in the most deprived 10%. The council tax base is indeed very low—the second lowest in the country, next to Hull—and while, in one sense, lower house prices can be an opportunity, they are a massive barrier when it comes to the viability of development and the ability to generate revenues locally.
It is crucial that the Government’s agenda for business rates retention also be maintained. There are challenges in the city with the rising need for social care and children’s services. While improving, children’s services in Stoke-on-Trent are still inadequate. Initiatives to allow for nationally led financing reform are ever more needed. I know the Government are aware of that, and I hope we can find sensible and long-lasting solutions.
Stoke-on-Trent City Council and VAST, working with local voluntary organisations, quickly set up the Stoke-on-Trent covid support network. I have seen amazing work being done by organisations such as Bethel church in Longton and Temple Street Methodist church in Fenton. I again thank all our local volunteers and council officers for their work. Be it voluntary organisations or local businesses, many have been impacted. Bethel church, for example, receives much of its income from its charity shop on the Strand in Longton, which of course has had to close. The £10,000 grant it received has been a huge relief, as it has been for many. As I said yesterday in the debate on the economy, businesses in Stoke-on-Trent South are extremely grateful for the support put in place by the Government.
I would ask the Government, however, to look further at sectors such as ceramics, where many producers are dependent on retail and hospitality. After years of being left behind, cities such as Stoke-on-Trent are excited that the Government are committed to levelling up, and great strides are being made to demonstrate that the city council is a good and wise spender of funding awarded. The huge success of Ceramic Valley enterprise zone is an excellent example of this. However, as the Secretary of State and Ministers well know, we were incredibly disappointed not to have received funding following our future high streets fund bid or our proposal for a towns deal. Other areas have been lucky, securing multiple pots, but our high streets have been especially hard hit by coronavirus, and many were in a bad state already.
I am thankful that many local businesses are reopening, but it is essential for the communities I represent in Fenton, Longton and Mere that our high streets are supported to evolve and survive. Things must change, and more empty units must be converted into alternative commercial or residential uses. Viability in particular disincentivises local investment in many towns in the midlands and the north. A scheme to match fund conversions and building improvements would help to remove some of the barriers, but this is not just about money, but about the reform of planning laws and making it easier for conversions to happen in towns like Longton and Fenton.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
It comes to something when the Chair of the Public Accounts Committee joins forces with my hon. Friend the Member for Sheffield South East (Mr Betts), the Chair of the Housing, Communities and Local Government Committee, to ask for more money. It is perhaps not a surprise that his Committee would do that, but it is not something that the Public Accounts Committee does.
However, I echo everything my hon. Friend said and, given the time, will not repeat it, but we know that local government is actually very efficient at spending money, so I reiterate what he said to the Minister about being on his side on this. We have seen the Treasury first offer all the money, and then massively backtrack, so we have been playing this game of chase with the permanent secretary to get information about exactly and precisely which elements of spending will be refunded as a result of covid-19. I urge the Minister to look at the information that has been sent both jointly and separately to the two Committees and at what his permanent secretary has said to see whether he can push things a bit faster. We will be behind him in getting that detail from the Treasury, because we are very much on the same side on this.
In my role as Chair of the Public Accounts Committee, we often look at where money is supposedly saved and efficiencies made, but the cost is often actually shunted to another part of the public sector. There is no more accurate description of that than when money is taken out of local government, because that shoves the cost somewhere else. If local government is doing its job properly and doing it well, that will often prevent further expenditure down the line by preventing problems that cost society, communities and the taxpayer a lot in the long term.
We know, given the current climate, that there is no long-term certainty over funding, as my hon. Friend the Member for Sheffield South East said, and there is a gap of £1 billion on covid spending alone. There is real pressure right now. Budgets are being looked at and decisions are being made. A long time ago—25 years ago—I was a councillor making these very decisions about spending, and we would be looking now at cuts for the following year. That was under a Government of the same party as the Minister, albeit a long time ago, so I will forgive him that if he can get the money from the Treasury now. The concern is that such decisions will be irreversible.
We are also seeing challenges to commercial funding, with Luton Borough Council being a bad of example of a lot of money suddenly draining from a council budget because of Government policies that encouraged it to borrow more. The Public Accounts Committee has been looking at that and will be issuing a report next week. We have also seen new laws creating new burdens on local government. I have been quite vocal in my concerns about the Business and Planning Bill, which frees up licensing so much that it will cost councils a lot of money both to manage the licences and manage the resulting antisocial behaviour, and it will cause problems for the police. Those budgets will be stretched on top of this gap in funding, which represents a 40% cut over the past decade for my council.
Local government is on the ground, it knows its communities, and it has been effective at delivery. It has been a crucial partner in delivering on covid responses, and yet councils are not getting the funding. Some estimates suggest that eight out of 10 councils have been looking at section 114 notices, and we know that several councils are technically bankrupt now. We need a clear answer from the Minister today. This is an estimates day debate, not just a general debate, and we are looking at the budget and we want clear answers. We campaigned to get this discussion so that we could get answers in this way.
We want to know about the timing of any financial settlement, but I appreciate that the Minister may not be able to announce the spending review. We need to know the split of funding on the issues that my hon. Friend has already raised and where there will be a shortfall on certain types of income, particularly around council tax. We need to know what the Government are planning for the loss of commercial income, because that can be devastating for some councils.
I add, in my final few seconds, that the £1 billion to remediate cladding will be nowhere near enough, and we need clarity for the many homeowners in really difficult situations as to how they will be supported to live their lives and how councils will be supported to fund that.
Chris Loder (West Dorset) (Con)
I welcome the support from the Ministry for Housing, Communities and Local Government, a Department that has really come into its own for diligent evangelism during the pandemic. I pay tribute in particular to the Minister for his angelic support over this time, which for many of us has been very difficult. He will know that full well, and I am very grateful for his support helping with crematorium chapels.
The work of local government in Dorset has shown its true value during the pandemic, and I want to take this opportunity to ensure that Dorset is properly recognised and that the Government ensure that Dorset has its fair share of funding and investment, which has not always been the case.
I start by paying tribute to Dorset Council. Under the leadership of Councillor Spencer Flower and chief executive Matthew Prosser, Dorset Council has distributed thousands of grants totalling well over £100 million, which has been hugely supportive to our community. Prior to coronavirus, Dorset Council’s budget performance was sound. MHCLG must ensure that the council is properly reimbursed for the costs of responding to the pandemic, but we also need to grasp the issues surrounding the escalating costs from things such as social care, which are not going away. The response to coronavirus is forecast to cause a budget gap of some £60 million this financial year for Dorset Council. As I have said, rural Dorset does not receive its fair share, nor has it done for some time. We need to make sure that sensible and diligent financial management is not used as an excuse to say that Dorset does not need support.
Equally, we have very proactive town councils in West Dorset, and I pay particular tribute to our mayors, town councillors and town clerks. Town councils come in all shapes and sizes, and I urge the Minister to ensure that our town councils hit hardest by coronavirus receive the financial support that they need, such as Lyme Regis. It has a permanent population of just under 3,800, but that jumps to 20,000 in a typical summer season. Lyme Regis Town Council provides extensive amenities for holidaymakers, and income from commercial and tourism activity is absolutely vital. The council needs additional support to weather the coronavirus storm, and I very much invite the Minister to consider that.
As I mentioned yesterday in the House, my experience of local enterprise partnerships, which are charged with directing investment priorities and stimulating growth, is that they have varying records of capability and success. As I said yesterday to the Economic Secretary to the Treasury, I urge this Minister to work closely with his BEIS colleagues to ensure that LEPs are delivering on their mandate. They are needed now more than ever. If they are not delivering, we need radical reform to ensure that the Government’s agenda is delivered.
Finally, demand for social care has been increasing for years. Local authorities have too often not seen their budgets grow at a commensurate rate. It is my sincere hope that we may soon see an integrated system of health and social care, but I also think that the pandemic has demonstrated how we the public care for others in the community, just as we did in times past. Grassroots initiatives are flexible, kind and neighbourly, and we need to embrace them for the future. It is my hope that the importance of local government will be fully recognised by the Minister, and I very much hope he will support Dorset going forward.
Olivia Blake (Sheffield, Hallam) (Lab)
I congratulate my hon. Friend the Member for Sheffield South East (Mr Betts) on securing this debate today. I also congratulate him on his joint work with my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier) on the Public Accounts Committee, of which I am a member. I want to focus today on the private rental sector, but before I do, I would like to urge the Government to ensure that the support they are providing to local authorities is sensitive both to the social and regional inequalities that exist. Throughout the public health crisis, we have seen that, far from the virus being a great leveller, it has disproportionately impacted those with lower incomes, those experiencing insecure working conditions and, of course, those from black, Asian and ethnic minority communities, as the Public Health England report has confirmed. The formulae for allocating covid funds should be weighted to deprivation factors, reflecting the different needs of the populations served by councils. We know that housing and health are intrinsically linked, which is why I want to talk about housing today.
Members of the House will be aware of the Shelter poll published this week, and the shocking figures that it contains. The number of respondents who usually report being in arrears has doubled, and estimations based on the polling mean that roughly 220,000 people across the country are facing possible eviction. It is easy to see this as a consequence of the pandemic alone, but that would be short-sighted, because we have not discussed the whole picture. In November last year, Shelter briefed that the average percentage of income taken up by private renting was 41%. That is, 41% of those people’s income is going purely to pay the rent. The New Economics Foundation has said that 1.2 million of the 5.6 million people at risk of losing their jobs live in private rented accommodation.
We can see the increased vulnerability of private renters in this week’s polling from Shelter. A breakdown of those figures shows that people in blue-collar jobs are twice as likely to report being in rent arrears. Also, thanks to movements such as Black Lives Matter, we have been talking about the racial injustice of the pandemic, and housing and private renting are not immune to this. BAME people are twice as likely to face rent arrears as other renters. Importantly, I have seen a breakdown of Shelter’s figures that suggests that those who have been furloughed are also more likely to experience problems. A 20% salary reduction will of course lead to the choice between eating and paying the rent.
We clearly have a structural problem where wages are too low and rents are too high, and covid-19 has made that situation even worse. I realise that it is not the role of MHCLG, as a budget-setter, to raise wages, although I would say that many Labour councils, including Sheffield City Council, have implemented real living wages. Perhaps that is something the Ministry could look at funding. Whatever the limitations on the Ministry’s ability to raise wages, however, there are solutions that can come from action taken. It can do something about the cost of rents. We know that 63% of renters have no savings; in fact, many have debts. One of the reasons that rents are so high is high demand. People cannot afford to get on the housing ladder. We need more affordable housing, and local councils need the funds to be able to deliver that and the powers to hold developers to account. Coronavirus has exposed how precarious the housing situation is for so many people, but to build back better, we must provide proper funding for social housing and take action on housing crisis.
Madam Deputy Speaker (Dame Eleanor Laing)
I am afraid that I have to reduce the time limit to three minutes in order to give everyone a chance to speak.
Paul Holmes (Eastleigh) (Con)
I congratulate the hon. Member for Sheffield South East (Mr Betts), my colleague on the Select Committee, on securing this debate. I want to echo his sentiments by acknowledging how hard the local government staff in my constituency and around the country have worked during the coronavirus. I want to talk briefly about two things. The first is the effect that this extra funding over the past few months has had on Eastleigh Borough Council in my constituency. Secondly, and more importantly to me, I want to talk about the dangerous clot that is rumbling in the local government funding situation and that is coming down the line, particularly because of the abuse of the leadership of my local authority in borrowing for commercial property rents.
I welcome, of course, the somewhat inevitable fact that the local government resource departmental expenditure limit has increased by 226% in the past year, and that spending power generally has gone up among local authorities. In Eastleigh, we have seen a total package over the last month of around £42.25 million, which I must say is very welcome for helping out my constituents. It is also welcome that so far the Government have announced more than £27 billion-worth of support for local authorities. It has made all the difference.
More important to me is the situation faced by my constituents in Eastleigh: the reckless decisions of the Lib Dem administration in Eastleigh and its lack of good governance compared with that shown by MHCLG Ministers. Over the past 10 years, the Liberal Democrat administration has decided to build a property portfolio that places the future viability of the local authority at risk, and proposes that it would eventually have to come to the Government for support.
To give some context, the annual budget of Eastleigh Borough Council is £31 million, but the council has borrowed more than £494 million to fund reckless spending decisions on commercial properties. The council owns the Ageas Bowl, where a really good cricket match is currently going on; the Hilton hotel; Travelodges; industrial sites; and offices. The chief executive has himself admitted that if the economic downturn continues, commercial rents will place the council in an invidious position.
The Institute for Fiscal Studies lists Eastleigh as vulnerable in three areas. First, it is vulnerable in respect of interest and investment income as a proportion of revenue expenditure and the potential risks of commercial property income. At the behest of the council’s leaders, every constituent of mine in Eastleigh currently has a debt of £4,500, equivalent to the amount that the council has in debt.
Eventually, the council will come to the Government to be bailed out. That is why I welcome the Government’s decision in respect of the Public Works Loan Board, but there will be a situation wherein councils—Eastleigh being one of them—will have to come to the Government to be bailed out, and ultimately my constituents will suffer because of services being downgraded. It will also damage their confidence in not only local government but national Government as a whole.
Daisy Cooper (St Albans) (LD)
I pay tribute to the amazing work of councillors and council officials in St Albans City and District Council and Three Rivers District Council. They have worked evenings and weekends and moved heaven and earth to get payments out to businesses; to sort out urgent housing repairs and hardship funds; to sort out the homelessness situation—and much, much more. I also pay tribute to officials at Hertfordshire County Council, especially those in the public health team, as well as those working in schools and adult social care. They have really stepped up to the mark, but the future is by no means certain.
St Albans City and District Council has had a devastating loss of income, largely because it does not receive any revenue support grant, so relies on fees and charges from other services. We have been in receipt of emergency grants from the Government, but they fall a long way short. The Government know the situation with each individual council, because councils are sending in their returns to the Government.
I wish to ask the Government to consider four things urgently. First, they should give councils more flexibility to borrow to fund their revenue budgets, and the Government should help with the repayment of the money in future years.
Secondly, there should be opportunities for cheaper borrowing, including from the Public Works Loan Board. If councils can borrow with lower interest rates, it will help to drive inward investment.
Thirdly, the Government should turbo-charge the business rates review. The Government were due to start to take evidence in March; that has been understandably delayed, but it is now crucial that they get on with the job. The broken business rates system has been breaking our high streets for years and we need to fix it as soon as possible.
Fourthly, on cladding, I echo the comments from the hon. Member for Hackney South and Shoreditch (Meg Hillier). Having served on the Fire Safety Bill Committee, I know as the constituency MP for St Albans that there are homes in my constituency that are not safe. It is all very well for the Government to announce funds to insulate homes and make them warm, but homes need to be warm and safe. We need billions of pounds of investment to make sure that remediation works can happen—and happen soon—and to train up the fire-safety assessors who can certify that homes are indeed safe.
Liberal Democrats believe that people should have control over their own lives and that decisions that affect their lives should be taken as close to them as possible—not by 10 Ministers sitting in a room in Westminster, but by local councillors who live around the corner and who can see with their own eyes the impact that a decision will have on their doorstep. That is why the Government must give councils the certainty, the resources and, crucially, the powers that they need so that decisions about the recovery of our communities are made by our communities.
Andy Carter (Warrington South) (Con)
I am very aware that this is an estimates day debate, and I just want to briefly pick up the point made by my hon. Friend the Member for Eastleigh (Paul Holmes) about borrowing and councils. I only wish we had £400,000-worth of borrowing: we are at £1.4 billion in Warrington, one of the highest levels in the UK. I hope we can come back and debate that further, because it is a real problem for local councils and local council tax payers that we have to address.
I wish to spend some time paying tribute to those in Warrington who have selflessly contributed to the local efforts to defeat covid-19. This is, after all, a debate on communities, and people make communities. It is a tremendously broad group of people who have stepped up and stepped out to help us. I met Paul and Helen from Bewsey at the weekend, who were out shopping for their 83-year-old neighbour: it was the first time they had spent time talking to him, having lived next door for three years. I am incredibly grateful for the work that people are doing in their communities to support one another.
Support workers at Warrington youth club have found new ways to engage with young people online during the lockdown. I also want to mention one particular young lady, an 11-year-old called Macy Owen from Grappenhall, ably assisted by her mum Lindsay and her dad Don, who has used her time off school to make bead rainbows. They have sold them on social media to raise funds to support the staff at Warrington Hospital. I looked just before I coming in to the Chamber and saw that they have now raised more than £7,000 for staff—a fantastic example of doing good in our community.
The message for us to stay at home has meant that we have been able to re-engage with those communities, with our local shops and services, and I thank those who have worked on the high street and those who continue to provide local services through parish and borough councils. MHLCG is at the heart of post-covid recovery. This three-month lockdown has slammed the brakes on economic activity on our high streets, and it is the high street in towns such as Warrington that needs more investment and regeneration than ever before. Reforming the planning regime, which makes it difficult for businesses to change the use of premises quickly, is urgently needed. I know that that is something the Minister and Secretary of State are looking at very closely.
There are also areas that we need to maintain in terms of planning reform. I want to send a special message to the Minister to ensure that we protect the green belt, which is fundamental in places such as Warrington to ensure that urban sprawl does not extend beyond the boundaries of the borough.
The Government, to their credit, have made incredible efforts in Warrington—in excess of £47 million to support local businesses and emergency funding for the local authority. We are incredibly grateful for the work that the Minister, Secretary of State and the team at MHCLG have done.
Matt Western (Warwick and Leamington) (Lab)
I would like to start, as others have, by praising our local authorities rather than burying them, as perhaps the Government would wish. In the last few months, we have seen an extraordinary effort, contrasting very favourably with the work of our national Government. We have seen real professionalism, we have seen them deliver, whether it be business grants or addressing business rates, and we have seen them delivering on the shielding programme as well. But of course, as we have heard, no other Department has faced the same scale of cuts that local authorities have. After 10 years, £15 billion has been cut and now with coronavirus, we are seeing an £11 billion hit to those authorities, but the Government are providing them with only £3.2 billion. Contrast that with what the Government said on 16 March, which was “Whatever it takes, we will stand by you”. That does not seem to be the case, and that is really hurting the authorities.
I commend my local authority Warwick District Council for what it has done. It has been agile, it has been active and it has delivered, and I praise it publicly for what it has done. But the challenges are great in social care, as we have heard; youth services; women’s refuges; and the enforcement that is now required of those authorities in making sure that we meet the challenge of coronavirus.
I want to talk about housing, because there is no greater priority. We know that there is a huge amount of homelessness in the UK. We need to build social homes on a massive scale. We need to build 300,000 houses a year, and of those 150,000 need to be social rented properties. Last year, only 6,300 were built, and in my constituency only 21 council homes—social rent properties—have been built.
The Help to Buy scheme is costing Government £4 billion. The Government are also spending £23 billion a year on housing benefit and paying £8 billion to private landlords. That is why we need to get hold of the issue of social rent properties and what council councils can actually deliver in that field.
The Government say they want to build, but they should start with rebuilding trust in our Government, and they can take a leaf out of the book of local government on how to deliver that. For 10 years, this Government and their predecessors have taken a wrecking ball to local authorities, but they have shown in the last few months what they can do and they are trusted by our public. We have seen that with covid-19, but we need to address issues such as knife crime and the issues among our social services.
In closing, the Government told us that they could not address the issue of rough sleepers until 2027, but they have managed to do so in a matter of months. It is now time that they deliver elsewhere.
Ben Everitt (Milton Keynes North) (Con)
I should start by drawing the House’s attention to my entry in the Register of Members’ Financial Interests.
We must reform local government finance. The formula grant system is unbalanced, outdated and unfair. It is a shame that we have delayed the review into local government finance, although that is for perfectly obvious reasons. But as well as reforming it, we must increase the quantum of funding, and I think this needs a grown-up conversation on localisation of revenue raising.
The current settlement is not ungenerous. Indeed, the increase in core spending power of 4.4%, which is £49.2 billion for local authorities, was the biggest in a decade. Milton Keynes received an increase of 6.6% in core spending power. This, of course, was all in February, before the world changed and before funding changed. Since then, £4.3 billion in support for councils has been issued by the Department for their additional pressures, for lost income and for the extra costs. The entire package for councils, businesses and communities comes to £27 billion. In my own local authority of Milton Keynes, we have received £137.6 million, which includes over £77 million for business rates relief.
Councils are our frontline. They deserve certainty and they deserve fairness. So it is very promising that the aforementioned review into local government finance is called the fairer funding review. This review should not, though, be an exercise in reslicing the cake. We need to level up local government finance—a phrase that I think may stick—but we also need to address the elephant in the room, which is social care. The rising costs of delivering social care are well known and recognised, but these costs are magnified by the unfairness of the current formula grant system.
We need to level up local government finance. We need to have a grown-up conversation about localised revenue raising. We need to increase the quantum. We need to remove the unfairness. We need to bake in a cross-party solution to social care. We need to deliver the fairer funding review.
Siobhain McDonagh (Mitcham and Morden) (Lab)
My contribution to today’s debate is on the eye-watering £1 billion spend by the Ministry on temporary accommodation. There are now 88,330 families trapped in temporary accommodation, including 128,340 children. These families have spent lockdown in hostels, warehouses and B&Bs, including 530 children who have been stuck in the latter for longer than the six-week legal limit. The scale of our housing crisis means that local authorities cannot even find temporary accommodation locally: 28% of families are sent far away from home, and away from friends, work and school. That is 24,430 households being moved from one borough to another, with local authorities playing chequers with people’s lives.
But the question is not how many, but who, where and how far away. So I commend the extraordinary investigation by ITV’s “Ross Kemp: Living with…” programme last Thursday, which revealed the detail behind these statistics and the impact that being sent across the country has on families’ lives.
In the past two years, homeless families have moved 400,000 miles across the country, which is the equivalent of 16 times around the planet. Councils in every region are sending families hundreds of miles away from home. There is a statutory duty for households in temporary accommodation to be housed in their home borough, or as close to it as possible. There is also a statutory duty on local authorities to inform receiving councils when they send homeless families to their borough. That groundbreaking programme found at least 60 councils that had failed to do so. The leader of Basildon Council even stated that 58% of the time a family arrive in his borough his council is not notified. That means that in the past four years more than 700 children have arrived in Basildon from London, putting the most extraordinary pressure on schools, GPs and hospitals, but putting even more pressure on these individual families, who are cut off from the support and help that they need. When will the Government enforce the law that already exists?
Sir David Amess (Southend West) (Con)
I was shocked to read in the evening Echo that, apparently, a new super council is to be created in Essex and that everybody had been told about it. I certainly had not heard anything about it, and I am one of the local Members of Parliament. Apparently, the leader of Essex County Council had a meeting with the chief executive of Southend-on-Sea Borough Council. They had a discussion but apparently she was not able to answer any questions. I am not surprised. There are many questions I would like to have answered, because this seems like a white elephant.
Mr Mark Francois (Rayleigh and Wickford) (Con)
It is a white elephant, but what is worse, it has been cooked up in private for two years by six council leaders—six chief executives. The Essex MPs are against it and did not know. So are all the back benchers on the six councils. The whole thing is a farce.
Sir David Amess
It is disgraceful. I want to know where this new super local authority would be and who would be running it. There are so many questions. We already have the police and crime commissioners, who are paid a bit more than Members of Parliament, with their layer of bureaucracy. The last thing I want is another layer of bureaucracy with this new super council and the break-up of Essex County Council. So I hope the Minister will reflect on what my right hon. Friend and I have said about this issue.
I want to praise Southend-on-Sea Borough Council’s registry office and, in particular, the chief registrar, Nicole Rogerson, who has done a marvellous job, and I am delighted that Matthew and Louise will be getting married on 18 July at Porters lodge in Southend—well done to them.
I am getting lots of complaints about parking and speeding in Southend, and, extraordinarily, Southend council is not having any meetings at all to regulate those things. I am not mad keen on cycling and I am sick to death of people riding their bikes on pavements, so I very much want the Government to do something about that issue. I love Old Leigh, where we have wonderful retail outlets, but to have another licensed bar there is totally unacceptable, and I hope the Minister will have a review of licensing laws. On council tax, money is very tight. This year our council tax went up by 3.99%. I do not know whether the Government are thinking of a freeze next year, but it would be very welcome. I was delighted with the stamp duty changes announced yesterday, but in Southend we have a particular problem with leasehold properties in the Ekco Park development. I wonder whether the Minister will look at that issue. Homelessness is obviously a crisis in so many of our constituencies. I pay tribute to HARP and Off the Streets for all the work that they have done. Will the Minister commit to review the guidance for social housing waiting lists, to ensure that those most in need are prioritised?
Many Members are fed up with illegal Traveller sites. We have had umpteen meetings with Ministers about this issue. The point has been reached where we really need some action.
Finally, I think we need to be cheered up. Next year the Duke of Edinburgh will be 100. The year after, Her Majesty the Queen will have been on the throne for 70 years. We need a city status competition, and what would give the nation greater pleasure than Southend being declared a city?
Matt Rodda (Reading East) (Lab)
It is genuinely a pleasure to follow the hon. Member for Southend West (Sir David Amess). I want to draw the House’s attention to a very serious issue, which is fire safety in flats and shared housing following the Grenfell disaster. This is linked to the funding of councils such as Reading Borough Council in my area and Wokingham Borough Council, and the funding of fire services such as the Royal Berkshire Fire and Rescue Service.
I would like to start by paying tribute to the Grenfell families. It is utterly impossible to imagine what they have been through both on the night of the disaster and in the three years since that dreadful time. We all want to find a timely and effective response to the problem of removing dangerous cladding and to other fire risks, and progress has been made. Many local councils and some owners of private blocks have removed cladding. Temporary fire safety measures have also been taken, such as regular patrols at night by either residents or security staff. However, this problem is on a vast scale, and there are significant obstacles that make removing cladding very challenging.
It is sad and deeply worrying that most dangerous cladding remains in place three years after the disaster. That includes the type of cladding used in Grenfell and a range of other highly flammable materials, such as wooden cladding and laminate. All these materials are found in Reading town centre in my constituency, and there are deep concerns about a wide range of other buildings across the area. Fire services have real concerns that temporary measures may no longer be effective because they rely on human behaviour, and they are seriously worried that human error will start to creep in and that measures such as patrols will lapse or cease to be fully effective.
I would like to draw the House’s attention to some of the issues in my constituency, to illustrate the scale of the problem. We have a number of large blocks over six storeys high that have these types of cladding. We have difficulties in getting owners to remove the cladding because of the complexities of the process. There are also a huge number of blocks of under six storeys, with hundreds of people living in them across Reading and Woodley, and many thousands of houses in multiple occupation, which may be terraced houses or flats above chippies or other takeaway restaurants, where there could be serious fire safety risks. New resources are needed to inspect all these premises, and more powers are needed for local authority building control departments and fire services to take action to speed up this process. I urge the Minister to work with me and other colleagues to address this important matter, and I look forward to hearing from him.
Selaine Saxby (North Devon) (Con)
I thank the Ministry for everything it has done during the pandemic to support so many businesses and individuals in our communities. My constituency has a huge number of small businesses, and the district council has now paid out over £41 million to 3,638 businesses, which is a huge undertaking. North Devon boasts a stunning coastline and beautiful countryside, served by market towns whose high streets, like so many, have been transformed by the pandemic. Market towns such as Barnstaple rely on those working in town to pop out at lunchtime for a sandwich or a quick bit of retail therapy. The move for so many to work from home, so many businesses remaining closed and tourists not being back in their normal numbers has meant that, while our shops are open, they are seeing less than 50% of the customers and takings they would expect at this time.
Barnstaple is currently working on its revised submission to the future high streets fund, which is another great initiative from the Ministry. A huge amount of work has gone into this locally from our economic development team in North Devon. I thank Sarah-Jane Mackenzie-Shapland, Dominie Dunbrook and the whole team led by Michael Titchford. However, in this fund application, Barnstaple, which has a population of just 31,000, is up against major towns—indeed, one could describe them as small cities—with populations that far exceed Barnstaple’s, and their council resources swamp those of my hard-working district council team.
If Barnstaple is not successful, having already missed out on the towns fund because the structure of the town centre management does not match the required business improvement district, I fear that there will be no funding and our high street will continue with the rapid decline it has seen throughout this pandemic.
Moreover, if Barnstaple cannot secure funding, as the largest town in my constituency, what hope is there for Ilfracombe, the next largest, with a population of just 11,000, and listed as one of the 40 most deprived English seaside towns in the recent Radius Data Exchange report, “Turning the tide: seaside regeneration”? The report highlights the decades of underinvestment in towns like Ilfracombe, and how solutions are available. However, without some funding to help smaller market and coastal towns, our levelling-up agenda will only stretch to major urban conurbations.
The situation is further exacerbated in areas like mine, where my district council is small and one of multiple layers of local decision making. This can make applying for and then implementing schemes designed to assist near-impossible, given the limited local resource combined with multiple layers of local government, often with their own competing projects and visions. Indeed, the issues that I highlight are replicated across the south-west peninsula. To enable all of them to succeed, the entire region needs further consideration. We have repeatedly requested to become the “great south-west” and recognise Devon, Cornwall, Dorset and Somerset as a single region so that we can work at a much greater scale in future.
David Simmonds (Ruislip, Northwood and Pinner) (Con)
I first need to draw the House’s attention to my entry in the Register of Members’ Financial Interests as a serving councillor.
I am sure that my hon. Friend the Minister would agree that the story of local government throughout this covid crisis, and for the past decade, has been one of extraordinary financial resilience. A number of Members have made reference to the NHS. We should ask ourselves whether the NHS could have managed a 60% reduction in the funding that it receives from central Government and still have seen the satisfaction of its users increase, as our local authorities have done over that period. How do we get more people into politics who come from business and professional backgrounds and who represent their communities? Clearly, if we look at the cabinets—the leadership—of our local authorities, that is exactly where we find those people. I pay particular tribute to my excellent colleague, Ray Puddifoot of Hillingdon Council, who has just entered his 21st year as leader of that authority, having spent a lifetime as a highly experienced and senior chartered accountant. He is one of the many local government people who have brought stability to the finances of our councils.
I want to pick up on three issues that I invite my hon. Friend to consider and that I think this House needs to pay particular attention to. The first concerns housing and planning. We hear a good deal about the impact that our planning system has, but we need to recognise that more than half a million consented developments are as yet uncommenced. Local authorities are doing an outstanding job in ensuring that housing opportunity is moving through the system, yet, all over the country, developers are playing off different parts of the system. Perhaps it is time to consider simply abolishing the Planning Inspectorate and Secretary of State call-ins, making sure that the local authority’s decision is final so that developers know who they have to negotiate with, the decision is made, and they can get their spades and shovels in the ground to develop the houses that we need.
The second issue that I would like my hon. Friend to consider is social care, which has been touched on extensively. Many of our constituents are astounded to discover that social care accounts for about 70% of all the money that our local authorities spend. Indeed, children’s social care is the only area of council spending to have increased, on average, in the past decade, yet it is a service that touches barely one in five of our constituents. We need to make sure that we have a financial solution that opens this up to the widest possible group of people to get their support.
Finally, I would ask us to learn lessons from what we have done with delayed discharges, where we need to see that local authorities and the NHS work together. Local authorities brought about a massive improvement in delayed discharges; the NHS strolled. We know where the opportunity lies.
Bob Seely (Isle of Wight) (Con)
I thank the hon. Member for Sheffield South East (Mr Betts) for securing this important debate. It is a pleasure to follow my hon. Friend the Member for Ruislip, Northwood and Pinner (David Simmonds), who as ever, on this and many other issues, talks extremely good sense.
I want to start with a couple of thanks yous and then move on to some Island-specific points. First, I thank the Isle of Wight Council and all its staff for their exceptional work in looking after Islanders during this dreadful pandemic. On behalf of Islanders, I thank John Metcalfe and Wendy Perera and all their teams, and council leader Dave Stewart and his senior team, Councillors Stuart Hutchinson and Wayne Whittle. I mention those people because it is important to give recognition where recognition is due.
I also thank the Government. I understand that local government has now received £4.3 billion from the Government. In the Isle of Wight, we have received about £105 million. That has gone through largely to our local businesses, and some has gone to the council. We are keen to try to keep the final £8 million for reasons that, in the next 120 seconds, I will briefly outline.
I was going to talk about housing, which, as the Minister knows, is a big issue on the Island. However, because he is here and the Housing Minister is not, I will talk about the Island deal, which, as he knows, is in six areas. I am delighted to say that we are already getting a better deal on the Island. We got £100 million of extra capital investment last year—£48 million in the NHS to drive forward reform, some great pilot schemes, and about £46 million for Ryde railway pier and Ryde railway—so we are getting there.
There are six other areas that I would like to talk about—but not now; I am only going to do one now. Those include NHS provision; unavoidably small hospitals have different economies of scale from significant hospitals, in the district general hospital model, that have the required or approved number of users. We also have agricultural issues, transport issues and, as I say, housing issues.
However, on local government funding specifically, I say to the Minister and his officials—I know they are working up some options, which I am delighted about—that any support for the Island must consider the additional costs of providing public services on an island. It is academically proven, beyond reasonable doubt, that it costs more to provide public services on an island—in isolated communities—than elsewhere. There is no serious debate about the additional costs. None of this will set a precedent, because the Isle of Wight is the only island of any significant size in the local government structure in England and Wales. There is no precedent being set at all.
We have an ambitious council. I very much hope that it is going to buy a critical site in East Cowes this evening as part of a jobs hub and jobs investment programme, and I look forward to that. However, when I meet the Minister and his officials to talk about the Island deal, can we please do so understanding that there will be no precedent being set? There are additional costs of providing public services on an island, which sadly have not been recognised in the past half-century.
David Linden (Glasgow East) (SNP)
I am grateful to the Chair of the Select Committee, the hon. Member for Sheffield South East (Mr Betts), for opening today’s debate, which has certainly been wide-ranging and informative in terms of scrutinising MHCLG policy. I want to use my speech to touch on three areas of policy and spending, relating mainly to the shared prosperity fund, the stronger towns fund and, latterly, homelessness.
Yesterday was a set-piece day on which the Chancellor came forward and made some big spending commitments, some of which I certainly welcome. However, as always with this Government, they are very good at announcements but less so on the delivery and the detail. There is perhaps no greater example of that than the much-vaunted UK shared prosperity fund, details of which have been conspicuous by their absence, to say the least.
The reality is that we face the very real prospect of crashing out of the European Union at the turn of the year, and still no meaningful details have been outlined about the future of funding for our communities. As a member of the European Union, the UK received structural funding worth about £2.1 billion per year. Scotland itself has benefited from billions in European structural fund money since joining the EU in 1973. These funds have been used to support getting people into work and out of poverty, improving their education and skills, and investing in our infrastructure and our communities. They have come from the regional development fund, which promotes balanced development across the EU, and the European social fund, which invests in employment-related projects.
Analysis from the Conference of Peripheral Maritime Regions estimates that the UK would have been entitled to approximately €13 billion of regional development funding in the 2021 to 2027 period if it had stayed in the EU. The same analysis shows that Scotland will lose over €840 million by 2027, with the highlands and islands alone losing €130 million. It is therefore urgent that the UK Government outline what the shared prosperity fund will look like, how it will operate, the level of funding it will manage and whether that funding will be allocated. It is essential that the fund is no less in real terms than the EU funding it replaces. I hope when he sums up that the Minister will be able to update us on the future of the shared prosperity fund, because communities cannot be left in the dark any longer.
I want to touch on the stronger towns fund, which I raised with the Secretary of State in the last round of departmental questions. As I reminded him then, back when there were considerably more Scottish Conservatives in the House, his predecessor, the right hon. Member for Old Bexley and Sidcup (James Brokenshire) was keen to inform them that Scotland could benefit from this stronger towns funding. However, again, details have been slow in coming forward. The stronger towns fund needs to be clarified and expanded and made fair for all parts of the UK.
The £1.6 billion fund ring-fences £1 billion for England and makes the other £0.6 billion available for bidding directly from local authorities. In doing so, the fund bypasses the Barnett formula entirely; it relies on the £0.6 billion that is biddable to negate the fact that there is no dedicated funding for devolved nations and therefore there are no direct Barnett consequentials for the £1 billion to be spent in England. Is this yet another example of Whitehall short-changing Scotland or will the Minister finally outline Scotland’s share of the stronger towns fund today? I am always quite struck by the number of Members in this House who can stand up and say how much money they are getting for their constituencies from stronger towns funding, but in Scotland we are no clearer.
I want to finish on a topic that impacts every town and city the length and breadth of the British Isles, which is homelessness. Despite the insistence of the previous Tory Government that cash injections would not solve rough sleeping, the coronavirus pandemic has shown that if there is a political will, there is a way.
In March, the Government announced £3.2 million emergency funding for local authorities to provide accommodation services to enable rough sleepers and those at risk of rough sleeping to self-isolate during the covid-19 outbreak. By May, a total of 14,610 people in England who were sleeping rough or were at risk of sleeping rough had been provided with emergency accommodation. Impressively, 90% of homeless people known to councils at the beginning of the pandemic have now been offered accommodation. That is obviously wonderful, but it needs to be taken on after the pandemic. We should not just be offering the homeless a place to stay to avoid the transmission of covid, but to end rough sleeping as an objective in itself. I hope that the Minister can offer some thoughts about how the Government plan to keep up this genuinely good work and ensure that one positive legacy from covid is that we support the homeless and make sure that we are looking after the most vulnerable in our society.
Kate Hollern (Blackburn) (Lab)
I thank everyone in the Chamber for their contributions, in particular my hon. Friend the Member for Sheffield South East (Mr Betts) who introduced the debate, and my hon. Friends the Members for Hackney South and Shoreditch (Meg Hillier), for Warwick and Leamington (Matt Western), for Sheffield, Hallam (Olivia Blake), for Mitcham and Morden (Siobhain McDonagh) and for Reading East (Matt Rodda).
Everyone has recognised the fantastic contribution of local councils and it is well deserved praise. Local councils have stood up to the challenge. They have continued to provide and support social care for elderly and disabled people under very difficult circumstances, have found accommodation for 90% of rough sleepers at extremely short notice, have administered more than £10 billion in business rates relief in grants for local businesses and co-ordinated support for people in vulnerable groups who have been shielding.
The response has been all the more impressive because local government has seen unprecedented levels of funding cuts over the last decade. It is interesting to hear Members talking about the last two years. I was a councillor for 20 years. In the last decade, under the current Government, local government has lost £51 billion. Just think about that—£51 billion in a decade. As a consequence, people have lost their jobs—street cleaners, park attendants, librarians, key workers, social workers, youth workers—and services have been lost at a great level. Councils are now facing a very difficult decision, because the key workers that we have clapped and cheered over the past few weeks could be at risk of losing their jobs, unless the Government keep their promise.
The Government have devolved responsibility for key elements of social care spending, such as crisis grants, the independent living fund and council tax. Councils are the mechanism that holds communities together. My local council—Blackburn with Darwen Borough Council—has done an absolutely amazing job. The council leader, Mohammed Khan, has been totally committed to keeping stability in the town, keeping people safe and delivering the services they need. But Blackburn with Darwen has lost 30% of its funding in a decade—the second highest figure in the north-west, beaten only by Liverpool.
Blackburn with Darwen has lost £51.7 million, and I am ashamed that we can sit here cheering councils and saying what a fantastic job they have done, while totally ignoring the cuts they have had over the last 10 years. The council has done everything in its power to support people through this pandemic. We have seen more than 30,000 food parcels, 3,500 vulnerable people supported and £40 million issued in business grants, all of which has helped Blackburn with Darwen through a difficult time. I would also like to recognise the 1,700 volunteers in my constituency, who have proudly played their part in helping vulnerable people through.
It has been quite clear that the Government’s stuttering over national decisions has placed even more burdens on local councils. As has been widely publicised, there were shortages of PPE, particularly in care homes. I have spoken to many care homes in my constituency that were at their wits’ end because they could not get the equipment they needed to keep their residents safe. Of course, it was councils that stepped in when the Government failed. The Government just acted too slowly. As a consequence, people lost their lives.
The school voucher scheme—another area where councils had to step in—was riddled with problems. Parents and children were left abandoned when the Government failed, and councils stepped in, giving children the food they needed. It is shameful that the Government extended the scheme only after a premier league footballer campaigned on the issue. Maybe what we need, rather than proper debate, are glossy headlines to make the Government move.
Test and track is an absolute joke—[Interruption.] I am sorry, but it is. Local directors have been given no information—
Kate Hollern
I can actually prove it, Minister. They have been given no information or have been given information too late to implement any changes. As for the app, I am sure we will see it some day.
All of this has been a recipe for disaster, but councils have kept their promises, because they are committed to serving their residents. Yet again, councils will be given no comfort in this estimates debate today. How long must council services—those on the frontline in our hard-hit communities—be treated as Cinderella services? On 16 March, the Secretary of State told councils that the Government stood ready to do whatever was necessary to support them in their response to coronavirus. By 4 May, he was back-pedalling on that pledge, and he gave a grim warning:
“We would not want anyone to labour under a false impression that what they are doing is guaranteed to be funded by central Government.”
Interestingly, the Chancellor said the exact opposite yesterday. He says they agreed wherever it takes. Perhaps we again have an example of a headline not being a true reflection of what is happening in debates.
It is true that the Government have provided councils with funding of £3.7 billion in three tranches to meet the costs of the crisis. The first was mainly for adult social care and was allotted on the basis of relative need. However, the second was allocated on a per capita basis and did not take into account deprivation, despite the mortality rate from the virus in the most deprived areas being more than double that in the least deprived areas. As a result, the funding for metropolitan councils in deprived areas was substantially lower in the second tranche, whereas the allocation for many Conservative-controlled shire councils miraculously increased. Funding for Surrey rose by 32%, whereas that for Liverpool fell by the same percentage—so much for the promise of levelling up.
Blackburn with Darwen Borough Council received a little over £9 million, yet it has been well publicised that, with the anticipated loss of income, the council could face a deficit double the size by the end of the financial year. In March, April and May, councils lost £470 million in business rates and £506 million in council tax as businesses were forced to close and people lost their jobs.
Councils across the country are already making cuts to services and will inevitably be looking at serving section 114 notices. Last week, the Secretary of State announced just £500 million in further funding for councils and a yet-to-be-worked-out sum for loss of income, fees and charges. I say “yet-to-be-worked-out”, because once again, there is no detail.
I recognise that time has marched on. I just ask the Minister to urge the Secretary of State to live up to his promise and, perhaps if that does not work, we can get the right hon. Member for Rayleigh and Wickford (Mr Francois) to get the Prime Minister’s adviser to make a difference.
The Minister of State, Ministry of Housing, Communities and Local Government (Mr Simon Clarke)
I congratulate the hon. Member for Sheffield South East (Mr Betts) on securing today’s debate and I thank hon. Members across the House for their contributions. I entirely echo the tributes that have been paid to the hard work and sacrifice of local government officials and elected representatives around the country. It is a good chance to pay tribute to the frontline workers—the carers, the teachers, the mortuary staff, the social workers, the emergency planners, the refuse collectors and so many others who have done their utmost to make sure that our society continues to function at such a difficult time. Every tier of local government has come together to rise to the enormous challenges that covid-19 has created.
Time is very short, so I will be brief. From the outset of covid-19, the Government have said that we would ensure that councils have the resources that they need. We have already delivered a multibillion-pound infusion of support. Last week, we announced a further comprehensive package of support with several important components. First, we are providing a further £500 million of funding to cover additional local authority spending pressures. That means that since the crisis began, the total unring-fenced grant funding that has been provided to local authorities for their spending pressures now stands at £3.7 billion, and that is without including the £600 million that we provided for care homes to relieve the strain on social care services.
We have particularly asked councils to prioritise some core aspects of their work. The hon. Member for Hackney South and Shoreditch (Meg Hillier), who chairs the Public Accounts Committee, pressed me for detail on this, and those are: adult social care, children’s services, public health services, fire and rescue services, household waste services, shielding the clinically vulnerable, homelessness and rough sleeping, domestic abuse and managing excess mortality. I am very happy to provide any further clarity that would be helpful—
Mr Clarke
As time is extremely tight, I had better make progress.
We have provided in total almost £28 billion to local councils, businesses and communities to help to support them through the virus. That includes £300 million for the new test and trace service. Unlike the hon. Member for Blackburn (Kate Hollern), who spoke for the Opposition, I will not talk that down. I think it is making immense strides. I pay huge tribute to the work of Tom Riordan, the chief executive of Labour-controlled Leeds City Council, who has done a fantastic job in helping us to bring that tool together.
The second element of our comprehensive package is a specific mechanism to address councils’ income losses. That includes a co-payment scheme to cover irrecoverable losses from sales, fees and charges income in financial year 2020-21. That includes such things as car parking fees or revenue from cultural assets. The hon. Lady said that it is not defined, but it is not defined precisely to enable flexing according to the extent of those losses as they crystallise, so it is capable of being as generous as is required to meet the eventual losses that we face.
Through that co-payment scheme, the Government will cover 75% of losses beyond the first 5% of planned income. This will help to address the issues that my hon. Friend the Member for West Dorset (Chris Loder) alluded to. In addition, my right hon. Friend the Secretary of State has committed to extending from one year to three years the period over which councils can manage shortfalls and local tax income relating to this year, as was specifically requested by the LGA.
The Chair of the Housing, Communities and Local Government Committee referenced leisure centres. We are working with the Treasury and the Department for Digital, Culture, Media and Sport on this issue. We recognise its complexities and I can assure him that we are very serious about tackling it. In the autumn spending review, the Government will agree an apportionment of irrecoverable council tax and business rate losses between central and local government for 2020 and 2021.
Taken together, the support offered here will safeguard a range of essential public services, from social care to public health, shielding the vulnerable and now helping to safely reopen our economy and wider society. There will always be scope for specific, bespoke discussions with individual councils that find themselves in difficulty. The shadow Minister referred to Luton Council and its airport. I can assure her that we are very aware of that issue and continue to work closely with them.
On the wider work we are doing, my right hon. Friend the Chancellor gave an excellent statement yesterday underscoring our commitment to saving jobs and boosting growth. Clearly, levelling up is a massive responsibility that the Government are intensely serious about. We heard several colleagues refer to the £3.6 billion towns fund, including the future high streets fund. Be that Barnstaple or Warrington, we want to make sure these funds are paid out quickly and help to make a real difference and deliver for our society. That comes on top of the £5 billion stimulus from the accelerated getting building fund that the Prime Minister announced last week.
We also want to work closely with council leaders from all political parties in delivering our ambitious devolution agenda. This is appropriate, given the hon. Members for Sheffield South East (Mr Betts) and for Sheffield, Hallam (Olivia Blake) and their role in this, as we have the parliamentary order coming up next week to unlock £900 million of investment for the Sheffield city region, which is great. We have also negotiated the £1.1 billion of investment for West Yorkshire announced at Budget. With West Yorkshire’s new Mayor in place, 41% of residents in England and 63% in the north of England will be served by directly elected city region Mayors.
I heard the comments of my hon. Friend the Member for Southend West (Sir David Amess) and my right hon. Friend the Member for Rayleigh and Wickford (Mr Francois), and I look forward to meeting them to discuss the situation in Essex, but I can assure them that we will not be pressing ahead with proposals that do not command popular consent. That is always at the forefront of our mind.
On the comments from the SNP Front Bench, I can also confirm that we will publish our White Paper on devolution and local recovery in the autumn, which will address issues concerning the UK shared prosperity fund, which I should point out is our money, top-sliced and sent back to us by the EU. None the less, we will provide detail on that. Clearly, it is very important and he can rest assured we are working hard to work out how we can safely allocate that money, but we made a commitment in our manifesto at the general election that no part of the UK would receive less from the shared prosperity fund than they currently do under EU structural funds.
I am conscious that time is very tight, so I will conclude by pointing out that levelling up is not specific to the north and the midlands of England. I had good talks with my hon. Friend the Member for Isle of Wight (Bob Seely) and we continue to look at his island deal. The whole country—all the nations and regions of the United Kingdom—should look forward to our work on levelling up. We are committed to making it happen and making it happen soon.
Mr Betts
I thank the Minister for his comments, although I still think there are issues to be worked through. My hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier), the Chair of the PAC, raised a point about clarity. We still need that clarity from the Government. I would still like it on the record, too, that the £3.7 billion will not be reduced by the commitment to cover 75% of income losses. That needs to be clear. [Interruption.] The Minister is nodding, which is very helpful.
Finally, I want to pick up on the shared prosperity fund. No area should get less than it gets now, but no area should get less than it would have got under the new arrangements that would have come into place if we had remained in the EU. That is a very important point for South Yorkshire, and I hope that the Minister will consider it.
Question deferred (Standing Order No. 54).