Merseyside: Funding of Local Authorities
(2 years, 9 months ago)
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Mr Philip Hollobone (in the Chair)
I remind Members that Mr Speaker encourages everyone to observe social distancing and to wear masks.
Margaret Greenwood (Wirral West) (Lab)
I beg to move,
That this House has considered funding of local authorities on Merseyside.
It is a pleasure to serve under your chairmanship, Mr Hollobone. I begin by thanking Mr Speaker for granting this debate, and I also thank Members from across Merseyside for attending today. I look forward to hearing their contributions.
According to analysis by the National Audit Office on selected main revenue income sources for local authorities, in 2010 Government funding for local authorities in England was just over £34 billion. Over the course of the next decade it decreased steadily, and by 2020 Government funding to local authorities in England was just over £8 billion. The cut of funding from £34 billion to £8 billion is staggering, and goes a long way to explain why we have seen the widespread erosion of public services. It represents a cut of around 76.5%. In other words, local authorities are being expected to continue to provide public services when they are receiving a fraction of the money they used to receive from central Government. No wonder our communities are feeling it.
If we look at Merseyside in the context of those National Audit Office figures, we see that the Government funding cuts that its local authorities have suffered are even higher than the England average. In my own local authority of Wirral, in 2010 the council received just over £266 million in Government funding, but by 2020 that figure was down to just over £40 million—a reduction of around 85%. Colleagues will be only too aware that it is a similar story elsewhere in Merseyside, and I am sure that we will be hearing details of the impact of those cuts.
I ask the Minister to listen closely to the figures that I am about to share. In Knowsley, the same National Audit Office figures show that in 2010 the local authority received more than £243 million in Government funding; that figure was down to just over £35.6 million in 2020—a reduction of around 85.3%. In Liverpool, in 2010 the local authority received more than £560 million from the Government, but by 2020 that figure was down to just over £75 million—a reduction of around 86.6%. In St Helens, in 2010 the local authority received more than £151 million, but in 2020 it received just over £16 million—a reduction of around 89.4%. In Sefton, in 2010 the local authority received more than £203 million, but 2020 saw it receive just over £16.7 million. That is a drop of around 91.8%.
Although local authorities have generally kept 50% of business rates revenues raised locally since 2013—and there is a pilot scheme to keep 100% of them in Wirral—that is nowhere near to making up the shortfall created by Conservative Government cuts. For example, Wirral Council received over £110 million less in annual income in 2020 than it did in 2010. Similarly, Knowsley received £116 million less, Liverpool over £209 million less, St Helens over £60 million less, and Sefton over £94 million less. Those staggering and brutal cuts by central Government are really punishing our communities. Political decisions taken by Conservative Governments since 2010 have had the effect of running down and forcing the closure of local public services.
Let us remind ourselves what it is that local authorities deliver. They provide and look after our libraries and leisure centres. They maintain our roads, streets, parks, and our open spaces where people relax, exercise, walk their dogs and where children play. They license taxis, the sale of alcohol and the movement of animals. They provide support to local businesses and chambers of commerce, stimulating the local economy. They manage planning processes, are responsible for public health, bin collection and waste disposal, free school meals, welfare support and advice and adult learning. They are responsible for trading standards and ensuring the safety and standards of the products that we buy. They are responsible for social services, safeguarding children and ensuring that vulnerable adults, including people with dementia, are cared for and protected, whether in their own home or a care home.
A decade of cuts to local government has resulted in £8 billion being lost from adult social care budgets, and many vulnerable people have been left without the support that they need. Some 400,000 older and disabled people are on council waiting lists for care, and there are more than 100,000 staff vacancies across the sector. That is a truly damning indictment of this Conservative Government. In short, local authorities, the services they deliver and the public realm they maintain are fundamental to our society and the way we live. If we want our councils to deliver good-quality universal public services, they need to be funded properly.
The Conservative party presents itself as the party of tradition, but it is anything but. The cuts it has imposed on local authorities since 2010 undermine our way of life and our traditions, and are pulling away the foundations of our communities. I am sure that we will hear from colleagues across Merseyside about what these cuts mean to their constituencies.
I want now to talk specifically about Wirral, where, as I outlined earlier, the local authority saw an 85% reduction in Government funding between 2010 and 2020, and received around £110 million less in overall income in 2020 than in 2010. The authority has been told that it must find savings of £20 million in its budget for 2022-23. Not doing so could lead to Government intervention. As a result, the council has been forced to make proposals to meet these financial constraints. The proposals are wide ranging and, if implemented, would have serious implications for communities in Wirral. The proposals include the permanent closure and demolition of Woodchurch leisure centre and swimming pool.
Mick Whitley (Birkenhead) (Lab)
I thank my hon. Friend for raising the issue of Woodchurch leisure centre and swimming pool, and for all her hard work in leading the campaign to keep its doors open. She has made some excellent points in her speech. She will know that, as well as serving many other constituents, the Woodchurch is an invaluable community asset for some of the poorest communities in Birkenhead, including the Prenton and Noctorum estates. Like the Woodchurch estate in my hon. Friend’s constituency, people living in those communities have far worse health outcomes than their peers in more affluent areas of the Wirral. Does my hon. Friend agree that closing this cherished institution would deal a grievous blow to the invaluable work that has gone on in recent years to improve the health of people living in the most left-behind communities that we represent?
Margaret Greenwood
I thank my hon. Friend for his excellent contribution. He is absolutely right, and he is right about the health deficit in the area. Woodchurch has a higher percentage of people with long-term health conditions and disabilities than the borough as a whole. He has anticipated the next part of my speech with regard to the surrounding areas, which are so important. It really is important that we save this swimming pool.
The Woodchurch leisure centre and swimming pool are much loved by residents and groups, including Woodchurch swimming club, and as my hon. Friend said, the facilities serve thousands of people across Wirral, including communities in Woodchurch, Upton, and the Beechwood and Noctorum estates.
Leisure centres and swimming pools are vital to the health, wellbeing and relaxation of people in Wirral. The Woodchurch estate has a far higher proportion of people with long-term health issues and disabilities than the borough as a whole. When meeting user groups in the past, I have been struck by how many people use the pool to help with health problems such as joint pain and mental health issues. It cannot be right that this important facility is at risk of closure, but of course, sadly, Government cuts have led us to where we are.
Leisure centres and swimming pools are important, too, for the education of children, who are now required to learn to swim as part of the national curriculum—so, although leisure services are not a statutory requirement, swimming is. Before covid, 14 schools were using Woodchurch pool to teach children to swim—a vital skill for children growing up on a peninsula fringed by beaches. Now, those schools are having to bus children further afield, taking valuable time out of their school day and adding costs to already overstretched schools.
Wirral Council’s proposals also include the potential closure of numerous libraries, including those in Hoylake, Greasby, Pensby, Irby and Woodchurch in my constituency of Wirral West. These are libraries to which young families can take their children to introduce them to books and meet other young families, and which, as children grow older, they can independently visit, browse and learn in an informal environment. They are places where people who have ideas about entrepreneurial projects that they want to pursue can carry out research, drawing on the expertise of highly qualified librarians who know how to source information on all aspects of human endeavour. They are places where people who do not have internet at home can access it to explore any subject they want and, if necessary, search and apply for jobs. Libraries provide incredibly important community hubs, and they are, of course, very important for tackling social isolation. We know that loneliness was identified as a public health challenge in Wirral prior to the pandemic, and libraries have a vital role to play in addressing that issue.
Further proposals in Wirral include ceasing maintenance in open spaces, including up to 10 to 15 local parks, and halving maintenance in others; the closure of two golf courses; changes to residents’ parking permits, in some cases introducing charges for residents living in areas of deprivation; a reduction in highway maintenance; an end to night-time lighting inspections; the withdrawal of additional street cleansing services in some areas; the closure of public toilets; and a reduced school crossing patrol service. That is not even the full extent of what is being considered. The implications of such measures are extremely serious and Wirral Council, like so many others, is having to make up for prolonged, brutal central Government funding cuts.
Last month, I and other Wirral MPs wrote to the Secretary of State for Levelling Up, Housing and Communities, calling on him to come forward with emergency funding for Wirral to prevent further reductions in public services. We eagerly await a response to that letter and I repeat that ask to the Secretary of State, via the Minister.
My hon. Friend the Member for Birkenhead (Mick Whitley) has been working to secure a meeting between the Wirral MPs and the Secretary of State to discuss the very serious situation facing Wirral. Last week, the Secretary of State said:
“I am looking forward to a meeting. I recognise that there are real issues in the Wirral, which I hope we can work together to resolve.”—[Official Report, 2 February 2022; Vol. 708, c. 336.]
I appreciate that the Secretary of State’s office has made contact this week, and I understand that it will be in touch again shortly, to find a date after recess. I hope a meeting can be arranged as soon as possible, because time is of the essence.
Tomorrow, Members will have the opportunity to debate the local government finance settlement. This is the fourth one-year settlement in a row for councils, which, according to the Local Government Association,
“continues to hamper financial planning and council financial sustainability.”
Wirral Council feels that it is imperative to have a multi-year settlement from 2023-24, so I would be grateful if the Minister could update us on that issue.
The response from Merseyside to the draft local finance settlement for 2022-23 was very clear. The leader of Knowsley Council said:
“We are continually lobbying the Government for fairer funding and ensuring that those areas that have greater needs are appropriately funded. Yet again, this has been ignored and we are once again having to look at how we can continue to provide the essential services our communities value and need.”
The leader of Sefton Council has said:
“I am afraid that the latest funding settlement shows little evidence of the Government investing strongly in public services…The Government has left us facing a position that remains austere and which will make our Borough’s economic recovery from COVID-19, when it does finally end, even more difficult.”
For Wirral, council funding from central Government does not come close to meeting the needs of the borough, as highlighted by the requirement to make such drastic savings.
The decimation of our local authorities and public services by this Government has to stop. As I have said, the Conservative party likes to present itself as the party of tradition, but when we look at the scale of the cuts it has delivered to local authorities since 2010, it is clear that it is anything but. It is leaving local authorities that want to serve local people struggling to provide even the bare essentials, and forcing the closure of vital community spaces such as libraries and leisure centres.
The Government have a choice. They can either continue down their current path of squeezing local authorities of every resource possible, or they can take another path and invest in people and communities, nurture and grow the potential of everybody, and create and maintain a physical and social environment in which individuals, communities and businesses can thrive, and in which people can have a sense of stability. It really is a simple choice, and it is a political choice.
It is time for the Government to change course. They must face the fact that services delivered by our local authorities, and the public realm that they provide and maintain, are fundamental to the functioning of a civilised society. If we are to thrive, the Government must invest in our communities, provide financial stability and fund the services upon which we all rely.
Several hon. Members rose—
Mr Philip Hollobone (in the Chair)
Order. The debate can last until 5.30 pm. I am obliged to call the Front-Bench spokesman for Her Majesty’s Opposition no later than 5.12 pm—the guideline limit is five minutes—and then the Minister, and then there will be three minutes at the end for Margaret Greenwood to sum up the debate. Until then, it is Back-Bench time and there are seven superstars from Merseyside seeking to contribute. There will, I am afraid, have to be a strict four-minute time limit, and then everybody will get in. We will start with the first person on my list, Maria Eagle.
Maria Eagle (Garston and Halewood) (Lab)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate my hon. Friend the Member for Wirral West (Margaret Greenwood) on her contribution and on obtaining the debate.
My constituency covers two of the local authorities involved on Merseyside—Liverpool City Council and Knowsley borough council. I want to say a little bit about Knowsley. This small authority has been disproportionately hit by the austerity and the brutal cuts that my hon. Friend referred to in her introductory speech. It has lost more than half its funding—that is, over £100 million. Years of austerity cuts have resulted in an average loss of £485 per person, compared with the average countrywide loss of £188 per person, yet Knowsley borough council represents the second most deprived borough in the nation. It was ranked the fifth worst when the Lib Dem-Tory coalition began to impose austerity, and it is now ranked the second worst, so it has not been improving over that period; its situation has worsened. It has the lowest score in the city region for deprivation affecting children, and the second lowest for deprivation affecting older people. More than 10,000 households are in fuel poverty—15% of the total—with many of them living in the Harewood part of my constituency. They are now facing a cost of living crisis as well as having to deal with the austerity cuts that my hon. Friend has set out.
Inflation is at its highest level for 30 years, and energy bills are about to rocket by 54%. Food prices are rising faster than general retail prices. Wages are stagnating and falling in real terms, with tax increases to national insurance and council tax stealth increases to come in April. The cut in universal credit has impacted on many people in Knowsley, with many now having to choose between heating and eating—that is the choice facing them. When they turn to the council, the amount of support that can be given after 12 years of brutal cuts is much lower than it used to be, and it is much harder for the council to provide the kind of support that it used to provide. It is the same in Liverpool, where the capacity for local people to get support from the council has been severely curtailed because of the impact of the cuts over that period.
If the concept of levelling up means anything, surely it means improving the lives of people in places such as Knowsley in order to level them up to the better standards of living in other parts of the country. One might have expected, therefore, that Knowsley would receive some of the Government’s levelling-up funding, but it has not. Despite making bids for the funding that the Government keep saying is available, it has not received any. The council was unsuccessful in its bid for an allocation from the levelling-up fund, and neither has Knowsley benefitted from any of the other levelling-up schemes through which the Government have been dispensing largesse.
The Government said that funding would be allocated to level up places such as Knowsley, but Knowsley has not been given any such funding. Instead, it has been given to other places that are perhaps not as high as Knowsley on the indices of multiple deprivation. This is not good enough. I hope the Minister will come up with a better way to make sure that people in Knowsley can get the respect and levelling-up funding that they deserve, because it has not happened so far.
Mick Whitley (Birkenhead) (Lab)
It is a privilege to serve under your chairmanship, Mr Hollobone, and I congratulate my hon. Friend the Member for Wirral West (Margaret Greenwood) on securing this important debate. She has painted a vivid picture of the grave situation facing Wirral Council and Merseyside, and of the terrible price that people living in both our constituencies are set to pay for the Government’s abject failure to give local authorities the support they so desperately need in the midst of this historic cost of living crisis. No corner of our borough will be spared the devastating consequences of further cuts to frontline services, but the poorest communities of Birkenhead stand to lose the most of all.
I represent one of the most left-behind constituencies in the country, with the north end of my town ranking in the top 1% for deprivation nationally. Families living there have already borne the brunt of a long and cruel decade of austerity. Youth services have been decimated, benefits have been slashed and the basic support on which so many people rely has been stripped to the bone. Birkenhead is now bracing itself for a renewed onslaught on frontline services, and it is our youngest and most vulnerable who will be hit the hardest of all.
The list of proposed savings currently being considered by the council makes for daunting reading. Eleven libraries are set to close their doors, including in the highly deprived wards of Prenton and Rock Ferry, where they are used by so many people as a means of accessing essential services. Adult and children’s services will be cut, and the Hive youth zone that neighbours my constituency office is to lose £150,000 in cancelled funding—a devasting blow for the many young people it supports. This not levelling up at all; it is punching down.
I look forward to the Minister’s contribution and have no doubt he will want to talk about the levelling-up funds that have been allocated to Birkenhead to support its ambitious regeneration scheme. In a town that has been starved of investment for so many decades, that money is very welcome, but we will not be made to feel grateful for what we have rightly deserved all along. We cannot ignore the fact that this is largely capital spending that will do nothing to cover the day-to-day costs of getting support to those who need it most.
I also imagine that the Minister will want to parrot the findings of the recent Chartered Institute of Public Finance and Accountancy report on the state of the council’s finances, with all the talk of making difficult decisions. That report makes no mention, however, of the fact that this was a crisis made in Westminster, not Birkenhead. Since 2010, a staggering £260 million of direct Government funding to Wirral Council has been slashed. That was not inevitable. It was an ideologically motivated attack on the public sector, perpetrated by successive Conservative Chancellors, and it has devastated the lives of thousands of people who I represent.
When the Minister rises to speak in a few moments, I hope he will accept responsibility on behalf of the whole Government for the catastrophe looming over our communities. Today, the Liverpool Echo carries the story of Delilah, a baby girl born in Birkenhead on Christmas Day. Her parents, Suzie-Lei and Nathan, want nothing but the best for their daughter, but the simple truth is that so much of their life will be shaped by what the Government do or do not do in the coming months and years. On behalf of Delilah and the countless young people living in my constituency of Birkenhead, I urge the Minister to make good on the promises of levelling up and give Wirral Council the support it so desperately needs at this difficult time.
Sir George Howarth (Knowsley) (Lab)
It is, as always, a pleasure to see you in the Chair, Mr Hollobone. I congratulate my hon. Friend the Member for Wirral West (Margaret Greenwood) on securing this important and timely debate. I thank her, and my hon. Friend the Member for Garston and Halewood (Maria Eagle), for setting out the headline figures for the reduction in grant funding to Knowsley since 2010. They both also referred to levelling up. Since they have put all that information on the record already, I will not go over the same material, but I will concentrate my remarks on levelling-up funding.
Last week, The Guardian published the results of its investigation into the local authority areas that have not benefited from levelling-up funding so far. Its conclusions are truly shocking. The article points out that some of the wealthiest areas in England are receiving 10 times—yes, 10 times—more funding than the poorest. How can that possibly be justified?
As I think my hon. Friend the Member for Garston and Halewood pointed out, Knowsley, which is a Labour-controlled local authority, received the shocking amount per head of population of zero—nothing—in the latest round of levelling-up funding, whereas Conservative-controlled Central Bedfordshire received £90 per head. Whereas Knowsley is the third most deprived borough in England, Central Bedfordshire is in the top fifth. How that can be justified defeats me, and I am sure it would defeat many qualified statisticians and researchers.
As Jonathan Webb from IPPR North accurately put it:
“This new analysis from the Guardian demonstrates the gap between the rhetoric and reality of levelling up.”
He went on to say that the way levelling-up funding is allocated is
“unacceptable and will only widen the UK’s existing regional”
disparities. That is the complete reverse of what we are told it is supposed to do.
Despite Knowsley’s being the third poorest borough in England, it received not a penny from the future high streets fund, the community renewal fund or the towns fund. Councillor Graham Morgan, the excellent leader of Knowsley Council, put it in a nutshell when he said:
“Levelling up has been nothing but a slogan so far. The people who work on these schemes can’t find any box which we haven’t ticked, so is there some other reason—a political reason—why Knowsley isn’t getting the support that local people need?”
The answer to Graham’s question, sadly, is yes—it is a political reason.
I will conclude with three questions. First, how can the Minister justify this politically skewed allocation of levelling-up funds? Secondly, can he give me a firm assurance that when the education investment areas are announced, Knowsley will be among them? Thirdly, will he agree to meet me and Knowsley Council to discuss the need for the regeneration of Huyton town centre?
Dame Angela Eagle (Wallasey) (Lab)
It is a pleasure to serve under your chairmanship, Mr Hollobone, and I add my congratulations to my hon. Friend the Member for Wirral West (Margaret Greenwood) on having successfully applied for this important debate. The past 11 years of Conservative rule have seen an unrelenting assault on the budgets of local authorities, but that assault has been worse in some places than in others. Those with the poorest and most vulnerable populations have been hit hardest; those with the biggest issues to deal with have suffered the highest level of funding cuts. That has been a conscious choice made by successive Conservative Governments in full knowledge of the consequences, which is why the phrase “levelling up” rings so hollow on the Wirral and Merseyside.
In my local authority of Wirral, £230 million in direct funding from the Government was cut to just £37 million by 2020, despite the fact that close to a quarter of Wirral’s neighbourhoods rank in the 10% most deprived nationally. We have all seen the explosion in food banks, social supermarkets, and people going hungry and not being able to afford to heat their homes as a consequence of deprivation and soaring levels of poverty.
There has been a staggering 53% real-terms cut in our Government funding since 2010, which equates to £635 per household. In the same period, local authority staffing levels in Wirral have fallen from 7,669 to just 3,713. The adult social care budget has been cut by a quarter since 2010, despite a huge increase in the number of older people and young disabled people who require help simply to live. This means that a huge and growing area of need is going completely unmet, and the life experiences of those who need support have plummeted, putting an unbearable burden on their carers. However, close to two thirds of the budget is taken up by adult and children’s services, leaving very little for anything else.
Despite the Government’s vainglorious boasts, the 2022-23 local government finance settlement is actually a 2.2% decrease on the last financial year when adjusted for inflation, and that adjustment will get even worse as inflation soars. National Government funding for Wirral has decreased by 37.3% in real terms since 2015-16, leaving the difference to be made up by huge increases in council tax, which the Government assume in their figures. More Government sleight of hand means that they are assuming that all local authorities will put up council taxes by the full amount they can without having to hold a referendum. This transfer of funding from national to local taxes has left local residents paying far more in council tax for far fewer services because of the huge cuts to their budgets allocated by the national Government.
In the aftermath of the covid pandemic, which closed council services and destroyed revenue-raising opportunities, Wirral has been ordered by Ministers to make £27 million of cuts to its 2022-23 budget, under the threat of further national Government intervention. That will mean the decimation of services, increased charges for the use of what local facilities remain, and a mass sell-off of local authority buildings. It means that, at the diktat of national Government, residents in Wallasey will continue being asked to pay more in council tax for lower levels of services. The Government have taken far more from our local area than is fair and have forced huge increases in council tax, which is still failing to keep up with the rising demand. That is not a fair or sustainable solution, and I look to the Minister to give us some relief in his response.
Paula Barker (Liverpool, Wavertree) (Lab)
It is a pleasure to serve under your chairship, Mr Hollobone. I thank my hon. Friend the Member for Wirral West (Margaret Greenwood) for calling this important debate. It is timely, because the Secretary of State is in Liverpool today, addressing northern leaders at the convention of the north.
Last week, we heard the Government fanfare around the levelling-up White Paper. As one commentator put it,
“the Government is like the arsonist turning up late to the scene of their crime with a fire extinguisher in hand claiming to help put out the fire they started”.
So hollow is the Government’s plan that this year—the year of levelling up—councils are being forced to increase council tax precepts yet again, while at the same time making deep cuts to local services. The degradation of local government finances since 2010 has exacerbated geographical inequalities, held back our regional infrastructure and limited the potential of our people and communities.
In this coming financial year, Liverpool City Council will see a starting revenue gap of an eye-watering £34 million. Inflationary pressures and the increase in national insurance—not to mention the insult of having to increase the pay of central Government commissioners by 50%, which is nothing short of a disgrace—are making the picture even grimmer. All that is on top of half a billion pounds-worth of cuts since 2010.
The picture is the same across the Liverpool city region. Even after the Prime Minister’s non-plan for adult social care, councils across Merseyside are still having to make swingeing cuts in that area and raise the adult social care precept, with a starting position of £12 million of cuts for Liverpool in adult social care alone. All the while, demand for services increases, and the recruitment, retention and workforce crisis rages on in the sector. We cannot go on like this.
Such is the arrogance across Whitehall that shuffling deckchairs is the modus operandi, with no real plan for municipal revival and no plan to restore local government to the pinnacle of achievement. Most insulting of all, there is no acknowledgement that the decisions of the past decade have contributed to the growing divide between the north and more affluent parts of the country. It is not rocket science why communities in places such as Merseyside, which have some of the highest levels of deprivation in the country and have been subject to some of the most brutal cuts, have become dirtier and less safe, have lower life expectancy, suffer from increasing food bank usage, and see widening education attainment gaps.
Forgive me for thinking that that has been a deliberate political ploy to re-engineer politics across the north of England, which lets Labour councils, as local establishments, shoulder the blame and burden for austerity and higher taxation, while the Conservative Government come along at the eleventh hour to save the day. Pay more, get less —no wonder our residents are fed up. It may benefit the Conservative party, but it is bad governance, and it is our communities that pay the price. The perverse nature of the centralised British state means that we now have Treasury announcements on filling potholes. Guess what? Local councils used to just fill potholes without the need for a Whitehall press release.
The Government cannot and will not level up this country while our councils are scraping around year after year to produce balanced budgets against a backdrop of sustained cuts. Across our city region, we simply cannot take any more. I hope the Minister has some real ideas for how that is going to be addressed.
Ms Marie Rimmer (St Helens South and Whiston) (Lab)
I am pleased to serve under your chairmanship once again, Mr Hollobone. I congratulate my hon. Friend the Member for Wirral West (Margaret Greenwood) on securing this much-needed debate.
Merseyside’s wealth is its people. They are warm and generous, with a tremendous sense of humour. Most of all, we are supportive of each other. I am glad to see so many of my Merseyside colleagues here. I have the honour and privilege of representing two local authorities in Merseyside: St Helens, the home of glass and, of course, of my beloved Saints; and Knowsley, the home of the historic towns of Prescot and Whiston.
Knowsley and St Helens have an impressive track record of delivering regeneration. They have both delivered projects to raise the aspirations of our communities and, ultimately, improve life chances. Both areas are full of proud people who want the best for their community, yet both areas have had their budgets eviscerated over the past decade of austerity, which has continued into the ’20s. We hear the budget cut figures so much that their consequences can be lost, but it is right that we hear them, and I am pleased that Members have covered them so adequately today.
The decade of austerity was destructive to our communities, yet it is about more than the cuts; it is about the communities and their needs, local authorities’ legal duties to protect and to provide care, and the consequences of the cuts and the vicious cycles they create. The Government have massively reduced central grants to local councils. The idea was for local authorities to become self-sufficient. Councils were expected to raise council tax and retain business rates to cover the cuts. The Government were repeatedly warned about the consequences that that would have. It may work in wealthier parts of the country, but it does not work everywhere.
Knowsley and St Helens are second and 22nd respectively on the 2019 list of most deprived local authorities. Less well-off areas do not raise as much council tax or business rates as wealthier ones. The consequences have caused even greater hardship for communities that still have not recovered from the massive loss of manufacturing jobs. Areas that have been left behind are being pushed further adrift. It is a vicious cycle that is hard to escape. The wealthier areas that generate more income stay ahead, while areas such as mine are not given the investment to catch up. I am not sure how that complies with the so-called levelling-up agenda. Forcing local authorities to bid for scraps that are a fraction of the budgets that they have had cut is not good enough.
The regional imbalances that we have are quite simply a stain on our country. We are more geographically unequal than any other rich country. How is it that Germany, a country that was divided in two for the majority of my life, the eastern part of which was under the yoke of communism for decades, is today a more equal country? It is an embarrassment that requires a serious plan to fix.
St Helens, Knowsley and other areas in need are not asking for a handout; we are asking for fairness. We want to become more self-sufficient, like the wealthier parts of our country. The Government must help us to achieve that by supporting local authorities with fair funding. That means funding based on needs—for care in particular. Deprivation needs to be included in funding distribution formulas. Our country’s regional imbalances can no longer be ignored; they need to be addressed now, before they become irreversible. I call on the Government to get down to addressing the needs of the people of this country.
Kim Johnson (Liverpool, Riverside) (Lab)
It is a real pleasure to serve under your chairship, Mr Hollobone. I congratulate my hon. Friend the Member for Wirral West (Margaret Greenwood) on securing this important debate.
My hon. Friends, the superstars of Merseyside, have spoken eloquently of the funding crisis across Merseyside. The communities we represent have suffered systematic defunding for decades. This latest round of so-called levelling up is just the most recent in an endless stream of broken promises and increasing pressures on poor and working people.
In Liverpool, we have had two thirds of our budget cut over 12 years of Tory austerity. The damage that has done to the service we deliver cannot be understated. I pay tribute to councillors and officers in Liverpool who have worked hard with the ever-shrinking budget to ensure that our council continues to provide the best support possible to those in need in our city, including Granby Sure Start, Windsor Street library, Park Road sports centre and the invaluable citizens support scheme.
Liverpool is rated the third most deprived local authority in England. The deprivation faced by our communities is incredibly stark and increasing at an alarming rate. With in-work poverty at record levels and child poverty sky-rocketing, those we represent are facing a cost of living crisis. There is a triple whammy of soaring energy bills, real-term wage freezes and Tory tax hikes for those least able to bear them. Now, we are expected to fund an eye-watering 50% increase in the wages of the central Government commissioners, while making cuts of £34 million—all at a time when billionaires, bankers and shareholders are seeing their profits soar and their taxes cut. It beggars belief.
How can it be that Shell has declared a 14-fold increase in profits at the same time as it was announced that the energy price cap is being raised by 54%? The Government-driven rise in council tax in April will further compound these regional inequalities, as the wealthier councils in London and the south-east will be able to raise far more money than councils such as ours in Liverpool. Unless the Government commit significantly more funding to Merseyside and other underfunded areas, they will fail to address the systemic growth in inequality and poverty that is crippling our region.
The financial challenges faced by our communities are growing at an alarming rate. If we are truly to face up to them, cushion the most vulnerable against the worst of the impact and give our communities the long-overdue investment they need and deserve, we need to reverse the cuts of the last decade and provide multi-year settlements for councils in order to provide stability and phase out bid funding culture.
We have been here and seen it all before. Liverpool is no stranger to central Government policies of managed decline—we fought them in the ’70s under Thatcher, and we will fight them today under Boris Johnson. We cannot allow our communities to pay the price. Our local government institutions are already scraping the bottom of the barrel to balance the books. We must reverse the cuts to public services and local government; we need a £15 minimum wage to boost incomes to the lowest earners; and we must reverse cuts to social security and pension payments and reinstate the triple lock.
Mike Amesbury (Weaver Vale) (Lab)
It is a pleasure to serve under your chairmanship once again, Mr Hollobone. I thank my hon. Friend the Member for Wirral West (Margaret Greenwood) for not only securing this important debate, but the work she is doing with local Labour MPs, councillors and residents to protect services from Government-imposed cuts in the Wirral. The Secretary of State is quickly gaining a reputation as the Minister for closing down, boarding up and hollowing out services in the Wirral and right across Merseyside.
Libraries, leisure centres and golf courses in the Wirral are facing closure, and their staff are facing the chop, as a result of centrally imposed austerity—an additional £27 million of austerity, despite the Chancellor and this lame duck of a Prime Minister promising that it was over. The stark reality can be witnessed right across every community in Merseyside and beyond. All right hon. and hon. Members present have exposed the continued pathway of Conservative-imposed austerity, despite the Government’s fine words, and have laid out the consequences for council budgets, people and services. My hon. Friend the Member for Garston and Halewood (Maria Eagle) referred to the exclusion of Knowsley Council from the mysterious levelling-up fund, while my hon. Friend the Member for Birkenhead (Mick Whitley) referred to the 11 libraries that are being levelled down and facing the chop.
Last Wednesday, the Secretary of State and his team finally published the long-delayed and trailed levelling-up White Paper, as referenced by many Members present. After 12 years of Tory Government, we were presented with 12 mission statements that act as a scorecard for failure; it is a cut-and-paste job with no new money, reannouncements and vague targets to be met in 2030.
It may be fascinating to discover, on page 2 of this 300-page levelling-up White Paper, that Jericho was the earliest permanent urban settlement. However, Members present—and, more importantly, our constituents—want to know when our councils and communities will get back the funds that have been taken away from our villages, towns and cities over the last 12 years. Some £490 million has been taken away from the people of Liverpool, and another £34 million is expected to be cut; more than £50 million has been taken away from my local council of Halton. In fact, every Merseyside local authority has seen a cut of more than 50% in real terms, according to the National Audit Office.
The Minister will of course refer to cash-terms increases, but that excludes inflation, which is at a 30-year high. The consequences in many cases are workforces depleted, children’s centres closed, libraries shut, youth services decimated and new charges introduced. The Government’s approach to levelling up has been to give communities a fiver for jumping through mysterious hoops, while taking away a tenner.
In the case of Knowsley, Tory Ministers do not even see the council as worthy of the crumbs off the table of the levelling-up fund; they instead favour Richmondshire, multi-billionaires who happen to donate to the Tory party, and filling the potholes on the driveway up to their mansions. The good people of Knowsley remain left behind in Tory Britain.
Without doubt, the Minister will refer to the Government’s preferred measure when talking about local government finances: core spending power. There will be some additional funding for adult and children’s social care, but nothing like enough to meet demand or to plug the gaps. In fact, it was stated that in real terms there will be a cut of 2.5% in this settlement. This smoke-and-mirrors approach will result only in the Secretary of State being laughed off the Merseyside pitch during his visit to Liverpool today.
Between 2010 and 2021, council tax has gone up by a massive 31%, while the area based grant has been cut by 37% on average. Tory Ministers have piled on the pain, with hard-pressed families paying more while receiving less in services, as was rightly stated. People have seen services closed down, places boarded up, and more and more councils facing bankruptcy.
Having council tax as a main source of income is inherently unfair; many councils in Merseyside have a higher number of band A properties with a lower tax base, but the arrangement favours the Secretary of State’s Surrey authority. Ministers have promised a fair funding review time and again, yet councils and communities are still waiting desperately. When can we expect that, and a fundamental reform of business rates?
That unfairness and the cuts have consequences. It is no coincidence that, as was reported on the front page of the Liverpool Echo today, a baby born in Merseyside will on average die younger than a baby born in Surrey—a shameful indictment of the Government’s 12 years in office.
The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Neil O'Brien)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate the hon. Member for Wirral West (Margaret Greenwood) on securing this important debate. As she has shown today, she is a passionate advocate for not only her constituency, but the whole of Merseyside. She has done us a favour by bringing together Members from across the region on the eve of the local government finance settlement debate to look at the funding in Merseyside.
Merseyside is a place with a hugely proud history and present. It is a European capital of culture, has legendary musical exports and at least two iconic football teams, and has, over the course of my lifetime, made significant economic progress, bouncing back from a difficult period of de-industrialisation. On the other hand, while Liverpool is absolutely recovering and making progress, we recognise that the city region continues to face profound challenges of deprivation and poor health—challenges that are among the most severe in the country.
We are committed to delivering a more prosperous future for Merseyside, and we want to help the area to play to its considerable strengths while it adapts to the challenges that I mentioned. Our plan is to do that in two different ways: first, through extra resources for local authorities in the local government finance settlement; and, secondly, through our flagship levelling-up proposals.
Neil O'Brien
I am afraid that I do not have time to give way; I am so sorry.
Neil O'Brien
I am up against the clock, as the hon. Lady knows.
As we announced on Monday, the local government finance settlement for the next year makes an additional £3.7 billion available to councils in England; that includes funding for adult social care reform. This is an increase in local authority funding of more than 4.5% in real terms compared with the previous year, and we expect core spending power—the measure of resources available to local authorities to fund service delivery—to rise from £50.4 billion in 2021-22 to £54.1 billion in 2022-23, which I am just about to come to. I emphasise that the Government are providing around £1.6 billion in additional grant in the next year through the settlement, and through additional funding for things such as the supporting families programme and cyber-resilience. What that means for Merseyside is that core spending power will increase for all authorities in the region by at least 7.7%, compared with last year.
Mr Philip Hollobone (in the Chair)
Order. The Minister has made clear that he is not giving way. I am not saying whether that is right or wrong. However, I point out that he has six minutes left. I know that feelings are running high, but everybody has had their say, so let us give the Minister the courtesy of hearing what he has to say.
Neil O'Brien
Thank you, Mr Hollobone. That 7.7% increase is above the average cash increase across England of 7.4%. It is a cash increase of 7.7% for Sefton, 7.9% for the Wirral, 8.1% for Liverpool city, 8.4% for St Helens and 8.5% for Knowsley.
However, as every Member here will know, we vowed to build back better from the pandemic, and that is not only about local authority spending. We plan to do that through a cross-government mission to level up the country. We will increase our support for local councils, such as those in Merseyside, taking control of their destiny and stimulating their own growth.
Last week saw the long-awaited publication of our levelling-up White Paper, which Members referred to. It set out our plans. Part of it is about helping people directly; that is why we have changed the universal credit taper rate, making the average full-time worker £1,000 better off. Part of it is about employment support and the extra £1 billion we are spending on helping sick and disabled people into work, so that they have a chance to earn more money. It is also about directly increasing wages through our record increase to the national living wage, which again will make people about £1,000 better off.
On the one hand, we are helping people in Merseyside directly, and on the other we are devolving unprecedented powers to Liverpool and Merseyside. When we came to power, the only part of England that had any devolved powers was London, the capital and the richest part of England. That settlement was obviously unbalanced—good for London, but not necessarily good for the rest of the country. As Members mentioned, the Secretary of State for Levelling Up, Housing and Communities is speaking at the Spine in Liverpool today, alongside council leaders and metro Mayors—a post that did not exist when we came to power—from across the north of England.
However, we know that our ambitions for Merseyside will not be delivered without proper investment, so our ambitions are backed up with funding. Since Steve Rotheram’s election as Liverpool city region Mayor in May 2017, the Government have provided the city region with £172 million through the transforming cities fund and £332 million through the local growth fund, and will provide it with £710 million over the next five years to transform local transport networks. Across the Liverpool city region, four areas have also seen substantial cash injections through the towns deal programme, which is designed to rejuvenate high streets. That includes £37 million for Southport; that is one of the biggest town deal investments to date. Through that kind of funding, we can help restore people’s civic pride in the place they call home in the years ahead. I also draw Members’ attention to the launch last year of the dedicated freeport in Liverpool, which estimates suggest could add £850 million to the local economy and create 14,000 new jobs.
To answer a question raised by Opposition Members, Members should look forward to further details on the UK shared prosperity fund, which we will set out shortly. That fund is worth £2.6 billion and will back the sort of projects that help people access opportunities in places of need. To respond directly to one of the questions asked, that will be an allocative process, not a competition. We are responding to the desire of places to have certainty about their funding. A number of Members raised questions about the commissioners. None of us wanted commissioners to have to go in. According to the independent Liverpool City Council commissioners report last year,
“The Council is emerging from a difficult, somewhat toxic period that has led to police investigations.”
I do not want to delve further into that. However, none of us wanted those commissioners to have to be there. We hope that their work will be complete soon.
A few hon. Members spoke about the wider context. The tax share of GDP is at a record high; there is increased corporation tax and capital gains tax, so the rich are paying more through that route; a crackdown on tax avoidance has raised £160 billion-plus; we got rid of the double Irish arrangement and various other tax dodges that flourished under the last Labour Government; and we introduced the first tax on private jets. We have done a number of things to ensure that those with the broadest shoulders are paying, and that is why we are able to produce the increases in spending power for local authorities that I outlined.
Provided that the local government settlement passes through the House tomorrow, we believe that Merseyside and the local authorities making up the region will be on a firm footing for the year ahead. We are moving to a multi-year settlement as soon as we can. It is important to get that right. I am confident that the hon. Member for Wirral West and all those who have contributed to today’s debate will share in my pride at the progress that has been made in Merseyside over the past decade. If I think back to when my brother and friends used to live there, there has been humungous progress across Merseyside.
In Liverpool’s heyday, when it dominated transatlantic trade, it was considered the New York of Europe. Today, the fusing together of the powerful role played by the Liverpool City Region Combined Authority and its Mayor with significant Government investment in the region has given the city region a new lease of life. The alchemy of science, health, technology, culture and education that we see in Merseyside in 2022 is testament to a truly great city region, and to its people looking not back but forwards with confidence. Although the city region is part way through its renaissance, there is a lot of potential still to be realised, and I look forward to further discussions with colleagues from across the House on how we can best support Merseyside.
Margaret Greenwood
I am somewhat flabbergasted by the Minister’s response, to be perfectly honest. He talks about our councils being on a firm footing for the year ahead and humongous progress on Merseyside; he cannot have been listening particularly closely to the debate, or the evidence brought forward by MPs about the huge amount of deprivation. I remind him that my hon. Friend the Member for Liverpool, Riverside (Kim Johnson) spoke passionately about the urgent need to address systemic poverty and inequality. Colleagues talked about food bank use, which has gone through the roof.
My hon. Friend the Member for Garston and Halewood (Maria Eagle) spoke of Knowsley—her constituency is in two local authorities—being the second most deprived borough in the nation, so how can the Minister stand there and talk about things looking good for Merseyside? As my right hon. Friend the Member for Knowsley (Sir George Howarth) said, Knowsley is not receiving any levelling-up money. It is astonishing that the Minister has taken this course. My hon. Friend the Member for Birkenhead (Mick Whitley) spoke passionately about this crisis being made in Westminster, not Birkenhead. He explained clearly that this ideological attack has devastated the lives of thousands of his constituents. He described it as not levelling up, but punching down. As my right hon. Friend the Member for Knowsley explained, Knowsley received no money for levelling up at all, whereas central Bedfordshire received £90 per head, and it is in the top fifth of the country. He asked how the Government can justify skewing the levelling-up fund.
My hon. Friend the Member for Wallasey (Dame Angela Eagle) spoke about an unrelenting assault on local authorities in the last 10 years, with the poorest populations being hit the hardest. She said that that was a conscious choice, which is why the phrase “levelling up” rings so hollow in Wirral. She spoke about the explosion in the number of food banks and social supermarkets, and about how devastated our social care budgets have been. My hon. Friend the Member for Liverpool, Wavertree (Paula Barker) spoke about the half a billion pounds-worth of cuts in 2010 to Liverpool—there was a cut of £12 million to Liverpool adult social care alone—and said clearly that we cannot go on like this.
This debate has been a plea from the MPs of Merseyside to the Government for funding for our communities. The impact is clear, raw, and hurting our people. My hon. Friend the Member for St Helens South and Whiston (Ms Rimmer) spoke about the importance of working to improve life chances, but she described a decade of austerity that has been destructive to our communities. She spoke of the huge regional inequalities in our country, and described how they are being entrenched, as less well-off areas can raise less through council tax and business rates.
I think I have covered everybody who spoke in this really important debate. I ask the Minister to go away and revisit the points made in it, especially that made by my hon. Friend the Member for Weaver Vale (Mike Amesbury) about this not being a Government of levelling up but a Government of closing down. This is real, and it is hurting our constituents. We ask the Government to think again.
Question put and agreed to.
Resolved,
That this House has considered funding of local authorities on Merseyside.