The Secretary of State for Levelling Up, Housing and Communities and Minister for Intergovernmental Relations (Michael Gove)
I beg to move,
That the Local Government Finance Report (England) 2022–23 (HC 1080), which was laid before this House on 7 February, be approved.
Mr Deputy Speaker
With this we shall consider the following motion:
That the Referendums relating to Council Tax Increases (Principles) (England) Report 2022–23 (HC 1081), which was laid before this House on 7 February, be approved.
Michael Gove
The House should also note that the Local Government Finance Report has since been updated with a small correction on page 14. Like you, Mr Deputy Speaker, I am grateful to the Select Committee on Statutory Instruments for its careful consideration of these reports.
Before I turn to the details of the reports, may I say a brief word of thanks to my right hon. Friend the Member for Tamworth (Christopher Pincher), who until very recently served as Minister for Housing and Planning? We will be starved of his eloquence at the Dispatch Box, because he has been translated to the Whips Office, but I know that that eloquence will not be wasted on my right hon. and hon. Friends, who will benefit from his wisdom and gentle guidance as they consider which Lobby to enter in the light of all the delicate matters that we discuss.
I should add that it was on the watch of my right hon. Friend that the number of first-time buyers in the country reached a record level, and that the stewardship he displayed, and also the imagination and attention to detail, were those of a model Minister. He will be missed. I should also add that although his shoes are both difficult to fill and always highly polished, we are nevertheless very fortunate to have in the Minister for Housing, my right hon. Friend the Member for Pudsey (Stuart Andrew), an excellent new addition to our departmental team. We welcome him to his place, and we know that he is a doughty defender of the interests of the north of England, of local government overall, and of those who aspire to live in and to own a decent home. I am therefore grateful for the fact that he has joined the team.
The local government finance settlement makes available, to local government in England, core spending power of £54.1 billion for 2022-23. This is an increase of £3.7 billion on 2021-22, a real-terms increase of 4.5%.
It would be remiss of me not to acknowledge that the considerable eloquence of the hon. Member for Wigan (Lisa Nandy) will be deployed inter alia in drawing attention to the years from 2010 to 2017-18 when there were necessary economies in local government spending. I suspect, although I cannot be certain, that she will for partisan reasons, entirely fairly, seek to contrast the restraint in public spending during those years with the increases that we are now making to suggest that the increases do not make up for the previous restrictions on public spending, but it is impossible to consider those restrictions without appreciating the context of the economic circumstances that the coalition Government inherited in 2010—I do not wish to make any partisan points—and that required us to deal with the inevitable consequences of the financial crash.
Ms Lyn Brown (West Ham) (Lab)
I am not going to delve into history; I would just like to talk about the pandemic of the last couple of years. In my constituency, Newham Council is about £10 million shy because of covid spending, which will have ongoing consequences. Much of it has come from revenue accounts for temporary accommodation. Newham has the largest housing list in the country and the second highest rate of child poverty, yet we are still having to cope with covid costs of £10 million and counting without any respite from the Treasury.
Michael Gove
The hon. Lady makes a series of important points. Newham Council faces serious pressures for a variety of reasons, as do so many in local government. This provides me with an opportunity to draw attention to, and to praise, the efforts not only of elected councillors but of those who work in local government in Newham and elsewhere who, in dealing with the strains of covid over the past two years, have shown immense determination, energy and forbearance.
Whichever party had been in power, these covid costs would have been inevitable because of the nature of the pandemic. I would argue that the big choices made by the Prime Minister on the vaccination programme and the approach we took immediately before Christmas in the wake of the omicron wave have been vindicated by events. I would also argue that the Chancellor of the Exchequer’s adoption of the furlough programme ensured that our economy weathered the storm more effectively than other economies did. Because of those big decisions made by the Chancellor and the Prime Minister, we are now in a position where the spending review can increase expenditure by 4.5% in real terms.
Ms Brown
I am grateful to the right hon. Gentleman for mentioning how very difficult it has been to be a councillor or officer in local government over the past two years. They have had a terrible job, but it is not made easier when they were told that their costs would be covered only to find themselves £10 million shy and counting. I hope he will take that away and think about how he can give respite.
Michael Gove
Absolutely. The position of those who are served by Newham Council has been very clearly outlined by the hon. Lady. Within the context of the settlement we are debating today, we will look at all the additional support we can give to those who are dealing with the consequences of covid.
Chris Loder (West Dorset) (Con)
Boroughs such as Newham will benefit from £38 million under the settlement, compared with rural areas such as Dorset, which will receive nothing. Does my right hon. Friend agree that should be borne in mind?
Michael Gove
My hon. Friend makes an important point, but it is vital not to pit urban against rural or Dorset against London. In the debate on the police grant report, he and my hon. Friend the Member for South Dorset (Richard Drax) drew attention to particular crime challenges that Dorset faces, with major cities such as Bournemouth in the broader Dorset area, issues of county lines and rurality, and pressure on public services overall. They were absolutely right to do so. We have sought to ensure that in the settlement we provide Dorset’s police and fire and rescue service with appropriate resource, but of course we keep things constantly under review.
For the benefit of the House, I will briefly run through the details of the funding settlement. Overall, the settlement funding assessment—in essence, what used to be the revenue support grant allocation—comes to some £14,882,000,000, a truly significant amount and a significant increase. In the local government finance settlement, we are also increasing our compensation to local authorities for under-indexing the business rates multiplier. We are making sure that local authorities have the opportunity to raise the council tax precept by 2% on the social care precept and that they benefit from an improved better care fund from the new homes bonus. The rural services delivery grant, which helps to address some of the issues that my hon. Friend the Member for West Dorset (Chris Loder) so ably raised, is being held at £85 million.
Perhaps the two most substantial changes are the increase in the social care grant, to take account of the particular pressures on local authorities as a result of the challenges that adult social care services face, and the additional £822 million that has been made available in a specific services grant. That money is unringfenced, and it is in keeping with the direction of our “Levelling Up” White Paper and of the Government overall in recognising that, wherever possible, those in local government are best equipped to meet local needs. That principle of devolution and local discretion will be in our mind as we consider how to reform local government finance further in future.
Rebecca Long Bailey (Salford and Eccles) (Lab)
The right hon. Gentleman is being generous in giving way. He will know that Salford City Council has faced budget cuts of £232 million since 2010 and has stated that the approach to funding that he outlines does not adequately reflect the demand that it faces. Does he agree that true levelling up requires funding to meet actual demand, and that it requires differentials for poverty, inequality and council tax payers’ ability to pay to be effectively factored into Government grant methodology?
Michael Gove
The hon. Lady makes an important point. As we review future reforms to local government finance, I look forward to working with her and other colleagues to make sure that her point about deprivation, which affects a considerable number of her constituents, is reflected in our overall approach. It is important to say that the most relatively deprived areas of England—those in the upper decile of the index of multiple deprivation —will receive 14% more per dwelling in available resource through this year’s settlement than the least deprived areas. The settlement serves the cause of social justice with a redistribution towards poorer areas, but of course we keep these things under review.
Gareth Thomas (Harrow West) (Lab/Co-op)
Why does the Secretary of State think that the Conservative chair of the Local Government Association, James Jamieson, has criticised the settlement for not including sufficient funding to tackle the considerable additional pressures on local services, particularly with respect to vulnerable adults and children?
Michael Gove
I talked to James Jamieson this morning, as I do most weeks. One reason why he leads the LGA is that he is a brilliant Conservative council leader. If James were here, I think he would say he was not criticising but encouraging us, as any friend would, to do even better. It is striking that the welcome that the local government sector gave this year’s funding settlement was broader, deeper and more cordial than it has been for some years. Politics being politics, any sector will always, entirely understandably, want its champion to be someone who can ask for more.
Mr Kevan Jones (North Durham) (Lab)
I note that the Secretary of State does not want to talk about what has happened in the past, but my hon. Friend the Member for Salford and Eccles (Rebecca Long Bailey) raised a point about need. It was no accident that the Government took the needs formula out of the local government settlement, meaning that areas such as mine and hers, which have high demand for social services—County Durham has over 900 looked-after children in care—have been the net losers. I am sorry, but it is not about pitting cities or areas against one another; it is just a matter of fact that certain areas have higher demands because of their demographics. That has to be taken into consideration, but the Secretary of State’s Government took the needs formula out during the coalition era.
Michael Gove
The right hon. Gentleman makes a number of points and ensuring that I addressed them all would mean that I would be here well after the moment of interruption. We could discuss the difficult economic situation that the coalition Government inherited in 2010. We could discuss the way that we unringfenced funding to ensure that local authorities could respond to that. We could discuss the particular way in which some local authorities, irrespective of political colour, were able to use their resources more effectively. We could discuss the way in which interventions beyond direct local government funding under the coalition Government sought to address deprivation. It is striking, for example, that between 2010 and 2014 the Education Secretary—whoever he was—managed to introduce a pupil premium that saw millions flowing to the very poorest students, an initiative that had not been introduced under the previous Labour Government and that helped to close the gap between advantaged and disadvantaged children.
The right hon. Member for North Durham (Mr Jones) is an brilliant campaigner for citizens in Stanley and North Durham. He makes his case effectively and he is right to remind us that when we look at local government finance it is important to bear in mind need and deprivation. That is what we are doing as we look overall at how we can review local government funding later on.
Michael Gove
I can never resist the right hon. Gentleman, so I am happy to give way again.
Mr Jones
The Secretary of State just does not get it. Those were not options; they were political choices taken by the coalition Government. The point that my hon. Friend the Member for Salford and Eccles and I are making is that on issues such as looked-after children and adult social care—he should remember that in County Durham life expectancy has gone down in the past 10 years—it is not optional for councils to intervene. They have a statutory obligation to do so and if that is not taken into account in the formula, councils in areas such as County Durham and Salford and Eccles will always be at a disadvantage because the right hon. Gentleman’s Government, of which he is a part, took that out of the funding formula.
Michael Gove
Again, the hon. Gentleman—my apologies, the right hon. Gentleman, and quite right too —makes three important points. On looked-after children, the whole position that we have had to take over the past 10 years on children in social care has been driven by a variety of factors that mean that we deal with the challenges of looked-after children and children at risk of abuse and neglect in a more intense fashion. That is why Josh MacAlister’s review of children in social care is so important and I hope that when it is published the right hon. Gentleman will welcome it.
On adult social care, the right hon. Gentleman is absolutely right that there is a greater degree of pressure, not just because we have an ageing population, although I note his important point about life expectancy in County Durham, but because we have more people moving into adulthood who, thanks to advances in medical care, also require social care. That is why in this settlement local authorities can make use of more than £1 billion of additional resource specifically for social care. On top of that funding, as was outlined in the presentation of the White Paper earlier today by my hon. Friend the Minister for Health, £162 million in adult social care reform funding is also being allocated to help local authorities.
Mr Clive Betts (Sheffield South East) (Lab)
I could recognise the valuable approach the coalition Government took under the then Secretary of State in removing ringfences, but we can contrast that with the number of pots that are being created that local authorities have to bid into, which seems like ringfencing by another name. The Secretary of State mentioned Councillor Jamieson, the chair of the LGA, who said at the Select Committee that we cannot sort out local government finance until we sort out social care funding. The LGA is looking for a big solution and it is disappointed that the levy highlighted as solving the problem actually gives no mainstream money to local councils to deliver important social care services.
Michael Gove
The Chair of the Levelling Up, Housing and Communities Committee makes two very important points. First, there is the tension, which always exists, between ensuring that we devolve as much funding as possible and simplify the funding landscape. There is also the need from time to time to respond to specific challenges. The one relates to the other, because local government, as he made rightly clear in his second point, wants additional funding for adult social care made available to it, and worries, for well-rehearsed reasons, that much of the additional funding will be devoted to the NHS’s immediate needs rather than long-term reform. I believe that the White Paper introduced earlier today on the integration of adult social care between the NHS and local government to an even greater degree will help address those issues. However, I recognise that they are serious ones and that the House will want to examine both the White Paper and any legislation that we introduce in due course.
I am conscious that many Members across the House will want to use the debate both to praise those in local government and to make specific cases for future funding reform. However, the settlement that we have secured marks a real recognition of the importance of local government and the Government’s determination to ensure that we strengthen its hand in dealing with the social ills that our country faces. That is why I commend the increase in the local government finance settlement to the House.
Sir George Howarth (Knowsley) (Lab)
Before I get into the substance of what I want to say about this settlement, I want to make a couple of remarks to the Secretary of State. There was a debate yesterday in Westminster Hall on local government funding in Merseyside—the Liverpool city region, as we now call it—which was covered by the Under-Secretary of State for Levelling Up, Housing and Communities, the hon. Member for Harborough (Neil O’Brien). In his response, he chose not to answer any of the questions asked by me or my hon. Friends from the city region. The Secretary of State is unfailingly polite and always pays attention to what people say, so I say to him ever so discreetly—of course, no one else can hear what I have to say—that he needs to have a word with the Under-Secretary of State, who should understand that one of the basic requirements of replying to a debate is to respond to what people said during it.
Unfortunately, the local government finance settlement, as others have said, is still 20% lower now than it was in 2012-13. I will return to the implications of that for Knowsley, but I will first make some general comments, some of which have already been made, about the overall implications for local government. As my hon. Friend the Member for Wigan (Lisa Nandy) pointed out, it represents a one-year settlement and, in a typically fluent, well-informed speech, she made it clear why that is unacceptable. I simply add that it is impossible for local government to plan ahead unless local authorities know more than a year ahead—preferably three years—what they will receive in grants. I am sure the Minister and the Secretary of State are well aware that that is an impediment for local authorities, and I hope that they will address it in future settlements.
My hon. Friend also mentioned that the Government promised—if the Government deliver on this, I am sure that it will be welcomed—that the next settlement will better reflect local levels of need. That would be important if it did address the disparities in deprivation between local authorities in different parts of the country, rather than to continue with the shift towards sparsity and population-based measures, which are manifestly unfair on those areas with the greatest need. I therefore ask the Minister—perhaps he will take the time to answer this at some point—to confirm that need will be properly accounted for in any new grant distribution system.
There is also justifiable concern that if Knowsley does not increase council tax by 2.99%, it would forgo permanent funding that the Government might assume will be available when determining future funding allocations. Will the Minister reassure me that the Government will not penalise those local authorities that, for whatever reason, decide that 2.99% is unaffordable to their residents?
I also worry that the settlement will be insufficient to cover inflationary pressures—for example, democratic pressures, legislative cost pressures, and pressures as a result of the health and social care levy on national insurance and energy price rises of up to 50%. As my hon. Friend the Member for Sheffield South East (Mr Betts) pointed out, the general level is already above 5% and could, by the end of the year, be as much as 6%. That will mean that the settlement will be less generous than it appears to be at the moment. Will the Minister again give us some assurance that any additional inflationary pressures that influence the way that the grant will work for local authorities will be considered sympathetically?
The settlement includes funding for new burdens, such as adult social care, children’s social care and home-to-school transport. Unfortunately, however, it is wholly inadequate and will not cover, for example, the £12 million that Knowsley faces as a result of these additional demands.
I turn to the specific implications of the settlement for Knowsley. As the Minister will know, since 2010 Knowsley has had its grant support reduced by £116 million. That figure was referred to in a debate yesterday. The cumulative effect of that on a small borough such as Knowsley—the third most deprived authority in England, by the way—is enormous. It means not only that services that are badly needed by people cannot be extended or grown to meet need—I have referred to some of the pressures that brings—but that people’s life chances are impaired, sometimes irreversibly, by the lack of support that they get. That is nothing to do with any intention on the part of Knowsley; it is simply a matter of the money not being there to do everything that it needs to do. Will the Minister undertake to start the process of reversing that unfair and unacceptable trend whereby areas with high need, such as Knowsley, end up having some of the highest cuts in grant support anywhere in the country?
The picture I have painted so far is one of unrelieved gloom, particularly for Knowsley, so let me make a couple of positive points. First, as my hon. Friend pointed out, the 8.5% increase in core spending power that Knowsley will get is welcome, although, frankly, it does not do anything like address the problem of the £116 million that we have lost over the past decade.
Secondly, despite the crushing loss of grant that we have experienced, Knowsley Council, amazingly, managed to bring about some transformational changes, including the regeneration of Kirby town centre. As a result of the fact that there were years and years of successive private sector owners who failed to regenerate the town centre, the council, very bravely, bought it and is now in the process of wholesale regeneration, which is obvious for all to see. There is also the Shakespeare North project, which I do not know whether the Minister is aware of—probably not.
Sir George Howarth
I am pleased to hear that, so maybe he is not completely a Shakespearean tragedy. The Shakespeare North project, into which, to be fair, the Government have put a substantial amount of investment, is a huge success. I pay tribute to the Government for putting money into the Arts Council, to Knowsley Council for putting in a substantial amount, and to the Liverpool City Region Combined Authority and metro Mayor Steve Rotheram for also contributing. I should also mention the private donors, including Lady Anne Dodd—the widow of Ken Dodd—who put £400,000 into the project for a comedy space.
Knowsley Council has been the driving force behind Shakespeare North, on which it should be congratulated, and much else besides that I do not have time to go into. However, there are important projects still awaiting Government support that we had hoped would come from the levelling-up fund, such as the regeneration of Huyton town centre. Knowsley Council put forward a really good project for regenerating Huyton town centre, and I totally reject the assertion that such projects were selected on merit alone because, frankly, this project would have been far better than some that were funded. As I said yesterday, there is real concern that the levelling-up fund has so far been politically skewed in a way that means Knowsley, yet again, loses out.
Mr Jones
Yes, I am, and the hon. Member for Redcar (Jacob Young) called me an anorak, so possibly I am both.
The White Paper’s analysis is not bad in that it raises the issue that we should be tackling, but it offers no solution to enable us to do that. I really enjoyed the undergraduate thesis on the Venetian city state and how Babylon was built, but again it did not reach any conclusions. Nevertheless, we have a Government who talk in terms of levelling up. My hon. Friend the Member for Sheffield South East is right: you cannot have levelling up if you exclude the way in which local government is financed.
The other sad thing is that the Government’s approach has mainly been around capital projects. I think it is because the Prime Minister has a fixation—he has a fixation on quite a few things—on projects where you can see that something is being built. No doubt a Minister or local Conservative Member of Parliament can unveil a plaque and say, “This is what we have achieved.” As my right hon. Friend the Member for Knowsley (Sir George Howarth) said, if it was a fair process, fine.
I used to have a saying, when I was in local government, that any idiot can spend capital, which they can. The more difficult thing is to get the revenue streams into the future. Like my right hon. Friend, distantly I used to understand local government finance, but no doubt my knowledge is a bit out of date. What I do recognise is that we can spend as much capital on projects as we like, but what is needed is the revenue funding to go alongside it for the day-to-day needs of our local communities.
My right hon. Friend the Member for Knowsley covered the bidding process very well, but the point is that, if it were a fair process, then fine, but it is not. Quite clearly, it is a pork barrel approach to the doling out of money to certain Conservative seats. Let me give an example in County Durham. Which constituency has either got new towns funding or levelling-up funding? The answer is Bishop Auckland.
Mr Kevan Jones
I do not disagree with the Secretary of State. County Durham is a wonderful county. It has some great towns and, more importantly, great people. But why did Bishop Auckland get that money as opposed to any of the other towns in County Durham? Well, it has a Conservative Member of Parliament. I doubt that it will be getting much funding in the future, following the recent antics of the hon. Member for Bishop Auckland (Dehenna Davison), with her criticism and plotting against the Prime Minister. She will be on the naughty step for a while, and will not get any future funding. The important thing is that this must be clear. I also question the bidding process. The problem with the process, as my right hon. Friend has said, is that it takes a lot of time and effort to take this through. Officer time is taken up, and councils are limited in the amount of officer time that they have. Then they have to go into some beauty parade, which is clearly rigged by the Government. The real issue in terms of levelling up is this—
The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Neil O'Brien)
I begin by paying tribute to the work of councils across the country. Over the last two years, they have been our foot soldiers in the fight against covid. They have innovated, worked hard and done incredible things to keep our vital services going, and they cannot be thanked often enough. I also thank officials in central Government and the Minister for Levelling Up Communities, my hon. Friend the Member for Saffron Walden (Kemi Badenoch), for their work in producing this balanced settlement today. She is away following the death of her father but she has done a lot of work to bring us to this point.
I also thank Members from across the House for their thoughtful and considered contributions to the debate. I would like to take some of them in turn and, as I do so, I will highlight what the settlement will mean for their area’s spending power. My hon. Friend the Member for West Dorset (Chris Loder)—the spending power of his area will go up by 6.8%—made the important point that even though areas may look pretty, or “chocolate box” to use his words, we must recognise that there are areas of serious deprivation in some of them. That is one of the reasons why we are maintaining the rules over such grant. It is at the highest level—£85 million—that it has been. I know that his council leader has met with the former Minister for Housing, my right hon. Friend the Member for Tamworth (Christopher Pincher), and the letter that they sent has been replied to. I look forward to further conversations with my hon. Friend.
Chris Loder
I really appreciate my hon. Friend responding to these points. I should be clear for the record that I, my colleagues and the leader of the council have been asking to meet Ministers for a very long time. I appreciate my hon. Friend’s comeback, but it is important to note that we would appreciate it if the meeting were expedited. I do not think that it has taken place.
Neil O'Brien
I assure my hon. Friend that we will expedite that.
Let me turn to the thoughtful comments made by the Chair of the Levelling Up, Housing and Communities Committee, the hon. Member for Sheffield South East (Mr Betts)—the spending power of Sheffield will go up by 7.6% under this settlement. He noted, to use his phrase, that the settlement was better than in some years, which may be faint praise, but we will take it. He raised the very important long-term issue about the relevance of upward pressure on social care caused by an ageing society, and one in which we do a better job of caring for the sick and disabled. As a party, we have taken difficult decisions to adequately fund that and the NHS, and difficult decisions on tax. We are also taking steps, as we set out in the House earlier, to promote the integration of health and social care, because we all know that is one of the crucial things we can do to make that sustainable in the longer term.
Mr Betts
I mentioned the letter from the Secretary of State offering a meeting with officials. Perhaps it could be a meeting with Ministers, and perhaps I could be allowed to bring someone from the CCG and someone from the city council, who are doing great work together, to explain what they really want to see to marry up this place-based approach to health with local government.
Neil O’Brien
Absolutely, and the hon. Gentleman anticipates the point I was about to make.
Of course, deepening devolution is one way of driving the integration agenda to save money and produce better services. The hon. Gentleman referred to the important health and life expectancy gaps, and the White Paper sets out the steps that the Department of Health and Social Care will take through its health inequalities strategy and its new tobacco strategy.
My hon. Friend the Member for South Dorset (Richard Drax) noted the importance of keeping taxes down, and I strongly agree. That is why the settlement keeps the increase to 2%, with 1% for social care—far lower than the double-digit increases we saw in many years under the Labour party.
I will reply at length to the right hon. Member for Knowsley (Sir George Howarth). This morning I relayed all the points raised in the important debate on funding in Merseyside to my right hon. Friend the Secretary of State, and we talked it through. I completely agree about the need for a multi-year settlement. We had to have one-year settlements because of the turbulence around covid, but we aim to have a multi-year settlement. Yes, it will take account of the need for levelling up and of inflation.
I am pleased the right hon. Gentleman mentioned Shakespeare North, as I was previously involved in its central Government funding. It is a brilliant project, and he rightly paid tribute to some of the individuals who are helping to make it happen.
The right hon. Gentleman also made some important points about the levelling-up fund. Seventy-five per cent. of the money has so far gone to top-priority areas, and only 6% has gone to bottom-priority areas. It is highly skewed towards the poorest areas and, in the first round, £20 million went to Liverpool, next door to Knowsley, and £37 million went to the Liverpool city region as a whole. It is not correct that there is a political process. There is competition, and there are arguments for having non-competitive funding, which is why there will also be an allocation through the UK shared prosperity fund. There are arguments for competition to get good bids, but we must not traduce civil servants who score the bids and allocate the money.
My hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill) will see spending power in his constituency go up by 6.2%.
Sir George Howarth
If, as the Minister says, I am wrong about how these decisions have been arrived at, will he apprise me of what was wrong with the Knowsley bids?
Neil O’Brien
Again, the right hon. Gentleman anticipates my next point. I am happy to facilitate a meeting between officials in Knowsley and officials in central Government to talk about the bid, but this is done on an objective basis. [Interruption.] It does not seem that the right hon. Member for Knowsley wants to make an intervention, as he is chuntering from a sedentary position. Liverpool, as I said, has received funding, so it is not politics; it is about getting the best bids and the right money to the right places. The spending settlement means an extra 8.5% for Knowsley.
My hon. Friend the Member for Bromley and Chislehurst made a verbal slip when he talked about when he was a young man. Of course, he meant to talk about when he was an even younger man, so I correct the record. He and the hon. Member for Westmorland and Lonsdale (Tim Farron), who is sadly no longer here, made important points about the public health grant, and those points are why we are protecting it in real terms across the SR period and why we have an extra £300 million to tackle obesity, an extra £170 million to improve Start4Life and children’s mental health services and an extra £560 million to improve drug and alcohol treatment.
The hon. Member for Westmorland and Lonsdale also made an important point about second homes, and we recently closed the tax loophole to try to address that issue.
The hon. Member for Harrow West (Gareth Thomas), in whose constituency spending power will go up by 6.8%, made the case for more devolution to more places. I agree: we are both widening devolution through the county deals process and deepening it where we already have it. I should point out that the only place in England that had devolution under the previous Labour Government was London, which is just part of the country; there was no devolution for the rest of England and we have put that right.
I hope that the right hon. Member for North Durham will reflect on the point he made and his serious criticisms of my hon. Friend the Member for Bishop Auckland (Dehenna Davison). Let me simply say that my hon. Friend is a superb, dynamic young Member of this House who has a lot of ideas and is making things happen for her constituency. Likewise, the same is true of the new council in Durham, where Labour is out of power for the first time in 100 years. Why is that? I do not seek to make partisan points in this speech, so let me simply say that perhaps one reason why voters in County Durham have turned away from Labour is that they are looking for people with a positive agenda who will get a devolution deal, and not people who just criticise from the sidelines.
Let me move on and address some of the other points made by the right hon. Member for North Durham that were slightly more becoming of him. He talked about having read all of the levelling-up White Paper; he will realise, then, that it marks an approach distinctly different from that under the previous Labour Government, when we saw the increasing concentration of research and development spending in Oxford, Cambridge and London. In the “Levelling Up” White Paper we increase spending outside the greater south-east by 30% over this spending review settlement period; we bring devolution to the rest of England, not just to London; and we get central Government back into the business of driving major urban regeneration in 20 places. Central Government were taken out of that business by the Labour Government’s decision to get rid of English Partnerships—a decision that, in retrospect, I think Labour will regret.
I am conscious that I am taking up time, Madam Deputy Speaker. In the year ahead, councils in England will be boosted by up to £3.7 billion in extra funding. That is a real-terms increase of 4.5% and includes an extra £822 million for services through a one-off services grant. The settlement puts councils on a firm footing for the year ahead—one on which they can build and grow. It maintains the things that are already working, such as the rural services delivery grant; it raises funding in areas where more support is needed, such as through the extra £72 million for the revenue support grant; and it makes sure that no council anywhere in England will receive less money by updating the funding floor.
The settlement reflects the reality of 2022 and the acute pressures faced by the social care sector, with an extra £1 billion made available to alleviate pressure in the year ahead and £162 million to pave the way for the landmark social care reforms we are putting on the statute book. With a core referendum principle of 2%, plus an extra 1% adult social care precept, the settlement protects taxpayers with the lowest expected average council tax rises since 2016-17.
Several Opposition Members made points about the wider context, which includes the £1,000 extra that people working full time will get from our massive increase to the national living wage—a Conservative achievement. It also includes the £1,000 extra that 2 million households will get because of our changes to the universal credit taper rate so that people can keep hold of the money they earn.
We are being asked to believe that there has been a road to Jericho moment and this is now a low-tax Labour party that also wants to spend more money on everything and cut the deficit. It simply does not add up. There have been moments in this debate when Labour Members have said, in short terms, that the funding for public services is paid for by taxation; we are on the edge of an intellectual breakthrough, Madam Deputy Speaker! If only they had learned that lesson before they left behind the biggest deficit in this country’s entire peacetime history—a deficit that we had to spend many years clearing up, with our coalition partners. On that non-partisan note, let me bring the debate to a close. I commend the settlement to the House.