Local Government Funding: Merseyside

Debate between George Howarth and Rishi Sunak

Tuesday 30th October 2018 Westminster Hall

[Rishi Sunak]

I totally reject the suggestion of hiding. It would be ridiculous to look at any local authority’s financial resources without considering the various ways in which such an authority funds itself. I am delighted that the hon. Lady is focused on keeping council tax low. Indeed, the Government have ensured that council tax today is lower in real terms, across the country, than it was in 2010. We have heard various suggestions from Labour Members about doubling council tax, which is something I assume the hon. Lady, being on the side of hard-working taxpayers like us, would reject.

The idea that the funding formulas do not take account of deprivation or the differing ability of areas to raise council tax is totally erroneous. For example, when the adult social care precept was introduced, it was understood that different areas would raise different amounts from it, which is why in the incremental billions of pounds that the Government have injected into the social care system directly through the better care fund there is an equalising measure to take that into account. That is exactly why, today, the most deprived authorities have a core spending power per household—taking into account all those things, council tax included—that is 23% higher than that of richer authorities. Indeed, that is why areas with larger council tax bases provide more of their area’s resources from council tax; Merseyside provides less than half of the amount those areas do, because the council tax base in Liverpool is that much lower. It is totally wrong to suggest that that is not taken into account.

I think it was alleged that I, or the Government, had removed deprivation from funding formulas. I can categorically say that I have not removed it from any funding formula. We are in a root and branch review of how local government is funded. We are in the midst of various consultations and I would be delighted to have hon. Members’ suggestions.

[Mr Howarth]

If that is the case, will the Minister explain why Knowsley, which is one of the most socially deprived parts of the UK, has had a £100 million cut in its grant? His figures just do not add up.

[Rishi Sunak]

I can tell the right hon. Gentleman that Knowsley’s core spending power per household is about 20-something per cent. higher than the average for a similar metropolitan authority, which takes into account exactly his point. He talked about the fair funding review and, as I said, that is exactly where all the issues will be considered, ensuring that deprivation or, indeed, multiple other factors, are taken into account in the new funding formula.

--- Later in debate ---

[Rishi Sunak]

I will make some progress.

The second vision I outlined, which is undeniably one of the most crucial roles for local government, is to continue to help the most vulnerable in our society. It is local authorities, as we have heard, that support the elderly, the disabled and our children in need, and we owe an enormous debt of gratitude to councils for their incredible work. I am delighted that the Government back local authorities to carry out those vital duties. Last year, the Budget provided an additional £2 billion for social care. Earlier this year, another £240 million was announced for social care winter funding, and in the Budget yesterday the Chancellor announced that a further £650 million will be provided for care services next year.

In contrast to what we have heard, the flexibility to use the funding for things such as children’s services is something that local authorities have specifically asked for. They will have the flexibility in each local area to use the funding for different care services, rather than its use being dictated by central Government. I would have thought that all Members appreciated their local areas having such flexibility to make the best use of the money, in the way they see fit.

I am pleased to say that that increased investment and better working between the NHS and local government is paying dividends on the ground. We have seen social care free up 949 beds a day since the peak two years ago—a 39% reduction in social care delayed transfers of care. In Merseyside, progress has been seen particularly in St Helens, and I commend the local authority on reducing such transfers by 72% since the February 2017 peak.

I have mentioned the troubled families programme, which is making amazing strides to support our society’s most vulnerable families. When I visited the Clubmoor children’s centre in Liverpool, it was a privilege to talk to several of the families participating and to see the life-changing work at first hand. I am proud to say that the Government have invested £1 billion in the programme over this spending cycle, with 130,000 families nationally achieving significant and sustained progress against the goals they have been set. In almost 17,000 of the families, one or more of the adults has moved into work, and the families I spoke to told me that that was central to their ambitions.

Across Merseyside, 10,000 families are being helped with more than £20 million of funding, and I pay tribute to Liverpool City Council in particular for doing a very good job, working with early help assessments. We heard from the hon. Member for Halton (Derek Twigg) about the importance of early intervention. Referrals to children’s services in Liverpool were down 3% in the most recent year—

[Mr Howarth]

On a point of order Mr Hollobone. I want to place it on record that, had he been here, my hon. Friend the Member for Halton (Derek Twigg) would have made a significant contribution, but he is, in fact, not here.