Local Government Funding

Debate between Graham Stringer and Preet Kaur Gill

Tuesday 15th January 2019 Westminster Hall

[Preet Kaur Gill]

My hon. Friend’s important intervention tells us about the plight of councils as a result of non-statutory services not getting the investment that they need. We will end up with councils delivering only statutory services, which will by no means meet the needs of our diverse communities.

In the context of Birmingham’s projected population growth of 121,000 by 2031, the cuts will mean even less money in real terms per person. Nor is the situation unique to Birmingham, as we have heard from many hon. Members across the country. The Institute for Fiscal Studies reports that

“funding from government grants, business rates and council tax is still set to be 1.4% (£0.6 billion) lower in real-terms than in 2015–16, which is equivalent to 4.2% per person after accounting for forecast population growth.”

Whatever the Minister and the Secretary of State may say, that means that councils will have less money to deliver services. This is not about the need to find minor efficiencies following a period of high spending; it follows a period of dramatic and coalition Government-enforced reduction of 22% per person, in real terms, in council spending on services between 2009-10 and 2015-16.

[Graham Stringer (Blackley and Broughton) (Lab)]

My hon. Friend is making a very strong case about the damage that is being done to local services by cuts in the Government grant. Does she agree that there is no resilience in local government’s tax base, which is strangling local democracy, and that there needs to be a reversal of the changes that were made in the late ’80s and early ’90s to councils’ abilities to raise their own money?

[Preet Kaur Gill]

My hon. Friend raises an important point, which I will touch on later.

Not only was that devastatingly large amount taken across the country, but the spending cuts hit more deprived areas far harder than other areas, a point which I will come back to later. The Government often mock Members asking for more money for a particular cause, but that misses the point. These cuts are not just about money; they are about what the money allows local government to do, or not to do—it is about the services and support that local government can provide to empower communities and support individuals to fulfil their potential.

New research by Unison shows that 66% of local councillors do not think that local residents are receiving the help and support they need at the right time. Does the Minister understand that that is not because councillors and council workers are not working hard enough? Does he agree that the reductions of £16 billion to core Government funding between 2010 and 2020 have led to that situation? Will he make public all the data and analysis his Department have put together on the scale and variation of local responses to cuts, as well as on the impact of almost a decade of austerity on local government, and the inequalities it has reinforced and perpetuated?

What does the Minister say to Lord Porter, the Conservative chair of the Local Government Association? In the most recent copy of First, the magazine for local government—I have a copy that I am happy to share with the Minister—he said:

“Next year will continue to be hugely challenging for all councils, which still face an overall funding gap of £3.1 billion in 2019/20.”

That figure is not what is needed to make progress or to invest further in the future of our families and communities—that is just to stand still. Does the Minister agree with Lord Porter?

I know that universal credit is not the Minister’s brief, but I hope he will take the opportunity to discuss his understanding of the problems that universal credit is causing for citizens and therefore for local government. What analysis has the Department done of the impact on local government of rent arrears from council tenants on universal credit? Residential Landlords Association research reveals that the number of private landlords with tenants receiving universal credit and going into rent arrears rocketed from 27% in 2016 to 61% in 2018, with the average amount owed in rent arrears by the universal credit tenant rising 49% between 2017 and 2018. If there are similar findings for council tenants—there is no reason to think universal credit impacts differently on council tenants from those in private accommodation—local authorities will be put under further pressure by a failed Government initiative.

This is not party political. This is not about Labour councils wasting money, or Conservative councils being frivolous. Lord Porter said:

“Councils can no longer be expected to run our local services on a shoestring.”

Does the Minister think that those Conservative councils that have gone bust or reduced services to the legal minimum have received enough funding? Will they receive enough funding through the latest funding settlement? If so, does he think that they went bust because of their own failures—and will he outline those failures?

When the Prime Minister took office, she promised that the mission of her Government would be to tackle injustices. Since 2015-16, the most deprived councils have seen a cut of 2.8%, while the least deprived have seen a small real-terms increase of 0.3%. That is not tackling an injustice—that is embedding and reinforcing one.