Local Government Finances

Lord Hussain Excerpts

Thursday 21st March 2024 Lords Chamber

[Lord Hussain (LD)]

My Lords, I thank my noble friend Lord Shipley for securing this debate. I am one of those Peers who had the opportunity of being a member of my local borough council—in my case, Luton Borough Council—for many years before coming to this House. Serving on the local council gave me a sense of pride and satisfaction. The council’s remit stretched from social services to education, housing, environmental improvement, libraries, parks, leisure services, community development, street services and much more.

On top of the usual meetings of the council and other outside bodies, I remember that the ward councillors periodically used to have surgeries and tour every street of their wards, along with field officers from relevant departments, taking note of any potholes, graffiti, fly-tipping, fly-posting, flooding, broken pavements, abandoned vehicles and anything else that was reported to them, and took prompt action as required. All this was made possible with sufficient central government funding and local taxation, but over the years our local authority, along with other authorities, has met with drastic cuts in central government funding. That has resulted in significant reductions to the library service, the youth service, community centres, daycare services, road repairs, refuge collection, street cleaning and many other areas of service, while the council tax has risen four times over the years.

The local government finances granted to councils such as Luton are only about 10% of what they used to get 10 or 12 years ago in their annual settlement from central government. Not only has this had a major impact on the level and quality of services that the general public used to get but it has put huge financial pressure on the residents, particularly low-income families, the elderly and single parents. To be honest, I am not sure I would really want to be a councillor any more.

Luton, in the east of England, is generally known to be an affluent town and has been well known for manufacturing for a very long time, but it has what are considered to be some of the most deprived areas in the country, with old housing and poor housing conditions, overcrowding, high unemployment, health inequalities, outdated school buildings, low educational attainment, a high crime rate and antisocial behaviour. The longer these areas are ignored, the bigger the problems will become. Urgent action is needed; these areas need huge investment to bring them in line with the rest of the town. What plan do the Government have to deal with the most deprived areas in the country, such as these?

The issue today is not about Luton alone. Many local authorities are struggling with their finances and some, including Birmingham, Nottingham, Woking and others, have actually gone bankrupt, while many more are on the brink of bankruptcy. According to an LGA survey carried out in December 2023, before extra money was announced—and I am glad that it was—one in five council leaders and chief executives in England thought it very or fairly likely that their chief finance officers would need to issue a Section 114 notice this year or next. Half are not confident that they will have enough funding to fulfil their legal duties next year, 2024-25. This includes the delivery of statutory services. Can the Minister say what plans the Government have to deal with this unprecedented situation and avoid more local authorities being bankrupted?