Lancashire County Council

Debate between Albert Owen and Andrew Percy

Wednesday 22nd February 2017 Westminster Hall

[The Parliamentary Under-Secretary of State for Communities and Local Government (Andrew Percy)]

It is a pleasure to serve under your chairmanship, Mr Owen. I congratulate my hon. Friend the Member for Morecambe and Lunesdale (David Morris) on securing this important debate. He is a doughty champion for Morecambe and Lunesdale, with a record of delivering for his constituency on a whole range of issues and helping to secure funding for it. This afternoon he is, again, battling away for his constituents and, indeed, for Lancashire.

Only this morning, I was in what I consider Lancashire —albeit Manchester now, which has been slightly carved out. This is an area of the country I take some interest in, given my direct role through the northern powerhouse portfolio. I apologise on behalf of the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Nuneaton (Mr Jones), that because of what is going on in the main Chamber, he is not able to respond to this debate.

We should start any debate on local government finance by being honest about what we, as politicians and political parties, went into the last election promising. I am not so sure about the manifesto policies of the Democratic Unionist party and the Scottish National party on local government finance in England at the last election—or, indeed, whether they had such policies; I suspect not. However, it is certainly true that the Labour and Conservative manifestos both included a commitment to no extra funding on top of that which is being delivered for local government. We all need to be honest about that. Nobody promised the electorate that there would suddenly be a cash windfall for local government if there were a change of Government. That is the appropriate starting point.

Local authorities are democratically elected organisations. They are independent of central Government and are, of course, responsible for managing their own budgets themselves. I must pick the hon. Member for Preston (Mr Hendrick) up on this nonsense about a special deal for Surrey. That has been wholly debunked and disproven, and it is completely inappropriate for Opposition Members to continue peddling that line. It is not the case.

[Albert Owen (in the Chair)]

Order. We need to stick to the subject before us.

[Andrew Percy]

Indeed. I am simply responding to a point made by the hon. Member for Preston, but I will take your guidance on that, Mr Owen.

Over the previous Parliament, councils showed that they are capable of finding savings and efficiencies, and some have delivered them very well. Many councils that have much lower proportionate per head funding have been able to deliver incredible savings and services as a result. A lot of this is down to local leadership, as my hon. Friend the Member for Morecambe and Lunesdale made clear.

Our sustainable financial settlement, which we are confirming at the moment, means that local authorities can take on the challenge of making savings, while continuing to provide excellent local services if they have the appropriate leadership. We have provided councils with a financial settlement that is over the next few years essentially flat in cash terms, moving from £44.5 billion in 2015-16 to £44.7 billion in 2019-20. Over the course of this Parliament, councils will have £200 billion to spend on local services. When we talk about local government finance reductions, we often forget about the £200 billion of spending on local services over the lifetime of this Parliament.

We have recognised, as both my hon. Friend the Member for Morecambe and Lunesdale and the hon. Member for Preston highlighted, that social care pressures for councils are very significant at the moment, as our population ages and as, I am afraid to say, we reap the failure of Governments of both colours years ago to properly plan for demographic shifts. However, we have enabled local authorities to access up to £7.6 billion in dedicated social care funding over this spending review period.

I shall now look specifically at Lancashire County Council over the course of this Parliament. Its core spending power is set to increase from £730 million in 2015-16 to £751 million in 2019-20. Unfortunately, the figure for 2019-20 is indicative. The staff who work at Lancashire County Council, as is true of council staff across the country, are dedicated to delivering local services, so this is not a criticism of them. However, the council is sadly among the 3% of local authorities that have not signed up to the long-term funding settlement, so that is an indicative figure. I am disappointed that Lancashire has not accepted our multi-year offer.

The majority of Lancashire County Council’s core spending power is raised locally, as my hon. Friend pointed out. In 2016-17, £402 million will be raised in council tax, and £7.9 million in the adult social care precept; so £410 million of spending for Lancashire County Council is raised locally, and £118 million is provided through the revenue support grant, which, to be perfectly honest, reduces over time, as Members know. We all are committed to local government playing its part as we try to deal with the deficit we inherited.

We accept the particular issues with the changes that the hon. Member for Preston highlighted, which is why we are providing £1.1 million of transition funding this year to Lancashire and will provide £1.2 million in 2017-18. Last month we introduced the Local Government Finance Bill, which will mean that by the end of this Parliament, local authorities will retain 100% of local business rates to spend on services. That move towards self-sufficiency is one that I strongly supported, as a former local councillor for 10 years, and that local government generally has been an advocate of.

As I said, Lancashire County Council is receiving £1.1 million in transition funding this year. That will ease the change between those two systems for Lancashire. The fair funding review, which we heard a lot about in the statement this afternoon, will also establish what the relative needs assessment formula should be in a world in which local government spending is funded mainly by local resources and not central Government grants. It is nearly 10 years since the current local government funding formulae were looked at thoroughly. Demographic pressures, which we also heard a lot about in the main Chamber this afternoon, such as the growth of the elderly population, may have affected areas in different ways. It is appropriate that we have this review.

I know that one of the pressures in Lancashire, as in many parts of the country, relates to social care. Earlier today, we confirmed the new adult social care precept flexibilities and the introduction of the adult social care support grant, which will enable Lancashire County Council to access an additional £9.7 million in funding for adult social care in 2017-18 alone. That is an ability to bring forward the precept increases. It is 3%, 3% and then zero. Unfortunately it is sometimes presented as though in the final year there will be no increase. That, of course, is built into local funding in the council tax base. That is real money, realised in every single one of those years, and bringing it forward levers in nationally nearly £1 billion extra.

I am aware of the independent statutory services budget review by PwC that took place in September last year in respect of Lancashire’s budget to deliver statutory services. As was mentioned, the council met officials in my Department in October last year following the review to discuss the findings. However, it is the responsibility of elected members and officers of the council in Lancashire to find solutions to address the challenges it faces. Similar changes are faced by other councils, which are responding appropriately. In so doing, they can make use of the sector-led support from the Local Government Association, which is funded by this Government.

We expect local authorities to act in an open and transparent way about their service provision and spending locally. It is important that local councils are honest with their constituents. In many of these debates, including in my own area, it is almost as if the entirety of local government spending is what the Government provide to it. When cuts of 20%, 30% or 40% are referenced, it is in a deliberate way to lead people to conclude that the council’s finances are being cut by 20%, 30% or 40%. That is simply not the case. We must all be honest; we all have a responsibility to be honest with our constituents about that. In relation to particular challenges in Lancashire, I urge the council to consider all options to drive forward public service reform and achieve appropriate efficiency savings.

My hon. Friend the Member for Morecambe and Lunesdale also talked about other funding that we have put into the area. It is important to reference that in this debate, because although we can look at the revenue support grant and the changes to it, we must also look at the other Government support. Just this morning I was pleased to launch the northern powerhouse investment fund, which will provide £400 million of lending and debt financing and equity to small and medium-sized enterprises across the north. That is Government funding and funding from other partners as well. It will enable businesses in Lancashire to grow and expand, and of course there will be a knock-on effect on local government finance as a result of that growth.

I hear my hon. Friend’s concerns about the local enterprise partnership and the distribution of some of the projects. He will forgive me if I cannot intrude too much on local grief; it is not for me to dictate to the LEP where the project priorities should be. All I will say is that it is important that the LEP is cognisant of the fact that it represents the whole of its geography and that the funds and projects that it puts forward should be for the benefit of all. Within the £70 million of local growth funding just for Lancashire that we announced just a few weeks ago—I remind hon. Members that that was from a £556 million pot for the north of England; the biggest share of the budget for the whole of England came to the north—there were some projects that will benefit Lancashire on a county-wide basis.

It is not unusual for LEPs to have people who are double-hatting, as my hon. Friend said, in terms of being from local authorities in the area. That is normal and appropriate so long as they always remember that their responsibility is to the whole of the geography of the LEP area.

My hon. Friend referred to the work of the LEP. Through the growth programme, it has been able to invest nearly £1 billion of public investment. The LEP has also established, with the support of the Government, one of the largest enterprise zone programmes in the northern powerhouse, with four EZ sites at Samlesbury, Warton, Blackpool airport, which I visited recently, and Hillhouse. Again, we are talking about significant Government commitments. Those zones come with big incentives for local businesses in Lancashire. Again, all of that helps to create jobs and wealth and to generate tax revenues for the local area.

I was pleased to visit only two weeks ago Lomeshaye industrial estate in Pendle, which my hon. Friend the Member for Pendle (Andrew Stephenson) advocated and lobbied for. That will receive £4 million from the Government to expand and create up to 1,000 jobs. Again, there is an absolute Government commitment to Lancashire in the form of that growth deal.

The Preston, South Ribble and Lancashire city deal is delivering an infrastructure delivery and investment programme worth over £430 million, which will expand transport infrastructure in Preston and South Ribble, create 20,000 new jobs and generate the development of more than 17,000 new homes. It is anticipated that that will leverage in £2.3 billion in new private investment.

The LEP has commercially invested its £20 million Growing Places fund in eight major developments across Lancashire. I cannot comment on the locations of those; that is of course a matter for the LEP. The LEP has also supported the development of four regional growth fund business growth programmes, valued at £40 million. It has an important role to play, but, as I said, must always be cognisant of the geographical challenges and demands of the area.

I will also just say, in terms of another Government commitment—

[Albert Owen (in the Chair)]

Order. The Minister will have to save that for another time.

Motion lapsed (Standing Order No. 10(6).