Local Government Funding

Alex Cunningham Excerpts

Wednesday 28th March 2018 Commons Chamber

[Alex Cunningham (Stockton North) (Lab)]

Many of us have first-hand experience of the responsibility on local authorities to provide services on a budget. The local authority of a Member who was, like me, elected to Parliament in 2010 will have less than half the Government grant now than it had then.

As councillors, we knew about the need for services such as adult social care for vulnerable people and services that families needed, such as children’s centres. There is a need for the bins to be emptied, the roads swept, the pavements repaired, the libraries and leisure centres kept open, planning applications processed, local businesses supported, child protection services sustained and many other things that local residents take for granted.

People are now noticing the differences—potholes, grass verges, graffiti, fly-tipping, antisocial behaviour and many other things basic to everyday life come to mind. Ministers may rightly say that my Labour Stockton-on-Tees Borough Council is a good council. Several times in recent years it has been shortlisted for, and even won, the council of the year award. Our social workers are winning national awards. We are getting gold awards for animal welfare. Our high street won the “rising star” award. We won “client of the year” for our partnership and building projects. We are winning engineering awards, fostering and adoption campaign awards and awards for protecting the most vulnerable.

Those are all being achieved in the face of adversity—in the knowledge that the day is beckoning when either funding is provided or councillors in Stockton will be delivering the most basic of services, stripped to the statutory minimum and rationed. Stockton Council has done the right thing—focused on protecting the areas and people most in need—but that does not negate the growing pressure on children’s and adults’ social care services, which now take up 57% of the council’s cash. It is no wonder. People are living longer and there is an increased dependency on services such as respite provision and community nursing. Demands for adult social care services are increasing, yet Stockton will see a £74 million a year cut by 2019-20 compared with 2010-11.

Given that local authorities have such a key role to play in people’s day-to-day lives, it is even more absurd that our model of funding is so unstable that it changes frequently and is then topped up with enforced council tax increases and the Tory Government’s social care precept. Do not try to kid me that the Tories are the party of low tax on hard-working families when they dump those central Government costs on council tax payers.

I am sure that what Stockton wants is reflected in many councils across the country. It wants a fair funding review that is just that—fair. I remember the £300 million of extra funding allocated by Government last year; the vast majority of it went to Tory southern authorities. It wants an end to the huge pressures in children’s services and a full recognition of the evidence linking deprivation and the numbers of looked-after children. That must be acknowledged and built into any new model, to ensure that children are kept safe and can receive services and support.

Councils want certainty over future budgets. They want a dose of honesty from the Government, who have reneged on their responsibility to fund councils properly and passed the buck to local councillors, who have to raise council taxes higher and higher in order to maintain statutory services. Northern councils want recognition that most of their properties are in the low council tax bands, which limits their ability to raise substantial sums through small increases. We do not have developers building blocks of 200 apartments costing £500,000 or even more, which can raise hundreds of thousands, if not millions, of pounds for the likes of Westminster and Wandsworth. This is not just a case of the north whingeing. The National Audit Office has confirmed the perilous position in which most councils find themselves, which could mean unsustainability for many of them. After eight years in power, the Conservatives must take some responsibility—in fact, all the responsibility—for this. They must realise the impact of their decisions. They are culpable for the funding crisis in most of our local authorities: it is no one else’s fault.

--- Later in debate ---

[Rishi Sunak]

As the National Audit Office pointed out, this Government were alert to the requirements of adult social care building as a pressure. This Government responded by delivering extra money for adult social care.

In general, what this Government are doing is working. In adult social care, we have seen delayed transfers of care fall by 34% in the past year. In housing, we are seeing record levels of new home building and infrastructure investment, and from Teesside to the west country, we are seeing areas seize the opportunity to shape their own future. My hon. Friend the Member for Sutton and Cheam (Paul Scully) was absolutely right when he said that other people may paint a gloomy, downbeat picture, but there are examples of councils delivering for their constituents across the country, and as he pointed out, Kingston is doing a fantastic job.

Indeed, according to the LGA, over 80% of people are satisfied with their local area as a place to live, and satisfaction with local council services has remained entirely stable. To ensure that that continues, it is right that we update and modernise our current funding formulas. In the short term, I want to reassure the hon. Member for Garston and Halewood (Maria Eagle) that the Government are not clawing back section 31 grants, as she suggested might be the case. My right hon. Friend the Secretary of State confirmed that last week.

My hon. Friends the Members for Christchurch (Sir Christopher Chope) and for North East Hampshire (Mr Jayawardena) rightly asked about negative RSG. The Government are aware of the strength of feeling on that issue. We are planning to look at fair and affordable options for addressing that problem and will consult on it shortly after the local elections.

My hon. Friends the Members for St Austell and Newquay (Steve Double) and for Lewes (Maria Caulfield) spoke passionately about the rural areas they represent. They highlighted the historical unfairness in funding that their councils have suffered and why they think that should be addressed. I can confirm to them that understanding the particular costs of delivering services in rural areas and analysing the relative resources they have will absolutely be considered as part of our fair funding review.

My hon. Friend the Member for Bexhill and Battle (Huw Merriman) spoke about the importance of getting population growth right. Areas such as his have seen increases in the number of those of a particular age, which puts costs on to certain service areas. He is right to highlight that the new funding formula should use up-to-date population information and that it should be dynamic and respond to what is happening on the ground.

We have heard about children’s services, and it is absolutely right that we focus attention on vulnerable young people who are denied the stability that many of us sitting in the Chamber have enjoyed. It is a privilege for me to be the Minister responsible for the troubled families programme. Delivered in partnership with local authorities, the programme will invest £1 billion to help the most vulnerable in our society. I spent a morning last week in Liverpool hearing at first hand from the families themselves about the difference that this programme is making to their lives. Conservatives like to measure success by the outcomes we achieve, not just the amount of other people’s money that we spend, and the results are hugely encouraging.

[Alex Cunningham]

Does the Minister recognise the very specific link between deprivation and the number of children taken into care by our local authorities, and what is he going to do about it?

[Rishi Sunak]

What the Government are already doing about exactly that is working with the Department for Education on the most thorough and extensive piece of work ever undertaken to understand precisely the drivers of the need for children’s services, which of course includes deprivation. The report will conclude later this year or early next year, and I am sure the hon. Gentleman is looking forward to reading the results.

Beyond that, the troubled families programme is driving innovation on the ground, changing the way that local authorities work and bringing previously disparate providers of care together to help those who need it most. Other people may like to talk of compassion, but we in the Government are delivering it.

We have heard a lot about spending, but curiously rather less from the Labour party about who is paying for it all. We in the Government know who ends up footing the bill—ordinary hard-working tax payers. Over the past few months, the Labour party’s plans have become abundantly clear. We have heard about a radical change to council tax, a new local income tax, the abolition of the referendum tax limit and, as if that was not enough, a garden tax. Under the previous Labour Government, council tax doubled, and we all know that history tends to repeat itself. I can tell the House that this Government will always be on the side of hard-working tax payers. My hon. Friend the Member for Filton and Bradley Stoke (Jack Lopresti) was absolutely right to say that we should be getting them value for money and keeping their bills low.