Inner-London Local Authorities: Funding
Debate between Alison McGovern and Joe Powell(3 weeks, 2 days ago)
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The Minister for Local Government and Homelessness (Alison McGovern)
It is a pleasure to serve under your chairship, Dr Murrison. I thank my hon. Friend the Member for Dulwich and West Norwood (Helen Hayes) for securing the debate, in which hon. Members have raised some important issues. She posed some questions that I will come to in my response. She mentioned that I served on the London borough of Southwark just before she was first elected to the best borough in London. She is right that a bit of my heart will be forever in Camberwell.
I learned a lot during those years, but local government has changed in the 20 years since I was first elected. Poverty in London has also changed, along with the services that boroughs try to provide. In a moment of shock and surprise, I find myself in agreement with the shadow Minister, the hon. Member for Ruislip, Northwood and Pinner (David Simmonds). He rightly characterises a situation faced by councils where costs are spiking, often because of policy failure not of their making, whether those are the costs of homelessness, mentioned by my hon. Friend the Member for Dulwich and West Norwood, or the costs associated with SEND mentioned by many hon. Members, to which I would add adult and children’s care.
We have fundamental issues to tackle and many of the policy levers lie in this place, not in town halls. We all need to own our responsibilities on that front. We continually need to rethink how we approach this issue. It is a shame in many ways that I could not introduce some of my colleagues in other parts of the country to this discussion. Hon. Members will have seen in the press that I have been variously accused of robbing the north to send money to the south, and now robbing London to send money somewhere else—the north or the midlands, I do not know.
In fact, the consistent theme in the funding settlement is the Government’s attempt to reconnect council funding with deprivation. I will come to the detail of that, because we are committed to making long-overdue changes to council funding. This is the first multi-year local government finance settlement in a decade, which, as Members have mentioned, will make a huge difference.
Alison McGovern
I will make some progress. Yesterday’s announcement keeps our promise of a multi-year settlement, because local communities in London and elsewhere deserved better than the out-of-date funding allocations not aligned with need, which meant poorer public services and slower growth, particularly for those dealing with the consequences of poverty.
We are making changes to how councils are funded. Many of these are changes that the public, local government partners and Parliament have long called for. We consulted four times on these changes, and we are grateful for the engagement from all corners, including from hon. Members in this debate. The engagement has informed our approach at every stage. The settlement confirms multi-year funding, our pledge to realign funding with need, and our commitment to end wasteful competitive bidding and to simplify funding.
The Government have an important role as an equaliser for local government income, and we are directing funding towards the places that are less able to meet their needs through locally raised income, which will enable all local authorities to provide similar levels of services to their residents. However, that is true notwithstanding the major differences in spiking demands around the country.
Following the provisional settlement consultation, the Government have announced an additional £740 million in grant funding as part of the final settlement, including a £440 million uplift to the recovery grant, bringing total investment over the multi-year settlement to £2.6 billion. Of that £2.6 billion, £400 million is supporting places in London that suffered the most from historical funding cuts, and there is an additional £272 million to bring the total investment in homelessness and rough sleeping services over the next three years to £3.5 billion—including over £800 million in London as part of our national plan to end homelessness.
That is a significant investment in the capital’s homelessness services, which is much needed, as has been mentioned by Members from across the House. It takes the total new grant funding delivered through the annual settlements for 2026-27 to 2028-29 to over £4 billion. Since coming to power, we have pledged a 24.2% increase in core spending power by 2028-29 when compared with 2024-25, worth over £16.6 billion. It is a significant uplift in the spending power of councils.
According to analysis by the Department, as a result of our reforms, nine in 10 councils will receive funding that broadly matches their assessed need by the end of the multi-year settlement, up from around one third before our reforms. In 2028-29, the most deprived places will receive 45% more funding per head than the least deprived.
Alison McGovern
I will give way to my hon. Friend the Member for Kensington and Bayswater (Joe Powell) first.
Joe Powell
As the Minister knows, where we have pockets of high deprivation in London, one concern is protecting those communities. When the settlement was announced, it was very clear that the Government’s expectation was that things like council tax support should not be the first thing that councils looked to. Does the Minister agree that the royal borough of Kensington and Chelsea cutting £441,000 of council tax support to our lowest income families as its first decision is not the right way to go about building a sustainable budget for the future?
Oral Answers to Questions
Debate between Alison McGovern and Joe Powell(9 months, 3 weeks ago)
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Joe Powell (Kensington and Bayswater) (Lab)
The Minister for Employment (Alison McGovern)
As we have already discussed, every young person in this country needs a good start. As part of our plans to get Britain working, we announced £45 million-worth of funding for eight youth guarantee trailblazers to lead the way. Kensington and Bayswater is covered by the youth guarantee trailblazer launched last month by the Greater London Authority.
Joe Powell
I recently visited the North Kensington jobcentre to learn about its support for young people and discuss the potential for working more closely with our brilliant local college, the North Kensington Centre for Skills, so that people can access opportunities in industries such as trades and housing. Will the Minister outline what more the Department is doing to bring together colleges and jobcentres for young people?
Alison McGovern
I thank my hon. Friend both for his question and for going to see the team at the North Kensington jobcentre; there is a really dedicated team of five work coaches specifically for young people. I am working with colleagues in the Department for Education on the development of Skills England so that in the future our work coaches—for example, the five who serve his constituency and look after young people—will have much closer access to get them into courses and get them building to move our economy and their careers on.