Local Government Finance Settlement

Andrew Gwynne Excerpts

Tuesday 19th December 2017 Commons Chamber

[Andrew Gwynne (Denton and Reddish) (Lab)]

I thank the Secretary of State for giving me a copy of his statement. I have had the briefest possible time in which to adequately consider its contents, but it was nevertheless given to me in advance.

I pay tribute to councillors and officers across the country who are on the frontline of this Government’s austerity agenda yet continue to serve our communities as well as they can. Many of them will have been looking to today’s settlement for assurances that the Government understand the challenges facing local government. Councils have already experienced unprecedented funding cuts since 2010, and since the general election, they have been left in the dark about the Government’s sustainable long-term funding plans.

The Secretary of State says that he is listening to councils “of all shapes and sizes”, but why must he exacerbate the rural-urban split? He has listened to Surrey—that much is clear—but in doing so, he has ignored the needs of Stockton, Salford and Sheffield. Before the general election, we had been promised a full legislative package to fund local government beyond the revenue support grant. Now, however, we have been promised not legislation but a consultation. Councils are desperate for additional funding, and they might well appreciate some of the piecemeal solutions offered by the Secretary of State today, but we are still without a sustainable plan or a vision for how the sector will be funded in the future. The Secretary of State notes that the aim is for authorities to retain 75% of business rates by 2020, and I look forward to hearing more details of how that will function, recognising that not every area has the ability to raise the income locally.

Many will have looked to today’s announcements to offer solutions to the crisis in children’s services, after the Chancellor failed to mention them in his Budget. Demand for children’s services is placing unbearable pressures on local authorities. Central Government funding to support children and their families has been cut by 55% over the past seven years—a total cut of £1.7 billion —forcing less money to be invested in intervention to cover the cost of emergency care. The result of these cuts has been appallingly clear—[Interruption]—if the Secretary of State chooses to listen. Cuts to early years intervention have meant a record number of children—some 72,000 last year—being taken into care. The number of serious child protection cases has doubled in the last seven years, with 500 new cases launched every day. More than 170,000 children were subject to child protection plans last year, which is double the number seven years ago.

The Secretary of State recognises the crisis facing children services, but he just brushes it aside. I suggest that he listens to Lord Gary Porter, who warned recently that both adult social care and children’s services were “at the very top” of the Local Government Association’s “worry list”, saying:

“If we don’t look after our older and younger people, it’s bad for our residents, bad for our communities and bad for our services more widely.”

It was important that today’s statement provided much-needed certainty to our communities. Instead, it acts merely as a sticking plaster and pushes the problems down the road for another Secretary of State to fix.

Our key tests for today’s announcement are whether it addresses the cuts to everyday services and properly funds councils to deliver those services in future, whether it assists the funding crisis in children’s services, and whether it fully pays towards local government staff getting a decent wage. It is interesting that the council-tax-raising flexibilities will not even cover the pay rise, which will itself place further pressure on the cutting of services. On the day that Labour’s shadow Health team announced that 2.3 million older people have been left with unmet needs, which is up from 1.2 million, another test is whether the announcement ensures that our aged and vulnerable people are supported and protected. In addition, does it ensure fair funding in the truest sense of the word “fair”? Does it address the uncertainty around RSG, recognising that areas with greatest social and health inequality are also the least able to fill the funding gap by other means?

The statement fails on all those counts. While today’s announcement offers some additional support, it merely pays lip service to many of the problems facing our local councils. The Secretary of State has today presented himself as Santa, but the details of the announcement really show him to be the Grinch.

[Sajid Javid]

I thank the hon. Gentleman for his Christmas spirit. Time and again, he stands at the Dispatch Box and says just one thing: he wants more spending. He wants more spending on police, fire services, children’s services, adult social care, sprinklers, pay and pensions—spending, spending, spending. It is the only thing he knows. However, not once has he appeared at the Dispatch Box or anywhere else to tell the country how he intends to pay for all that spending. The truth is that it is the same old Labour, and Labour is all about higher spending, higher taxes, higher debt—all the same polices that will take our economy down to its knees and crash it. It is the only thing that Labour knows.

I want to remind the House about what happened the last time Labour was in office. We had the deepest recession in almost 100 years, which destroyed the lives of so many millions of people in this country. Unemployment was 500,000 higher when the Labour Government left office than when they first came into office, ensuring that they delivered on the one promise of every Labour Government: they will always leave unemployment higher than they found it. Under the 13 years of Labour Government, council tax bills went up by almost 110%, and their measures contributed to the deepest budget deficit of modern times. We will take no lectures at all from the hon. Gentleman.

I of course recognise the pressure on councils, and we have done something about that in the settlement by increasing real-terms spending power for the next two years while ensuring that we maintain a balance between the need for councils to provide services and taxpayers themselves. The hon. Gentleman mentioned negative RSG, but perhaps he was not listening carefully because I said that I will be consulting early in the new year on options to deal with that challenge, which will be welcomed by the sector even it if it is not welcomed by him. He referred to the business rates retention pilots, suggesting that there was some political dimension to how they were chosen. He said that Sheffield and Stockton did not get a pilot, but it would have helped if they had actually applied for one. Councils need to apply for something before they can get it. He then mentioned Salford, but perhaps he does not know that Salford is part of a business rates retention pilot as part of the Greater Manchester region, which received a pilot earlier this year. It would really help if the hon. Gentleman did his homework before he appears at the Dispatch Box and starts making things up.

As for social care, the hon. Gentleman does not recognise that we have acknowledged the pressures, particularly the short-term pressures, which was why the spring Budget allocated an additional £2 billion. Together with the extra flexibility through the precept, that will lead to a real-terms spending increase in each of the next three years.

Finally, the hon. Gentleman talked about his tests, which included seeing whether local authorities are properly and fairly funded. The one thing he should know is that, in order to fund any public services fairly, including those provided by our excellent local authorities, we need a successful economy, which Labour will never deliver.