Local Government Funding
Andrew Gwynne Excerpts(6 years, 8 months ago)
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Andrew Gwynne (Denton and Reddish) (Lab)
I beg to move,
That this House believes that local government has severely suffered as a result of almost eight years of brutal and devastating cuts; notes with concern that the Institute for Fiscal Studies estimates that between 2010 and 2020 local government will have had direct funding cut by 79 per cent; is concerned that the top ten most deprived councils in England are set to see cuts higher than the national average, with nine on course for cuts more than three times higher than the national average; believes there is a risk that services and councils are reaching a financial breaking point; calls on the Government to act on the warnings of the National Audit Office and initiate a review into the funding of local government to ensure that the sector has sustainable funding for the long term and to immediately provide more resources to prevent more authorities following Conservative-run Northamptonshire into effective bankruptcy; and further calls on the Government to report to the House by Oral Statement and written report before 19 April 2018 on what steps it is taking to comply with this resolution.
The motion calls on the Government to respond to the challenges faced by local government. I want to start by paying tribute to councillors of all political persuasions and none, and to council officers and staff, who have risen to those difficult challenges over the past eight years, making really tough decisions but ones that have often sought to protect public services. As I will come on to explain, all levels of local government are now saying that the cuts have to end or local government will collapse.
I am proud of my own roots in local government, having served on Tameside Metropolitan Borough Council for 12 years before coming to this House. My wife is a Tameside councillor approaching her 19th year of service. I know the very difficult decisions that she and her colleagues continue to have to make because of the decisions taken by Members of this House and this Government.
For those without the first-hand experience, the work of local government, as the Secretary of State recently put it, may seem small in the grand scheme of things, but to consider those working at the coalface in local councils as merely cogs in a machine to make the jobs of politicians in Westminster easier is a failure to recognise the real value, the responsibility and the pride shown by our local leaders.
Wes Streeting (Ilford North) (Lab)
In May, I will cease to be a councillor after eight years as a member of Redbridge London Borough Council. In my borough and, I suspect, every other Labour authority up for election this year, Conservative candidates will be out there attacking them for council tax increases that have been forced on them to protect public services from the savage cuts of this Tory Government. Is that not an example of the utter hypocrisy of the Conservative party: anti-cuts campaigners locally, while in this place cheering those cuts and voting them through?
Andrew Gwynne
My hon. Friend is absolutely right. Of course, part of the reason—two sides of the same coin—is that there have been eight years of cuts from this place to local councils, meaning that council budgets have shrunk. It is also this place that has allowed councils to increase council tax. This year it increased the limit by a further 1%, which means that it is merely shifting the blame on to local councillors of all political persuasions—and this is not a party political point.
Andrew Gwynne
I will give way in a moment, but I am responding to my hon. Friend the Member for Ilford North (Wes Streeting).
That is why it is so unfair: the Government have devolved the cuts and devolved the blame. They have sought to distance themselves from decisions for which each and every Member on the Conservative Benches is directly responsible.
Andrew Gwynne
And I remind the hon. Gentleman that council spending has been less in real terms since 2010. In the decade to 2020, my own local authority of Tameside will have lost close to £200 million of Government funding. That is unsustainable and he has some responsibility for that because of his votes.
Catherine West (Hornsey and Wood Green) (Lab)
My hon. Friend is making an excellent speech. Does he agree that particularly perturbing are the cuts to children’s services? Every single local authority leader, regardless of party, is screaming out for more money for children. Cuts to children’s services, particularly those for very young children, have such a long-term impact. We must give every single child the best start in life.
Andrew Gwynne
My hon. Friend is absolutely right: if ever cuts had consequences, they manifest themselves in the problems faced by our children’s services.
Andrew Gwynne
Not just yet, as I am still answering my hon. Friend the Member for Hornsey and Wood Green (Catherine West). What we are seeing in all councils that are responsible for children’s services is the real increase in demand, and I will talk a bit more about that later. This is coming not just from me but from the Tory-controlled Local Government Association, which says that children’s services require an extra £2 billion of funding. That is quite clear. It is coming from county councils, metropolitan district councils and unitary councils, and from the Special Interest Group of Municipal Authorities and the County Councils Network, as well as the Tory-controlled LGA. Everybody is singing from the same hymn sheet, yet when it comes to the priorities of this Government, when they were faced with a choice in the November Budget, what did they choose? A £5 billion tax giveaway through the bank levy and to vote down an Opposition amendment in which we pledged to put the £2 billion into children’s services—exactly where the Secretary of State’s own Tory councillors are saying it needs to go.
Andrew Gwynne
No, I will make a bit of progress. [Interruption.] I have taken three or four interventions already and I am only on page two of my speech. A little bit of patience is perhaps needed from Government Members.
The fact is that for politicians of all political persuasions and none in local government, the sense of pride and responsibility is why many of us came into politics—to make our world a better place for the people we grew up with, our neighbours, our family and our local communities. It is therefore saddening that this debate is even needed today.
Andrew Gwynne
I will just move on. The fact is that since 2010, local government has borne the brunt of the public spending cuts. Since 2010, 49.1% of central Government funding has been cut from local government—[Interruption.] It is interesting that the Parliamentary Private Secretary is giving his Back Benchers cue cards and whispering in their ears about what to say.
Mr Ranil Jayawardena (North East Hampshire) (Con)
Will the hon. Gentleman give way?
Andrew Gwynne
I will not—[Interruption.] If the hon. Gentleman cannot think of his own intervention without the help of the Parliamentary Private Secretary, it is probably not worthy.
Metropolitan district councils have seen a reduction in spending power of 33.9% in real terms—
Several hon. Members rose—
Madam Deputy Speaker (Dame Rosie Winterton)
Order. The hon. Gentleman will give way if he wishes to, but we must hear his speech.
Andrew Gwynne
Thank you, Madam Deputy Speaker. Metropolitan district councils have seen a reduction in spending power of 33.9% in real terms from 2010 to 2017-18. Over the same period, county councils’ spending power has fallen by 22.1%, but spending power masks the true scale of the cuts to Government grants. This is having a drastic impact on council services. Youth centres, museums and libraries are having to close. Our social care system is in crisis. Compared with 2010, there are now 455 fewer libraries, 1,240 fewer Sure Start centres and 600 fewer youth centres.
Huw Merriman
It is all well and good for the hon. Gentleman to talk about the difficulties from 2010, but the reality is that many of those difficulties have been caused by the Labour Government’s policies. I was a district councillor for eight years. I know how tough it was. Take some responsibility for what you delivered.
Andrew Gwynne
As I say, I was a councillor for 12 years, 11 of which were under a Labour Government, and we had 11 years of growth in our local authority. That was something to be proud of. However, the Government’s record gets worse—
Emma Hardy (Kingston upon Hull West and Hessle) (Lab)
Will my hon. Friend give way?
Emma Hardy
I thank my hon. Friend for giving way and for his excellent speech—[Interruption.] No, I feel that the atmosphere in here ignores the very real consequences of what we are talking about. I have mentioned before that in my constituency there are 140 more looked-after children who have been taken into care because they have not had that early intervention and early support. Government Members can laugh and joke and make this into some sort of comedy show, but I am sorry; we are talking about the impacts on real people’s lives. Real people’s lives are being changed forever because of this Government’s actions, and I do not think that it is a laughing matter!
Andrew Gwynne
My hon. Friend is right to be angry. When the public watching this debate see Tory MPs laughing, sneering and smirking at our public services in crisis, they will know what side the Tories are on, and it is not theirs.
Wera Hobhouse (Bath) (LD)
I thank the hon. Gentleman for giving way, because this is an important debate. Yes, the Liberal Democrats are now on the Opposition side—[Interruption.] Listen! We were on the Government Benches to say that we needed to tighten our belts, but for a long time now we have said that enough is enough. We are seeing the impact on our local services. We cannot stand by any longer. You all must have constituents coming—
Madam Deputy Speaker (Dame Rosie Winterton)
Order. That is a very long intervention. I call Andrew Gwynne.
Andrew Gwynne
Thank you, Madam Deputy Speaker. The hon. Member for Bath (Wera Hobhouse) is right that these cuts have gone far too far. Many of my constituents, though, will not forgive the Liberal Democrats for the part they played in pushing through the deepest austerity in the coalition Government. Many of those hard choices have resulted in some of the increases in demand that we are now seeing, particularly in children’s services and adult social care.
Maria Caulfield
I thank the hon. Gentleman for giving way; he is very generous. I understand his call for more funding for local government, but can he explain why Labour Members voted against the local government finance settlement, which gave councils more money?
Andrew Gwynne
Because it is a fact that the local government finance settlement went nowhere near the gaps that have been created by the hon. Lady’s party in local government. We do not support ongoing austerity. We want to ensure that we reinvest in our public services, and that is why I hope she will join us in the Lobby tonight. If she believes in defending public services and wants to see more money for our local councils, she can support our motion tonight, and I look forward to her being in our Lobby.
House building has fallen to its lowest rate since the 1920s and homelessness is rising. The number of people sleeping rough on our streets has more than doubled since 2010—[Interruption.] The Secretary of State can chunter, but I do not think that doubling the number of rough sleepers is a record for the Housing Secretary to be proud of. Older people are not living with the dignity and comfort that they deserve because of the cuts to social care. The outsourcing of public services has led to one scandal after another, and the collapse of private outsourcing companies such as Carillion has put services at further risk. Demand for children’s services is placing growing pressure on all councils. Central Government funding to support children and their families has been cut by 55% since the Conservatives came to office.
Andrew Gwynne
Well, if the hon. Gentleman can say where the extra £1.7 billion that has been cut from children’s services will be made up from, I look forward to hearing his suggestion.
Andrew Gwynne
The fact is that—[Hon. Members: “Yes or no?”] The fact is that the privatisation of our council services has been a catastrophic failure. I can tell the hon. Gentleman that the next Labour Government will introduce new rules to allow councils that want to to fully in-source their services without let or hindrance by the Government, because we support publicly owned, publicly accountable public services.
Several hon. Members rose—
Andrew Gwynne
I will give way to the hon. Member for Carlisle (John Stevenson), who has been so patiently bobbing at the back for the past however many minutes.
John Stevenson
I am grateful to the hon. Gentleman for giving way so generously. In Cumbria we had the opportunity for a devolution deal. It did not happen. In Cumbria we had the opportunity to reduce the number of councils and councillors, which would have meant savings of around £25 million, which could have been spent on frontline services. The reason for the failure was Labour councils and Labour council leaders. Does the hon. Gentleman not think that was a failure of the Labour party?
Andrew Gwynne
Of course, the hon. Gentleman did not want to tell me where the £1.7 billion for the shortfall in children’s services was coming from. I know that in Cumbria there is a shortfall in funding for children’s services, as there is in every other county council in England. Every metropolitan district council in England and unitary councils across England are all saying the same thing. Perhaps he ought to speak up for Cumbria and get the extra money for Cumbria’s children’s services.
The result of the cuts has been appallingly clear. Cuts to early years intervention have meant a record number of children, some 72,000—let us stop and think about that—taken into care last year. 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—double the number seven years ago.
Ruth Cadbury (Brentford and Isleworth) (Lab)
Like my hon. Friend, I too was a councillor—for 25 years. Does he agree that the removal and slow cutting of early intervention services, specialist family services and support and grants for charities that support people and families in the community over the past seven or eight years is part of the reason why too many children are coming into children’s services, too late and with too many serious problems?
Andrew Gwynne
My hon. Friend is absolutely right. We had numerous debates in the Parliament from 2010 to 2015 about children’s services and in particular the cuts to Sure Start. I think Sure Start had the basis for being one of the previous Labour Government’s greatest achievements, had it been allowed to remain in place, fully funded in the way that Labour intended. What used to gall me the most was Member upon Member on the Government Benches saying that Sure Start was a waste of money and did not work. Sure Start was never intended to be a quick fix. Government Members can tell me in 20 years’ time, when the children and parents who went through Sure Start are parents and grandparents themselves, whether Sure Start worked or not. I believe that one of the biggest tragedies of the David Cameron era of Government was the slash-and-burn approach to early years.
Several hon. Members rose—
Andrew Gwynne
I give way to my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy) again.
Emma Hardy
One of the issues facing our schools is the number of children attending who are not classified as school-ready. There are increased numbers of children with oracy problems and children starting school who are not toilet trained, which increases the impact on our schools’ resources.
Emma Hardy
That is because of the lack of support for children from health visitors and Sure Start services. Does my hon. Friend not think it is time for the Government to reverse those cuts if they are genuinely committed to giving every child the best possible start? Or can only children from families with the money to pay for it have the best possible start?
Andrew Gwynne
My hon. Friend is absolutely right, and that is the short-term approach of this Government and their predecessor, the coalition. However, making short-term savings in a particular year has resulted in massive cost and demand increases further down.
Andrew Gwynne
I will give way to the hon. Gentleman, as he keeps trying to intervene on interventions.
James Cartlidge
When interventions transmute into speeches, some of us get a little frustrated. The point is that difficult decisions had to be made when in 2010, we were faced with the highest budget deficit since the war. The hon. Gentleman is effectively saying that we should have protected the Department for Communities and Local Government budget, just as we chose to protect the NHS. What taxes would he have increased or what other Departments would he have cut to pay for that?
Andrew Gwynne
I will take no lectures from a Member who voted to cut the bank levy by £5 billion. I politely point him towards the “Grey Book”, which we published with our manifesto, “For the many, not the few”—I am sure it is well thumbed on the Government Benches. In our manifesto we pledged to give, this year and every year, an additional £1.5 billion for local councils and where we—[Interruption.]
The Secretary of State for Housing, Communities and Local Government (Sajid Javid)
I will tell him.
Andrew Gwynne
The Secretary of State says he will tell me. I am glad that he is looking into Labour policy development. Perhaps he ought to consider his own policy development on these matters, because the Government are so woefully lacking in any such proposals. Our proposal was fully costed, with £500 million for early years, £8 billion for social care—
Andrew Gwynne
I will not give way again, because I am answering the hon. Gentleman’s question. What we proposed, when put together, is a far better deal for our children, our elderly and our councils than what the Conservatives have been able to come forward with.
Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)
Does my hon. Friend agree that it is about time that we bust the Tory myths about the economic shock that this country faced? The reality is that the economy was growing when Labour left office. It was the absurd austerity policies of the Tory party that prolonged the recession and made it worse, giving us what is now the longest recovery in our country’s economic history.
Andrew Gwynne
My hon. Friend is absolutely right, and it cannot be said often enough. When the Gordon Brown Government ended, the economy was growing again. That is a statement of fact. [Interruption.] The Secretary of State chunters again about “the deepest recession”. I think he will find that the global crash started in the United States of America—something that even his former Chancellor of the Exchequer, George Osborne, now acknowledges.
Catherine West
My hon. Friend is making some great points. Does he agree that the children’s services crisis has been worsened by the 1% pay freeze over the last eight years? I hope we hear good news at the end of this debate from the Minister about pay increases for those workers being brought in line with the NHS pay increases.
Andrew Gwynne
My hon. Friend makes a really important point. I will come to some of those issues later, but her point is very well made, because we have not only seen the hollowing out of our local services. We have also seen the impact of that on local government as a whole.
I know that is an inconvenient truth for Ministers, and I am sure that when the Secretary of State responds, with his pre-prepared speech, he will say that I am making overtly political points. That seems to be his stock answer. He seems to forget that it is the job of the Opposition to point out the Government’s failings, of which there are many in local government policy. However, it is not just the Labour party saying this; it is the National Audit Office. Surely the Government recognise the National Audit Office as a reputable organisation that knows what it is talking about. The NAO has told us what the Government’s policies mean. They mean that one in 10 councils with social care obligations will have exhausted their reserves within the next three years. They mean that the Government’s short-term fixes are not working and that local government still has no idea how its finances will work after 2020. It is about the cost of negligence being paid for by communities across the country. Vital services are cut, and because the Government shift the blame on to local councils, giving them so-called flexibility but then criticising them when they use it, council tax bills are increasing.
Planning and development, the National Audit Office has shown, has been cut by 52.8%. If we are to meet the Government’s ambitious targets for new homes, who will be the planners of the future? Who will identify the land to be built on? Who will process the planning applications? Who will be the enforcement officers to ensure that the homes and other buildings are built in accordance with the plans?
Funding for transport has been cut by 37.1%. These are our bus routes. These are the vital links between our communities. These are our roads, our pavements, our cycleways. I note that Conservative Members are now silent about that.
James Cartlidge
It is extremely kind of the hon. Gentleman to give way, but it must be said that he is continuing the same argument. When we had the deficit, we chose to protect the NHS and had to make other difficult choices. He is effectively saying that Labour would have protected the budget of the Department for Communities and Local Government. He must therefore tell us what other budgets he would have cut, or what taxes he would have increased, to pay for that protection.
Andrew Gwynne
I think that people listening to the hon. Gentleman’s intervention will find it hard to believe that he protected the NHS, for a start. However, I am glad that he has intervened on the issue of transport. It is rather ironic that he has come here and said that we would want to protect local government. He is damn right we want to protect local government, but so does his Defence Secretary. His Defence Secretary took to Twitter a couple of weeks ago decrying the fact that Conservative-controlled Staffordshire County Council was removing bus services from his constituency—the same Defence Secretary who voted for the cuts in this place.
Emma Hardy
One of the impacts of the transport cuts is the declining number of apprentices, who find it difficult to travel to college to complete their apprenticeships because of the cost of local transport. In their manifesto, the Conservatives promised to give apprentices subsidised local travel. This is another instance in which their promises have failed and they have failed to deliver, because they are apparently incapable of any joined-up thinking.
Andrew Gwynne
My hon. Friend is absolutely right, but this does not just apply to transport. It applies to food safety, and to day-to-day services such as street cleaning and the emptying of bins. It applies to our museums, our heritage, our cultural services and our libraries: the glue that holds together the fabric of our local communities. I do not support the Government’s notion that they can go on cutting vital day-to-day services without those cuts having an impact.
Andrew Gwynne
I will come back to the hon. Gentleman, if he will allow me. I need to draw my remarks to a conclusion, but I will take a few more interventions before I do so.
It is not just the National Audit Office that is making these comments. Back in 2015, the Institute for Fiscal Studies was warning that deprived areas were suffering from the harshest council cuts. The Government called for councils to spend their reserves and sell off their assets. Tory Northamptonshire followed that instruction to a T, and look where it got them.
As local government leaders warned of the coming crisis in adult social care, the Government said
“town halls are hoarding billions in their piggy banks”.
The Municipal Journal said recently, in response to this toxic situation:
“This is a wholly unsustainable position, and has already led to speculation about the long-term futures of four other counties which have used significant cash reserves in recent years: Surrey, Lancashire, Somerset and Norfolk.”
All I can say is that if the Surreys of this world are now struggling and pleading poverty to the Secretary of State, heaven help the Liverpools, the Manchesters, the Birminghams, the Tamesides and the Hulls of this world.
Wera Hobhouse
I thank the hon. Gentleman for giving way. He is very generous. Does he agree that if there is to be wholesale reform of local government funding, it should at least be fair, and should not punish areas that are already more deprived than others? There must be a fair funding formula, but that is not what is currently proposed.
Andrew Gwynne
The hon. Lady is absolutely right. Anything that comes out of the mouths of Ministers that contains the words “fair” and funding” sends shivers down my spine.
Hugh Gaffney (Coatbridge, Chryston and Bellshill) (Lab)
My hon. Friend is making a very important speech. I should say that I am currently a member of a council, and as a councillor I know about the effect that the cuts are having. In Scotland, £1.5 billion has been slashed from local government since the Scottish National party came to power. Does my hon. Friend agree that the nationalists are simply a conveyor belt for the Tory austerity that is continuing in Scotland?
Andrew Gwynne
My hon. Friend can speak very well about his experiences in Scotland. Tory austerity south of the border is driving local councils to the edge of a financial cliff, and I am very sorry if that is being replicated north of the border by the SNP Government in Holyrood.
Several hon. Members rose—
Andrew Gwynne
I must make a little more progress. I will give way once more before I finish my speech.
It is little surprise that when we talk to Conservative Members in private they are just as concerned about what is going on in their own local communities as Labour Members are in public. It is not just the Opposition who are expressing concern about what is happening across local government; the IFS, the NAO and the media that cover local government are all saying the same things, as are members of the Conservative party.
Ensuring that vulnerable children have the protection that they need should not be a party political matter, which is why I am grateful for the work done by the hon. Member for East Worthing and Shoreham (Tim Loughton) to highlight the crisis in children’s services. Both the hon. Member for Harrow East (Bob Blackman) and the current Minister for Policing and the Fire Service, the right hon. Member for Ruislip, Northwood and Pinner (Mr Hurd) have campaigned against library closures. As I said earlier, the Defence Secretary has expressed concern about the cutting of bus services by Tory-controlled Staffordshire County Council—and he is right.
The Government can talk the talk on social mobility, supporting apprenticeships and investing in local communities, but at the moment—as was pointed out by my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy)—people who live in rural areas and want to find work or apprenticeships cannot travel because there are no local transport services for them to use. I agree with the Defence Secretary. I only hope that he will be in the Lobby with us today, supporting his Twitter petition. For many years we have argued for a change of direction while the Government have stuck their head in the sand.
Mr Sweeney
Does my hon. Friend agree that what has been displayed today, in the most spectacular fashion, is total Tory economic illiteracy about what this country has faced? Had the Tory party continued with Labour’s stimulus plan, we would have restored the public finances at a far faster rate than can be achieved through a self-defeating austerity project.
Andrew Gwynne
My hon. Friend is absolutely right. The evidence was there when we left office, and the almost immediate impact of Chancellor George Osborne’s turning off the taps was apparent for all to see.
Several hon. Members rose—
Andrew Gwynne
I will not give way again.
Today’s vote offers all Members on both sides of the House an opportunity to send a very clear message to the Government and the Secretary of State: the message that things must change as a matter of urgency, that our vital public services should be properly funded, and that our communities need and expect their councils to deliver the services that they want to see. I hope that all Members will join us in the Lobby to stand up for their communities, their public services, and—yes—their councillors, too. This is not just about Labour councillors, but about Conservative, Liberal Democrat and independent councillors: everybody who serves our communities in the town and county halls across England.
The Government need to think again about the impact of their reckless and short-sighted approach to council funding. Northamptonshire is the first, but it almost certainly will not be the last. For local government, money tomorrow is no solution to a crisis happening today. I urge all right hon. and hon. Members to support us in the Lobby. I commend this motion to the House.
Andrew Gwynne
On a point of order, Mr Deputy Speaker. Given the unanimous view of the House to accept Labour’s motion on local government funding, and given that the motion ends with
“and further calls on the Government to report to the House by Oral Statement and written report before 19 April 2018 on what steps it is taking to comply with this resolution”,
that is the clear view of Members. How can we ensure that it happens?
Mr Deputy Speaker (Sir Lindsay Hoyle)
I think that the hon. Gentleman already knows the answer, but let me see if I can help a little. I am sure that the Government will reflect on the motion, but in the end, it is up to them, and unfortunately, it is not binding. I think that answers the question.
Northamptonshire County Council
Andrew Gwynne Excerpts(6 years, 8 months ago)
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Andrew Gwynne (Denton and Reddish) (Lab)
I thank the Secretary of State for advance sight of his oral statement and for bringing to the House a much-awaited response to the sorry crisis in one of his own party’s councils.
The best value inspection of Northamptonshire County Council of 15 March makes very sorry reading and is an indictment of not only mismanagement locally, but eight years of intransigence and austerity nationally. The Secretary of State will know that Northamptonshire’s problems have been building over a number of years, yet the council bragged about its “pioneering” approach to council services, running them as a business and operating “almost like a PLC”, according to the former chief executive. It did not take long before it became clear that just like the public sector, the private sector cannot deliver adequate services when there is still too little funding.
In 2015, the Local Government Association warned that forcing councils to spend reserves to plug funding gaps—something the Secretary of State’s predecessor, Sir Eric Pickles, used to demand of all councils—would be a “reckless gamble” and
“would put local communities on the fast-track to financial failure.”
As we have heard, back in September last year, the LGA conducted a financial peer review, warning that Northamptonshire would be the first to collapse. I am not sure whether the Secretary of State had read that report because he was soon cutting the ribbon at the new £53 million headquarters, as the authority was preparing the paperwork to declare itself bankrupt.
Worse, the Local Government Chronicle has suggested that there are already at least 10 authorities preparing to issue section 114 notices, and now the National Audit Office has warned that one in 10 councils with social care obligations will have exhausted their reserves within the next three years. So can the Secretary of State tell the House: what contingency arrangements have been put in place should other authorities follow Northamptonshire over the cliff edge?
I hope that the Government will learn from the failure in Northamptonshire. Even now, we are still learning more; we found out just this week that the ex-chief executive was paid more than £1,000 a day, while people were losing their jobs and services. That is why it is so crucial for commissioners to be sent in. The problems at Northamptonshire are so deep-seated that the residents of the county should not expect more of the same mismanagement from the Tory councillors who have driven it into the ground.
The Secretary of State says that he is minded to appoint commissioners. The Labour party has been calling for that for some time. Can he give a timescale—when will he make a formal decision? Should he decide to appoint commissioners, how soon does he expect them to be in place following that decision? Does he expect that their remit will be as extensive as that recommended in the report? If he does, he will have our full support.
On the budget, it is clear that Northamptonshire’s problems continue. Creative accounting may have got the county through the year end and through the budget setting for 2018-19, but Northamptonshire’s finances remain in a precarious state, and the principal pressures in children’s and adults’ services remain serious issues for the authority. What certainty does the Secretary of State have that Northamptonshire will be able to meet those cost pressures in the new financial year without additional central Government resource? What level of direct budget monitoring will be taking place by his officials in the Ministry throughout the year and will he be recommending that Northamptonshire undertakes additional in-year budget-setting exercises should it need to?
We give a cautious welcome to the reorganisation of local government in Northamptonshire, but changing lines on a map does not, in itself, resolve the deep- seated problems facing local government. In asking Northamptonshire’s councils to make suggestions to him, does the Secretary of State agree that any proposals for new councils must have the widest possible degree of consent from the communities they seek to represent? What resources will be made available to the new authorities to start them off on a sustainable footing? Does he envisage a Northamptonshire residuary body that will be established to take on the historic problems associated with the county’s finances, so that the new councils can start with a clean slate? And what assessment has he made of the financial capability of unitaries to run the functions of local government in Northamptonshire?
Northamptonshire is the first but it will not be the last. Given the assessments by the NAO and the Local Government Chronicle that other councils will follow Northamptonshire in the coming years, what assessment is the Secretary of State making and what resource is he going to make available to ensure that that does not happen? This is what happens when a Government have created a £5.8 billion gap in local government funding. Everyone is saying that social care is on its knees and when children’s services need an additional £2 billion. Local government cannot be allowed to collapse on this Government’s watch.
Sajid Javid
I thank the hon. Gentleman for his comments, but I must say that I do not think he listened to a word of my statement. Once again, he appears to have come to the Dispatch Box with a pre-prepared statement. It is clear that he is very disappointed indeed by the report because it is not what he wanted. He wanted a report that he could use for party political purposes, so that he could play his favourite game, political football—a game that has no respect for the people of Northamptonshire.
The hon. Gentleman wanted to claim that what has happened in Northamptonshire was due to a lack of funding. He did not listen to what I said in my statement and he clearly has not read the report. He comes to the Dispatch Box having not even read the report—and he calls himself the shadow Secretary of State for Housing, Communities and Local Government. Had he read the report, he would have seen that the independent inspector is crystal clear that it is not an issue of lack of funds; it is to do with poor governance and poor financial management.
The hon. Gentleman must have been very disappointed that the report did not allow him to make his party political arguments. I noticed that he conveniently ignored the history of local government interventions, so let me remind him: in 2001, Hackney, Labour-controlled; in 2003, Hull, Labour-controlled; in 2008, Stoke-on-Trent, Labour-controlled; in 2009, Doncaster, Labour-controlled; in 2014, Tower Hamlets, Labour-controlled; and in 2015, Rotherham, Labour-controlled. Perhaps he can detect the pattern, but if he cannot, let me help: all those councils were Labour-controlled. He has conveniently ignored that.
The hon. Gentleman did manage to get round to a few questions, so let me try to answer them. He asked about the timescale for the decision that I am considering on sending in the commissioners. It is a “minded to” decision at this point. I will take representations, as I rightly should, up to 12 April, after which I will make a final decision. If the decision is to send in commissioners, they will be in place by the end of April.
The hon. Gentleman asked whether there will be more funding for the council. As I have said, the inspector has said that lack of funding is not the issue. Simply to give the council more funding would be to reward mismanagement and would clearly be wrong.
The hon. Gentleman asked about reorganisation. It is of course necessary to consider reorganisation, because that is one of the inspector’s central recommendations. I do not want to predetermine the outcome. The inspector has recommended two new unitaries. We are open-minded about the proposals and I will consider them carefully, to a timeframe that allows us to look at them properly and to make sure that any options are consulted on properly.
Finally, I suggest kindly to the hon. Gentleman that, if he wants to come to the Dispatch Box and be taken seriously, can he listen to my statements in future, instead of appearing and talking about fiction?
Local Authority Financial Sustainability: NAO Report
Andrew Gwynne Excerpts(6 years, 9 months ago)
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Andrew Gwynne (Denton and Reddish) (Lab)
It is a pleasure to serve under your chairmanship, Mr Evans. I congratulate my hon. Friend the Member for Weaver Vale (Mike Amesbury) on securing this absolutely crucial debate today. I thank the many Labour Members who have contributed, particularly those who made speeches: my hon. Friends the Members for Peterborough (Fiona Onasanya), for Kingston upon Hull West and Hessle (Emma Hardy), for Liverpool, Walton (Dan Carden), for North West Durham (Laura Pidcock) and for Leigh (Jo Platt). They speak up on behalf of their communities, who are really struggling in the face of eight years of Tory austerity.
I find it bitterly surprising that there is not a single member of the parliamentary Conservative party here, save for the Minister and her Parliamentary Private Secretary. I cannot believe that after eight years of cuts and the destruction and decimation of our public services, there is not a single member of the Conservative party willing to stand up for their communities and to say to the Minister and the Government, “Enough is enough!”
Emma Hardy
I have already spoken about the cuts facing the East Riding of Yorkshire Council. My constituency represents a very small part of that council, but the Conservative Members of Parliament that represent the council, such as the hon. Member for Beverley and Holderness (Graham Stuart), are not here. Why is it left to Labour MPs to give the Government the message about what is happening in their own Conservative-controlled councils?
Andrew Gwynne
I agree wholeheartedly with my hon. Friend. As I said, I find it bitterly surprising. When we talk to Conservative Members in private, they are as concerned about what is going on in their own communities as Labour Members are. When we look at what is happening across local government, it is not just the Opposition raising concerns.
Wera Hobhouse (Bath) (LD)
I was a councillor for 10 years in a local authority in the north of England and I totally agree with the hon. Gentleman. It is time for everybody to speak up against the cruel cuts that completely demolish local authorities. People say, “The Lib Dems were also involved in this in the coalition years.” We need to take responsibility and say, “Yes, there was a point when we agreed to that, but enough is enough.” We have to stand up and say it is no longer acceptable. Our local services are no longer any services to speak of and everybody suffers.
Andrew Gwynne
I am grateful to the hon. Lady. I will be kind to her because she was my son’s German teacher at Audenshaw School. She is right to acknowledge the role that the Liberal Democrats played in this matter. I know she was not a Member of this House when the cuts were made, but some of the most damaging and deepest cuts made to local government happened under the coalition Government. Not a single Liberal Democrat Member of Parliament stood up, spoke out and voted against those cuts, so I am afraid the Liberal Democrats do have a responsibility for the state that local government is in today.
However, the hon. Lady is absolutely right to say that enough is enough. Local government is in crisis—and it is not the Labour party saying that, but the National Audit Office and the Tory-controlled Local Government Association.
Fiona Onasanya
In my constituency, Peterborough is run by a Conservative council, which has come to me and said, “Will you join us and lobby Government and say enough is enough? Stand up for Peterborough. We do not have enough funds. We cannot continue to do more with less.” Does my hon. Friend agree that the Government need to listen to their own voices from within and stop the cuts?
Andrew Gwynne
I absolutely agree. The Tory-controlled Local Government Association and Tory-controlled County Councils Network speak with one voice in the local government family, which is that local government is on its knees, our public services are struggling and local government cannot carry on if the cuts continue over the coming years. We know what is happening because it is happening today. Tory-controlled Surrey County Council, in one of the richest parts of the country, is complaining that it does not have enough money. If Surrey County Council has not got enough money, what hope have the Liverpools, the Tamesides and the Hulls of this world?
Dan Carden
I am delighted my hon. Friend has made that point. We are trying to argue that this matter is not economic, but political. When Liverpool has 60% of its properties in band A, what hope have we got of raising council tax to pay for all our services?
Andrew Gwynne
My hon. Friend makes a very important point. One of the two local authorities that I represent, Tameside Metropolitan Borough Council in Greater Manchester, has a £16 million social care funding gap this year. A 1% increase on the council tax brings in about £700,000. The Tamesides of this world will never be able to fill the gap in the cuts from central Government, so the point my hon. Friend makes is absolutely crucial. The authorities that we represent are grant-dependent for a reason, because no amount of business rates retention and increases in local taxation through the council tax within the referendum framework will ever make up the difference between the cuts that have been made centrally.
Lilian Greenwood (Nottingham South) (Lab)
My hon. Friend makes a powerful point. The situation is similar in my own local authority of Nottingham City where the amount required for adult social care in the year ahead is £12 million, and the social care precept raises around £3 million. Does he think that the Minister expects us to provide each elderly or disabled person with just a quarter of the care that they need, or should we simply pick a quarter of them and show that they have the care, leaving the other three quarters without the care that they require? What does he think the Minister’s advice would be?
Andrew Gwynne
I will let the Minister speak for herself. We know that local authorities have to provide social care and that it is not the social care services that necessarily get squeezed, but all the other services that many of our residents access on a day-to-day basis. Most of our constituents do not access adult social care unless they have an elderly relative who needs it and they do not access children’s social care unless they have a child in the system, but they expect their parks to be well maintained, their streets to be adequately surfaced, street lighting to be fixed, and litter to be picked up. They expect basic decent services, and it is those services that are being cut.
Emma Hardy
Exactly. There are cuts to the local library service, for example. Local libraries have had to reduce their opening times, and yet the move towards universal credit means that everybody is expected to apply online. They were told, “Go to your library and use the computers there,” but there are not enough computers in the local library and it is not open as much as it used to be. That is another consequence of the cuts and it shows a lack of joined-up thinking, a lack of forward planning and a lack of consideration and regard for the people in the poorer parts of this country.
Andrew Gwynne
Absolutely. Those are the pressures facing our communities. We talk about local services as though they are isolated from one another, but they are the life blood of many towns, villages and communities. Library services, welfare support and advice, and housing services are crucial elements of what makes communities tick and brings them together.
I speak not only in my role as shadow Secretary of State for Housing, Communities and Local Government but as someone with a fundamental belief in local government’s power to make a difference. I spent 12 mainly happy years, and my wife is nearing her 18th year, as a Tameside councillor. I want to add to the thanks that my hon. Friend the Member for Weaver Vale expressed in his speech. We do not thank nearly often enough those, of all political parties and none, who serve as councillors and elected Mayors, or the staff and officers who implement councillors’ decisions. I offer thanks and appreciation to all those who work in our communities as elected members and local authority staff and officers. They are on the frontline of defending public services. Not only that, but they are the last line of defence when it comes to making the tough decisions that the Government have forced on them. I recognise the way many of them value and take pride in their position as councillors.
The National Audit Office’s assessment of the Ministry of Housing, Communities and Local Government makes for rather uncomfortable reading. Fundamental to the argument presented by the NAO is the failure of the Ministry to present a long-term strategy for the sector. As a result, even the four-year settlement that we were told was intended to offer some financial stability just kicked the can down the road. Authorities face major funding uncertainties beyond 2019-20.
Even within those four years of supposed certainty, local government has had to deal with rapidly shifting priorities from central Government—often announced at relatively short notice. It is reported by the NAO that the majority of case study authorities with social care responsibilities that it spoke to said that central Government funding outside the settlement had changed a number of times. An example was the new homes bonus being repurposed to fund adult social care.
We are told that
“The Department’s view is that these changes reflect considered responses to new pressures and risks”.
Anyone who has been following the issue would know that those pressures and risks have been growing since the beginning of the decade. As will ring true for many of my hon. Friends who have spoken today, over the decade from 2010 to 2020 Tameside will have lost close to £200 million in funding. Stockport will have lost well over £100 million. We can, as I have said, never fill those gaps with council tax alone. Although Stockport has a slightly better and more advantageous council tax base than the Tameside part of my constituency, this year it will have to find a further £18 million of savings—or cuts, as I like to call them—which is leading to consultation of residents about some drastic changes to the delivery of social care.
Tameside has said that demand for its services is at unprecedented levels. That is because of the wider impact of austerity on the public purse. If we operate in silos, there should be no surprise when cost-shunting presents itself as a problem on the town hall doorstep. Whether it is the closure of Sure Start centres or early intervention and family support, or the reduction in the number of domestic violence officers who used to be employed by the police, resulting in children being presented as safeguarding cases to the local authority, everything moves one way—from one part of the public sector to another. It may be councils pushing on to the NHS or police pushing on to councils, but it is a merry-go-round of self-defeating prophecy. We must stop that, and fund services properly.
Elsewhere in the report, we were told that the Government are working towards implementing the fair funding review. However, the implications of that are not yet clear. I must be honest with the Minister: anything that comes from a Minister’s mouth and that includes the words “fair”, “funding” and “local government settlement” sends shivers down my spine. We sure know what that means: that the Tamesides, Stockports, Liverpools, Durhams, Leighs, Wigans and Hulls—I could rattle through all the areas—will almost certainly end up with less money. As sure as night follows day, that is what happens when the Tory Government instigate funding changes to local government. Yet we have real social need, and are not able to raise money directly. What we see is the culmination of a crisis facing local government across England. What certainty can the Minister give our councils that they will get a fair funding settlement reflecting the areas’ needs and their inability to make up funding gaps through other sources? So far that has been badly lacking.
I want to end by discussing today’s crisis. Tory Northamptonshire is the first council effectively to declare bankruptcy, but it will almost certainly not be the last. The NAO reckons that in the next few years, unless the funding settlement improves considerably, one in 10 councils with social care responsibilities will have exhausted their reserves and, almost certainly, be in a similar predicament.
How did Northamptonshire, which by any standard is a wealthy part of the country, with a good council tax base, end up with an overspend at this year end of about £21 million, and reserves depleted to about £17 million? I will tell the House how it happened: it took the advice of the former Secretary of State, Sir Eric Pickles, who said that rather than complaining about cuts councils should spend their reserves. Once reserves are spent the money is gone; once the assets are sold, the asset base is gone. Once the money is gone, councils have to make cuts and take difficult decisions.
Fiona Onasanya
Does my hon. Friend agree that the situation is a clear case of knowing the price of everything and the value of nothing?
Andrew Gwynne
It absolutely is, but if it was compounded by Tory mismanagement at local level in Northamptonshire, the root cause of the problem undoubtedly came from the Tory Government. They have, as we heard from my hon. Friend the Member for Weaver Vale and the National Audit Office, presided over cuts of almost 50% in central Government funding to councils. That is unsustainable. If we want councils and councillors to facilitate services of such a quality as to provide dignity to the elderly and the best start for the young, and to provide the general population with quality public services, that must be funded.
Emma Hardy
We have talked a lot about percentages and money, but I want to mention something a little more individual: the incredible increase in the number of looked-after children in my constituency, which has gone up by 140. We have one of the highest numbers in the country, and that is a consequence of the cuts. That is what happens when cuts take place.
Councils do not have the money for early intervention or the other services that used to provide that extra family support. Such support does not exist anymore, because all that is left is the statutory service. Sure Start used to be available for wider family participation; groups that anybody could take their child to are now open only to a small number of people who have a particular identified need. That all contributes to the increasing number of looked-after children. We cannot just sit here and ignore it: 140 children’s lives have been changed forever.
Andrew Gwynne
My hon. Friend is absolutely right. Indeed, it is worse than that because we need to rebuild these services, yet over the past eight years we have lost thousands of dedicated council workers and staff. We have lost the corporate knowledge and history that was embedded in our local authorities. This is not just a question of money; it is difficult to rebuild overnight that capacity in our local councils.
The reality of Government cuts is laid bare in the National Audit Office report. Planning and development has been cut by 52.8%. If we are to meet the Government’s targets for new homes, who will be the strategic planners of the future to identify the land? Who will be the planning officers who implement planning applications? Who will be the planning enforcement officers and ensure that homes and buildings are built in accordance with the plans? Transport funding has been cut by 37.1%. These are our bus routes and the vital links between communities; these are our roads, pavements and cycleways. These cuts are unsustainable.
Emma Hardy
The Government talk the good talk on social mobility and say how important that is, but at the moment there are young apprentices who live in rural areas and cannot afford to do an apprenticeship or attend college, or they cannot get there because there are no local transport services for them to use.
Andrew Gwynne
Absolutely. This is about our museums, heritage, and cultural services—the glue that makes our communities tick. It is about who we are and that sense of place, yet funding has been cut by 34.9%. Housing services are not just about ensuring that people have roofs over their head. They are about support for the homeless and ensuring that our housing market works correctly. They are about tackling the scourge of rough sleeping, yet funding has been cut by 45.6%.
When a Government have created a £5.8 billion gap in local government funding, when everyone is saying that social care is on its knees, and when children’s services need an additional £2 billion, this Secretary of State, this Minister and this Tory Government stick their heads in the sand. They fail to give our services the money they need, and they ignore the crisis that is happening on their watch to our services and communities. We need a Government who are committed to our local councils and to rebuilding our communities. We need a Labour Government for the many, not the few.
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Mrs Heather Wheeler)
It is a pleasure to serve under your chairmanship, Mr Evans—for the first time, I believe. I congratulate the hon. Member for Weaver Vale (Mike Amesbury) on securing the debate. For the record, I am married to a councillor, and I employ a councillor.
This is an important issue that the Government take seriously, and we recognise the hard work of our councillors, councils and council staff. The report sets out the National Audit Office’s view on the financial sustainability of the sector. I wish to take this opportunity to set out what the Government are doing to support local authorities and to design a fairer and more transparent system of funding that gives them more control over the money they raise. Every day, local authorities deliver vital services to the communities they serve. Like the rest of the public sector, they have had their part to play in helping to bring down the deficit. It is to their credit that they have continued to provide high-quality services, while delivering a better deal for the taxpayer. Indeed, so good are they that non-ring-fenced reserves have increased by 47% since 2011, to £21 billion in March 2017.
We take the funding of local government very seriously. That is demonstrated by the package of measures that we provide to local government as part of the 2018-19 finance settlement, which Parliament approved last month. The settlement confirmed a real-terms increase in resources for local government over the next two years, from £44.3 billion in 2017-18 to £45.6 billion in 2019-20. That is the third of a four-year deal, and it has reinforced our commitment to delivering more freedom and fairness, and greater certainty to plan and secure value for money. The deal has given English councils access to more than £200 billion of funding in the five years to 2020.
We recognise that pressures are growing, particularly in the light of higher than expected inflation—I was delighted, however, to hear today’s announcement that inflation is down to 2.75%—and pressures on services such as adult and children’s social care. That is why in the settlement we sought to strike a balance between addressing the pressures on services and the burden placed on taxpayers, by increasing the core council tax referendum principle by 1% to 3% for authorities in 2018-19.
Andrew Gwynne
But that is not a single penny extra from central Government. All the Minister has done is shift the burden from central Government on to local taxpayers. As I explained, a 1% increase in Tameside brings in £700,000. It is not enough, is it?
Mrs Wheeler
I thank the hon. Gentleman for that intervention and repeat: the money from this Government has increased from £44.3 billion in 2017-18 to £45.6 billion in 2019-20. The National Audit Office rightly noted that local authorities are increasing their spending on the social care services that councils provide to our elderly and vulnerable citizens, in the face of growing demand. This is why at the spring Budget in 2017 an additional £2 billion was announced for adult social care. This year we have seen how that money has enabled councils to increase provider fees, provide for more care packages and reduce delayed transfers of care.
Mrs Wheeler
The business rates for the City of London are many, many millions of pounds. The money that is split out goes to the rest of the country.
Andrew Gwynne
Of course, this is not just about the councils that are unable to raise enough business rates to support their services now. Will adequate funding mechanisms be in place to ensure that if a large employer were to close and leave a council that is currently sustainable in terms of business rates, it would in effect get the shortfall created by the employer moving out or closing down?
Mrs Wheeler
I would be devastated if that happened and I cannot imagine why it would happen, with the growing economy that we have.
We will continue to work with the sector to identify opportunities to increase the level of business rates retention further at the right time. We are already making progress towards that. The Government have announced an expansion of the piloting programme for business rates retention into 2018-19. In the latest round of pilot bids, more than 200 authorities put themselves forward, demonstrating local government’s enthusiasm for business rates retention. We are enthusiastic about working with them to take that agenda forward. We will be taking forward 10 new pilots, covering 89 authorities, instead of the five that we originally planned. A further pilot will begin in London in 2018-19, and existing devolution pilots will continue in 2018-19. The 10 that we have selected, taken alongside the existing pilots, give a broad geographic spread.
Oral Answers to Questions
Andrew Gwynne Excerpts(6 years, 9 months ago)
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Jake Berry
In particular for Leicestershire but for all councils, there could be no better champion than my hon. Friend of fairer funding for the many councils, not the few. This evidence-based review will provide an opportunity for more accurate funding allocations for Leicestershire and other councils.
Andrew Gwynne (Denton and Reddish) (Lab)
On 4 December, the Secretary of State told the House that
“the local government finance settlement is coming along shortly, and he can look to see what happens with that.”—[Official Report, 4 December 2017; Vol. 632, c. 684.]
Apart from our finding out that the Secretary of State is bad at maths and does not know what is happening in his Department, the settlement came and went with no help for children’s services. Since then, Tory Northamptonshire Council has effectively gone bust, citing children’s services as one of the main cost pressures, and only last week the National Audit Office published a damning report showing the worst crisis in the local government sector’s 170-year history. That is happening on these Ministers’ watch. With the spring statement tomorrow, what will the Minister do to ensure that our children’s services get the £2 billion that even the Tory-controlled Local Government Association says they so desperately need?
Jake Berry
We have increased funding in real terms, which I am sure the hon. Gentleman’s constituents, like mine, will welcome. With the fairer funding review coming up, rather than trying to score political points across the Chamber, why does he not get involved with it so that local authorities can concentrate on delivery?
Local Government Finance
Andrew Gwynne Excerpts(6 years, 10 months ago)
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Sajid Javid
My remarks a moment ago were about not the transitional grant but the problem of the negative RSG. I will come on to other grants in a moment.
We have responded to concerns about proposed changes to the new homes bonus. By the end of 2018-19, we will have paid out £7 billion under the scheme to reward the building of some 1.4 million homes, including £947.5 million for the year 2018-19. When we consulted last year on proposals to link NHB payments to the number of successful planning appeals, it was clear that the sector wanted continuity and certainty. That is what we have delivered, with no new changes to the NHB this year and the baseline being maintained at 0.4%. Furthermore, as we set out in our housing White Paper, we are enabling local authorities to increase planning fees by 20% where they commit to investing the extra income in their planning services. That should provide a welcome boost to local planning authorities and address concerns about under-resourcing.
The final settlement includes small adjustments to top-ups and tariffs for authorities based on corrected Valuation Office Agency data. I know that my opposite number—that is, the opposite number I have today, the hon. Member for Denton and Reddish (Andrew Gwynne)—has been trying to make some mischief on this point, so let me spell it out very clearly for him. [Interruption.] Well, he raised a point of order on this issue yesterday. I think it is worth spelling it out clearly, because perhaps he has not understood what we have said.
The provisional settlement was based on the VOA’s official statistics, the best published data available at the time. Just ahead of the provisional settlement, officials were notified of an error in the VOA data. Ministers were not told about this until 16 January, as officials did not know what, if any, changes might have to be made to the tariffs and top-ups for individual authorities. The hon. Gentleman will know that the moment corrected statistics were published by the VOA, revised figures were provided to local authorities to enable them to finalise their budgets. He should also know that part of the reason for the publication of a provisional settlement—the clue is in the name—is to test the numbers and to make adjustments. I respectfully suggest to the hon. Gentleman that he spend more time dealing with the substance of today’s settlement and a little less on childish antics.
Andrew Gwynne (Denton and Reddish) (Lab)
I am grateful to the Secretary of State for clarifying the position. Of course, the point is this: who runs the Department? The Secretary of State has some responsibility. If his departmental officials knew that the data were incorrect, was it not incumbent on him, as Secretary of State, to have known that and made it clear to the House when he presented the provisional settlement that the data were likely to be changed? The fact is that he came to the House on 19 December and gave incorrect information when answering right hon. and hon. Members’ questions. It is shameful.
Sajid Javid
As usual, the hon. Gentleman stands at the Dispatch Box and raises his voice, acting like a child again. He has nothing whatsoever to say on the substance of the issue.
Councils have a crucial role to play in helping to deliver the homes that our country desperately needs. However, we all know that we cannot achieve that without having the right infrastructure in place: the schools, GP surgeries, transport links and other essentials. The private sector can go only some way in delivering that infrastructure. It is clear that we must raise our game to match our ambitions, which is why last July we set up the housing infrastructure fund to support local authorities to provide infrastructure and build more homes. In the end, we received a staggering 430 bids, worth almost £14 billion, to deliver 1.5 million homes, demonstrating the incredible ambition that is out there to tackle the housing crisis—an ambition that we are keen to get behind and back fully. Hence our move to more than double the housing infrastructure fund in the autumn Budget, dedicating an additional £2.7 billion to it, bringing the total funding to £5 billion.
Last week I was delighted to announce the first funding allocation: £866 million for 133 successful projects, involving 110 councils, that will help unlock up to 200,000 homes. Those projects promise to deliver a strong pipeline of homes at pace and scale, and represent another important step towards meeting one of the defining challenges of our time.
I will now turn to another major challenge: social care. I am under no illusions about the pressures that councils face in addressing one of the biggest challenges we face as a country, which is why we have put billions of pounds of extra funding into the sector over the past 12 months. I can today announce a further £150 million for an adult social care support grant in 2018-19. This will be allocated according to relative needs and will help councils to build on their work and support sustainable local care. It comes on top of the additional £2 billion for adult social care over the next three years announced at the spring Budget. With the freedom to raise more money more quickly through the use of the social care precept, which I announced this time last year, we have given councils access to £9.4 billion more dedicated funding for adult social care over three years.
Andrew Gwynne (Denton and Reddish) (Lab)
I begin by thanking colleagues from all parts of the House who have contributed to this debate, including my hon. Friends the Members for Sheffield South East (Mr Betts), for Birmingham, Northfield (Richard Burden), for Nottingham North (Alex Norris), for Stoke-on-Trent Central (Gareth Snell), for North Durham (Mr Jones) and for Bolton South East (Yasmin Qureshi), and the hon. Members for Ludlow (Mr Dunne), for Shrewsbury and Atcham (Daniel Kawczynski), for Newton Abbot (Anne Marie Morris), for Wellingborough (Mr Bone), for Corby (Tom Pursglove), for North Dorset (Simon Hoare), for Bath (Wera Hobhouse), for Waveney (Peter Aldous), for Dover (Charlie Elphicke) and for Redditch (Rachel Maclean).
I pay tribute to everybody who serves in local government, both councillors and officers. Let me make a special mention of Denton West councillor Brenda Warrington who, a couple of weeks ago, became the first ever female leader of Tameside Metropolitan Borough Council, and a very fine leader she will be.
It is clear from the contributions from both sides of the House that there is massive concern not only about the growing crisis in funding local government, but worse, about this Government’s inaction in addressing it adequately. Only this week we have seen a council effectively declare itself bankrupt. The issuing of a section 114 notice in Northamptonshire, a Tory-controlled council, should send shivers down the spines of Ministers, because they know that this is a crisis caused in part by them and their actions. The warning signs at Northamptonshire had been obvious for some time, but only in this Government would the Secretary of State toddle along formally to open the council’s new £53 million headquarters that it is now being told it may have to sell off. Perhaps that was the fault of his officials, too.
Northamptonshire completely overshadowed the Secretary of State’s big announcement yesterday of an additional £150 million found from the magic money tree of the Ministry of Housing, Communities and Local Government. When local government budgets have been slashed by £5.8 billion since 2010, it seems that the Secretary of State cannot even shake that tree effectively. We all know from reports in the media and from Tory MPs’ tweets on Monday night that this is solely about trying to prevent a rebellion on his own Back Benches.
The £150 million extra going into social care this year is still a cut. The Secretary of State, with his banking background, might be able to kid his Back Benchers with this sop, but this year, additional Government spending on social care, even with this sum, is still facing a cut of £177 million. It is not the first time that this Government have tried this trick, because two years ago the transitional grant scheme provided an additional £300 million of funding, and what happened? Eighty per cent. of it went to Conservative-controlled councils, 70% of which were county councils. In contrast, metropolitan districts got only an additional 2% of additional funding, despite the fact that many of them were among the hardest hit. Places such as Nottingham, Knowsley and Liverpool received no additional money. When the Government talk about fair funding, they must mean funding for all councils, irrespective of their political persuasions and none, based on the services they need to provide to the communities they represent.
Let me provide Members with a few quotes:
“Councils in England face an overall funding gap that will exceed £5 billion by 2020.”
Then there is
“£1.3 billion…needed right now…to stabilise the…care provider market”,
and:
“Councils also face an unprecedented surge in demand for children’s services and homelessness support.”
Those are not my words; they are the words of Conservative peer and head of the LGA, Lord Porter. How out of touch can this Government be? How long can the Secretary of State bury his head in the sand, telling himself, “Yes, we’re making cuts, but they’re having no real impact on the ground”? He should speak to Tory councillors, because we know there is a real problem in local government when even Tory councillors are saying today what Labour councillors were saying five years ago.
I commend the work of all councillors in these difficult times. They need commending for doing all they can to support local services and local communities, despite this Government’s best efforts. This incompetent Secretary of State even thought he could come to the House of Commons in December and pass a provisional settlement off as fact, when he tells us today that his officials were to blame. He knew that it was riddled with errors. He can blame his officials today, but his letter to me, which he signed only two days ago, was far less definite. He said:
“My intention is always to provide local authorities with as much certainty as possible…We published the Provisional Local Government Finance Settlement before Christmas to give councils notice of the figures they should use to plan their budgets…At that time…we knew the overall scale of the error in the…published data….We therefore published the Provisional Settlement on 19 December on the basis of the…statistics.”
Those were his words, and it was his signature. The Secretary of State is either so incompetent that his officials do not bother to tell him about important details ahead of him making a statement to the House of Commons, or he does not read the letters that go out in his name, which is perhaps why he needs to place a corrected version of the letter in the Library.
I have written to the Prime Minister today to draw her attention to this sorry affair, because it has done incredible damage to the Secretary of State’s reputation and to the Department’s reputation in the local government sector. Councillors deserve better. Many councils are doing all they can to help people live independently in their communities and reduce demand on hospitals, but with unprecedented funding cuts since 2010 and social care services facing a £2.3 billion funding gap by 2020, that is becoming increasingly difficult.
It is not just adult social care. As Labour’s first health check report showed, demand for children’s services is also placing growing pressure on local authorities. Funding to support children and their families has been cut by 55% over the last seven years, and the result of those cuts has been appallingly clear. Cuts to early years intervention meant that a record number of children—some 72,000—were taken into care last year. The number of serious child protection cases has doubled in the last seven years, with 500 new cases launched each day. More than 170,000 children were subject to child protection plans in the last year, which is double the number seven years ago.
Many of us hoped that the Budget would contain the genuine new funding that our children’s services need, but the Secretary of State failed to get that put in place. We then hoped that yesterday’s announcement might offer some hope for children’s services—another let-down. When is the Secretary of State going to stand up to the Chancellor and demand the money that the sector so desperately needs? The financial crisis engulfing local government should be giving the Secretary of State sleepless nights. The Local Government Chronicle suggests that there are already at least 10 authorities preparing to follow Northamptonshire and issue section 114 notices, and the Municipal Journal reports that one in 10 council bosses fear that their local authority will not have enough funding to fulfil its statutory duties in 2018-19. Ministers cannot afford to stand by and wait for that to happen.
Today’s vote offers all Members on both sides of the House an opportunity to send a very clear message to the Government that things have to change, that vital public services should be properly funded, and that our communities deserve better than this botched and rushed settlement. I hope that all Members will join us in the Lobby to stand up for their communities, their public services and their councillors, and to get this Government to think again about their damaging approach to council funding for next year.
Public Service Delivery: Northamptonshire
Andrew Gwynne Excerpts(6 years, 10 months ago)
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Rishi Sunak
I thank my hon. Friend for his questions. I know that this is something that he is thinking about deeply on behalf of his constituents. Let me take in turn the points that he raised. With regard to the fire service, he will hopefully be aware that the Home Office is considering that application and will make its decision in due course. On his points about the financial situation, he is right to say that there are a range of issues that were highlighted in both the independent audit reports and the LGA peer review, which, as he rightly pointed out, cited both culture and governance issues at the council.
On the process from here, Ministers do not have direct contact with the inspector—he is rightly independent—so it is not possible to direct him to report earlier. I would point out that the 16 March deadline means that this inspection will conclude in much less time than was allowed for the Tower Hamlets and Rotherham inspections, which, hopefully, should give my hon. Friend some comfort regarding a rapid resolution.
Finally, if the council meeting is not successful, the finance director has the option of issuing a further section 114 notice. However, it is important to note that he, as the statutory official, has the flexibility today and in the future to authorise any payments that he sees fit and for which there is a sensible case, including, as he has guaranteed, to safeguard vulnerable people. At the point at which the council is ready to make formal representations to my Department for anything that it might require, we stand ready to engage with it.
Andrew Gwynne (Denton and Reddish) (Lab)
Mr Speaker, thank you for granting this urgent question. I welcome the Minister to the Dispatch Box; it is just a pity that it is not the Secretary of State.
There have been deeply troubling reports for a number of months that Northamptonshire County Council has been failing in its duty to the people of Northamptonshire and to the public sector workers who provide valuable services to local people. As has been mentioned, the Local Government Association conducted a financial peer review back in September. That report had three key findings. First, it found that time was
“running out for Northamptonshire County Council”.
Secondly, it stated that the council was
“heading towards major financial problems”,
and, thirdly, it said:
“There was a sense that the scale of the financial challenge for the Council was just too great for it to overcome itself and that the government would have to bail it out.”
Since then, we have had more reports that the council was failing in its duty to the people of Northamptonshire, and residents will now pay the price for its negligence.
The failure of this Tory-run council is the result of a perfect storm of chronic underfunding and catastrophic Tory mismanagement, yet when a Government have taken £5.8 billion out of local government finance, when everyone is saying that social care is on its knees and when children’s services need another £2 billion, not only does the Secretary of State not turn up to reply to an urgent question, but he sticks his head in the sand and fails to give local government the money it needs to provide safe, decent, quality services. This situation shows, yet again, that we cannot push the cost of local government on to council tax payers, because that just does not raise enough money locally. The Secretary of State knows that, the Minister knows that, the Treasury knows that and the local government sector knows that, so when will Ministers stand up to the Chancellor and demand the money that local government needs?
The Local Government Chronicle suggests that at least 10 other local authorities are preparing to issue section 114 notices. The sector will look very closely at how the Minister treats Northamptonshire, so what contingency arrangements does he have in place should other authorities fall over the cliff edge? What guarantees can he give from the Dispatch Box that services in Northamptonshire and across the country will be protected by his Department? Will he join Sally Keeble, Gareth Eales and Beth Miller—Labour’s candidates in Northamptonshire—in calling for the appointment of commissioners to fix this mess?
It was announced last night on Twitter that the Secretary of State was in the process of politically fixing the financial mess he has made for his Tory Back-Bench friends. Two years ago, the transitional grant scheme gave out an additional £3 million of funding, but 80% of that went to Conservative-controlled councils, 70% of which were county councils. By contrast, metropolitan districts got only an extra 2%, despite being the hardest hit. In the light of that, we will be watching the Minister and his Department very carefully, because all councils are financially stretched and all councils deserve fairness.
Rishi Sunak
I thank the hon. Gentleman for welcoming me—albeit lukewarmly—to the Dispatch Box. He talks about the Secretary of State, but it is this Secretary of State who has taken action with regard to Northamptonshire. It was this Secretary of State who, in response to the negative opinions of the external auditors and the LGA peer review, decided to commission an independent inspection at the end of last year. That is exactly what responsible government looks like, and the Secretary of State should be commended for taking swift action.
The hon. Gentleman asked me to prejudge the outcome of the inspection, but it would be absolutely inappropriate and unfair to the council for me to do so. When the Government receive the results of the independent inspection, we will of course carefully consider its findings, but it would be wrong to draw conclusions about those findings today, as he suggests we do.
The hon. Gentleman mentioned finances. We will, of course, be discussing finances tomorrow. This Government have backed local authorities with an historic four-year funding deal that provides more than £200 billion and a real-terms increase in spending for next year and the year after. Everything is always about money for the Labour party, but the hon. Gentleman would do well to listen to the words of the chief executive officer of the Chartered Institute of Public Finance and Accountancy, who said:
“Whilst Northamptonshire has had a difficult context within which to balance its budget…other councils in a similar situation have successfully managed their budgets”.
As my hon. Friend the Member for Kettering (Mr Hollobone) pointed out, the issue is one of governance and culture. Those are the points that were highlighted and that the inspector will be considering.