Local Government Finances: London
Andrew Rosindell Excerpts(1 week, 2 days ago)
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Andrew Rosindell (Romford) (Con)
It is a pleasure to serve under your chairmanship, Ms Lewell. I thank the hon. Member for Leyton and Wanstead (Mr Bailey) for rightly raising this issue for debate. I am grateful to him, as I am sure we all are.
I endorse the comments of pretty much all Members who have spoken, but especially my hon. Friend the Member for Hornchurch and Upminster (Julia Lopez)—we share the borough of Havering. Members have highlighted what we all know: the local government funding system is fundamentally broken. No matter what borough we come from, the current system simply is not working. We are all suffering local services that are inadequate. Funding is not there for things that are essential, and we are seeing money spent on things in local government that I believe are wasted.
Particularly in Havering, as well as in Bromley and in Hillingdon, which is represented by my hon. Friend the Member for Ruislip, Northwood and Pinner (David Simmonds), we also say that our boroughs are spending a lot of money to fund the Greater London Authority, and most of that seems to be spent in inner-London areas. Outer-London areas are funding inner London. We have been doing that for many decades, not just since the Greater London Authority and the mayor were created, but under both Governments.
I would like to depoliticise this issue a bit. We can blame each other—[Hon. Members: “Ah!”] We can blame each other, but the last Government did not deal with it, and I hope this Government will attempt to deal with it. Without fundamental change, the problem will go on and on. What we need is less, but more effective, government. We need spending on the right things. We need to give control back to our local areas and to have less control by central Government and the Greater London Authority.
I will not repeat all the arguments made by my hon. Friend the Member for Hornchurch and Upminster, because all the points she made were absolutely correct, but Havering has particularly suffered from underfunding and an unfair funding formula for many decades—in fact, all the way back to when the London boroughs were created in the 1960s. When the London boroughs were created, the outer-London areas, which were considered to be wealthier, were effectively putting money into the centre, and they did so for many decades. As hon. Members have said, that has changed. As the hon. Member for Leyton and Wanstead said, outer-London areas have altered and the demographics have changed. But the funding formula remains the same.
We need to completely change how we deal with this issue. Fiddling around with the figures at the edges will not solve it; we need root-and-branch reform of how local government operates in the Greater London area. We need more flexibility in areas such as Havering, which are not really in London—we orbit London, but we are far more linked to Essex areas than we are to inner London—and fundamental reform of the whole system.
Outer London has always been poorly funded and unfairly treated. In Havering, which has a large older population and a large younger population, and changing demographics, we particularly need more support. I hope the Minister will pledge that support, because all our constituents need change.
Rachel Blake (Cities of London and Westminster) (Lab/Co-op)
It is an honour to serve under your chairship, Ms Lewell. I thank my hon. Friend the Member for Leyton and Wanstead (Mr Bailey) for securing this important debate. I also thank our friends and colleagues from the London local government family who are here listening to the debate. Their tireless work, day in, day out, is not unappreciated, and we are really happy to see them here today.
It has been good to listen to the cross-party support for the debate, but I was a little disappointed not to hear a bit more reflection from Opposition Members on how we got here, despite our having much shared experience as local representatives. That includes the slashing of housing investment by the previous Conservative Government and the slashing of genuinely affordable homes by the previous Conservative mayor—where is he now? Let us not forget the failed fair funding review that the hon. Member for Bromley and Biggin Hill (Peter Fortune) referenced, which hung over local government for years and prevented meaningful planning.
In the last 14 years, we have seen an 173% increase in rough sleeping and a 69% increase in temporary accommodation —that is shameful—as well as rising rents and falling investment. Let us not forget that the cause lies firmly with the Conservatives. The hon. Member for Bromley and Biggin Hill tempts me to remind us what happened in 1997. Labour halved temporary accommodation, made record investment in the condition of homes through the decent homes programme, and introduced the historic 2008-11 programme of new, genuinely affordable homes, which benefits many families now.
Rachel Blake
No.
Let us come to the matter at hand. I would like to talk about temporary accommodation costs, special educational needs and the specific challenges of managing the visitor economy in the very centre of London.
Luke Taylor (Sutton and Cheam) (LD)
It is a pleasure to serve under your benevolent gaze, Ms Lewell. I thank the hon. Member for Leyton and Wanstead (Mr Bailey) for securing this important debate, and I point to my entry in the Register of Members’ Financial Interests, which shows that I still proudly serve as a councillor in my constituency in Sutton borough.
London faces a crisis in council funding unparalleled in living memory. We have a funding system that has been starved for years under previous Conservative Governments. As a result, our councils are now struggling to meet the growing demands of the communities they serve. This is not an exaggeration—this is an emergency. Since the onset of austerity in 2010, per capita Government funding has been reduced by more than a fifth, with boroughs now receiving 28% less funding per resident. Meanwhile, London’s population has skyrocketed, increasing by over 900,000 in the past 15 years. The city’s councils are crying out for a long-term funding solution.
Local government provides critical frontline services to our society. It is where people turn for help to meet their daily needs, and it is how communities are supported. Let us be clear: many councils that put in considerable effort to balance the books are not at fault here; they are simply not given enough financial support in the first place as statutory demands rise. It makes a mockery of our conversations about policy here in Westminster when people’s bins go uncollected and children are left waiting for their EHCPs. Our attention should be focused on helping local government, which is at the frontline of the state, to deliver the basics.
Outer London boroughs like Sutton, Kingston and Richmond are getting a raw deal on Government funding—in fact, some of the worst in the country. We see that in police abstractions and we see it in financial council funding.
Andrew Rosindell
The hon. Member mentions that the people of Sutton are getting a raw deal, and I am quite sure that they are. Does he think that the people of Sutton are getting good value for money from the precept we are paying to the Mayor and the Greater London Authority, or would he like some of that money put back into the local communities that he serves?
Luke Taylor
I thank the hon. Member for his intervention. Sutton has one of the lowest spends per resident by Transport for London of any of the London boroughs. We have no tubes, no overground, and half a tram stop in the very northernmost part of the borough, which shows how poorly we are served by TfL infrastructure, so I agree with the hon. Member’s point.
Outer London is being left behind, with some of the lowest support per capita. Our broken system means that inner London continues to be prioritised, despite the shifting needs across the city. There is a growing mismatch between funding allocations and local need, worsened by a funding formula that has not been updated since 2013. The data on which those allocations are based—population demographics and deprivation levels—are outdated and no longer reflect the reality on the ground. Research from the IFS in 2022 found a 17% gap between funding need and actual funding across London, the largest gap of any region in England. There is a temptation among many—we have all heard it—to paint London as a city where the streets are paved with gold and the challenges of poverty are less intense, which is nonsense. London has the second highest poverty rate in the country, second only to the west midlands. It has infrastructure problems, growing homelessness and millions of people suffering with the ever-rising cost of living, which is particularly pronounced in the context of London’s overheated property market.
The problem is diffuse, not concentrated in inner London. Indeed, poverty is shifting across London in ways we have not seen before, as working patterns change and jobs and industries ebb and flow. The outdated funding model forces outer London boroughs to tackle what are often characterised as inner London problems with far less support. The Minister must reassess the funding formula to ensure a fairer deal for boroughs like Sutton.
It is time to recognise the significant demographic and social changes that have taken place in London over the last 12 years. The homelessness crisis is an example of how poverty is shifting across London in unprecedented ways. Homelessness in my home borough of Sutton increased by 51% between 2018 and 2023. London is at the epicentre of the UK’s homelessness disaster, with the highest levels in the country. London Councils estimates that one in 50 Londoners are currently homeless and living in temporary accommodation. In Sutton every night 1,200 families are housed at the cost of the council. Nearly 90,000 children in the capital are homeless. That is one in every 21 children in London—at least one homeless child in every classroom.
As the Liberal Democrat MP for Sutton and Cheam, I am proud to live in a borough that is committed to housing the homeless where we can, but for the sake of such boroughs that hold that commitment it is essential that we address the gaps in support and provide long-term solutions to end homelessness for good. The financial strain currently put on councils to fight the crisis is utterly unsustainable. Boroughs are spending £4 million every single day on temporary accommodation, and those costs have shot up by 68% in just one year. If such trends continue, homelessness will bankrupt our boroughs and plunge our city back into the dark days of Victorian poverty and inequality. Municipal government will wither away and the fingertips of the state will succumb to financial frostbite, meaning we will no longer be able to reach out and rescue families from homelessness and communities from disintegration. Our city will be a plaything of the rich and famous—no longer a home, but a cold shell. Let us be under no illusion: that is what is at stake.
We are already seeing councils needing exceptional financial support just to survive. The housing revenue account is under unprecedented pressure, and with cuts to resources, capped social rents, rising inflation and ageing housing stock, London boroughs are being forced to cut £260 million over the next four years, making it harder to build new homes or to maintain the ones we already have. So we on the Liberal Democrat Benches urge the Government to urgently publish a cross-Whitehall plan to end all forms of homelessness and exempt groups of homeless people and those at risk of homelessness from the shared accommodation rate; ring-fence emergency funding for local councils for permanent accommodation of rough sleepers; increase the local housing allowance rates in line with inflation; and ensure sufficient financial resources for local authorities to deliver the Homelessness Reduction Act 2017. If we do not, I fear the consequences for the future liveability of our city will be existential.
Local Government Finance
Andrew Rosindell Excerpts(1 month, 4 weeks ago)
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Jim McMahon
I take my hon. Friend’s points entirely. I credit him for much of the work that was done when he chaired the Select Committee, which he did for a long time, and I attribute to his intervention the credibility that it is due. We are focusing today on our immediate fiscal response to support councils over the current financial year, but we accept that to bring about long-term structural reform, such matters as addressing a council’s ability to raise local tax through business rates and council tax must be taken into account, alongside, of course, the cost of delivering public services, including the cost of rural service delivery. We are absolutely committed to taking all those factors into account.
Jim McMahon
I will make some progress, but I will take more interventions later.
Councils know that the current system is riddled with inefficiency and is poorly targeted at meeting need. It is vital that we get this right, and we want to hear from all parts of the sector to better understand the drivers of need, including deprivation, the ability to raise tax locally and the impact on service delivery in rural areas. The consultation on these reforms runs until 12 February, and we welcome representations from all who have a stake in this agenda. We are listening to the sector and, through this settlement, responding to the real drivers of cost, especially the spiralling demand in areas such as social care. Importantly, we are taking into account the ability of councils to raise funding locally.
Andrew Rosindell
What does the Minister say to residents of the London borough of Havering, who have had a very poor settlement over many decades under all Governments? We have one of the oldest populations in London and also one of the youngest populations in London, so the settlements never take into account the factors that I have outlined. Will he please look at the outer London boroughs? It seems to me that all the money goes to inner London, and we do not get very much in places such as Romford.
Jim McMahon
Where we can agree is that we accept that the old perspective that there are inner-London pressures that do not feature in the outer-London boroughs might have held in the past but it does not address the complexity that there is today, because a number of pressures have moved outwards into those outer boroughs. I think that that is accepted and appreciated. I said that this might not be a perfect settlement, but it is a good settlement. The hon. Gentleman’s council has a 6.5% increase in its core spending power. So there is room there—this is not a flat cash settlement—and we hope that the local authority will make the necessary decisions.
We are not interested in scoring party political points or pitting one council against another. We know that councils of all political stripes are struggling, and we want to work together, through the later reforms that we are looking at as part of the more structural review we are undertaking, to make sure that we genuinely address that. We hope that when Members across the House look at the rationale and the evidence base—whether they agree with the quantum is a separate issue—they can at least say that it holds. That is the work that we are undertaking today, and we encourage Members to contribute to the process.
Renters’ Rights Bill
Andrew Rosindell Excerpts(5 months, 3 weeks ago)
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Ms Stella Creasy (Walthamstow) (Lab/Co-op)
I congratulate all Members who have given their maiden speeches today, and the Minister for Housing and Planning, my hon. Friend the Member for Greenwich and Woolwich (Matthew Pennycook), for all his hard work on this Bill.
If I am honest, I am disappointed that the shadow Secretary of State, the right hon. Member for North West Essex (Mrs Badenoch), is not still with us—looking at the faces of Conservative Members, she appears to be unexpectedly busy—because she seemed to argue that the challenge that the Government are creating is to intervene poorly in a market. In the limited time available to me, I want to take on the challenge that she created, because I am not sure that she actually understands what this market is. That may well show in Conservative members’ voting if they think they are voting for somebody who understand market economics.
Let us look at what we are talking about. In my constituency, we have had the biggest growth in affordable housing in London, yet we have also had a 55% increase in homelessness. This is not a healthy market where there is effective competition, and where every participant has the tools to operate equally. Let me try to explain through some of the stories from my constituency. My constituent Kate, who works in the NHS on a nurse’s salary, has had to move every single year, because landlords are selling properties and putting up prices. That is not healthy—it is an overheated market. It means that the state picks up the pieces, through the salaries we need to pay and to deal with the consequences for her and her family.
My constituent Claire, who is self-employed, started renting her home for £1,750 a month in November 2019, and it had increased by £200 by 2023. She has now been threatened with another £400 a month raise, putting her total rent up to £2,350 for the same property within five years. What powers do my constituents have in that market, apart from to exit? That is not a healthy, functioning market.
We are seeing mould in properties, so the quality of goods in this market is not good enough. Emily, a mum from Walthamstow, was scrubbing mould from the walls of her three-month-old son’s room every single day. She eventually walked out because she found mould on the underside of her son’s cot mattress. But she was afraid to complain because she was afraid of section 21 eviction powers, so she does not even have the voice of exiting the market. Albert Hirschman would be horrified. We have to end the scandal of no-fault evictions, and we have to deal with the mould.
Andrew Rosindell
The hon. Lady is making some excellent and valid points, but does she agree that the London borough of Waltham Forest should ensure that its residents who are homeless—our heart goes out to those people—are cared for and looked after in Waltham Forest? At the moment, her borough council is sending her homeless constituents to the London borough of Havering. They are living in Harefield Manor in Romford. Surely Waltham Forest should look after its homeless people in its own borough.
Ms Creasy
I know that the Conservative party is about to go down a rabbit hole about immigration, but honestly, moving people from Walthamstow to the hon. Gentleman’s constituency is not the challenge here. We have a broken rental market where the rights of renters do not allow them to compete fairly.
Let me give the hon. Gentleman another example so that I can explain the problem. The reason we need to tackle bidding wars is that there is a straight-out conflict of interest affecting the consumer. How can the person who represents them to the landlord also represent them fairly in a rental agreement? It is little wonder that Catherine, one of my constituents, found that she had to offer £300 over the asking price to secure a flat in a bidding auction. That is why people from Walthamstow are being moved out, and the hon. Gentleman would do well to think about sorting that market out, rather than trying to build a blockade on the A406.
Discrimination against single parents is widespread in the market, by definition because of what happens when households need to rent property. Ruth, in my constituency, is a single mum with two young children. She was told by agents, “Don’t even bother applying.” She could pay the rent and she was entitled to housing, but she was not even entitled to compete in this market.
In the final minute I have, I want to make a plea to the Minister about the credit rating of those in our private rented sector. It is not true that renting in the private sector automatically damages someone’s ability to get a mortgage, but if they are having to move time and again, their credit rating clock goes back to the start because lenders look at their addresses, they have to re-register for all their utility bills and they have to keep building up their good record. That gets taken into account by some lenders. People are finding that this affects other forms of credit, including the credit cards that many of them are using to pay their bills. In my constituency, the average percentage of people’s income spent on rent is 44%. If they have kids and are trying to pay for childcare, it does not take a rocket scientist or Ayn Rand to realise that this market is not working for them.
I believe we could do more if we came up with a good credit score passport to help those constituents of mine and others, who are paying their bills but who have been evicted through no fault of their own, not to lose their precious good credit rating. I hope the Minister will be willing to listen to some ideas about how we can do that with the companies.
Thank goodness for this legislation. It is long overdue, because tackling unfair markets is absolutely what good co-operators like myself and good people who care about social justice wish to do, and I shall vote wholeheartedly for it as a result.
Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)
Recent statistics show that 50% of the private rented sector in Cornwall does not meet the decent homes standard, way above the average of 21%. Less than 20% of homes in Cornwall were in the private rented sector four years ago, yet a quarter of our children and young people were living in those homes, including a third of our under-fives.
That has been evidenced by the noticeable uptick in recent years of section 21 evictions that affect families with young children. Cornwall now has more than 800 households in emergency or temporary accommodation, and many of them are young families who have struggled to find somewhere else to live because of the cost, their children or even their cats. Because of our geographical spread, many of those families have ended up in holiday parks, caravan sites or hotels up to an hour and a half’s drive from home. With poor rural transport links, this often leaves families completely cut off from jobs, schools and support networks.
In September 2020, Cornwall council’s economic growth committee published an inquiry into the private rented sector in Cornwall and recommended a number of measures to extend licensing powers. It also recommended data gathering on landlords and tenants in the private rented sector, Disclosure and Barring Service checks, longer terms and the limiting of annual rent increases. However, covid happened, further local government cuts affected officers’ capacity and the council changed to a Conservative administration that was wary of upsetting landlords following covid, so none of the recommendations was enacted.
Regardless of the council’s caution, the private rented sector has still been decimated in Cornwall, with many landlords selling up or flipping to lucrative short-term holiday lets. Prices have skyrocketed, and many people are struggling to find a home, which is why I am so pleased and relieved that the Government have prioritised this Bill. It will bring in many of the measures proposed by that Cornish report—at last, we will end no-fault evictions, introduce longer protected terms and limit annual rent rises. Awaab’s law will force landlords to follow strict timescales to inspect and repair homes, including those with damp and mould, and the decent homes standard will apply to the private rented sector for the first time, with local councils given the power to fine landlords who fail to address serious hazards.
Many people are shut out of the market if they have children or pets, or are on benefits. Changes to stop that happening will prevent the most vulnerable in my constituency remaining unhoused, and the heartache as people have to decide to give up treasured pets.
Andrew Rosindell
The hon. Lady is making some compelling points and mention pets. Does she remember the Dogs and Domestic Animals (Accommodation and Protection) Bill of 2020, which I put to the House all those years ago? I am glad that the measures in that Bill now being brought into legislation. Does she agree that this Bill needs to be extended further, so those in social housing, as well as those in freehold accommodation, can have a pet, so everyone can have a pet at home, and not lose their home because they love and care about their cherished animal?
Jayne Kirkham
I was not here when the hon. Gentleman introduced his previous Bill, but I am sure the Minister has considered the importance of pets to people living in all types of housing.
The court system and local authorities will need extra capacity to deal with the extra work created by the legislation. I was pleased to hear the announcements about digitisation and the ombudsman. The proposed changes will support the security of privately renting families in Truro, Falmouth and across Cornwall. As I have said, many people in Cornwall have been evicted from their rented homes with two months’ notice, so they can be used as short-term or holiday lets. We know that Cornwall council is the local authority with the largest supply of short-term lets outside London.
There are 24,300 holiday let properties in Cornwall, up 30% on 2019. Statistics from the council tax base tell us that over 13,000 second homes are registered in Cornwall, which is nearly 5% of the total housing stock and five times higher than the average across England. There are also 27,000 families on the waiting list for social housing, but Cornwall has only 10,000 council houses and 22,000 housing association homes.
I am pleased that the Minister is considering a toolbox of measures that could be made available to local authorities to discourage the further depletion of the private rented sector and full-time residential housing in Cornwall, such as the higher council tax that is coming in, licensing and registration, planning restrictions and closing the business rates council tax loophole.
In conclusion, I very much welcome the Bill. It provides many benefits for the people in Truro and Falmouth who rely on the private rented sector for their home, and certainty for the landlords who provide those homes.
Oral Answers to Questions
Andrew Rosindell Excerpts(7 months ago)
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Matthew Pennycook
As I was saying, the Government are committed to ensuring that development both protects and provides for green space. I am more than happy to discuss the particular challenges that my hon. Friend faces in her part of the country.
Andrew Rosindell (Romford) (Con)
As the Deputy Prime Minister should be aware, people in Romford are very angry that Mayor Khan is forcing us to build high-rise blocks. Does she agree that the London borough of Havering, despite being part of Greater London, is Essex, and that we should remain a town and country borough?
Angela Rayner
As a Mancunian, I do not think I am in any place to tell Londoners what is in Essex and what is not.