Merseyside: Funding of Local Authorities

Angela Eagle Excerpts

Tuesday 8th February 2022 Westminster Hall

[Dame Angela Eagle (Wallasey) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Hollobone, and I add my congratulations to my hon. Friend the Member for Wirral West (Margaret Greenwood) on having successfully applied for this important debate. The past 11 years of Conservative rule have seen an unrelenting assault on the budgets of local authorities, but that assault has been worse in some places than in others. Those with the poorest and most vulnerable populations have been hit hardest; those with the biggest issues to deal with have suffered the highest level of funding cuts. That has been a conscious choice made by successive Conservative Governments in full knowledge of the consequences, which is why the phrase “levelling up” rings so hollow on the Wirral and Merseyside.

In my local authority of Wirral, £230 million in direct funding from the Government was cut to just £37 million by 2020, despite the fact that close to a quarter of Wirral’s neighbourhoods rank in the 10% most deprived nationally. We have all seen the explosion in food banks, social supermarkets, and people going hungry and not being able to afford to heat their homes as a consequence of deprivation and soaring levels of poverty.

There has been a staggering 53% real-terms cut in our Government funding since 2010, which equates to £635 per household. In the same period, local authority staffing levels in Wirral have fallen from 7,669 to just 3,713. The adult social care budget has been cut by a quarter since 2010, despite a huge increase in the number of older people and young disabled people who require help simply to live. This means that a huge and growing area of need is going completely unmet, and the life experiences of those who need support have plummeted, putting an unbearable burden on their carers. However, close to two thirds of the budget is taken up by adult and children’s services, leaving very little for anything else.

Despite the Government’s vainglorious boasts, the 2022-23 local government finance settlement is actually a 2.2% decrease on the last financial year when adjusted for inflation, and that adjustment will get even worse as inflation soars. National Government funding for Wirral has decreased by 37.3% in real terms since 2015-16, leaving the difference to be made up by huge increases in council tax, which the Government assume in their figures. More Government sleight of hand means that they are assuming that all local authorities will put up council taxes by the full amount they can without having to hold a referendum. This transfer of funding from national to local taxes has left local residents paying far more in council tax for far fewer services because of the huge cuts to their budgets allocated by the national Government.

In the aftermath of the covid pandemic, which closed council services and destroyed revenue-raising opportunities, Wirral has been ordered by Ministers to make £27 million of cuts to its 2022-23 budget, under the threat of further national Government intervention. That will mean the decimation of services, increased charges for the use of what local facilities remain, and a mass sell-off of local authority buildings. It means that, at the diktat of national Government, residents in Wallasey will continue being asked to pay more in council tax for lower levels of services. The Government have taken far more from our local area than is fair and have forced huge increases in council tax, which is still failing to keep up with the rising demand. That is not a fair or sustainable solution, and I look to the Minister to give us some relief in his response.

--- Later in debate ---

[Neil O'Brien]

I am afraid that I do not have time to give way; I am so sorry.

[Dame Angela Eagle]

Oh, come on!

[Neil O'Brien]

I am up against the clock, as the hon. Lady knows.

As we announced on Monday, the local government finance settlement for the next year makes an additional £3.7 billion available to councils in England; that includes funding for adult social care reform. This is an increase in local authority funding of more than 4.5% in real terms compared with the previous year, and we expect core spending power—the measure of resources available to local authorities to fund service delivery—to rise from £50.4 billion in 2021-22 to £54.1 billion in 2022-23, which I am just about to come to. I emphasise that the Government are providing around £1.6 billion in additional grant in the next year through the settlement, and through additional funding for things such as the supporting families programme and cyber-resilience. What that means for Merseyside is that core spending power will increase for all authorities in the region by at least 7.7%, compared with last year.