Birmingham City Council

Angela Rayner Excerpts

Tuesday 19th September 2023 Commons Chamber

[Angela Rayner (Ashton-under-Lyne) (Lab)]

I thank the Secretary of State for the advance copy of his statement today. It has been a while since we faced each other: 804 days, to be exact. A lot has changed since then. We are on our third Prime Minister, our fourth Chancellor and, of course, our sixth different Minister for Housing. They have crashed the economy, families face the worst cost of living for a generation, and mortgage rates have increased nearly fivefold since our last meeting. But one thing has not changed: local government has been pushed to the brink. Birmingham is just the biggest, latest example.

This is a deeply worrying time for people in the city. The issues facing the council are difficult and complex, and administrations of all three major political parties have grappled with them in the years since they emerged. Since May, the new leadership in Birmingham have been working urgently on this issue and have been clear that they will take responsibility for tackling the problems facing their city, but they can only make that progress if the Secretary of State treats them as partners, and not as a political football.

I welcome the comments the Secretary of State has laid out today in regard to the action and support he will give Birmingham, but can he assure us that the commissioners will work with the city’s elected representatives and leadership to tackle these problems together? Is his Department considering a similar approach to other struggling councils? Will his officials be taking a deep dive into the areas he mentioned in his statement?

In Birmingham’s case, the Secretary of State mentioned the large equal pay settlement as the straw that broke the camel’s back, but he also told us that governance and service delivery concerns were raised by three independent sources: the local government and social ombudsman, the housing ombudsman and the Department for Education’s commissioner for special educational needs and disability. That came after Lord Kerslake’s review, which found that successive administrations had failed the city. Yet he provided no support until the section 114 notice. Why does it take that for the Government to take action on this scale?

Like the rest of the country, Birmingham is facing the shock of spiralling inflation and battling a cost of living crisis, but in the face of all of this, the Government stripped away its reserves. Can the Secretary of State confirm that that amounts to £1 billion taken from the pockets of local communities over the last decade? He surely cannot deny that Birmingham has experienced some of the most severe cuts of the last 13 years, and he must recall that it was this Prime Minister who boasted of changing the funding formulas to take money away from deprived urban areas. Now, faced with an eye-watering equal pay claim, with which the leadership are rightly dealing, Birmingham has been pushed over the edge.

As the Secretary of State admitted, this is by no means a single case. Local authorities across the country are struggling, and, after 13 years, he cannot seriously say that it is all their own fault. Perhaps he can confirm that only one council issued a section 114 notice before his party took office in 2010, and that since then eight councils have issued notices, with warnings that another 26 are at risk of bankruptcy over the next two years. Can he tell us why so many local authorities of all political stripes have already issued section 114 notices on his watch? This is not a one-off, so what work is his Department doing to support local authorities that are warning of financial distress now?

The truth is this crisis in local government has been caused by the Conservatives’ wrecking ball. With every swing, another local council is pushed to the brink and another local community falls over the edge. That is the difference between us. A Labour Government would oversee sustainable, long-term funding for councils, and we would work with local authorities and push power, wealth and opportunity out of Westminster. The Secretary of State finished his statement by talking about upholding the good name of local government. Surely we can all agree that central Government have real questions to answer. Will the Secretary of State finally grasp the nettle and take responsibility, or is his message to local councils today that this is just the start of more misery to come?

[Michael Gove]

It is a great pleasure to be reunited with the right hon. Lady; those 800 days apart seemed much longer. We have certain things in common—both of us have been trade union organisers in the past—but she has been much more successful in internal party elections than I have ever been, so I do have a lot to learn from her. Nevertheless, I must politely remind her that while in my statement I was, I hope, careful and scrupulous in making clear that responsibility goes back quite some time in Birmingham, and responsibility does need to be shared between elected members and officials, I did not mention anything specifically or explicitly party political, because I believe it is vital that we work together across parties and across political traditions to deal with this issue.

Given that the right hon. Lady did mention the party politics of this, I think it important for us to recognise that the intervention in Birmingham, and our interventions in Sandwell and Liverpool, have all been interventions in Labour-led local authorities in which comprehensive mismanagement extended back over years. It is simply not good enough to say that Birmingham has not received the support that it needed. Birmingham has a core spending power of £1,202.4 million. That is a 10.6% increase in the last year, and a 31.8% increase since 2015-16.

Labour local authorities have been supported with funding, and also supported with the help of West Midlands Combined Authority. There is a striking factor in the west midlands: why is it that Labour Sandwell and Birmingham are failing, while the Conservative leadership of Andy Street has seen the delivery of record investment and record house building? If people want to draw political lessons from what we have seen in Birmingham, the message is very clear: if you want effective and efficient local government, trust in Conservative leadership, particularly at a time when we need to recognise that a fundamental problem afflicting Birmingham’s finances is an equal-pay problem exacerbated by the actions of trade unions—trade unions which, in many cases, are funding Front-Bench spokesmen for the Labour party. It is vital that Labour politicians use their influence to ensure that we can work together to deal with the problems that that great city faces.