Local Government Funding

Angus Brendan MacNeil Excerpts

Wednesday 28th March 2018 Commons Chamber

[Drew Hendry]

I am delighted that the hon. Gentleman has intervened, because I was expecting him to do so. I was a former group leader at COSLA, so I have been watching for a number of years the Scottish Government manage to put money into local authorities in a way that could not be done down here. In fact, in the last debate on local government that I took part in in this Chamber, Tory MPs were talking about their councils having to hand back the keys to Treasury Ministers such were the cuts. Actually, one of the biggest challenges in Scotland is dealing with the private finance initiative legacy left by Labour in terms of the additional interest costs on all these different items that continue to drain local authority resources.

I want to turn to Highland Council, because it is on my own patch and I speak from experience. Highland Council’s resource budget for our services such as schools, roads and housing rose to almost £450 million for the coming year—an increase of over 2% compared with last year. While the Scottish Government protect local authority budgets, the UK Government leave them paying the price for the austerity agenda.

Highland Council is a good example of the impact of universal credit on local authority budgets. As many Members will know, the constituency of Inverness was a pilot area. We went through the live service and then full service roll-out in June 2016. Local agencies, the council and I have been voicing concern about these issues since 2013, and the measures introduced do not even scratch the surface of the process failings of universal credit. Our local authorities are paying the price now, and right hon. and hon. Members in this Chamber who go through full service roll-out will see the effect on their own local authorities.

Let me reflect on the cost to Highland Council of the impact of rent arrears. Average rent arrears for somebody on universal credit are now £840. Average rent arrears for somebody not on universal credit are £250. The effect of that is that in July 2016 rent arrears were £1.6 million. In March 2017, that figure rose to £2.2 million, and then in December 2017, it rose to £2.7 million, racking up the costs for local authorities, which are having to implement and deal with the effects of universal credit. This will have an effect on services as it starts to drain their budgets.

The extra resources needed for administering the change to universal credit are running into hundreds of thousands of pounds—money that is coming out of the council budget. The welfare support team do amazing work, but they are flat out with demand. Housing officers are also flat out with demand, as more people face housing crises. Some 29% of landlords already say that they have evicted because of universal credit rent arrears. People are becoming homeless, so the local authority has a duty to house them. It is a vicious cycle of costs for the local authority. The increased demand then affects other agencies such as Citizens Advice.

The impact on poverty is also very harsh. One in four children in Scotland is growing up in poverty as a result of this Government’s austerity regime. As household incomes are pushed, people find themselves relying more and more on local authority services. Highland Council, especially its welfare support team, has done incredible work in the face of the most trying difficulties.

The SNP Government are committed to mitigating Tory austerity wherever they can. Since 2013, the Scottish Government have spent more than £100 million a year to protect people from the worst aspects of Tory welfare cuts. We are fully mitigating the bedroom tax in Scotland, and we have pledged to abolish the tax completely when we have the powers to do so.

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

My hon. Friend is making the SNP’s fundamental point, which is that it would be far better for us as an independent country to be making the right decisions in the first place than having to spend £100 million to correct the Tories’ errors.

[Drew Hendry]

I am grateful to my hon. Friend for his intervention. As ever, he makes a telling point: choices would be different in Scotland. We would choose not to have to mitigate something as horrendous as the bedroom tax, which was so ill thought out that the Tories did not take into account the fact that there are virtually no houses in the highlands and islands that do not have more than one bedroom.

Since its establishment, the Scottish welfare fund has helped more than 275,700 households. The fund provides crisis grants when someone experiences a disaster or emergency and community care grants to enable independent living. We have also extended the Scottish welfare fund on an interim basis to mitigate the UK Government’s decision to remove housing benefit for 18 to 21-year-olds. In 2016-17, more than 17,500 applications for crisis grants were made because of delayed payment of benefits—that is around 10% of all applications. Between July and September 2017, that increased to 14%, clearly showing the impact of the Government’s harsh welfare cuts.

We have restored the council tax support cut in Westminster through the creation of council tax reductions, protecting the incomes of more than half a million people on low incomes. We have extended the child allowance in the council tax reduction scheme by 25%, benefiting 77,000 households by an average of £173 a year, or £15 a month. That boost for low-income families will help nearly 140,000 children across Scotland.

Following the UK Government’s decision to scrap the UK-wide scheme, we have safeguarded support for 2,600 disabled people through the Scottish independent living fund. We have now created an extra £5 million fund to support young disabled people to make the transition into adulthood.

To conclude, I urge the Minister to listen to hon. Members and to stop shifting the responsibility for his Government’s austerity agenda on to local authorities across the nations of the UK.