Local Government Finance

Calvin Bailey Excerpts

Wednesday 11th February 2026 Commons Chamber

[Steve Reed]

I want to make some progress, because I have taken quite a lot of interventions, but I will give way before I conclude.

Local government is still under pressure, and we will not bury our heads in the sand or dodge the difficult decisions. The adult social care system is in crisis, and we are facing up to that by transforming it. This settlement makes available around £4.6 billion of additional funding for adult social care in 2028-29, compared with 2025-26, including £500 million for the sector’s first ever fair pay agreement. That means more carers getting better pay and having the time to provide the high-quality, compassionate care they want to give. It will get us moving towards a national care service that gives people better-quality care, joined-up services, and more choice and independence.

[Mr Calvin Bailey (Leyton and Wanstead) (Lab)]

We are very grateful for the settlement and the announcements that the Secretary of State has made today. Both Redbridge and Waltham Forest in my constituency are receiving significant uplifts from this Parliament, and Ministers have been excellent in listening to the arguments of both those London boroughs. Although this measure will not be enough to fill the immediate financial gaps left by the Tories, it is a step forward. However, given that temporary accommodation costs have risen so much in London—by about 75% over the last five years—will the Secretary of State set out how the Government are acting to expand the supply of socially rented homes?

[Steve Reed]

I thank my hon. Friend for recognising that funding is now following deprivation. He will find the answer to his question in the homelessness strategy, which I will come to. [Interruption.] Madam Deputy Speaker, you are indicating with your wrist that I need to speed up, so I will make some progress.

On children’s social care, the system was again left on its knees. That is why this Government are driving forward the biggest transformation of children’s social care in a generation by rolling out the Families First Partnership programme. We have backed the programme with nearly £3 billion over four years, including an investment of over £2.4 billion in this multi-year settlement. It gives local authorities, police and health partners the tools to provide families with the right support at the right time, shifting the system from expensive statutory provision towards early intervention and preventive support. It will help families stay together, divert thousands of children from care and transform the outcomes and wellbeing of children across the country.

The investment in the Families First Partnership programme marks a milestone in transforming the children’s social care system, but we recognise that the children’s social care residential market is fundamentally broken. Local authorities are being pushed to the brink, while some private providers are making excessive profits. This cannot—and it will not—continue. Instead, we are working to reduce reliance on residential care and move towards a system rooted in family environments through fostering. Last week, the Government set out a plan to expand fostering for 10,000 more children by the end of this Parliament. The evidence is clear that taking this approach will be better for children and better for the local authorities that provide the services. Using the new powers in the Children’s Wellbeing and Schools Bill, we will explore the implementation of a profit cap in the children’s social care placement market to ensure that public money delivers value and care, not profiteering.

It is obvious that the current special educational needs and disabilities system is not working for children and families. We know that it is not working for councils either, as they are seeing funding for neighbourhood services diverted into a broken system. The Government are bringing forward ambitious reforms that will create a better and financially sustainable SEND system, built on early, high-quality support for kids with SEND to improve their time at school and maximise their potential throughout life. My right hon. Friend the Secretary of State for Education will set out the details of those reforms in the upcoming schools White Paper.

Crucially, we are taking action now to support local authorities as we move towards that reformed system. We will deliver this in phases, the first of which will address historic deficits accrued up to the end of 2025-26. All local authorities with SEND deficits will receive a grant covering 90% of their high-need deficit up to the end of 2025-26. This is subject to local authorities securing the Department for Education’s approval of a local SEND reform plan.

On homelessness, as my hon. Friend the Member for Leyton and Wanstead (Mr Bailey) has said, we know that temporary accommodation is a growing financial pressure on councils, with near record levels of rough sleeping and declining social housing stock. The final settlement also provides a £272 million uplift to the homelessness, rough sleeping and domestic abuse grant, taking total investment delivered through the settlement to £2.7 billion. On the ground, that will mean families off the streets; kids out of temporary accommodation and instead living in safe, secure homes; and people’s lives put back on course. We are matching that landmark investment with our national plan to end homelessness, led by the Minister for Local Government and Homelessness, to put the full might of the state behind preventing homelessness before it happens.

Today’s settlement is about keeping a promise—a promise to repair the broken foundations of local government, and a promise to put the heart back into our communities. When the last Conservative Government slashed councils to the bone, the consequences were severe: the services people use every day were undermined, streets became filthy and people’s lives got tougher. The hard work of councillors, mayors and frontline staff kept vital services running during those hard Tory years, and we thank them for the work they did in those circumstances. Our aim is a future where councillors, working with their communities, have the freedom to innovate—rebuilding public services and investing in high streets, youth clubs and libraries. We are fixing the foundations so that councils and their communities can build the public services, renew the high streets and shape the future they want to see.