Local Government Funding

Charles Walker Excerpts

Tuesday 15th January 2019 Westminster Hall

[Mr Charles Walker (in the Chair)]

Colleagues, I am extremely sorry for disrespecting your very precious time. You can admonish me afterwards, one after the other—it is unforgivable. I hope that you accept my apology, but I will understand if you cannot.

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[Preet Kaur Gill]

My hon. Friend makes a really important point. We need to invest more money in public health and not siphon it away from councils, for issues such as sexual health, drug and alcohol strategies, mental health—there are a number of issues, and I could go on.

Does the Minister agree that preventive services and approaches are the most efficient and effective way to improve outcomes for our residents and tackle many of the issues that they face? If so, does he agree that local government needs appropriate and sufficient funding to achieve that goal by providing frontline services and working with civil society to develop and sustain multi-organisation and agency approaches? If he agrees on those two points, does he believe that, as things stand, our local authorities have the resources necessary to deliver those services and approaches now and in the future?

I thank all Members who have attended this debate and who are waiting to contribute. The turnout reveals the depth and strength of feeling about this important issue. We all work with our local councils and know the vital services they provide and the work they put into care for our multitude of residents and citizens, particularly support for families, protection of children and care for older and disabled people. We all know that the Government’s current attitude and approach are not sustainable, and we need this Administration to wake up to that fact and address it properly.

I have waited until now to mention Brexit, which we must discuss and examine, if only briefly. The Government have committed billions to many Departments in preparing for Brexit. With the Treasury giving the Department only £35 million for preparations, will the Minister allay the fears of councils around the country by promising that any additional financial commitments and burdens that are placed on councils as a result of Brexit are fully funded by central Government? We need fully funded local government to drive many of the things that make Britain a great country in which to live and work. With councils already facing a funding gap of £7.8 billion by 2025, the Government must take the opportunity of the final settlement and the 2019 spending review to deliver truly sustainable funding to local government. Are they up to the challenge?

[Mr Charles Walker (in the Chair)]

I apologise again to colleagues for my unforgiveable lateness. We will start winding up at 3.40 pm, so everybody should keep their speeches quite short, because there are about 13 speakers.

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[Several hon. Members rose—]

[Mr Charles Walker (in the Chair)]

There are still plenty of Members who want to speak, and the winding-up speeches will start in 35 minutes. I will let the debate run for an extra two minutes—I will not deprive Members of two minutes—but we need to manage time a bit better.

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[Vicky Ford]

I agree about the importance of local services, but the lesson from the restructuring of children’s services in Essex was that they became an outstanding service through a focus on the most vulnerable, who most needed support. When they were focused more broadly, and were not necessarily so targeted on the vulnerable, they did not achieve the same outcomes for the young people who really needed them.

I shall not say that there is not a challenge in Essex County Council. Indeed there is. There is huge pressure from population growth, inflation growth and increasing demand for services. The county council is announcing today that it will increase council tax by just under 4%. It would dearly have liked to be in the pilot scheme for business rate retentions, and is disappointed not to be. There has been some more money from the Government, which is welcome, for winter pressures, social care and highways, but those have been short-term amounts. They are not for the long-term planning that is needed.

As my colleague and neighbour, my right hon. Friend the Member for Witham (Priti Patel), pointed out, the impact on adult social services is severe. About 45% of the county council’s budget is spent on adult social services. We are expecting a nearly two-thirds increase in the number of over-80s in the next decade, and a doubling in the number of over-90s. Seven care homes have been closed and while the county council has tried to minimise the impact of that, and to support those who are affected, the impact on residents is necessarily huge. We need a longer-term solution for the funding of adult social services. The council is making quite sensible, radical changes in its thinking on insurance schemes, lifetime individual savings accounts, possibly more of a local sales tax, and other ways to take the business rate retention scheme to the next level. We need to focus on that.

We are a rapidly growing part of the country. In Chelmsford, it is planned to build about 18,000 homes. We need those new homes. People want to come and live in the county, and we need to help young people on to the housing ladder, but we need the infrastructure to go with it. The county council is spending about a quarter of a billion pounds this year on roads, and primary and secondary school places, but there are some long-term projects, such as our second railway station and the north-east bypass. Those are infrastructure projects for which people have waited decades, and they are vital to go with the housing. I wanted to pick up on the point about homelessness raised by my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter).

[Mr Charles Walker (in the Chair)]

Order. Will the hon. Lady begin to wind up, just to be generous to other Members?

[Vicky Ford]

Yes, I will, Mr Walker; thank you.

There are huge pressures in tackling homelessness. Local charities work hard, but they need more support from Chelmsford City Council. It is the only city that has not had extra support for homelessness. We have projects to secure more social lettings and supported housing, and more help for those at risk of becoming homeless. I hope that the Minister will see that those funding bids are granted.

[Several hon. Members rose—]

[Mr Charles Walker (in the Chair)]

We have seven speakers in 16 minutes, so I shall let colleagues divide that among themselves.

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[Several hon. Members rose—]

[Mr Charles Walker (in the Chair)]

Will everyone do three minutes each? The Opposition Front Bench has given me back six. Clive Lewis, three minutes—please.

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[Several hon. Members rose—]

[Mr Charles Walker (in the Chair)]

Fantastic. There are five speakers left, which means about two minutes and 25 seconds each. Let’s go.

[Rachael Maskell (York Central) (Lab/Co-op)]

Thank you for chairing this debate, Mr Walker. Although £44 million has already been wiped from York’s budget, another £4.1 million will go this year—hardly austerity coming to an end. Local authorities are the game changer for introducing early intervention and prevention into a system. Thanks to a perverse decision by my local authority, the budget to tackle substance misuse was slashed by 25%—a £2 million budget lost £500,000—even though we have the highest level of deaths due to substance misuse in the country. We see the consequences of such cuts across York, and I can give many such examples.

York also has the worst funded education in the country. Schools are on tight budgets, and that is matched with the highest level of attainment inequality in the country. Such a diminution in funding has consequences that are harming my community, and I implore the Minister to put his money where his mouth is and end austerity by ensuring that local authorities have the resources they need to transform our communities.

Labour councillors across York are ready to transform our city, with incredible ideas about early intervention and prevention. Without those resources, however, they will be constrained, and if we are to see a game changer in the way our society works, we must make the right choices. In particular, I reflect on housing investment in our city. Hardly any social housing has been built in York since 2015, and that has had serious consequences for many other factors. We need only turn to the work of Michael Marmot to know the impact of such policies on public health. We need not only resources but the right leadership to make real changes in our community. This debate is just a start, and it is important to follow it up. I would welcome a meeting with the Minister to talk about the difficult issues and challenges our city faces, because the funding formula is not working across the board.

Finally, the business rates system has failed our community. It is driving people away from the high street, which has a perverse effect on the income received by local authorities. We urgently need the review that was promised two years ago, and I implore the Minister to speak to Treasury colleagues so that that comes to fruition.

[Mr Charles Walker (in the Chair)]

Outstanding timekeeping.

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[Several hon. Members rose—]

[Mr Charles Walker (in the Chair)]

I call Jamie Stone, who has three minutes, before Emma Hardy, who will also have three minutes.

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

Thank you, Mr Walker. I congratulate the hon. Member for Birmingham, Edgbaston (Preet Kaur Gill) on what was a very eloquent speech indeed. Much of what I am about to say has been summed up in a characteristically pithy intervention from the hon. Member for Coatbridge, Chryston and Bellshill (Hugh Gaffney). As a Scottish Member, the question for me is: “Where are the Scottish Government in this debate?” It perhaps speaks volumes that we do not have any Scottish National party Members with us today—enough said.

It would not be normal if I did not talk about the remote far north of Scotland, so I will do so again. We face enormous problems in the Highland Council, of which I was a member until I was elected to Parliament: a sparse population, huge distances, inclement weather and the sheer cost of services and goods. Those elements militate against running the council cheaply. Over the last four years that I was a councillor, I found the cycle of going through budget cuts year after year a sickening process, because we felt that we were cutting right into the flesh, blood and bone of what we were trying to do for the good of constituents.

Of course, this is a devolved matter—I take heed of that—but I want to make two points arising from that. First, the settlement that the Scottish Government give councils such as the Highland Council is questionable, but they are not here to answer that point. Does the settlement from the Treasury to the Scottish Government accurately reflect the needs of Scottish local government? Would the Minister consider an audit of the money that goes to the Scottish Government and how much is actually delivered to councils to become council services?

As I want to leave some time, my second and final point is simply this: I recognise that local government is the foundation stone and building block of proper democracy. If the public’s faith in local government is damaged, we damage something that is so important to the way the country works: our democracy. Even on tempestuous days such as today, that democracy is hugely important and, I believe, an example to the world.

[Mr Charles Walker (in the Chair)]

Thank you. Last but not least, I call Emma Hardy.

[Emma Hardy (Kingston upon Hull West and Hessle) (Lab)]

Thank you very much, Mr Walker. I stand here to represent an incredibly proud city. I hope that the Minister bears that in mind, because I am asking not for the Government’s pity about the poverty faced by people in my city, but for fairness and justice, and for the Government to acknowledge that not everybody lives in the leafy shires. I am sorry, but the suggestion that one solution could be greater investment in ISAs is so breathtakingly out of touch that it shocked me.

In my city of Hull we have the lowest average weekly wage in the country, at only £376 a week. The cuts to local government are devastating my city and creating a huge problem for the children living there. The Government talk a lot about the importance of social mobility, but those are meaningless words if people are not given equality of opportunity. My point about fairness is that there is deeply entrenched regional inequality, which is shameful to the country.

In an earlier intervention I mentioned that in one of my wards—Central ward—over 47% of people live in poverty. In my constituency there is an average life expectancy difference of nearly 10 years—the number of years that someone is expected to live a healthy life is lower in Hull than in other areas of the country. That should shame the Government into action.

Another problem is that we have £1,300 less per pupil spending on schools than in the rest of the country. We cannot rely on increasing local council tax to plug that gap. Hull City Council is 81% reliant on Government funding grants, and when that money is taken away it has a greater impact in Hull than it does in other areas of the country. Some 86% of people in Hull live in a band B or band A property, so a 1% rise in council tax would bring in only £2.90 per person in Hull, compared with £7.08 in the City of London, or £6.33 in the wonderful South Hampshire. For a city such as Hull, with highly significant deprivation, a very low tax base and limited ability to generate its own income, it is essential that the Government’s future financial settlement calculations recognise and make allowances for that. I ask the Minister not for his pity, but to give Hull its fair share of money and the money it needs. I ask him to reverse the cuts.

We heard today that Marks and Spencer is leaving the city of Hull. Our high streets are being decimated, so will the Government take action quickly and do something about business rates as well? To pull the funding from Hull—and from under the feet of the people of Hull—without making proper and necessary investment was always going to be a disaster. The Minister has the opportunity to own the Government’s past mistakes, recognise the failings of his predecessors, and do something about them.

[Mr Charles Walker (in the Chair)]

Order. I call the shadow Minister, whom I thank for his generosity with his time.

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

Thank you, Mr Walker; it is a pleasure to serve under your chairmanship. I thank my hon. Friend the Member for Birmingham, Edgbaston (Preet Kaur Gill) for securing this absolutely critical debate at such a critical time, as local authorities enter their budget-setting cycle. The council meetings will take place over the coming months, and councils will be forced again, for another year, to make absolutely devastating cuts to their local communities.

That is what this is about. When we talk about council cuts, it does not gain a lot of interest, but when we talk about people and communities, the impact on the future life chances of our young people and the way older people are cared for, it absolutely matters and is crucial to our communities. In truth, the fabric of our communities—the very foundation on which the Government are trying to rest future English devolution—is fragile and near breaking point.

There has been passion in the room today: 16 speakers on the Opposition Benches and four speakers on the Government Benches, including the Minister, who will speak shortly. That shows the real interest in the issue. None of us comes to Parliament to make our communities worse off. We have heard the desperate pleas from hon. Members who really care about the impact of the cuts on their communities, not for political advantage or to try to embarrass the Government, but because we live in our communities and see the impact on our neighbourhoods: the lack of funding in our schools, the effect on all those who cannot get the social care that they need, and the young people who have been denied the best possible start in life because children’s centres are taking cuts or being closed entirely.

One of the Minister’s colleagues has said that the way to revive our high streets is to open libraries on them, when hundreds of libraries are closing every year because the money is just not in the system. We need radical change and radical reform, because quite frankly, we have seen tinkering around the edges far too often, and that does not get to the crux of the issue. The crux of the issue is this: council tax and business rates have a role to pay—they are important property taxes—but both have limitations and will be pushed to breaking point if the Government do not do something.

Council tax is a hugely regressive tax. It takes 7% of low-income families’ incomes, compared with just over 1% of higher-income families’ incomes. The more pressure that is applied to council tax, the greater the pressure that is applied to low-income families. Time and again, the Government duck their responsibilities to provide central Government funding to support local communities, and the burden falls on council tax payers. Council tax will again be increased this year to the maximum level of 6%. On top of that, more money is required to go to the police, and in the case of combined authorities or mayors, even more money is applied to that precept as well, because the Government are walking away, saying, “Well, it’s not our problem,” when it is a problem absolutely of the Government’s making. Those are political choices.

It was absolutely right that austerity meant that every Department had to take its fair share of cuts, but the evidence says that local government has lost 800,000 members of its workforce—it is at its lowest level since comparable records began—while the central Government workforce figure is at its highest level since comparable records began. That is not a fair distribution of cuts or austerity. Local government continues to take the pain and the burden.

Many important points have been made today and I would love to go through the list of hon. Members who spoke. One thing that inspires me about Parliament is just how rooted in community our parliamentarians are—particularly Labour parliamentarians. I congratulate my hon. Friends on giving their communities a voice. The Minister, who is respected in local government—I am not trying to make a ding-dong match out of this, some real questions need real answers—has an opportunity to set out his stall, to say what he stands for and what he believes in, and to stand up for the pressures that local governments face. Any Minister at the Ministry of Housing, Communities and Local Government who presided over a local government family that can barely afford to make ends meet would not be fulfilling their responsibilities.

[Mr Charles Walker (in the Chair)]

Thank you. I will call Ms Gill to make her final remarks at fifteen seconds past four. I call the Minister.