Local Government Finance (England)

Clive Betts Excerpts

Monday 24th February 2020 Commons Chamber

[Robert Jenrick]

If the hon. Gentleman will give me a few minutes, I will come on to our ambitious plans for devolution. He will have seen in the Queen’s Speech that later this year we will bring forward a White Paper on English devolution, which we hope will build on the very good work done in recent years, including to establish Mayors across the country.

Today’s settlement is good news on many counts; it provides more money and more stability for councils, but above all, it is good news for local people. We are delivering the best settlement for a decade while keeping people’s council tax bills low. Under the Conservatives, council tax in England is 6% lower in real terms than in 2010. The average council tax bill increase in 2020-21 is projected to be below 4%. That compares to an average increase of 5.8% between 1997 and 2010. It was a Conservative-led Government who ultimately made sure that local people had the final say on their council tax bills, following years of tax rises under Labour.

[Mr Clive Betts (Sheffield South East) (Lab)]

The Secretary of State says that council tax bills are 6% lower than in 2010, but does he accept the figures produced by the Institute for Fiscal Studies, which show that in real terms, local government spending per head of the population has fallen by 20% since 2010?

[Robert Jenrick]

I am not familiar with those figures, but I am sure that the hon. Gentleman will welcome the fact that through this settlement, we are providing a 4.4% real-terms increase in spending for councils, while keeping council tax as low as we can.

I am putting forward a controlled package of council tax referendum principles based around a core increase of 2%, with a flexibility of up to £5 for shire district councils. This strikes the right balance between giving local authorities flexibility to meet the needs of their local area and empowering local residents to veto excessive increases.

As we have heard in a number of interventions, we are also fundamentally changing how we allocate council funding, to deliver a fairer, more up-to-date, more transparent way of allocating taxpayers’ money. It must be right to explore how we can bring the increasingly convoluted and outdated funding formula into the 21st century, and how we can better link the funding of public services to the needs of individual local authorities. There is no question but that the fair funding review is a substantial piece of work. There are many different views on the way forward, which raise challenging questions that we will need to work through in the months ahead. We plan to consult widely on our proposals this spring, and to listen to the views that we receive. In that spirit, I hope that we in the House can work together to build consensus, and move forward to a better funding formula.

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[Mr Betts]

I thank the Secretary of State for giving way again. I very much welcome the Sheffield city region deal, and I want to pay credit to the previous Northern Powerhouse Minister, the right hon. Member for Rossendale and Darwen (Jake Berry), for the perseverance he showed in trying to get all the authorities in the city region together to do that deal. Does the Secretary of State agree that any powers that other mayors have must now be made available to my hon. Friend the Member for Barnsley Central (Dan Jarvis), Mayor of the Sheffield city region?

[Robert Jenrick]

I happily join the hon. Gentleman in paying tribute to my right hon. Friend the Member for Rossendale and Darwen and others in this House, including the hon. Gentleman, who have persevered with that devolution deal, which at times seemed a forlorn cause but now appears finally on course to being fully implemented. We have made it clear that we will be offering all existing mayors the full suite of powers that are available to Andy Burnham as the Mayor of Greater Manchester, with the exception of the health powers that he exercises—I think there is widespread agreement that a degree of further thought is required before we roll out those powers in other parts of the country, but we are certainly not opposed to doing so once we have given that more time and consideration.

Our English devolution White Paper will look to spread the benefits of greater control to all parts of the country, and this is the right time to do it. At the start of a new Administration and at a moment of national renewal, we must seize the opportunity to reform local government and give more powers back to the public.

Levelling up means firing up our towns through our £3.6 billion towns fund, so that they can be engines of opportunity and growth. From St Ives to Stocksbridge, towns and their local councils are engaging actively in that, using the towns fund to attract private investment and invest in transport, skills, culture and technology.

It means pulling out all the stops to deliver 1 million homes over this Parliament and nurturing places that inspire pride and a strong sense of belonging. I firmly believe that we can build the houses that our country needs—houses of all types, including more affordable homes—while also building safer, greener, more beautiful homes in communities that foster neighbourliness and a true sense of identity. We will be asking a lot of councils. We will be asking them to deliver the housing need of their communities, and in some cases, to do so without encouraging needless urban sprawl or the ruination of the countryside and a loss of the green belt. That will mean that they will have to be ambitious and to develop brownfield land aggressively, as we are seeing in some of the best parts of the country. It will mean reimagining town centres and building upwards with gentle density.

No one can abdicate responsibility for meeting the acute housing needs of our country, and some councils are already leading the way in doing that. Last week, I wrote to councils that are exceeding the housing need of their communities to thank and praise them. I hope that more councils will follow their example, and we will support and incentivise councils in the years ahead to do so.

The investment that we make today is part of a wider picture of investment to renew communities and to address the priorities of the public, which we promised to do in the general election and for which we were lent the support of millions of people across the country, and we now need to repay the trust that they placed in us. We heard about some of that investment earlier today, with the recruitment of 20,000 extra police officers over the next three years.

It also means investing over £14 billion more in our schools between now and 2022—an extra £150 million a week and the largest cash boost in a generation. It means putting more money into our buses, with an extra £220 million in our national bus strategy and £5 billion for buses, cycling and walking, which will play an important part in the lives of all our constituents. It means upgrading our local roads, backed by £28 billion of investment, and more money for potholes. It means committing to fund the Leeds-to-Manchester route as the first stop on our journey to deliver Northern Powerhouse Rail. It means committing to High Speed 2—the spine of the country’s transport network—alongside radical improvements to local transport networks all across the country. It means investing £500 million in new youth clubs and services, and creating a £250 million cultural investment fund to support local libraries, museums and social and cultural capital in our communities.

Thanks to the almost £3 billion of extra investment that we are providing, this settlement will see constituencies in every corner of England getting more money next year, while protecting taxpayers. That means more money for the most vulnerable and the key public services on which we all depend, and a sound basis on which local government can build for the future with confidence. Let us get behind this settlement and allow that good work to begin today.

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[Mr Clive Betts (Sheffield South East) (Lab)]

The Secretary of State is right that the spending review is better for local government and that it gives a spending power increase of just over 2% in real terms—I think that was the figure given—but that has to be put in context: it is actually a 5% reduction from 2015-16 and a 20% reduction per head of population in real-terms spending power since 2010. Those are the figures the IFS has produced. Local government has received bigger spending cuts than any other part of the public sector, and we have all experienced that in our constituencies up and down the country, whether they be urban, rural, large city or small town; they have all been hit disproportionately by those cuts.

At least we have some stability this year, as the financial officers in Sheffield have said. For the first time, they are not facing a package of cuts. They have welcomed the £10 million extra for social care, and the city has tried to maintain spending on social care for the elderly, looked-after children and people with disabilities, as have most councils up and down the country, but we know that this is really a one-year settlement, for obvious reasons, and that next time we will probably be looking at a multi-year settlement. The hon. Member for Waveney (Peter Aldous) talked about the fair funding review, but that is not about an increased budget in total; it is just about redistribution. Somebody will lose out, unless the Government put more money in so that everybody gains. That will be the challenge that comes out of the review.

There is also supposedly the retention of up to 75% of business rates, and maybe some impact from the business rates review itself—who knows? These all major changes. The question is: is this year the lull before storm for many authorities or the beginning of better things to come? That is the test for the Government. Another test is: is austerity really over? That was the question the IFS asked in its comments about the spending review and the figures I quoted from its report. Is austerity really over? What do we even mean by “an end to austerity”? That is an even bigger question. Does it simply mean that local authorities will not have to make any more cuts in overall terms, or does it mean they will have resources to undo some of the cuts they have had to make?

To my mind, the answer has to be the second one. An end to austerity has to mean going back and putting more money into the services that have been so badly cut over the years. As councils have tried to protect social care, other services—my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) very properly went through them—be they buses, leisure, libraries, street repairs or refuse collection, have been cut consistently by up to 50%. We cannot continue to see more cuts in those important services, and, moreover, we cannot continue without some restitution of the services that have already been cut.

I heard what the Secretary of State said about the review of social care and the need for cross-party debate and, hopefully, agreement. I am more than happy to join in with that, and I am sure that the Housing, Communities and Local Government Committee will be as well. We dealt with the issue in the last Parliament, and I think that our joint report provided a good basis for progress. Realistically, however, any significant change in social care funding will probably not happen during the current Parliament. What we need is more money put into the current system, at least for the foreseeable future.

Let me identify two areas of concern—apart from social care—that are having a real impact on my constituency and nationally. Like many MPs, I regularly raise road safety issues on behalf of constituents. One concerns the need for yellow lines at the end of Moor Farm Avenue, a road that leads from a private estate to the very busy Mosborough Moor. Those yellow lines would ensure that the corners—the junctions—were kept free of obstruction, so that motorists leaving the estate would have a better sightline to vehicles coming in the opposite direction. What has happened? The council’s response is that after years of funding cuts, it cannot satisfy all requests. That scheme is one of 1,600 on a waiting list in the city of Sheffield.

Another issue is the lack of a crossing outside Halfway Nursery Infant School. I have been campaigning for that crossing for 10 years. At present, it is dangerous for children and their parents to cross the road, but the council can fund only a couple of schemes a year in the whole city.

I wonder where the Liberal Democrats are tonight. I do not know whether my eyesight is failing, but I cannot see anyone on the Liberal Democrat Benches. However, they campaign locally, and every scheme is a priority, although when they were in government we experienced the biggest ever year-on-year cuts in local authority spending. But never mind: the point is that these schemes are important, and council funding for them has been cut by more than 50%.

The other day I read an important article in the Daily Mail—I am sure that the Secretary of State reads nothing else at his breakfast table. According to that article, the Food Standards Agency has doubled its estimate of the number of intestinal illnesses caused by takeaway and restaurant food each year, and 2.4 million cases of such illnesses are linked to food contamination. That, it says, is connected with the reduced number of local authority environmental health officers who carry out food safety checks. Another important service provided by local authorities has been diminished and run down, and, again, not making cuts is not enough: we need money for authorities to be able to reinstate those services.

I welcomed the Secretary of State’s comments about devolution. I think he has a genuine commitment to and enthusiasm for it. The Select Committee began an inquiry into the issue before the election, and I hope that we will continue that inquiry, because I think that, along with social care, this is an issue on which we can work to secure cross-party agreement.

[Several hon. Members rose—]

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

First, may I congratulate the hon. Member for Cities of London and Westminster (Nickie Aiken) on what I thought was a really thoughtful maiden speech? It is quite telling when councillors come into this place. The experience and insight they bring, regardless of party affiliation, means that we are actually at one when it comes to the need for reform of local government. I very much welcome her contribution on that point.

I thank my hon. Friend the Member for Sheffield South East (Mr Betts), who is the Chair of the Select Committee, for the contribution he made and the insight he brings to this debate. He made it very clear, from information from the IFS, that we have now seen a 20% reduction in spending power since 2010. He asked the question that we all ask: if austerity is over, what does that mean in practice? Does it mean just that the funding cuts stop today, or does it mean that we will begin to rebuild what has been taken from many of our local communities since 2010?

My hon. Friend also laid out a statistic that was new to me—I was surprised by this, but perhaps I should not be so surprised—which is that 2.4 million cases have been linked to food contamination. No doubt a reduction in the number of our public health officials has played a part in that, but in England we are behind. In Wales, a takeaway has to display its food hygiene ratings on the door of the premises, as it does on online ordering platforms, in a way that a takeaway in England does not have to do. In addition to the need to rebuild our public health functions, we need to move forward and make sure we have mandatory food hygiene ratings so that people can make an informed choice about where they buy food.

As always, my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy) gave a real insight into the impact of cuts and austerity on her community. There are a staggering 848 looked-after children—almost doubling since 2010—with council services left at crisis point. There is a real tension: the Government have of course reduced the central grant and council tax is going up all the time, but the very councillors who are working to protect their community and their council often face the most criticism from local people for the very difficult decisions they have to make. That is a very difficult task for many.

My hon. Friend the Member for Harrow West (Gareth Thomas), as always, gave a London insight, painting a picture that we are not always used to hearing about in this place. We very much hear the story that London is thriving and the rest of England is really struggling, but we see real pockets of deprivation in this great capital that should shame us all. We are seeing every local authority really struggling to make ends meet and demand for services really going through the roof.

My hon. Friend also made the case, and I absolutely support this, for saying that we cannot believe that devolution in London has finished. The problem with devolution in England is that we look to London, and we discount it for the rest of England, believing that the job here is done, and it absolutely is not. If we look at devolution in our major cities around the world—New York, Tokyo and other places—we see real fiscal devolution and real law-making powers devolved to a local level, in a way that leaves London in the shadows. When we talk about levelling up, there is a need not just to talk about redistributing finance and capital investment, but about the powers needed across all our major towns and cities in this country to make sure that every community has the right to determine their own future.

My right hon. Friend the Member for North Durham (Mr Jones) was absolutely blunt in his assessment. It was interesting to hear the exchange across the Chamber on parts of that, but we can understand why tempers are so frayed on this fraught issue. How can it be right that 40% of a council’s budget—£232 million—has been taken away from local public services. In the midst of all that, when my right hon. Friend raises those issues and the impact on his community and reflects on the local authority’s difficulty in trying to balance the books, we have people who for reasons of cynical political game playing decide to make the local council the target, instead of laying the blame where it thoroughly deserves to be, which is of course with the Government who are pushing through those cuts.

My hon. Friend the Member for Enfield North (Feryal Clark), a councillor for 14 years, is also adding real quality to this place. We need more councillors coming here—maybe it should be a prerequisite of coming to this place, as perhaps then we would have a better quality of debate. The figure of £800 per person cut from that local authority is absolutely eye-watering. Although we bat around the numbers, as they are important, what this really means is that those essential services that make a place a decent place to live have been affected: the community centre is not open any longer; the library is now closed; the Sure Start centre that gave young kids the real start in life that they need is no longer there. A startling report today says that life expectancy is going backwards for women and is stalling for men. How can that be right? We are seeing a decrease that this country has not seen for 120 years. Why? It is because of the lost decade of Tory austerity. That cannot be right.

May I just place on record, as my boss my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) did, a tribute to the right hon. Member for Rossendale and Darwen (Jake Berry) for the work he did as the Northern Powerhouse Minister? One thing that I enjoyed about the right hon. Gentleman was that he knew how to take a good rebuttal, and the exchanges that we had were fun and in good spirit and were a good challenge. He worked hard behind the scenes to try to make progress on devolution, and I hope that continues.

My final point is that we cannot afford to continue this pressure on council tax. We all know that council tax is out of date, and maybe next April, when council tax revaluations turn 30, we can have a big party and crack open the sausage rolls, the prawn cocktails could come out and maybe a bit of fizzy orange, or perhaps we should look back and recognise that there has been a collective failure on council tax revaluation and the need to modernise. Governments duck this because it is not popular, but we now have a system that is very unfair.

How can it be right that over the last five years we have seen council tax increase by a third in England? That is not right. What would happen if income tax was increased by a third in the same period? What would happen if national insurance was increased by a third in the same period? What would happen if VAT was increased by a third in the same period? What would happen if fuel duty was increased by a third in the same period? And, God forbid, what would happen if beer duty was increased by a third in the same period? There would be a riot in the Strangers’ Bar as we speak. But of course there is not a riot over the council tax increase. Why? Because we can defer blame down to local councils, but it is just not good enough. Today we see that low-income families have 8% of their household income taken for council tax while that figure is only 1% for higher earners. That cannot be right. It is hugely regressive and it is getting worse with every year that passes.

If the Government really want to address this, it requires maturity. It requires a forward view and it requires a clear strategy that has to be more progressive and up to date, and must reflect geographical variations. It must also recognise that council tax has its limitations. Of course property tax is very important, but it cannot take the burden of adult social care and children’s services, and it cannot be right that our ability to receive adult social care in older age is determined by a house value 29 years ago, any more than whether a child gets the care that they need to protect them from harm is determined by the same measure.

We need to grow up on this; we need to tackle it, and we need a solution that puts councils in the right place for the long term.

[Mr Betts]

I agree with my hon. Friend. We need a separate funding stream for adult social care, as the two Select Committees recommended in the last Parliament. Also, my Select Committee recommended a review of council tax very much along the lines that the hon. Member for Cities of London and Westminster (Nickie Aiken) recommended, but the Government just dismissed it in their response and said they were not minded to do a review of any kind. Does my hon. Friend agree that that is disappointing?

[Jim McMahon]

It is disappointing, but is inevitable in a way, because there would be winners and losers—and, let’s be honest, the winners would be the poorest who have less agency to mount a campaign and the losers would be the wealthiest, the people with agency who can mount a campaign in objection to it, and the major right-wing newspapers will also mount a campaign against it. It will be called the garden tax, the conservatory tax, the porch tax, or the driveway tax, but it will never be a tax that is actually deemed to be fair. But that is what this country needs; it cannot be right in England that we carry on with such an unfair tax system.

If the Government want to be mature—if they want to look long-term, if they genuinely want to take the politics out of this, which is probably what is needed—I am sure our side would be looking to contribute to that, but if they want to wilfully ignore the impact on low-income families and on many local authorities now not able to fund decent local services, I am afraid they can expect strong opposition on this side.