Liverpool City Council Funding

Dan Carden Excerpts

Tuesday 29th October 2019 Westminster Hall

[Stephen Twigg]

The hon. Lady is absolutely right to put on the record the amazing contribution that LCVS makes, as do similar councils in other parts of the country. In the 12 years that I have been in Liverpool, I have been struck by the strong sense of community and the sorts of organisations that come out of some of the most socially and economically deprived communities, some of which I mentioned. I can imagine how much worse the impact of those cuts in Government support would have been if it were not for the great work done by LCVS and some of the other voluntary organisations to which I referred.

The reality is that the council faces a near-impossible challenge: when services are needed most, it has fewer resources with which to respond. The Association of Directors of Children’s Services calculates that the number of statutory responsibilities for local authorities in children’s services has gone up by something like 50% since 2011. We need an urgent review of the financing of statutory services to ensure that they are adequately resourced, because otherwise there is a real risk that we will fail the most vulnerable people again.

The city council is pioneering new technologies to combat climate change. Liverpool has set the bold aim of becoming the world’s first climate-positive city by the end of next year, which would mean the city would remove more carbon dioxide from the atmosphere than it emits each year. The council is working alongside the Poseidon Foundation to help offset its carbon emissions by incorporating blockchain technology into the day-to-day operations of the city council. Reflecting the challenges of climate change, the council recently declared a climate emergency. It is crucial that the Government work with the council and local community to ensure that the funding and support is there, so that we can respond fully to the scale of the climate emergency.

The city council has also been innovative and ambitious in seeking to deal with the desperate financial situation that it faces—for example, it has been pioneering in its Invest to Earn strategy, generating income through investments in the private sector that can then be ploughed back into support for local services. The council has relied heavily on the Public Works Loan Board for low-interest loans to invest in the purchase of assets that can bring in new revenue streams and grow the local economy. It is very concerning that the Treasury has now announced an increase of an entire percentage point in the interest rate for the Public Works Loan Board. The city council is doing all it can to mitigate the impact of austerity, but the interest rate increase will make that task more difficult.

Decisions made by Governments since 2010 have resulted in poverty becoming more entrenched for many of my constituents. We have now had the latest English indices of multiple deprivation, and Liverpool ranks third. Almost a quarter of the population of Liverpool live in income-deprived households, and around a third of children are growing up in poverty. The high level of need, which results in demand for services, cannot be met solely by a council tax base that, as I have said, is low. We desperately need a fairer funding deal.

[Dan Carden (Liverpool, Walton) (Lab)]

Does my hon. Friend agree that the imposition of universal credit, which is very much a political decision by the Government, has only added to the woes of the most vulnerable people in our city? I pay tribute to him, and to the hon. Member for Liverpool, Wavertree (Luciana Berger). We could be heading into a general election very soon, and they have been part of the Merseyside community for the past 10 years. I pay tribute to them for all the work they have done in this place to raise the issues of poverty and the most vulnerable people.

[Stephen Twigg]

I thank my hon. Friend and neighbour for his kind words, and I echo his comments about our friend, the hon. Member for Liverpool, Wavertree. He is absolutely right about the impact of universal credit and, before that, other changes—for example, the reductions in disability benefits and the introduction of the bedroom tax. That combination of factors has been significant in contributing to the challenges that the city council faces.

I am proud that Liverpool City Council has managed to keep delivering vital services and has done its best to protect some of the most vulnerable people, but the city now faces a budget gap that the council estimates to be £57 million, and it has just £16 million left in the reserves. Something surely has to give. The city council, the Members of Parliament and the entire city are united in saying to the Government that we want a fairer funding settlement that genuinely reflects the real levels of need in the local community. My concern is that if this is not put in place, we risk losing crucial services that our most vulnerable constituents rely on every day.

I hope that the Minister can give us some hope that there is light at the end of the tunnel. I particularly hope that he can address the two specific requests for a meeting and for the Government to consider a royal commission on local government funding, because many of the issues faced by my constituents in Liverpool are faced by other communities across Merseyside, across the north-west and, indeed, across the country.