Local Government Finances: London

Dan Tomlinson Excerpts

Wednesday 26th March 2025 Westminster Hall

[Natasha Irons (Croydon East) (Lab)]

Councils are at the coalface of politics and are leaders in delivery. From potholes to parks and parking, local councils deliver the things that we care about. For too long, our councils have been failed by central Government. They have been undervalued and underfunded.

In London, where councils receive 28% less funding per Londoner than they did in 2010, boroughs are now at crisis point. London’s housing emergency has pushed an estimated one in 50 Londoners into homelessness and pushed London councils into spending £4 million a day on temporary accommodation.

[Dan Tomlinson (Chipping Barnet) (Lab)]

Barnet council now processes 10 homelessness applications every single day—more than double the number it was processing just two years ago. This, coupled with additional spending on educational needs and adult social care, is crippling councils’ budgets, much as council leaders will try to do the best they can by their local communities. Does my hon. Friend agree that that must change if we are to see a sustainable future for councils in outer London?

[Natasha Irons]

Of course I agree. It is imperative that we solve this crisis.

With overspends in children’s and social care services across London, seven London boroughs require exceptional financial support to balance their books, and Croydon council is one of them. As with councils across the country, poor decisions and failure in governance, mixed with chronic underfunding, saw the council issue its first section 114 notice in 2020.

As an outer-London borough with inner-London problems, Croydon has historically suffered from a financial settlement that does not reflect the demands on its services. The debt built up over successive administrations now costs the council £71 million a year to service, and it borrows £38 million of that from central Government. Although I appreciate that it is not something the Government can just write off, I urge them to work with Croydon council to restructure the debt and find a long-term solution to bring down the cost and its impact on day-to-day spending.

Debt is not Croydon council’s only challenge, because even if the debt were wiped out, it would still need to borrow an extra £65 million from the Government to balance its books. Although there are overspends in the areas that we would expect, such as children’s and adult social care, the council is also grappling with a number of neighbouring boroughs placing vulnerable people in temporary accommodation in Croydon while not funding the ongoing associated costs.

A massive 24% of people in temporary accommodation in Croydon have been placed there from outside the borough, with the highest number of placements coming from Lambeth, Lewisham and Bromley. With families often stuck in temporary accommodation for many months or even years, it falls to Croydon to pick up the further, ongoing costs with regard to demand-led services. With councils across London bidding for accommodation and social care placements in Croydon, the council is often forced into a bidding war to provide support for its own residents.

Will the Government look at funding London councils properly, and introduce measures such as including deprivation in the local government funding formula, or increasing the local housing allowance in line with inflation and removing the cap on how much councils can reclaim to cover the costs of temporary accommodation? Will they also consider ways to reduce profiteering in the marketplace for demand-led services, consider legislating to ensure that a home council continues to fund the costs of care when children are placed outside their home borough, and ensure that a family’s home council continues to fund the costs of placing homeless families outside the host borough? I ask because no one wins when councils are forced into this situation and pitted against one another.

If we want people to see and feel the change that they voted for, on their streets, in their communities and across this country, it is properly funded councils that can deliver that. If we want the services that communities rely on every day to be of the highest quality, it is properly funded councils that can make that happen. If we want to make it feel as if the lights have finally come on in this country, it is properly funded councils that can flip the switch.

--- Later in debate ---

[Danny Beales (Uxbridge and South Ruislip) (Lab)]

Last, but not least. It is a pleasure—less of a pleasure now, but it was a pleasure—to serve under your chairmanship, Ms Lewell. I echo the points my colleagues have made about the unprecedented financial pressures on London councils. While we need to tackle temporary accommodation, the SEND crisis and much more—that is as true in Hillingdon as in any other borough—we also need to ensure the very best financial governance for local authorities.

Unfortunately, in Hillingdon, on top of those long-term pressures, we have seen short-termism and poor governance. A salami-slice approach to budgeting—taking off an extra per cent each year—and the failure to transform services and build the financial base of the council long term have all come home to roost, with the council now in financial crisis. We have seen that if we do not invest in new homes, we get temporary accommodation pressures. If we do not invest in early years and youth services, and close them instead, we get more pressures later in the education system. That is what has happened in Hillingdon.

We have the lowest reserves among our nearest neighbours. The Chartered Institute of Public Finance and Accountancy reported that we ran them down from £62 million in 2021 to £20 million in 2025.

[Dan Tomlinson]

In Barnet, we have around 85 care homes. Inner London boroughs such as Camden and Islington have around 20, yet the grant that inner London boroughs receive is around £3 million, whereas Barnet council and other outer London boroughs only get around £2 million. Does my hon. Friend think that that injustice in the funding formula is also causing issues for councils such as the one in the area he represents?

[Danny Beales]

I do—we have to consider the costs that outer London boroughs face, as well as London more generally. As has been said excellently by my hon. Friend the Member for Leyton and Wanstead (Mr Bailey), London is special; it is different, and it faces extra costs and pressures. That is the case right across London.

This very year, Hillingdon’s own financial officer wrote a damning cover report to the council’s budget, making it clear that the road is fast running out. They pointed to governance issues within the council and an inability to meet its own, less ambitious savings targets in previous years, compared with the projected future targets. My constituents have paid the price for that mismanagement—they are paying substantially more every single year, with fees and charges going up exponentially, and getting fewer services as a result.

I welcome the calls for extra long-term financial support for local government, which is much needed; however, we have to ensure as a Government that when we agree that extra long-term financial settlement, which hopefully we will, governance improvements are in place. This money should not be used to fix the cracks in the short term again, but should be used to fundamentally transform services, including the SEND system, the housing system, the social care system and many others. In some authorities, when times were slightly easier than they are today, that did not happen.

To sum up and echo my colleagues’ points, London councils are on their knees financially. As a Government, it is vital that we intervene, because local government is key—it is everyone’s front door to government and their community. We need to invest and we need long-term reform of services, including our education and housing systems, to provide the mixed, successful and financially sustainable communities we all want to see.

Planning and Infrastructure Bill

Dan Tomlinson Excerpts

2nd reading
Monday 24th March 2025 Commons Chamber

[Gideon Amos]

We would support that, as we did in a Westminster Hall debate very recently. We should be hearing such voices in the planning system, not shutting them out of the planning system.

On energy infrastructure, we welcome support for battery storage and improving access to the grid. Transmission connections are a huge source of delay—one of the biggest bottlenecks for renewable energy. But if we are to unblock that infrastructure, we need to go much further. All large-scale infrastructure projects, not just electricity transmission, should give people direct community benefit. Whether wind farm, solar farm, battery array or gas-fired power station, those living nearby should benefit through local investment or lower bills.

We also support the ambition to streamline planning for major projects, with exceptions on taking category 3 people out of compulsory purchase consultations. Let us note again who the real blockers were on these really big projects. They were not the people. It was nothing to do with local communities or the planning profession—I declare an interest as a member of the planning profession—and it was not councils. It was Ministers who left decisions lying on their desks, wrecking the timescales scrupulously followed by other parties in the process, so let us not blame people for politicians’ failures.

There are things to welcome in the Bill, but it hits the wrong target in many important areas, and this is where I must raise some more serious concerns. The detail provided in the changes to national infrastructure projects is good, but it is in real contrast to other areas of the Bill. There are many Henry VIII clauses that give sweeping powers to the Secretary of State and a democratic deficit is becoming a serious concern. For all that we welcome the aim to deliver homes, the Bill takes aim at communities, when we should be encouraging and empowering them to deliver and create the homes and places we want to see. I say again that racking up permissions—we already have a staggering 1.5 million homes without permission—will not ensure a single one gets built. We need to tackle the failure to build out of permissions granted by taking back the land or further limiting the lifetime of permissions. “Use it or lose it” needs to be the message.

Unless we deal with the supply chain issues and the lack of skills, we will have even more blockers on development.

[Dan Tomlinson (Chipping Barnet) (Lab)]

How does the hon. Gentleman square his support for getting more homes built and helping children who are living in temporary accommodation with his opposition to 250 new homes in his constituency, which he announced online just this month?

[Gideon Amos]

I am absolutely delighted to be supporting thousands of new homes across my constituency. The population of my constituency has gone up almost 10% over the past 10 years and I have supported thousands of those new homes, as have my Liberal Democrat colleagues on the planning committee who voted through all those permissions. If occasionally a smaller development in the hon. Gentleman’s constituency is not right, I would expect him to oppose it, just as I would in my constituency. I believe Members across the House have done so.

By giving more powers to communities, a community-led approach could actually increase supply. It is time, for example, to give councils the power to end Right to Buy in their areas. They cannot fill the bath, in terms of providing council houses and social homes, if the plug is taken out and they are forced to sell them off as they have done over the preceding decades. Through proper planning, we also want communities in control of how many holiday lets are allowed in their area, so that homes are not swallowed up that could otherwise increase the supply of affordable housing. That is not in the Bill and should be.

Mandating renewable energy such as solar panels on roofs, as my hon. Friend the Member for Cheltenham (Max Wilkinson) articulately argued for, would put people and local communities in control of the bills coming from their pockets.

Growing our economy, sustaining nature and building new homes are not mutually exclusive. They can work together. There are so many examples of how they can work together. For example, decent gardens have more biodiversity than many rural areas. Community-led decisions very often bring the best results, with residents’ infrastructure needs addressed and development shaped around green spaces and sustainability. To unblock homes, the Government need to do two key things instead of taking aim at ordinary people: first, unlock the infrastructure we need, including GPs, transport, green spaces, green infrastructure and water connections; and, secondly, fund the social homes that have been so sorely lacking. Since social housing disappeared as a meaningful proportion of housing supply and social housing targets fell away, this country has never been able to keep pace with demand. Our target is 150,000 per year. I hope the Government will provide a target of their own for social homes; so far, nothing has been said on that either. Invest in those two things, as history has taught us, and the number of homes we could provide would be almost unlimited.

Meanwhile, in communities like my own—where the 2,000-home Orchard Grove development in the west of Taunton, which I support, is taking shape—the reality is that while many people want to see new GP surgeries, developments are held back by the fact that we often cannot get GPs to staff the surgeries where they are being built.

We want to see a Bill about communities leading in planning and development. Instead, the Bill is part of a growing trend that is taking powers away from local communities. It takes a big step in that direction by allowing the Secretary of State to override planning committees and enabling national schemes of delegation that allow Whitehall to dictate who makes decisions on a local council—another Henry VIII clause, giving Whitehall unlimited power to rewrite the standing orders and constitutions of councils up and down the country. That cannot possibly sit right with anybody who values our proud tradition of local government that is independent of central Government. Consultation is sidelined elsewhere, too. Sport England will no longer have a voice to protect playing fields, and people subject to compulsory purchase orders will no longer have the voice they had before.

If the Government believe that local is the problem and that planning committees are the blocker, let us take a quick look at the actual figures. Councils approve more than 85% of planning applications, with some studies putting that figure even higher—closer to 90%. Councillors of all parties are not blocking development; they are enabling 90% of permissions to go through.

Planning Committees: Reform

Dan Tomlinson Excerpts

Monday 9th December 2024 Commons Chamber

[Matthew Pennycook]

I refute entirely the hon. Gentleman’s claim that the changes represent a loss of control. I encourage him to read the paper, which is about ensuring that decisions are taken by the right local, experienced—professional or elected—members as is appropriate. He and I have had this conversation about second homes many times before. He knows that we are looking and are interested in what additional powers we can give local communities to bear down on the negative impacts of excessive concentrations of short-term lets and second homes. We want to give local communities more power to tackle some of those problems, not less. The proposals in the working paper are in line with that general sentiment.

[Dan Tomlinson (Chipping Barnet) (Lab)]

I thank the Minister for his work on this and other areas to boost growth across the country for families in my constituency and elsewhere. I note that this weekend the Leader of the Opposition met her Canadian Conservative counterpart —a Conservative who has embraced planning reform and pro-growth measures and who is gaining rapidly in the polls, as far as I can see. Does he agree that it is interesting to see Conservative Members taking an entirely different approach, opposing sensible changes that would support growth in this country and sticking with chaos in the planning system, rather than stability, which is the foundation for economic growth?

[Matthew Pennycook]

My hon. Friend is right. These are sensible, proportionate changes to streamline the delivery of housing across the country—housing that we desperately need. If the Conservatives want to put their heads in the sand and resist reform in this area, all they will be doing is digging their long-term electoral grave. The people of this country want good homes and good neighbourhoods to live in. That is what we are determined to bring forward.