Local Government Finances: London

Daniel Francis Excerpts

Wednesday 26th March 2025 Westminster Hall

[Daniel Francis (Bexleyheath and Crayford) (Lab)]

It is a pleasure to serve under your chairship, Ms Lewell. I need to say at the outset that my wife is employed as a SEND co-ordinator in the London borough of Bexley.

I was a councillor in Bexley for 20 years, including 10 years under the last Labour Government. I hear what the hon. Member for Bromley and Biggin Hill (Peter Fortune) says, but I assure him that we had a very different funding arrangement then—my local authority was not in the position it now is. The hon. Member for Old Bexley and Sidcup (Mr French) is no longer in his place, but he was the deputy leader on the council and I the leader of the opposition when we faced our funding crisis back in 2021. That funding crisis continues to this day.

In our council, reserves have been used to balance the budget for years. That includes the £5 million we needed to balance the budget in the 2018 council election year. Things became worse in 2021, when the council applied for its capitalisation order. It made 15% of staff redundant and had to sell a building for £9 million to fund the redundancy costs. In the period from 2010 to 2015, Bexley went from having the 10th most expensive council tax in London to the 8th most expensive.

At my election speech last year, I pledged to work tirelessly with my Conservative-controlled local authority to deliver for local people and businesses, and I am here on their behalf to make some key pledges about the pressures they face and the pressures we have heard about today.

First, as my hon. Friend the Member for Ilford South (Jas Athwal) said, we face the matter of the fair funding settlement. Demographic changes in outer London and inner London mean that the borough I was first elected to represent on the council 25 years ago is a very different borough today. Parts of my constituency, such as Slade Green and Northumberland Heath, are very different, demographically and in terms of poverty, from how they were then. My council’s position is that council tax should not be a primary driver of increased core spending power, and that we should simplify the assessments and reduce the number of relative needs formulae.

Then there is the public health grant. I have sat there, through budget after budget, as either leader of the opposition or the opposition finance spokesperson, listening to the Conservative leader, Baroness O’Neill, saying that the public health grant for Bexley is the second lowest in London. I am pleased—in fact, I am proud—that, under a Labour Government, Bexley this year has had the sixth-highest public health increase of all the boroughs, but clearly that position remains, and our public health grant remains too low. As I have said, our finances remain in a very difficult position, with a £32 million budget gap next year, which needs to be addressed.

Most worrying is our safety valve agreement. Our safety valve agreement was signed because of the significant overspends in special educational needs, but that will expire next year. We are not currently on course to achieve the requirements in the safety valve agreement and the statutory override. There is potentially £12.8 million at risk. As I have continually said to the Government, we clearly need to resolve that to protect some of our most vulnerable children in next year’s budget, but also residents and businesses across the London borough of Bexley.