Covid-19: Funding for Local Authorities

Danny Kruger Excerpts

Tuesday 24th November 2020 Westminster Hall

[Danny Kruger (Devizes) (Con)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I am grateful to the hon. Member for Bethnal Green and Bow (Rushanara Ali) for giving us the opportunity to pay tribute to council staff across the country.

The whole country has been knocked sideways by the pandemic, and frontline workers in all sectors and industries have stepped up in the most tremendous way, and that really does apply to councils and council workers. They have faced huge costs and huge reductions in their income because of the crisis, but the real effect is not financial. It is on the staff who deliver services for councils. I want to acknowledge that. When we were having the daily press conferences at 5 o’clock, the leader of Wiltshire Council, Philip Whitehead, said to me in despair one evening, “Can we please have the press conferences in the morning,” because all those announcements were coming out and his staff were having to work right through into the middle of the night to respond. That made me realise how hard council staff work, not only out in communities, but in council offices as well.

I want quickly to acknowledge the financial commitments that the Government have made to local authorities through the crisis: nearly £5 billion of non-ring-fenced money, specific grants for a range of special activities that councils have to perform, £6 billion in cash-flow facilities to help councils, and compensation for the loss of fees they have incurred. However, I acknowledge that councils are still out of pocket, and we need to think about how that gap will be met in the months and years to come.

In Wiltshire we have a prudent council that has balanced the books in recent years. It has received additional money from the Government—£15 million is due. That is still to be confirmed, but we trust that it will arrive. Also it has been possible to increase the council tax through the social care precept, which, again, is to be confirmed. We understand and hope that it will be allowed. The authority still faces a budget gap of nearly £30 million, and I recognise that it will be a long task to match and meet that. I hope more money can be found.

I want to finish with two more strategic solutions that all councils have to grapple with, and opportunities that they can take. The first is in reform of social care, which makes up the bulk of spending by local authorities—65% in the case of Wiltshire. I am not going to get into a debate on how to reform social care, but clearly our model is not working and we need to fix it and the financing of it. I support the call by the Health and Social Care Committee and the Housing, Communities and Local Government Committee in the last Parliament for a new model of social insurance to fund social care, which will enable us to get on top of costs.

Finally, I want to pay tribute to a Labour council, Wigan, which, over the last 10 years, has faced all the challenges of austerity, and coped with them by doing a deal with the community of Wigan—the people of Wigan. It kept frontline services open and cut its own back office. It kept the frontline services open by trusting communities and working properly in partnership. That is the model for all of us.