Local Government Finance

David Simmonds Excerpts

Wednesday 17th December 2025 Commons Chamber

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

It is no surprise that the Government sought to sneak this consultation out with the minimum level of attention, proposed, as it was, for simply a written ministerial statement at the last possible second. We can all see that poverty is rising, driven by a shrinking economy and rising unemployment, combined with inflation running at 3.6% and higher energy bills. Rising business rates are crippling our businesses, and local communities everywhere are feeling the pressure created by this Government’s choices.

How does the settlement help our councils to deal with all that? First, it assumes that working people—all people—will pay higher taxes everywhere. We should not misunderstand the Minister’s words on core spending power. The settlement enshrines an assumption that taxes will rise to the maximum possible extent everywhere, with fees and charges for parking, libraries and everything else following the same trajectory. Even if the inflation target of 2% is reached—which seems unlikely given that it is currently at 3.6%—the increase represents a 1% uplift for local government during the whole life of this Parliament, and that sector was left £1.5 billion worse off by the rise in national insurance contributions alone.

Resources at a local level are going backwards. This is a settlement that punishes efficiency, with those councils that deliver the best value for money being raided to bail out the more spendthrift—and I am sure we can guess which parties tend to run those councils. It is a settlement that introduces new, higher taxes on hospitality—voted for by every party in this Chamber besides the Conservatives—bearing down on investment and opportunity. It brings in a homes tax on more expensive homes—money that goes to the Treasury, not councils. In the Red Book, that is estimated to cost the Government a net £335 million due to the damage it does to the housing market. Only this hapless Labour Government could bring in new taxes that actually cost the Treasury money—and here they go again.

This settlement repeats the fallacy that poverty is the only driver of council costs. The average English local authority delivers more than 800 different services. Our rural coastal areas, and anywhere else with lots of retirees, face the high costs of adult social care but do not necessarily score highly on indices of deprivation, despite the costs being driven by statutory duties. The undertaker Prime Minister is ushering many councils towards their financial doom. As this Government hammer Wychavon and Stratford-on-Avon, they are also hammering Ashfield, Dartford, Burnley, Cambridge, Hyndburn, Lichfield and Bolsover, which are among the places worst hit by this financial settlement.

The Government’s detachment from the consequences of their actions is striking, and all while the Prime Minister and the Chancellor dodge the new high-value council tax in their grace and favour accommodation. All this is behind the smoke and mirrors that disguise from our local authorities the financial impact. They have been required to carry out their public budget consultations without having had sight of the impact of this settlement.

Let me conclude with some straightforward questions. Will the Minister tell the House when our locally elected brethren will learn the net impact of this settlement on their council tax budgets? When will we debate the impact of the Government’s cuts to SEND capital funding? When will the House have the opportunity to scrutinise their decision to impose exceptional financial support or higher council tax rises to bail out the consequences of their decisions? When will they provide clarity on the impact of their SEND proposals on council budgets? How will the Government use the budgets allocated to the new devolution areas and now snatched back to mitigate the impact of their decisions?

Will the Minister admit to the House that this is a tax-raising, job-destroying, housing-hobbling, rate-raising, service-slashing, community-crippling, election-cancelling settlement that fails even on its intended purpose of shunting resources to politically favoured areas?

[Alison McGovern]

I can hardly wonder at getting that purely political response when I made the perfectly legitimate political point that under the Tories a lot of councils were dealt very bad funding settlements indeed. We do not need to trade political insults to see the libraries closed, the parks left unmaintained and the damage done to councils, but I look forward to discussing this issue with the hon. Member across the Dispatch Box as we move forward, once he has talked to his own councils about the funding settlement they will be receiving.

The hon. Member asked some slightly more important questions, particularly on SEND. He will know that this is primarily a matter of getting the absolute best outcome for our children. The Department for Education will bring forward plans in the new year, and I am working closely with Ministers in that Department to ensure that we get it right. I mentioned some of the details in my statement.

I do not recognise the picture described by the hon. Member on devolution, and I feel confident in saying that nor would the Minister for devolution, my hon. Friend the Member for Peckham (Miatta Fahnbulleh), who is in her place. She announced significant investment for the places affected, and we all look forward to working with areas up and down the country to ensure that our country grows as we wish it to.