Local Government Funding

Ed Davey Excerpts

Wednesday 28th March 2018 Commons Chamber

[Sajid Javid]

I will come on to the local government financial settlement shortly, but if the hon. Lady is so concerned about the resources that local government receives, why did she vote against a real-terms increase for the next two years for local authorities? She can perhaps reflect on that while she waits.

Returning to the reforms that councils are making, some authorities are opting for unitarisation. In Dorset, for example, the nine existing councils will be abolished to create two new unitary councils, generating annual savings of approximately £28 million. I have announced that I am minded to replace the existing five councils in Buckinghamshire with a single council for the area, which could generate savings of £18 million.

[Sir Edward Davey (Kingston and Surbiton) (LD)]

Despite all the efficiency gains that some local authorities can generate, some authorities are in genuine difficulties, as we have seen in Northamptonshire. What advice would the Secretary of State give to Members and council leaders where councils are struggling to balance their budgets and are considering section 114 notices? How should such considerations be linked to Members of Parliament so that we can work together to tackle the difficult situations that many communities are dealing with?

[Sajid Javid]

I do not know whether the right hon. Gentleman was present for the statement I made yesterday on Northamptonshire County Council, but the independent inspector specifically concluded that the situation was not due to a lack of funds but to the mismanagement of funds and other issues. However, the right hon. Gentleman makes a wider point that councils can face certain financial difficulties even if they are managing their finances well, and those councils should rightly make maximum use of the available flexibilities. If they want to go further, they can try to get the support of local people through a referendum. In the longer term, we need a fair funding review, to which the hon. Member for Bath (Wera Hobhouse) recently referred, to ensure that the system distributes funding more fairly. The recently closed consultation received some 300 representations, and will be going through them.