Local Government Funding

Debate between Emma Hardy and Preet Kaur Gill

Tuesday 15th January 2019 Westminster Hall

[Preet Kaur Gill]

My hon. Friend raises an important point, which I will touch on later.

Not only was that devastatingly large amount taken across the country, but the spending cuts hit more deprived areas far harder than other areas, a point which I will come back to later. The Government often mock Members asking for more money for a particular cause, but that misses the point. These cuts are not just about money; they are about what the money allows local government to do, or not to do—it is about the services and support that local government can provide to empower communities and support individuals to fulfil their potential.

New research by Unison shows that 66% of local councillors do not think that local residents are receiving the help and support they need at the right time. Does the Minister understand that that is not because councillors and council workers are not working hard enough? Does he agree that the reductions of £16 billion to core Government funding between 2010 and 2020 have led to that situation? Will he make public all the data and analysis his Department have put together on the scale and variation of local responses to cuts, as well as on the impact of almost a decade of austerity on local government, and the inequalities it has reinforced and perpetuated?

What does the Minister say to Lord Porter, the Conservative chair of the Local Government Association? In the most recent copy of First, the magazine for local government—I have a copy that I am happy to share with the Minister—he said:

“Next year will continue to be hugely challenging for all councils, which still face an overall funding gap of £3.1 billion in 2019/20.”

That figure is not what is needed to make progress or to invest further in the future of our families and communities—that is just to stand still. Does the Minister agree with Lord Porter?

I know that universal credit is not the Minister’s brief, but I hope he will take the opportunity to discuss his understanding of the problems that universal credit is causing for citizens and therefore for local government. What analysis has the Department done of the impact on local government of rent arrears from council tenants on universal credit? Residential Landlords Association research reveals that the number of private landlords with tenants receiving universal credit and going into rent arrears rocketed from 27% in 2016 to 61% in 2018, with the average amount owed in rent arrears by the universal credit tenant rising 49% between 2017 and 2018. If there are similar findings for council tenants—there is no reason to think universal credit impacts differently on council tenants from those in private accommodation—local authorities will be put under further pressure by a failed Government initiative.

This is not party political. This is not about Labour councils wasting money, or Conservative councils being frivolous. Lord Porter said:

“Councils can no longer be expected to run our local services on a shoestring.”

Does the Minister think that those Conservative councils that have gone bust or reduced services to the legal minimum have received enough funding? Will they receive enough funding through the latest funding settlement? If so, does he think that they went bust because of their own failures—and will he outline those failures?

When the Prime Minister took office, she promised that the mission of her Government would be to tackle injustices. Since 2015-16, the most deprived councils have seen a cut of 2.8%, while the least deprived have seen a small real-terms increase of 0.3%. That is not tackling an injustice—that is embedding and reinforcing one.

[Emma Hardy (Kingston upon Hull West and Hessle) (Lab)]

My hon. Friend is making a fantastic speech. In Central ward in Hull, more than 47% of children live in poverty. That is one of the highest rates of poverty in this whole country. More people in Hull claim jobseeker’s allowance than the national average. At the same time, there have been £120 million of cuts. Does my hon. Friend agree that that could never be justified by any Government that are serious about giving every child equality of opportunity?

[Preet Kaur Gill]

My hon. Friend makes a really important intervention. The figures are harrowing. I hope the Minister is listening carefully and will respond to Members’ interventions at the end of the debate.

Local government is not homogenous. The service needs of their populations, ability to raise revenue locally and reliance on central grants all differ substantially. Proposed and existing policies such as business rates retention and council tax limits will mean different councils can raise significant amounts, which may not match the spending pressures those councils face.

As academics from Cambridge pointed out in October 2018, the Government’s austerity politics have led to

“a shrinking capacity of the local state to address inequality...increasing inequality between local governments themselves and...intensifying issues of territorial injustice.”

Local authorities vary in the needs of their population for services, their reliance on central grants and their ability to raise local revenue. With the Department planning to introduce 75% business rates retention for all local authorities, and access to public services for citizens increasingly reliant on the local tax base—whereby poorer areas are not as able to provide as many public services or the same quality of infrastructure as areas with healthier, more wealthy tax bases—without a strong redistributive element, the under-investment, or even lack of investment, in communities and the people who live there will see them unable to prosper.

Will the Minister ensure that no council has its funding reduced as a result of a new distribution system? What actions will he take to that end? The National Audit Office has highlighted the dangers of bringing in a business rates retention model that has not been fully tested. Will the Minister commit to making public a full and thorough evaluation of the pilot schemes before committing to any further roll-out?

I could raise any number of areas where Government cuts to local government are causing immeasurable immediate and long-term damage—from homelessness to fire safety, from crime prevention to children’s services and public health. Reductions in any of those areas are not impact-neutral, as they influence and prohibit the capacity to prevent and support. As I was cabinet member for public health at Sandwell Council, I will focus on public health, and I hope my colleagues will pick up on other areas.

Councils’ public health budgets are being cut by £531 million between 2015-16 and 2019-20. The Government are taking with one hand, while, at the same time, putting more money into the NHS. Preventing illness and catching problems early so they do not develop further down the line will save the NHS and social care money, so the short-sightedness of cutting public health funding must be due either to ignorance, or to a political choice to undermine councils’ abilities to improve the health of the public. Which is it?