Local Government Reorganisation

Florence Eshalomi Excerpts

Wednesday 15th January 2025 Commons Chamber

[Madam Deputy Speaker (Caroline Nokes)]

I call the Chair of the Housing, Communities and Local Government Committee.

[Florence Eshalomi (Vauxhall and Camberwell Green) (Lab/Co-op)]

I thank the shadow Minister for securing this important question; he has highlighted some key issues.

Sadly, we know that our councils are at breaking point. The Select Committee’s first major inquiry is to look at local government finances, and we look forward to engaging with the Minister on it. It was reported that local authorities in England were facing £77.5 billion-worth of debt by the end of last year. Much of that is debt to central Government or from borrowing. Sadly, because of that, vital frontline services such as housing and social care are at breaking point. Residents cannot afford to be caught up in buck-passing or discussions about accountability if this reorganisation goes through, so can the Minister assure the House that residents will still have the same level of power and scrutiny over vital services during the reorganisations?

[Jim McMahon]

I thank the Chair of the Select Committee for those questions. What I hear from residents and even from councillors in two-tier areas is that, more often than not, local residents have no idea which council to go to in order to get the answers they need on local services. Reorganisation will provide efficiency savings in organisational costs that can be directed towards frontline services, which we believe are the priority for taxpayers. There should not simply be the cost, in many cases, of such services existing. We also believe that it is right, from a democratic accountability point of view, that residents have a clearer line of sight on which body to hold to account for local decisions.

On the point about local government finance, which we absolutely understand and accept, we have worked hard and I would say we have been relatively successful on rebalancing the funding crisis in local government. We have done that by providing £5 billion of new money, taking the total allocation to £69 billion. We cannot undo 14 years of damage in six months—it has been damaging over the 14 years—but we are now bridging to that multi-year settlement where we can really begin to repair the foundations. I think we have made progress on that.