Local Government Finances: London

Helen Hayes Excerpts

Wednesday 26th March 2025 Westminster Hall

[Helen Hayes (Dulwich and West Norwood) (Lab)]

It is a pleasure to see you in the Chair, Ms Lewell. I congratulate my hon. Friend the Member for Leyton and Wanstead (Mr Bailey) on securing this important debate.

I was a councillor in Southwark for six years before I was elected to this place. It is a privilege to serve in local government. Our councils carry the heavy responsibility of delivering local services across a huge range of areas, and they have a unique opportunity to make a real difference in the lives of local residents by delivering vital protections for vulnerable people as well as the services that all of us rely on. I pay particular tribute to my local councils, Lambeth and Southwark, for the work that they did during the covid-19 pandemic and what they have done over the last few years to support residents with the cost of living crisis.

I was elected to my local council in 2010, on the same day that the Tory-Lib Dem coalition Government took power in Westminster. I remember the first meeting of our council, when we were briefed on its financial settlement from central Government at the start of a period of austerity. I remember the shock that descended in the room at the scale of the cuts to our budget as the impact on local services became clear.

We had no idea what was yet to come. For 14 years, the Conservative Government outsourced both the pain and the blame for their austerity programme to our local councils, cutting well over 50% of the local government grant, slashing the affordable housing grant, freezing council rents, reducing investment in the existing council housing stock, and freezing the local housing allowance, driving up homelessness. On SEND—an area in which I take a particular interest as Chair of the Education Committee—the coalition placed almost all the statutory responsibility for delivering services on councils, but took away their ability to deliver new school places directly, driving up home-to-school transport costs and the cost of purchasing places in the independent sector.

There will not be a Member here today who does not see the impact of the housing crisis, and the crisis of temporary accommodation, on our constituents and local authorities. The shortage of homes is driving more and more residents to seek support from their council, and putting more and more into the worst-quality accommodation, which has destabilising effects on families across our city. The Liz Truss mini-Budget had a devastating impact on our councils’ ability to build new homes. Both of my boroughs have ambitious programmes for delivering new homes, but they have had to mothball sites as the cost of materials and labour has been sent spiralling.

On all of these issues and many more, London councils face a perfect storm in their finances, and we urgently need support from the Government. Let me finish with five quick measures that the Government should turn their attention to: raising the local council housing allowance to stabilise housing in London; ensuring immediate investment in small sites owned by councils and housing associations that already have planning consent and can be delivered; addressing the statutory override—there is not sufficient engagement with councils on what the Government plan as they begin to plan for the next financial year—getting housing revenue accounts back on a sustainable footing; and delivering multi-year settlements to give certainty and stability to our councils for the future. I know that our councils have the commitment and determination to keep delivering for our residents, and I call on the Government to support them to do so as a matter of urgency.