Local Government Finance

Helen Morgan Excerpts

Wednesday 7th February 2024 Commons Chamber

[Helen Morgan (North Shropshire) (LD)]

In common with many Members of the House, including 40 Members of the Government Benches who signed a County Councils Network letter a couple of weeks ago, I can report that my local council—Shropshire Council—is cutting services because it is chronically underfunded. I declare my interest as a vice-president of the Local Government Association.

It is disappointing to try to score political points about an issue that is so important and directly affects the lives of so many people. Shropshire Council is run by the Conservatives and, while undoubtedly the Liberal Democrats would make different political choices about how money is spent, there is no getting away from the fact that the issue affects councils of all types, under all parties, because there is a chronic structural funding issue that we need to address. Most people in Shropshire are paying more for less because of our social care costs, which amount to 85% of the budget. No political party will be able to solve that issue without additional help from central Government. There must be recognition of the social care crisis that is overwhelming councils such as mine.

It is worth reflecting on the amount of central Government funding that has been awarded to councils since 2016-17. According to the House of Commons Library, there has been a £5.75 billion decrease in real-terms funding—in Shropshire, that is about £37.3 million—and compared to 2015-16 there is 51.3% less funding per person in Shropshire from central Government. How are we going to stop people paying more for less? I do not have the answer, and I know the leader of Shropshire Council does not have the answer either.

What does that mean for people across the country? Providing fewer services drives inequality of all types. Let us think about the example of swimming pools. The Government have said 276 local authority pools have been closed since 2015, including the Whitchurch swimming pool in my constituency, although we are lucky because that pool is being rebuilt. Many places are not so lucky; people in my constituency may be without a swimming pool for years, but in some places it will be forever. If they cannot get to a neighbouring town, have access to a car or pay to go to a nice private swimming pool, their children will not learn to swim. That fundamental and deep inequality, which we should avoid, is a direct consequence of poor council funding.

Another example in my constituency is that the civic centre in Whitchurch has had to close recently because of issues with reinforced autoclaved aerated concrete and asbestos. The council cannot afford to either rectify or rebuild that civic centre because of the interest on the money they would have to borrow. The amount to be borrowed would be about £7 million, so the interest would be about £750,000 a year. The council should not be in a situation where it cannot provide cultural enrichment or generate economic benefit by bringing people into the town centre because it cannot afford that relatively small amount of additional borrowing for something so basic.

As I mentioned, Shropshire Council is Conservative-run. I have had some constructive meetings with its leader, who has been very open and said that the social care requirements will overwhelm the whole budget in future years unless something urgent is done. No amount of paperclip savings will get the council to the point where it will be able to afford our social care budget in the future. Not only do we have an ageing population and an elderly demographic, but we are also a very rural area. The cost of delivering social care is much higher in such areas—a point to which other Members have alluded—as carers have to travel long distances between each person they are caring for and so pay high fuel costs. It is much more expensive to deliver that social care.

We need to look urgently at the issue of fair funding, taking into account the cost of service delivery. While the £15 million increase in the rural services delivery grant is welcome, the total budget of £120 million will not touch the sides of the social care issues that councils in rural areas face. We urgently need the Minister to work with his colleagues in the Department for Health and Social Care to fundamentally reform how we fund and deliver social care. Until we grasp that nettle, we will not solve the issue of local authority funding with the odd extra bit of money here and there. Someone could end up in crisis just so that fewer councils have to issue section 114 notices.

I wish to touch on children’s social care and special educational needs and disabilities. I had an interesting conversation with a school recently about its budget. I realise that this is not a topic for this Department, but, while the money the school gets to support a child on an education, health and care plan is woefully inadequate—it makes a loss on each child that it is trying to support—the £6,000 cost is crippling the council budget. We need to look at that, but, again I urge the Minister to consider what that means for the lives of individual people. I have a case of a young man who has just turned 16. He has a life-limiting illness and severe disability. The council had to save money and made a policy decision not to fund transport for young people over 16 with special educational needs and disabilities, so his transport funding was cut. Thankfully, we have resolved the situation for that one individual, but there will be thousands of other individuals in the same position across the country, and the impact on the family is devastating. Those young people need to go to a special place during the day for additional care or schooling, and their parents need to go to work. If the transport is not there, it has a fundamental and detrimental impact on the life of that family. We need to acknowledge that and find a way to solve the issue.

The Levelling Up, Housing and Communities Committee report, which has already been referred to by the hon. Member for Sheffield South East (Mr Betts), has said that SEND support is an issue that will lead councils to a cliff-edge of section 144 notices, so we need to address that matter properly.

I also wish to touch on the issue of housing, which affects those district and unitary councils that have to deal with the problem of temporary housing. A couple of weeks ago, Eastbourne District Council organised an event in Westminster; they invited council leaders of all parties and from all parts of the country to discuss the issue of temporary housing and its impact on their budgets. It was a well-attended event, with a good deal of cross-party agreement. However, I was a little disappointed not to see a Minister there to talk to those council leaders.

Eastbourne is spending 48% of its budget on temporary housing. That is not sustainable. Even in Shropshire, which cannot be counted as one of the councils with the most critical issue of temporary housing, we have seen the numbers of those in temporary housing double since 2018. It is important that the Government grasp this issue of social housing—housing for social rent—because people are living in temporary accommodation that is often unsuitable, inadequate, and not anywhere that any of us would be satisfied to live in. The problem could be solved by investing in social housing. We have a plan to deliver 150,000 social houses a year by the end of the next Parliament. To put that into context, it would save, according to the House of Commons Library, £11 billion a year in housing benefit, which currently ends up in the hands of private landlords. Therefore, it makes economic sense to solve this problem, and I urge the Minister to consider that.

I am aware that I have repeated some of the points that other Members have made. Rural councils are struggling to meet the needs of an ageing population and the increased costs of delivering those services. They are struggling to plan not only with this single-year settlement, but with the fact that there is no certainty about what happens after next year. Shropshire Council is trying to save £50 million this year. That means £1 million of cuts every week to services that people have paid more for, and the council does not know what it will cut next year. That is the reality. Dipping into reserves, using some of its capital budget for revenue, or selling off some of its assets are one-stop solutions and do not solve the ongoing structural deficit into the years ahead. Therefore, once a council has sold the library and spent that money on adult social care, what does it do the following year? There is no library left to sell. It is so important that we do not plug these gaps with short-term fixes. We must address the structural problem affecting our councils.

In my meeting with the council leader, I was told that even after a 30% increase in council tax in Shropshire to plug the gap, people would still see a cut in services. Clearly, that is unsustainable and unacceptable.

Let me return to this point about the difference between rural and urban councils. The Rural Services Network has said that urban councils get 38% more than rural ones. However, we should not be having an argument about robbing Peter to pay Paul, because those urban councils are in crisis as well. We need to look at the overall cost of delivering services, and find a solution to deal with the fundamental drivers of increased costs.

I know that the Minister has been a councillor, as have many Members. Regardless of their political party, no councillor has got themselves elected and put themselves on the frontline in order to charge their own residents more and deliver less. We should be considerate of individuals in that situation, and address the fundamental drivers of the crisis affecting councils led by all parties and in all parts of the country. To reiterate, the issues are social care, children with special educational needs and disabilities, and housing. I urge the Minister to work with his colleagues in the relevant Departments to come up with long-term fundamental reform in those areas to solve this crisis.

--- Later in debate ---

[Chris Loder]

I thank the hon. Lady for giving way. I appreciate the point she makes and agree with much of what she says. I just wanted to briefly say—

[Helen Morgan]

On a point of order, Mr Deputy Speaker. I believe my hon. Friend had finished her speech. She was not accepting an intervention.

[Mr Deputy Speaker (Sir Roger Gale)]

Are we saying that the hon. Lady had sat down?