Financial Distress in Local Authorities

Imran Hussain Excerpts

Thursday 1st February 2024 Commons Chamber

[Mr Betts]

I thank my hon. Friend for his question. We clearly set out that the problem is due to a cut in funding. That is the result of a reduction in the central Government grant, with council tax increases only partly, but not wholly, replacing the funds. That issue needs addressing if we want councils to continue not only performing social care functions, but doing everything else that our communities rely on. We need fundamental reform; that is what we are calling for in the longer term. That is a challenge for any Government—I look at both Front Benches here—because if we reform local finance, some people will have to pay more and some will have to pay less. I always say that those people who pay more never forget about it and continue to blame the Government for years to come. Those who pay less will thank the Government and then forget about it next year. There is always a challenge when it comes to spreading the tax take around differently. But we will have to do it differently, because these council services—not just social care, but the parks, the buses, the libraries, the roads, the environmental services, the planning, and the economic development, which has almost fallen off the scale in some councils—are really important.

[Imran Hussain (Bradford East) (Lab)]

The reality is that 14 years of ideological austerity cuts have left many authorities on the brink of bankruptcy. From 2015 to now, Bradford Council has had £100 million-worth of cuts, which has left our services decimated and our communities devastated and deprived of much-needed services. I thank the Chair of the Select Committee for his report. I particularly welcome the call for much-needed and immediate funding for local authorities. Does he agree that the much-needed funding must be given, and if it is not given, any blame for section 144 notices should lie directly and squarely at the door of this Government?

[Mr Betts]

I thank my hon. Friend for his question. The report says that not every section 144 notice can be blamed on the Government. There will be circumstances in which councils get themselves into difficulty, but what we have said is that there are general problems coming down for councils, which have been created by a shortage of funding. We did make reference to Bradford. Bradford’s problem is the young age of its population—the number of children. Children services are run by trustees appointed by the Secretary of State for Education. That body has demanded from the council an amount equivalent to about 50% of its council budget. We could get the ridiculous situation in which the Secretary of State for Levelling Up, Housing and Communities sends in commissioners to run services to try to find the money to pay the trustees who are appointed by the Secretary of State for Education. That does not seem a great way for local government to operate.