Local Government Finance

James Wild Excerpts

Wednesday 11th February 2026 Commons Chamber

[James Wild (North West Norfolk) (Con)]

This settlement is supposed to deliver fair funding; that is what the formula says on the tin, but it fails the Ronseal test. Norfolk’s core spending power in the first year of the settlement is lower than the national average, and the largest increases in core spending power are going to urban authorities. This simply fails to recognise the needs of large rural counties such as Norfolk. The County Councils Network’s assessment is that rural counties and unitaries face the highest pressures, collectively amounting to £7 billion of costs by 2028-29.

[Natasha Irons]

I appreciate the hon. Member’s concerns. My constituency is an outer-London borough that has long been deemed as having inner-London support through finance, and it has inner-London problems—it is not particularly leafy, and deprivation is tough and takes a massive toll on our councils. Does he understand that addressing deprivation, the cost of housing and things like temporary accommodation are crucial for places like mine?

[James Wild]

Indeed. I am sure that if the hon. Lady catches your eye, Madam Deputy Speaker, she will elaborate on that.

Here is my point. Perhaps the kernel of the unfairness is the lack of recognition of remoteness and its impact beyond the adjustment for adult social care. It has been removed from most of the formulae—

[Antonia Bance]

Will the hon. Member give way?

[James Wild]

I will not give way; lots of people want to speak.

This is a serious cost pressure on rural authorities that the Government have chosen to ignore. Of course, this has been compounded by the removal of the rural services delivery grant in 2025—the loss of funding that had been put in place specifically to acknowledge the high cost of rural service delivery. That was a political choice made by a very political Secretary of State.

People in Norfolk can see in plain sight how this Government view rural areas, in the light of the farm tax, the lowering of the bus funding that the previous Government had put in place, and the scrapping of road and rail schemes in our area. I ask the Minister, who is not currently in her place—I hope the Whip on the Front Bench will make a note of my question—why Ministers rejected the evidence that Norfolk and other rural authorities submitted about the additional costs that they face and the importance of remoteness.

After remoteness, there is the recovery grant, which is supposed to be a one-off formula intended to give local authorities the funding they need. The formula was meant to be replaced, but the Government have decided to continue it for the next three years. However, there is no funding for Norfolk county council, despite the allocation, and the additional element of the final settlement, supposedly being targeted at upper-tier authorities—only Labour upper-tier authorities, it seems. It is little wonder that the Institute for Fiscal Studies said:

“Maintaining…allocations of the recovery grant does not look like a principled decision”.

I think that says it all. The policy is designed to shove all funding to Labour councils. Let us be clear: this is about shifting resources away from rural areas and into unitaries.

[Blake Stephenson (Mid Bedfordshire) (Con)]

I declare an interest: I am a Central Bedfordshire councillor. Central Bedfordshire will have to find £17 million off the back of this so-called fairer funding formula. Does my hon. Friend agree that that is nothing short of pork barrel politics?

[James Wild]

I agree. The figures simply bear that out. As a result of the settlement, council taxpayers in Norfolk—it is probably the same for my hon. Friend’s constituents—will bear the brunt through much higher council tax. Maximum council tax increases are assumed for the full three years of the settlement.

Let me touch on internal drainage boards, which are responsible for managing water levels and reducing flood risk. They play a vital national role in protecting key areas, including the prime agricultural land that is so important for our food security; yet the cost of IDBs falls on council taxpayers. In the borough council of King’s Lynn and West Norfolk, 40% of council tax goes towards IDB levies—costs that other local authorities do not face. Funding should reflect the nationally important role of IDBs. Additional support was introduced by the previous Conservative Government. It has been continued by this Government, but they are not uprating it with inflation to take account of the high energy costs that IDBs pay. We do not know if that support will continue in future years. If it does not, will the Minister commit to working with the local and district authority groups that have been set up precisely to find an equitable solution?

Of course, Norfolk is losing out further still because of the Labour Government’s decision to cancel the Norfolk and Suffolk mayoral election and the county council election—two political choices with which I fundamentally disagree. Not only have our elections been scrapped, but my constituents—and those in Suffolk—were due to benefit from an annual investment fund of £37.4 million a year, which the Government have now cut for Norfolk. We will lose out on £48 million in the next two years. Why? Because of decisions taken by these Ministers. It is another sign that this Government neglect the people of Norfolk.

I welcome the announcements on SEND deficits, but it is clear overall that this is not a fair funding settlement. There is an over-reliance on council tax increases for my constituents, there is no recognition of the true costs that rural authorities pay, and ministerial decisions will lock in inequalities for years to come. The Government should think again.

--- Later in debate ---

[Alison McGovern]

The right hon. Gentleman has had ample time to contribute, and while I would normally give way with gusto and have a bit of political knockabout with him, today is not the day for that.

I would like to take this opportunity to thank the right hon. Gentleman and everybody else who has contributed today and also to thank those who contributed to the consultation on the provisional settlement and the Members who made representations to me directly. There could be no quick fixes. We cannot undo over a decade of damage overnight, but the settlement we are discussing today is our most significant move yet to make English local government more sustainable, and I am committed to going further in coming years to fix the pressures our councils are facing. The Secretary of State set out the various mechanisms that we are employing to do that in his opening speech. This Labour Government have backed local governments through action, and since coming to power we have made available a nearly 25% increase in core spending power in ’28-29, worth £16.6 billion.

I shall briefly turn to the points Members made. The hon. Member for Taunton and Wellington (Gideon Amos) relayed the situation with regard to flooding on the Somerset levels. I send my support to his constituents and will work with the Flooding Minister, my hon. Friend the Member for Kingston upon Hull West and Haltemprice (Emma Hardy), as required. The Chair of the Select Committee, my hon. Friend the Member for Vauxhall and Camberwell Green (Florence Eshalomi), and the former Chair, my hon. Friend the Member for Sheffield South East (Mr Betts), told me to be bold and I will try, but I look forward to their support in persuading all our colleagues in this place to vote for whatever bold solutions we come up with. Members including my hon. Friends the Members for Hartlepool (Mr Brash) and for Croydon East (Natasha Irons) and the hon. Member for Fylde (Mr Snowden) talked about failures in children’s care, and I feel sure that we will work together on that.

Many Members talked about their experiences of councils struggling yet often achieving, despite that struggle, to provide great innovative services on lean budgets, and we applaud them all for that.

[James Wild]

Will the Minister give way?

[Alison McGovern]

I am determined not to give way, if that is okay—I think we need to bring this debate to a close. [Interruption.] The hon. Member for North West Norfolk (James Wild) asks me about remoteness from a sedentary position. I have discussed this issue in detail with many Members on a one-to-one basis, and I repeat that there are other ways in which the settlement accounts for the actual costs of providing services, such as the area cost adjustment and other means. I do not agree with what has been said, but I do not want to detain the House any longer.

I had a wonderful January engaging with many Members across this House on the settlement; it was a fascinating opportunity to hear about the uniqueness of every area. I particularly thank my colleagues from Knowsley, St Helens, Gateshead and Banbury for the way in which they engaged on this settlement and contributed to how it looks today.

I thank all Members once again for their valuable contributions today. The Government are under no illusion about the scale of the challenge that local authorities face as they continue to deal with the legacy of the previous system, but our changes will make a big difference. They will get money to where it is needed most, creating a fairer and evidence-based funding system and—most importantly to me and many others—restoring the link between funding and poverty.

Question put.