Local Government Funding

Jim Fitzpatrick Excerpts

Wednesday 27th March 2019 Westminster Hall

[Jim Fitzpatrick (Poplar and Limehouse) (Lab)]

It is a pleasure to see you presiding today, Mrs Main, and to follow my hon. Friend the Member for Colne Valley (Thelma Walker). She made a fine opening speech, and I congratulate her on securing this important debate. Attention has already been drawn to the imbalance of numbers in attendance, which speaks volumes. It is not rocket science to work out why, but perhaps the Minister, who is an honourable gentleman, might comment on the numbers attending the debate as well as responding to it.

I will make only a short contribution and refer to one briefing from my local authority of Tower Hamlets, and from our excellent Mayor, John Biggs, and the very respected cabinet member for resources, Councillor Candida Ronald. Colleagues will know that Tower Hamlets is one of the poorest boroughs in the country, but it has a rich past, with the Tower of London, Cable Street and the docklands. It has an exciting future as a key part of London’s regeneration engine.

Tower Hamlets Council voted to support the “Breaking Point” national campaign, which was set up to call for the Government to properly fund local authorities. Tower Hamlets core funding this year is £148 million lower than in 2010, which is a staggering reduction of 64%. Since 2010, around one third of the council’s staffing posts have gone. Future cuts mean that Tower Hamlets must save a further £44 million from its budget over the next three years. Will the Minister advise us how that might be achieved?

While the council has faced cuts from central Government, our borough’s population and demand for services have continued to grow. Like other councils, Tower Hamlets continues to face a crisis in adult and children’s social care and special educational needs funding. Demand is increasing. Last year alone, the council received almost 4,000 fresh requests for adult social care support—up 8.7% on the previous year.

At the Tower Hamlets full council meeting on 20 March, Mayor Biggs attacked the Government for

“putting frontline services at risk.”

An important consideration is how austerity has hit other local services such as policing, and the effect on the council’s priorities. We have lost more than 200 police officers from the streets of Tower Hamlets. The council’s response was to step in and invest £3 million to pay for some of its own officers. Regrettably, that is just one area in which Tower Hamlets Council was forced to cover the gap created by this Government, but it cannot be expected to replace everything.

On fair funding, Tower Hamlets responded to the Government’s consultation and raised the following concerns. The first is that it has less emphasis on deprivation. Secondly, it fails to factor in the impact of additional population, which is key in Tower Hamlets, where more than 200,000 commuters travel to each day. Thirdly, fair funding has a notional approach to council tax income and does not give an actual figure, which would significantly penalise authorities that have worked hard to keep their council tax rates low. Finally, the cost of homelessness and temporary accommodation does not adequately form part of the formula, which will impact on high-cost areas, especially London.

Even Tory councils are struggling to cope. It is well known that Northamptonshire County Council effectively declared bankruptcy last year. Nationally, councils now face plugging a further funding gap of £7.8 billion by 2025 just to keep services standing still and meet additional demand. I hope the Government accept that there is a crisis, even if it is not geographically universal. The Government might claim that the era of austerity is over, but it is not even in sight. We need them to step up and recognise that this is a problem.