Local Government Funding: Merseyside

Jim McMahon Excerpts

Tuesday 30th October 2018 Westminster Hall

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Mr Hollobone.

I would say that it is also a pleasure to respond to the debate, but it is not a pleasure at all; it is heartbreaking, when we consider the human stories that sit behind the numbers that we have heard today. However, I pay tribute to my hon. Friends the Members for Garston and Halewood (Maria Eagle), for Liverpool, Riverside (Dame Louise Ellman), for Wallasey (Ms Eagle), and for Liverpool, West Derby (Stephen Twigg), my right hon. Friend the Member for Knowsley (Mr Howarth), and my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger), for how they have stood up to represent their communities in the face of absolutely devastating cuts to vital public services.

I should declare an interest as a vice-president of the Local Government Association and I will use some of the LGA’s information in my speech. The truth is that austerity is not over, but it was never going to be over, because as things stand the Government do not believe in strong local public services. We have heard talk today about how the Government do not like a big state. The truth is that the Government actually do not mind a big state, provided that it is a big national state, because the workforce data today says that the national Government workforce is the biggest since comparable records began, compared with local government, which is now at its smallest since comparable records began. The disproportionate cut has not only been to local government; within England the most deprived communities have been the hardest hit. The most deprived communities have seen cuts of about £220 per person, compared with about £40 per person in the least deprived, so austerity has been targeted on local government and then within local government it has been targeted on the areas that could least afford to take the hit, in the way that we have seen.

The Government have completely ignored pleas from the cross-party LGA to do two things: first, stop the in-year cut of £1.3 billion; and, secondly, fund forward the £5.8 billion that would have addressed homelessness, adult social care and children’s services. Let us be honest—when it comes to the £410 million that is being put forward, the majority of people who work in social care are paid the minimum wage. When the national minimum wage goes up in April, those people will rightly be uplifted, but there is a cost to that for the providers. Much of the money announced in the Budget will go not to additional care for over-65s who need it, but to pay people who are being paid the lowest possible rate for providing an essential community service. I do not believe that is fair, the LGA does not believe that is fair and councils across the country do not believe that is fair, but again we see the Government turning a blind eye to it.

We all know where the real impact has been felt; we know the numbers on adult social care and the fact that 1.2 million people who would have had care in 2010 do not get that care today. We know that there are more young people who have been taken into care because they are at risk if they are kept at home, and the cost of that to local authorities. We also know, because the Government have walked away from their responsibilities, that the only way that councils can fund that care is to reduce eligibility and take the money from vital neighbourhood services.

The services that council tax payers see and value that come from the council tax that they pay have been the very services that have been taken away to fund the pressures on people’s services in every community in the country. The public say, “I’m paying more council tax, but the bins are being emptied less often, the local library has closed and the park doesn’t get maintained in the way that it used to.” All those really important services have been affected.

I hoped that when we had a change in Secretary of State that the new Secretary of State would finally have the ear of the Treasury, so that they could finally get a fair hearing and make the case for these vital community services, but it strikes me that one or two things have happened. Either the Ministry did not bother making the case in the first place, or—it could be both these things—the Treasury just does not care about the human impact of austerity and how we have seen it distributed across the country.

What I want to know, what people in the Chamber want to know and what people in England want to know is, what will the Minister do to address such chronic underfunding? It will be on his watch that an older person will die because they do not get the social care they need, or a child will be made to feel vulnerable because they are not getting the protection they need. Where will the money come from?

--- Later in debate ---

[Rishi Sunak]

Thank you, Mr Hollobone. I think the hon. Lady was being snide about the fact that Merseyside is a business rates retention pilot. I am sure that the £54 million that Merseyside will keep this year in additional funding as a result of the pilot is nothing to be snide about, and will make an enormous difference on the ground, helping the people I know she cares about. Many other local authorities across the country would be happy to be one of the pilot areas, so if she thinks that Merseyside would rather not be one and would give up the opportunity to others, I would be happy to talk to her afterwards.

[Jim McMahon]

Will the Minister give way?

[Rishi Sunak]

I will try to make some progress.

Business rates retention is not the only incentive for local growth, as it sits alongside the other support the Government give to local authorities’ wider ambitions through local growth deals. For example, £2 million has been invested to create the first dedicated digital skills academy in the UK, at the City of Liverpool College, and more than £13 million has been invested in a highway infrastructure scheme comprising a series of essential and integrated improvements along the A565 corridor. In sum, the Government strongly support Merseyside’s economic growth, whether through direct investment or business rates retention, and thus enable it to fund services over the years to come.