Financial Distress in Local Authorities

Jim McMahon Excerpts

Thursday 1st February 2024 Commons Chamber

[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.

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

I thank the Chair of the Select Committee for what I think is a very important report. I also thank the Committee members who have spent a significant amount of time getting under the skin of the issue. First, does he agree that, ahead of the scheduled finance settlement next Wednesday, the Government need to finally take responsibility for the financial crisis in local government? Secondly, does he share my concern that the breakdown in local government audit is contributing to the removal of the early warning system?

[Mr Betts]

I thank my hon. Friend for that question. Yes, it certainly is doing so. I have just produced a report about local government audit. There is a real problem there. If accounts have not been audited for three years, as in most cases, but probably longer in other cases, how on earth do we know what is happening in local council finances? Certainly, getting local audit on an even keel by the end of this year is very important, but where accounts are qualified, as they will be, councils should not be blamed for that; it is the problem of the local audit system, and we really must sort that out.

--- Later in debate ---

[Mr Deputy Speaker]

I cannot do it quicker than that, can I?

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

You have set the bar now.

[Mr Deputy Speaker (Mr Nigel Evans)]

It is a very high bar. I should quit now. Thank you very much everybody.