Local Government Funding

Jim McMahon Excerpts

Tuesday 15th January 2019 Westminster Hall

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

Thank you, Mr Walker; it is a pleasure to serve under your chairmanship. I thank my hon. Friend the Member for Birmingham, Edgbaston (Preet Kaur Gill) for securing this absolutely critical debate at such a critical time, as local authorities enter their budget-setting cycle. The council meetings will take place over the coming months, and councils will be forced again, for another year, to make absolutely devastating cuts to their local communities.

That is what this is about. When we talk about council cuts, it does not gain a lot of interest, but when we talk about people and communities, the impact on the future life chances of our young people and the way older people are cared for, it absolutely matters and is crucial to our communities. In truth, the fabric of our communities—the very foundation on which the Government are trying to rest future English devolution—is fragile and near breaking point.

There has been passion in the room today: 16 speakers on the Opposition Benches and four speakers on the Government Benches, including the Minister, who will speak shortly. That shows the real interest in the issue. None of us comes to Parliament to make our communities worse off. We have heard the desperate pleas from hon. Members who really care about the impact of the cuts on their communities, not for political advantage or to try to embarrass the Government, but because we live in our communities and see the impact on our neighbourhoods: the lack of funding in our schools, the effect on all those who cannot get the social care that they need, and the young people who have been denied the best possible start in life because children’s centres are taking cuts or being closed entirely.

One of the Minister’s colleagues has said that the way to revive our high streets is to open libraries on them, when hundreds of libraries are closing every year because the money is just not in the system. We need radical change and radical reform, because quite frankly, we have seen tinkering around the edges far too often, and that does not get to the crux of the issue. The crux of the issue is this: council tax and business rates have a role to pay—they are important property taxes—but both have limitations and will be pushed to breaking point if the Government do not do something.

Council tax is a hugely regressive tax. It takes 7% of low-income families’ incomes, compared with just over 1% of higher-income families’ incomes. The more pressure that is applied to council tax, the greater the pressure that is applied to low-income families. Time and again, the Government duck their responsibilities to provide central Government funding to support local communities, and the burden falls on council tax payers. Council tax will again be increased this year to the maximum level of 6%. On top of that, more money is required to go to the police, and in the case of combined authorities or mayors, even more money is applied to that precept as well, because the Government are walking away, saying, “Well, it’s not our problem,” when it is a problem absolutely of the Government’s making. Those are political choices.

It was absolutely right that austerity meant that every Department had to take its fair share of cuts, but the evidence says that local government has lost 800,000 members of its workforce—it is at its lowest level since comparable records began—while the central Government workforce figure is at its highest level since comparable records began. That is not a fair distribution of cuts or austerity. Local government continues to take the pain and the burden.

Many important points have been made today and I would love to go through the list of hon. Members who spoke. One thing that inspires me about Parliament is just how rooted in community our parliamentarians are—particularly Labour parliamentarians. I congratulate my hon. Friends on giving their communities a voice. The Minister, who is respected in local government—I am not trying to make a ding-dong match out of this, some real questions need real answers—has an opportunity to set out his stall, to say what he stands for and what he believes in, and to stand up for the pressures that local governments face. Any Minister at the Ministry of Housing, Communities and Local Government who presided over a local government family that can barely afford to make ends meet would not be fulfilling their responsibilities.

[Mr Charles Walker (in the Chair)]

Thank you. I will call Ms Gill to make her final remarks at fifteen seconds past four. I call the Minister.