Local Government Finance (England)

Debate between Jim McMahon and Liz Kendall

Wednesday 10th February 2016 Commons Chamber

[Jim McMahon (Oldham West and Royton) (Lab)]

I refer Members to my entry in the Register of Members’ Financial Interests. I am a serving councillor on Oldham Metropolitan Borough Council.

I pay tribute to councillors up and down the land for the fantastic work they do in delivering excellent public services right across the communities we are here to serve. Time after time, residents say that they trust local government far more than central Government. Review after review has concluded that local government is the most efficient arm of government—far more efficient than any central Government Department.

However, the term “lions led by donkeys” could not be more apt than when we look at the relationship between central Government and local councillors, who are the frontline in delivering services and often the last line of defence for the communities they are there to serve. For far too long, local government has been subjected to the whims and follies of Ministers who use critical public services as a plaything—as a toy.

In central Government’s armoury, cash is the weapon of choice. As a councillor for 12 years, and as a former council leader representing a community of 250,000 people, I have witnessed and, indeed, implemented settlements passed down by this Government. As demand for support increased, money was taken away, as the link between need and the available cash was being broken.

The Government were warned time and time again that removing money from prevention would only shunt costs on to other parts of government. That is why, for almost every pound taken from local councils in Greater Manchester, the same amount has been shunted across to welfare and health, because the pressures just get moved around the system. That makes things worse for the people we represent, and it saves the Government no money whatever.

[Liz Kendall]

Is my hon. Friend aware that the cost of delayed discharges from hospital is almost £1 billion a year? That could buy more than 40,000 elderly people a full year of home care. How does that make moral or economic sense?

[Jim McMahon]

I absolutely agree. The better care fund had a mechanism for putting money at the frontline to make savings further down the line, but it was completely inadequate for the needs that were there.

The Chartered Institute of Public Finance and Accountancy has placed on record its view that some councils could well fall over. The challenge, of course, will not come from one lone council failing to set a budget; it will come in the courts. As entitlement to basic services such as children’s services, education and social care are taken away, somebody will test that entitlement in court. When the judgment is that their entitlement has unlawfully been taken away, that will send a shockwave through the system that central Government are not fully ready for. At that point, the system may well fall over.

The truth is that the Government do not want to be honest about the true cost of cuts. Most people will accept that adult social care is one of the biggest challenges facing local government and society more generally. Our older population grew by 11.4% between 2010 and 2014, while core funding was being taken away. Age UK estimates that more than 1 million people have unmet care demands. What is the Government’s response? It is lacklustre, weak and pathetic; it simply does not address the social care crisis in this country today.