Local Government Finance

Debate between Jonathan Brash and Jim McMahon

Wednesday 5th February 2025 Commons Chamber

[Jim McMahon]

I thank my hon. Friend for that question and pay tribute to Salford for its leadership in the work it is doing in many areas of public sector reform in Salford and across Greater Manchester. In the end, if all we do is pay at the back end for a system that, frankly, is broken, we will be paying more and more every single year for a system that is delivering worse outcomes for service users. That is bad for service users and bad for taxpayers, so we must have a more fundamental response and we fully intend to do that.

The multi-year settlements are essential to ensure local leaders have the time and space to plan their budgets. But we will not stop there. We are introducing a fairer system to give councils the certainty and stability they need to go from costly crisis management to long-term prevention and the root-and-branch reform of local public services. Crucially, I can now confirm that core spending power for the sector will be more than £69 billion for 2025-26, a 6.8% cash terms increase on this year. I can confirm that, despite some very difficult choices—there have been choices and trade-offs to make, as there always are—this settlement will mean that no local authority will see a reduction in its core spending power.

[Mr Jonathan Brash (Hartlepool) (Lab)]

I welcome the settlement, which sees a reversal of the past 14 years for Hartlepool, where cumulatively we lost £235 million in a decade. This year, additional grant funding is going up by £10 million, which is hugely welcome. However, there remains the problem of the council tax system itself. In Hartlepool, if you are in a band H property you pay more than £3,000 more than you do if you are here in Westminster. Surely the Minister can agree with me that that is inherently unfair? Will he engage with me and the all-party parliamentary group on council tax reform, which I lead, to bring fairness to towns such as Hartlepool?

[Jim McMahon]

There are, understandably, many criticisms of council tax. It is accepted that it is a fairly regressive tax in terms of the relationship between the ability of a household to pay versus a property’s value, but in the end it is a reliable tax that is understood by the taxpaying public. The framework of council tax will be maintained, in the same way as business rates, but that does not mean that we cannot do more to make it fairer. The best way to make it fairer in this settlement is for the Government to play their part. What we have seen over the past 14 years is that, despite an acceleration in council tax increases, councils have still found themselves impoverished: they cannot raise enough money locally, whatever they do, to fund the demand for local public services. We clearly see the role of the Government as an equaliser to the system. Taking into account the ability to raise tax at a local level, by providing a top-up the Government can ensure that every area gets decent local public services, and we can begin to get some fairness into the system. I take my hon. Friend’s point entirely, however, and I look forward to the work of the all-party parliamentary group.

Local Government Reorganisation

Debate between Jonathan Brash and Jim McMahon

Wednesday 15th January 2025 Commons Chamber

[Jim McMahon]

Agreeing to write off £2 billion of debt at the Dispatch Box would be quite career-limiting, I would say. I can say, however, that the scale of the financial challenge in some areas is absolutely understood and we will work to try and find a solution. We are not yet at the point of announcing that, however.

[Mr Jonathan Brash (Hartlepool) (Lab)]

In Hartlepool, 75% of every penny spent by the council is spent on social care. That is contributing to a burden on council taxpayers in Hartlepool that is far too high. Does the Minister agree that in the wider local government reorganisation, consideration needs to be given to regional collaboration on social care or, indeed, removing social care from local government altogether to ease the burden on council tax payers?

[Jim McMahon]

My hon. Friend will be aware that Dame Louise Casey is conducting a broader review of adult social care for reasons that are well understood by the House. On whether the matter should or should not sit with local government, I will say that where local government really excels is in being local and rooted in the community, in being the deliverer of a public service and in being able to organise at a place level. That does make a difference, and we should not underestimate the impact when done well. We need to make sure that social services are adequately funded for the work they have to do to provide a good level of service for local people.

Oral Answers to Questions

Debate between Jonathan Brash and Jim McMahon

Monday 28th October 2024 Commons Chamber

[Jim McMahon]

We always say that local government is paid for one way or the other: either we pay at the front-end through fair funding being fairly distributed across the country, or we pay at the back-end because eventually the system falls over and we must repair the damage. If we take ourselves back to the coalition years, when austerity first came in, the cruelty was that we did not reform public services, repairing them from the ground up, to get ahead of those system changes. That was a wasted opportunity.

[Mr Jonathan Brash (Hartlepool) (Lab)]

This year, Hartlepool borough council is set to overspend on children’s social care by some £5 million, due in no small part to the outrageous charges levied by private sector children’s homes. What can the Minister do to cap those providers’ charges to ensure that local government can continue to deliver its statutory obligations?

[Jim McMahon]

I recognise that, in large part, children’s services are the funding pressures that are driving council budgets. We cannot forget, though, that behind every one of those numbers is a child who often is not getting the outcomes they need. Far too often what we are seeing in the system is that high costs are not just sending councils to the point of bankruptcy, but delivering worse outcomes for young people. We want to see far more resilience built back into the system, and there are examples today of councils that are building that public sector provision back into the marketplace.