Local Government Finance

Kevan Jones Excerpts

Tuesday 5th February 2019 Commons Chamber

[Mr Kevan Jones (North Durham) (Lab)]

Let me start with a couple of facts: there has been a 49.1% reduction in Government core funding to local authorities and a 28.6% real terms reduction in spending power, which means Government funding plus local council tax, since 2010; and there has been a 32% real-terms reduction in spending on non-social care areas. Those are not my figures, but those of the National Audit Office.

My hon. Friend the Member for Liverpool, West Derby (Stephen Twigg) mentioned the Centre for Cities report, which shows that those cuts have not been fairly distributed; they have been targeted at northern cities and northern councils. Some of the more affluent areas, such as Wokingham in Surrey, have had no reduction in core spending at all. This Government have used local government funding like a pork barrel, putting it into areas that support the Conservative party and penalising areas that do not. Since 2010, Durham County Council has lost £224 million in its budget, and it is predicted that in the next four years it will have to slash another £39 million. That is being done by a Conservative Government, but I do not want to let the Liberal Democrats off, because they also signed up to these cuts when they were in coalition.

On the ability to raise finance, Durham has a similar problem to that outlined by my hon. Friend the Member for Liverpool, West Derby, as 55% of its properties are in band A. The more core funding from national Government is cut, the more Durham County Council’s ability to raise funding is limited. In addition, Durham can raise only a limited amount through the retention of business rates compared with what can be raised in Westminster and other places. So the future does not look bright for Durham County Council, a well-run authority, under this Government’s proposals. If we look at core spending power per dwelling, which is what the Government are looking at, we see that the national average is £1,908 whereas the figure for Durham is £1,727 and Surrey’s figure is £2,004. Areas of deprivation in Surrey would not even register on any type of social index compared with what we have in Durham, a former industrial area, which just shows us the way in which this Government have used the system to reward their own areas.

My hon. Friend the Member for Sheffield South East (Mr Betts) raised the issue of public health funding. If the Government go forward with the notion of the fair funding formula—that should be getting done under the Trade Descriptions Act—Durham County Council is forecast to lose some £19 million, or 35% of its public health budget. That is happening in some of the most deprived communities anywhere in the country. It is a rural county, but it has deprivation on a par with some inner cities and parts of the former coalfields. How can it be right that under that formula Surrey would gain, and deprived areas such as County Durham would lose? The Government are taking political decisions about where the funding goes. There is this notion among those on the Government Benches that somehow every single council is the same, but I am sorry, they are not. The demands on my local council and councils such as Liverpool in respect of adult social care and looked-after children are a lot more severe than the demands in some of the areas that are getting extra funding.

In her statement on Europe on 10 December, the Prime Minister said:

“It means working across all areas to make this a country that truly works for everyone, and a country where nowhere and nobody is left behind.”—[Official Report, 10 December 2018; Vol. 651, c. 25.]

I am sorry, but the policies of this Government over the past eight years have run counter to the Prime Minister’s promise. That just shows how hollow her words are.