Local Government Funding

Laura Smith Excerpts

Tuesday 15th January 2019 Westminster Hall

[Preet Kaur Gill]

My hon. Friend makes a really important intervention. The figures are harrowing. I hope the Minister is listening carefully and will respond to Members’ interventions at the end of the debate.

Local government is not homogenous. The service needs of their populations, ability to raise revenue locally and reliance on central grants all differ substantially. Proposed and existing policies such as business rates retention and council tax limits will mean different councils can raise significant amounts, which may not match the spending pressures those councils face.

As academics from Cambridge pointed out in October 2018, the Government’s austerity politics have led to

“a shrinking capacity of the local state to address inequality...increasing inequality between local governments themselves and...intensifying issues of territorial injustice.”

Local authorities vary in the needs of their population for services, their reliance on central grants and their ability to raise local revenue. With the Department planning to introduce 75% business rates retention for all local authorities, and access to public services for citizens increasingly reliant on the local tax base—whereby poorer areas are not as able to provide as many public services or the same quality of infrastructure as areas with healthier, more wealthy tax bases—without a strong redistributive element, the under-investment, or even lack of investment, in communities and the people who live there will see them unable to prosper.

Will the Minister ensure that no council has its funding reduced as a result of a new distribution system? What actions will he take to that end? The National Audit Office has highlighted the dangers of bringing in a business rates retention model that has not been fully tested. Will the Minister commit to making public a full and thorough evaluation of the pilot schemes before committing to any further roll-out?

I could raise any number of areas where Government cuts to local government are causing immeasurable immediate and long-term damage—from homelessness to fire safety, from crime prevention to children’s services and public health. Reductions in any of those areas are not impact-neutral, as they influence and prohibit the capacity to prevent and support. As I was cabinet member for public health at Sandwell Council, I will focus on public health, and I hope my colleagues will pick up on other areas.

Councils’ public health budgets are being cut by £531 million between 2015-16 and 2019-20. The Government are taking with one hand, while, at the same time, putting more money into the NHS. Preventing illness and catching problems early so they do not develop further down the line will save the NHS and social care money, so the short-sightedness of cutting public health funding must be due either to ignorance, or to a political choice to undermine councils’ abilities to improve the health of the public. Which is it?

[Laura Smith (Crewe and Nantwich) (Lab)]

My hon. Friend is making an excellent speech. The underfunding of social care is a travesty in itself, but it also has consequences for our hospitals, including avoidable hospital admissions and delayed transfers of care. Does my hon. Friend share my concern that the cuts to local government funding are far-reaching and could have a profound impact on our NHS?

[Preet Kaur Gill]

My hon. Friend raises an important point. The NHS spends only about 5% of its funding on preventive measures. That just cannot be right. As she rightly says, social care costs will soar, and that makes no sense at all.

The Government have announced that they will phase out the public health grant after 2020-21. Instead, they expect business rates retention to entirely fund public health spending. Health inequalities will increase. While they have proposed some kind of top-up system, as with many areas concerning local government, it is unclear how that would work and to what extent that top-up would support the local authorities that need it.