Ministry of Housing, Communities and Local Government

Layla Moran Excerpts
1st reading: House of Commons
Tuesday 2nd July 2019

(4 years, 9 months ago)

Commons Chamber
Read Full debate Supply and Appropriation (Main Estimates) Act 2019 View all Supply and Appropriation (Main Estimates) Act 2019 Debates Read Hansard Text Read Debate Ministerial Extracts
Layla Moran Portrait Layla Moran (Oxford West and Abingdon) (LD)
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I start by thanking the Backbench Business Committee for allowing this debate on this incredibly important matter. I thank the hon. Members for Hackney South and Shoreditch (Meg Hillier), for Sheffield South East (Mr Betts), for Birmingham, Ladywood (Shabana Mahmood) and for Newton Abbot (Anne Marie Morris) for supporting the application, along with all the members of the Public Accounts Committee. I also thank the hon. Members for Redcar (Anna Turley) and for Warwick and Leamington (Matt Western), who submitted similar applications that have been lumped in with this debate. I also give my thanks in advance to everyone who wants to speak today; I will be as quick as I possibly can.

Local government spending is a story of unsustainability and inequality. According to the Local Government Association, which is holding its conference as we speak, funding to local government and business rates have fallen by £4.1 billion since 2015. Councils have far less spending power, but here is the rub: our local councils are having to deal with a big growth in demand for key services. Taking into account the decrease in Government grants, subsidised a bit by the increase in council tax, our councils have lost nearly a third of their spending power over the last nine years, and key services are suffering.

We all know what that means, at its heart, for the most vulnerable in our communities. Since 2010 the number of homeless households has risen by 33%, the number of looked-after children is up by nearly 11% and the number of people aged 65 and over in need of care has increased by 14%. It is great that we are living longer, but central Government have not grasped the nettle.

The combination of with higher national insurance contributions, the apprenticeship levy and the national living wage means that councils are at breaking point. Given the major stresses on children’s services and adult social care, I will focus on those today, but there are many others, and I look forward to other Members making contributions about their local area.

Jim Cunningham Portrait Mr Jim Cunningham (Coventry South) (Lab)
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For childcare and other local authority services, central Government have shifted funding away from a grant system and on to business rates. Shopkeepers, in particular, are now finding it difficult to carry on their business. Central Government have also failed to deliver on social council housing, which is an indictment.

Layla Moran Portrait Layla Moran
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I thank the hon. Gentleman for his contribution. In fact, spending on services has decreased by 19.2% in real terms, which is not sustainable.

In my local area, Vale of White Horse District Council is a good example. We won the council from the Conservatives in the last round of local elections, and now we have sight of the finances. I am sure this is not unique in the country, but there is not enough money to fund the basic statutory services that the council is expected to deliver. The council is therefore eating into its reserves at an alarming rate. Coupled with that, an outsourcing agreement that was meant to save the council £50 million, and in fact has saved nothing, is projected to cost the taxpayer money. We are in a dire situation in the Vale.

Gareth Thomas Portrait Gareth Thomas (Harrow West) (Lab/Co-op)
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The situation in the hon. Lady’s area is mirrored in Harrow, where the council has lost over 97% of its revenue support grant since 2010 and is really struggling. Is it not therefore particularly sad that neither of the two Conservative candidates for the premiership are talking about these issues at their hustings?

Layla Moran Portrait Layla Moran
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I hope today’s debate will be a clarion call to them and others about the importance of local government in delivering key services.

The resilience of local councils across the country is a focus of the National Audit Office’s work, and it has real cause for concern. The message I have received from my friends at today’s LGA conference is twofold. First, we must remember that councils are multi-million pound companies, yet they do not know where their funding is coming from past next year. How on earth are they expected to plan without any sense of the medium term, let alone the long term?

Secondly, if we are to shift the burden from central Government to local government, income generation needs to be made easier. Across the country, I am not aware of a single council that has successfully used the referendum mechanism to raise council tax. This is not working. We need another way to make sure councils are properly funded.

Alex Sobel Portrait Alex Sobel (Leeds North West) (Lab/Co-op)
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Between 2011 and 2015, according to the NAO, 25% of the central Government grant to councils was cut. Does the hon. Lady regret the role of the Liberal Democrat coalition Government in such a heavy level of cuts?

Layla Moran Portrait Layla Moran
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When I was a candidate, I, too, fought against these cuts, particularly those to children’s services. As the hon. Gentleman knows, I am a teacher, and I was seeing the effect the cuts would have. Interestingly, the data show that some of that was fat that could be trimmed off. [Interruption.] Let me finish. [Interruption.] Just look at the transcripts from the Select Committee on Housing, Communities and Local Government. In 2012-13, there was an increase in efficiency, but I will concede that after that point the cuts should have stopped. The point of today’s debate is to move forwards. Having been elected in 2017, I hope the hon. Gentleman will join me in looking forwards and not backwards.

Layla Moran Portrait Layla Moran
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I am moving on. I am not going to give way.

Clive Betts Portrait Mr Betts
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The hon. Lady just referred to the Select Committee.

Layla Moran Portrait Layla Moran
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I will come back to the hon. Gentleman in just a second.

Let me move on to adult social care, because it is really important. The Chancellor’s extra £750 million for social care in 2019-20 falls drastically short, given that the funding gap for adult social care is expected to reach £3.6 billion by 2025, according to the Local Government Association. This is a vital government service and central Government responsibility is shared between two Departments. I have many questions for the Minister, but one is: where on earth is the adult social care Green Paper? The situation is no longer sustainable. The adult social care sector in England accounted for 1.34 million jobs in 2016-17, yet, according to the National Audit Office, it has been 10 years since a national workforce strategy has been published. Furthermore, 43% of those aged 80 or over in England in 2016 needed help with activities for daily living, yet only 20% actually received the help they need. Demand is increasing and less is being provided—and to fewer people.

Layla Moran Portrait Layla Moran
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And of course I happily give way to the Chair of the Select Committee.

Clive Betts Portrait Mr Betts
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I am not sure the hon. Lady will be quite so happy when she hears what I have to say about the matter. Again, this is typical of the Lib Dems, is it not? We see collective memory loss about what happened between 2010 and 2015, and them now washing their hands. Does she accept that the biggest cuts in real terms per year in adult social care happened between 2010 and 2015, and she and her colleagues in the Lib Dems bear equal responsibility for that?

Layla Moran Portrait Layla Moran
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I thank the hon. Gentleman for his point. As I say, I am looking forwards.

On adult social care, the Liberal Democrats are proposing—I would be curious to know whether Labour is planning the same—a penny in the pound on income tax to add to the social care budget, in order to sort out the short-term funding issues. That has to be just a short-term solution. The longer-term solution is not this tit-for-tat political to-ing and fro-ing; it has to be a cross-party effort to find a long-term settlement that will last for decades, not years.

Kevin Hollinrake Portrait Kevin Hollinrake (Thirsk and Malton) (Con)
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I entirely agree with the hon. Lady on this. The Select Committees on Health and Social Care and on Housing, Communities and Local Government issued a joint report on the future funding of social care. One of its recommendations was a social care premium—an insurance based model like the German model. Would her party engage with that, on a cross-party basis, involving Conservative Members and Members on those Benches?

Layla Moran Portrait Layla Moran
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I absolutely agree with that. Those calls were led by my right hon. Friend the Member for North Norfolk (Norman Lamb), who has been working on this issue on a cross-party basis. We have to do this together or we are not going to do it at all.

I now come to children’s services, an issue that, as a former teacher, is very close to my heart. Councils are overspending on these services, too—they did so by £872 million in 2017-18. The Public Accounts Committee has reported that 91% of authorities overspent. We are talking about young vulnerable children here. Something odd is happening, because although the number of children in the population has gone up, increasing by 7% since 2010, the number of child protection assessments has increased by 77%, on average, across the country. Worryingly, however, the figures are really different depending on the area of the country, suggesting that best practice is not being spread. For example, Camden Council has decreased the number of children that it has in looked-after care but other parts of the country have increased this by more than 90%. What are the Government doing to ensure that what some councils are clearly doing right is being spread? Meanwhile 42% of all local councils are rated as good or outstanding by Ofsted—but that means 58% are not. That is atrocious. We need to make sure that councils are held to account. My understanding is that Ofsted is so overstretched that it has for the moment suspended the rating of local councils. Will the Minister clarify whether that is true?

The final thing I wish to talk about is prevention. I serve on the Public Accounts Committee, and my colleagues and I are interested in value for money for the taxpayer. I am deeply concerned that the changes to children’s centres and youth services are not delivering value for money. In fact, worse than that, they are failing the young people of our country. The decrease in the number of Sure Start centres in Oxfordshire has meant that we cannot reach the same number of families as we did previously.

Meanwhile, the head of Ofsted said in her annual report:

“The evidence suggests that these cuts to youth and other services are a false economy, simply leading to greater pressures elsewhere.”

The Minister will know that in 2015 the Government axed the Audit Commission. Who is looking after the money? When something is cut in one Department, what effect is it going to have elsewhere? I am told that the responsibility is now in the purview of the Ministry of Housing, Communities and Local Government, but it is not transparent. In the reports that the Public Accounts Committee has seen, it was not obvious that everyone knows what is going on. That is a key ask of the Minister: who is looking after the money? From what we have seen, not enough people are.

The lack of someone looking after the money has an effect on things such as the schools system. Schools have now become a repository for every other issue that has happened in local government, and we see the same with our police. I am sure many Members know of similar issues to those that I see in respect of special educational needs and disability funding: there just is not enough money adequately to support the children who need education, health and care plans. Why, when schools are already under funding pressure, are they being asked to provide the first £6,000 towards any plan? Surely it would make more sense that if a child has a need, that need is fulfilled.

Similarly, when are we going to see the Government address inequalities in the system, such as those relating to young carers? They are required in statutory legislation to undergo an assessment of what they need, but there is no legislation that follows through on that and says that they have to be provided with the things they have been assessed as needing. Who is dealing with those kinds of inequalities?

Gareth Thomas Portrait Gareth Thomas
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One pressure that the hon. Lady has not mentioned is homelessness. Although we on the Opposition Benches will not be surprised by the Government’s lack of additional revenue to tackle homelessness, does she not think it particularly odd that the Conservative party, which claims to be the party of the armed forces, is doing nothing about the scale of rough sleeping among veterans?

Layla Moran Portrait Layla Moran
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As I said at the beginning of the debate, we have seen a rise in homelessness. It has been a particular focus of mine on the Public Accounts Committee, and the hon. Gentleman might be aware of my campaign to scrap the Vagrancy Act 1824. We need to make sure that the fact that we are a compassionate nation is reflected in all parts of policy. I could not agree with his point more. As he rightly pointed out, there are many things that I have not touched on, but I am sure other Members will. This has just been a quick canter around the finances in the estimates.

I hope that the Public Accounts Committee’s reports on local government spending and sustainability are bedside reading for all Ministers, because they make recommendations that I sincerely hope Ministers will take seriously. When the Minister responds to the debate, please can we have answers on the following? First, where is the spending review? How on earth can we expect councils to plan for the medium and long term when they do not even know where next year’s money is going to come from? Secondly, where is the fairer funding review? The Government have moved the burden of taxation from central Government to local government, but the underlying inequity in the system still exists. Thirdly, linked to that, where is the business rates review? As was alluded to earlier, local economies are suffering because of a lack of joined-up thinking. Finally, a refrain that I hope and am sure others will continue: where is the social care Green Paper?

We need all four together before we can achieve genuine value for money in what local councils deliver. Anything else is a false economy. All of us see the knock-on effects of these Whitehall spending decisions in our postbags. We also see the desperation of people who come to us because they feel that their local councils have failed them. However, half the time, it is not local councils that have failed them; it is central Government. Local government is vital. It is the coalface—it is where real policy meets real people. I hope that today’s debate will be a clarion call. Local government may not always be sexy, but it is certainly significant. I thank all colleagues for being here and the Backbench Business Committee for enabling us to have today’s debate.

None Portrait Several hon. Members rose—
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Geoffrey Clifton-Brown Portrait Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)
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I am grateful for the opportunity to catch your eye in this debate, Madam Deputy Speaker.

I pay tribute to the hon. Member for Oxford West and Abingdon (Layla Moran), who is a highly valued member of the Public Accounts Committee, of which I have the honour to be deputy Chair. It is clear from her speech that she is extremely knowledgeable about this area, particularly about education, on which she is the Liberal Democrat spokesman.

I also pay tribute to other Members who have helped to secure this really important debate. The reason it is so important is that local authorities are by far the largest devolved form of government in England. They deliver a range of vital services, such as education, planning and social services. The money devoted to local government, and therefore to the effectiveness of these services, is vital to the people of this country, which is why, for the first time in 27 years in this place, I wanted to speak in an estimates debate, but particularly in this one on the Ministry of Housing, Communities and Local Government.

It is a disaster for the people covered by a local authority area when it runs out of money and centrally appointed commissioners are brought in to oversee the finances, as we have seen in Northamptonshire County Council. We need to look very carefully at the role of section 15 officers, who have issued more than 114 notices of loss of financial control since 2010-11. We particularly need to encourage the Government to be intrusive in their inspection of local audits, because it is possible to spot when a local authority is beginning to get into trouble far sooner than was the case with Northamptonshire, thereby possibly avoiding bringing in the local commissioners.

As the hon. Member for Oxford West and Abingdon said, the finances of local government are fairly parlous at the moment—resources fell by 34% in real terms between 2010-11 and 2017-18. Paragraph 12 on page 9 of the National Audit Office report states tellingly that overspending and the use of resources were not fully financially sustainable over the medium term. I encourage my colleagues on the Front Bench to look very carefully at this whole matter.

Local government is now facing a funding gap of £3.1 billion by 2019-20, which is estimated to rise to a staggering £8 billion by 2024-25, according to the NAO. Local government spending is being stretched significantly as we face the demand for services way outstretching available funding. This year, for example, Gloucestershire County Council has had to raise its council tax in every district to make £21 million of savings to deal with the financial pressure. To simply keep up with the county’s demand for services, council tax payers now need to provide nearly £295 million.

Children’s social services are a particular worry in the county and across many education authorities. It is the No. 1 financial pressure on Gloucestershire’s 2019-20 budget, as the authority will spend an additional £16.3 million on the most vulnerable children and young people in the county. Ofsted made a monitoring visit to Gloucestershire’s children’s social services in April—its sixth monitoring visit since our local authority was judged to be inadequate in March 2017. It is promising to see that progress has been made. However, that progress was deemed to be slow, and we cannot continue to fail to provide good enough social services for our most vulnerable children and young people.

Throughout the country, 42% of children’s social services are rated good and we spend some £8.8 billion on them, but 91% of local authorities have overspent in this area and we need to understand why. We had the education debate yesterday, and although there is a record amount of money in education overall—rising from £41 billion in 2017-18 to £43.5 billion in 2019-2020—the problem is with distribution. That is the case for my local authority, and I suspect that some of my colleagues on both sides of the House who are in the f40 group would agree that the distribution of money is critical. For example, an authority such as Hackney is getting £6,500 per secondary place, yet some schools in Gloucestershire are below the fair funding amount of £4,800 per secondary place.

Layla Moran Portrait Layla Moran
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I apologise for intervening, as I have already spoken for a long time. I am a vice-chair of the f40 group. Does the hon. Gentleman agree that the current calls from the f40 are about not just distribution but quantum? The “Together for Education” event that took place across the way in Westminster on the weekend before last called for an extra £2.2 billion a year in the education budget, because the f40 group recognises that we can redistribute all we want but the quantum also needs to rise.

Geoffrey Clifton-Brown Portrait Sir Geoffrey Clifton-Brown
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I accept what the hon. Lady says. The problem is that it is about not only the money that schools get, but the costs that central Government keep imposing on schools—pensions, the apprenticeship levy or other expenditures. The costs keep going up, so the amount that schools have to spend is squeezed every year.

The Government need to do two things. First, they need to consider the quantum, as the hon. Lady has said. Secondly, when they impose an additional tax or an additional cost on a school, they need to consider very carefully how that school’s budget is being squeezed. We want to give our children the fairest possible start in life, and allocating adequate resources to education is almost the most important thing a Government can do, which is why I feel so strongly about this issue.

I also feel strongly about children’s special needs. The amount that Gloucestershire is spending in this regard is going up and up. I am grateful to the Government for providing an additional £1.35 million this year and next to deal with the problem, but they need to understand the causes of the increased demand in special needs, and education, health and care plans. The Government probably need to ring-fence this budget so that we do not get into the situation that we did this year, whereby Gloucestershire County Council was going to top-slice its general schools budget by up to 0.5% to deal with the problem. It is currently entitled to do so, but that is not fair on schoolchildren in general, which is why the Government need to ring-fence this budget.

Local enterprise partnerships—where local authorities contribute a significant amount of money, certainly some of the expertise and some of the governance—are rather variable, as we discovered from the NAO report. Some work extremely well; some work far less well. Some are governed extremely well; some are governed less well. There is geographical overlap in some, but not in others. If the Government wish to deliver their industrial strategy to the best possible degree, they need to look at the whole matter of LEPs quite carefully.

The fire and rescue service in Gloucestershire is currently run by the county council, but there is considerable pressure from the Home Office to transfer it to the police and crime commissioner. We have already had one inquiry and the proposal was rejected, yet the police and crime commissioner still wishes to overturn the decision. I say to my colleagues on the Front Bench that a considerable amount of resource and effort is being wasted by continually bickering over this matter. The fire and rescue service, I say loud and clear, is well run in Gloucestershire. The county council supports it, as do, I think, most Conservative colleagues—certainly, I support it very strongly. It should remain where it is.

We need to get local government funding functioning properly. This is a really serious problem. The Government wish to move to a new form of funding—the core rate support grant—in local government in 2021. That means that there are vital decisions that they need to make quite quickly. The proposal is that councils should keep three quarters of the revenue, down from 90% originally, but fundamental decisions on how this will work are coming very late in the day. No council should be under financial pressure, because of the tier splits, to move to 75% retention. We need to decide what the distribution system should be. If Westminster Council, for example, keeps 75% of its rate support, it will be awash with money, whereas a council in the north that keeps 75% will be in severe shortage. The councils need to know. As the hon. Member for Oxford West and Abingdon says, it is only fair that the funding system for councils both for next year and the year after are made very clear fairly soon.

The other side of the coin is that the Government have a target for building 300,000 more homes each year. Councils will be able to do that only if they are properly incentivised by the council tax system. They need to be able to work out what that system is going to be. As part of the local government finance reorganisation, what will the incentives be for councils that want to expand their council tax base, as with the incentives to expand their business rate base? Again, the Government need to make some decisions on this. They need to tell us whether the new homes bonus will remain, and in what form, to give councils that incentive.

This is a huge field. I think I have cantered over some of the main areas, and others will do the same.