Local Government Finance

Layla Moran Excerpts

Wednesday 11th February 2026 Commons Chamber

[Gideon Amos (Taunton and Wellington) (LD)]

In our manifesto, the Liberal Democrats called for multi-year settlements for local government; for councils to be freed to generate more revenue, including by charging more council tax on second homes and from increased planning fees; and for an extra £2 billion on education, including for special educational needs and disabilities. It is right that funding for local government is rebuilt after the consequences of the 2008 crash and the famous letter left by the outgoing Labour Government that they had spent all the money and there was none left. The moves forward in the areas I have mentioned through this settlement are positive and we welcome them.

The announcement that 90% of SEND service debts that councils have unavoidably built up will be met by central Government also begins to address the crisis in SEND, but I am afraid it does not finish the job. The promised SEND reforms have again been delayed. Whatever the outcome of those SEND reforms, they must not be a precursor to weakening the protection disabled children rely on and their parents expect.

Our five tests for SEND reform would guarantee that children’s rights to SEND assessments and support are maintained, and that the voices of children and young people with SEND, and those of their families and carers, remain at the centre of the reform process. Secondly, capacity in state special school provision must be increased, alongside improvements to inclusive mainstream settings. Thirdly, national Government must top up funding for each child whose needs exceed local authority provision within a given cap. The Government must get on and introduce a cap on the profits made by private sector SEND companies. Fourthly, early intervention must be improved and waiting must be times cut. Lastly, schools must be incentivised to both accept SEND pupils and train their staff.

The additional funds for housing and homelessness, while small, are welcome, including those for Somerset council in my constituency. The extra funding through the recovery grant is also welcome, but places such as Kingston upon Hull tell us that it does not go far enough and will not fill the gaping hole in financial stability that persists. It is disappointing that social housing does not get a mention in the settlement. We need a new generation of council and social rented homes. Our plans are for 150,000 per year and Shelter’s are for 90,000 per year. Both would be a good proposition. The Government’s proposal for 18,000 per year just will not meet the level of need out there.

The additional funding, along with provision for SEND deficits, will help councils like mine in Somerset to keep the council tax rise to the 4.99% norm across the country. In a cost of living crisis, people cannot afford more than the minimum increase. That is something Somerset MPs and the council pushed hard for, and I am grateful to the Local Government Minister for meeting us and engaging with us on that. It is notable that 70 out of the 74 Liberal Democrat-led councils have kept the council tax rise to the norm minimum of 4.99%. The four that are, exceptionally, going above that all inherited from their previous Conservative administrations a social care funding time bomb.

Voters will take note that Reform-led Worcestershire county council is increasing council tax to the highest level allowed in the country. Typically, Reform Members are not here to take part in the debate on local government finance. The message is clear: vote Reform and pay more tax than anyone else in the country.

[Layla Moran (Oxford West and Abingdon) (LD)]

My hon. Friend is giving a powerful speech outlining how Liberal Democrat councils up and down the country are doing their best in this cost of living crisis. Oxfordshire county council finds itself in a £24 million deficit as a result of the settlement. Meanwhile, residents on the doorstep are saying to us, “What about my potholes?” He is right to point out that social care is part of that demographic deficit. [Interruption.] Does he agree that we need to tackle the core issues and that one of those is social care, because sorting that out helps everything to do with local government finance?

[Gideon Amos]

My hon. Friend is absolutely right. Conservative Members ask, from a sedentary position, who runs the council, but I use the phrase “inherited time bomb” advisedly. The well-respected Conservative former leader of Somerset county council, Dave Fothergill, was one of the first in the country to identify this issue. He told “Panorama” back in 2019 that adult social care was a time bomb that was ticking. That time bomb has now gone off around the country, and council tax payers are having to bail out the broken social care system.