Housing, Communities and Local Government: Departmental Spending

Lilian Greenwood Excerpts

Thursday 9th July 2020 Commons Chamber

[Mr Clive Betts (Sheffield South East) (Lab)]

First, I will look at the covid crisis and how local government has responded to it. I think I speak for every Member of this House when I say that local councils, collectively across the piece, whatever their party, have responded magnificently. We do things virtually these days, so perhaps a virtual round of applause for local councils from Parliament would not go amiss.

What local councils have done is deliver social care; rehouse rough sleepers; work with the voluntary sector to help vulnerable people; administer the business grants scheme that the Government introduced; get the director of public health working at a local level on testing, tracking and tracing; and, of course, keep essential services, such as refuse collection, up and running for our constituents. They have done all that against the background of austerity. Local councils have had bigger cuts to their funding than any other part of the public sector in the past 10 years. The National Audit Office figures show an 80% cut in grants and an almost 30% cut in spending power over that 10-year period. Of course, the councils in the poorest areas have, by and large, had the largest cuts in grant, because they had the largest grants in the first place.

Despite that situation and despite the fact that they have had to try to prioritise social care spending for both adults and children, councils have kept services going. When we look at some of the cuts that they have had to make in other services, we see that it was nearly 50% on housing services, 50% on health and safety, and 20% in five years in real terms in public health grants. Those services—housing, health and safety and public health—are exactly the sorts of services that have been required to deliver in response to covid. None the less, they have stepped up to the mark and done extremely well.

What have the Government done in response? I think that we have had a change of language from Ministers, which is a bit concerning. On 16 March, the Secretary of State said that the Government would do whatever was necessary to support these efforts—very similar words to the ones that were used in relation to the health service.

[Lilian Greenwood (Nottingham South) (Lab)]

Will my hon. Friend give way?

[Mr Betts]

I will give way, but just once I think.

[Lilian Greenwood]

I will be very brief. Did my hon. Friend share my sense of déjà vu when councils were promised “whatever funding is needed”? Nottingham City spent £8 million on fire safety improvement post-Grenfell and it did not receive a single penny from central Government, despite exactly the same sort of comments being made at the time.

[Mr Betts]

That leads into another area. The Select Committee has just produced a report about cladding and other such issues. We have challenged the Government to produce funding through that report, so I am sure that we will take up that issue as well.

The change came when the Secretary of State appeared before the Select Committee. Suddenly, he was saying that they had asked councils to do things, but that they would be fully compensated for the things that they had been asked to do. Then there was a very general list. The Public Accounts Committee and the Select Committee, as well as the Local Government Association, have been trying to get more information on that. There is still a lack of clarity about precisely what will be funded. That is important, and quite different from the national health service, which seems to be given, rightly, “everything that it takes”—the commitment given to local councils.

We have had tranches of money—£2.16 billion then £500 million—given to councils to cover both extra costs and lost revenue, which is just as important for many councils as the extra costs they have incurred. However, the LGA is saying that by the end of June, according to the returns that went to the Ministry, the costs were £4.8 billion against the £3.7 billion received—a gap of £1 billion. The Government said they would give some help with lost income by compensating councils for 75% of the amount after the first 5% of losses, which is welcome, and somehow apportioning the lost revenue from council tax and business rates. There are two questions to ask about this. The Government have already included loss of income in the £3.7 billion compensation, so will the commitment to cover 75% be reduced? I see the Minister shaking his head; it would help if that was explained very clearly indeed.