Provisional Local Government Finance Settlement

Lord Kennedy of Southwark Excerpts

Wednesday 6th January 2021 Lords Chamber

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, first I draw the attention of the House to my relevant registered interest as a vice-president of the Local Government Association. Secondly, I place on record my thanks to the whole of local government, including elected mayors, councillors, officers and all staff, for the fantastic job that they have done in the most difficult of circumstances over the past year.

When our communities have been most in need, local authorities and their staff have stepped up and delivered in every field—teachers, social workers, care staff, refuse collectors and all the others doing the important jobs that must be delivered. However, this is a disappointing Statement from the Government. It will lead to job losses and cuts to key front-line services, such as adult social care, which will cause great hardship to people and communities. On top of that, the Government are proposing that councils raise additional revenue through a 5% rise in the council tax, taking money from hard-pressed people who are already struggling.

Council tax is a regressive tax. It hits people and families on lower-than-average incomes much harder than people on higher incomes. In our most deprived areas, people on lower incomes will, as a result of this Statement, see the bills that they pay rise and the services they rely on cut. “Pay more, get less for your money” seems to be the by-line of the Government—not a great deal in my opinion.

So can the noble Lord tell the House what plans the Government have to support local authorities during the year as we seek to get out of the nightmare of the pandemic? It is very likely that Covid costs will outstrip even the revenue that can be raised from the council tax increase.

What plans do the Government have to support hard-pressed families? Is the noble Lord talking to the Treasury to ensure that support packages are available after March this year? Can he say something about the support that will be available for councils to help families who find themselves homeless? Does he think that the funding system for local government is fair and fit for purpose? If he does not, what action is he taking to change it? If he does think it is fair, can he please justify that?

At the start of the pandemic, the Government said that they would provide local authorities with all the support they needed. Sadly, however, I do not think that many in local government would say that that is the case at the start of 2021—that promise has not come to fruition.

Another huge issue for local authorities is the costs associated with people who have no recourse to public funds. How does the noble Lord intend to address that with this settlement? On a more general note, does he see the practical sense, particularly in these extraordinary times, of providing a multi-year settlement for local government? It would seem to be worth considering and would certainly help local government with its long-term financial planning.