Local Government Finance

Louise Ellman Excerpts

Tuesday 5th February 2019 Commons Chamber

[Dame Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

Liverpool has received yet another poor local government settlement, but that is no surprise; it is a continuation of the Government’s austerity policies. Liverpool has high concentrations of deprivation and this settlement simply fails to recognise the city’s needs.

Liverpool is now No. 4 on the national list of areas of deprivation, but that is a great improvement on being No. 1, and the praise for the change must go to Mayor Joe Anderson and the councillors in Liverpool who have worked so hard to protect people against a background of continuing cuts. They have worked with the private sector to boost the economy, because that is how to improve things and increase prosperity.

Let us look at what has been happening to local government spending. The Centre for Cities report shows that since 2009-10 Liverpool households have suffered the second deepest real-terms cuts in the country, having lost £816 per resident. Government support has reduced by 63% since 2010.

Government policy is very clear. It is to make the city and other areas more reliant on raising their own income, and Liverpool is involved in a pilot scheme looking at just this policy, but we must remember that raising council tax in Liverpool by 1% produces £1.4 million, while raising it by 1% in Surrey raises £6 million. If we are to have a local government system unduly dependent on areas being able to raise their own finances, areas suffering poverty and deprivation are bound to suffer more. Under the settlement for 2019-20, if Liverpool had a tax base the same as the national average, with the same range of property values, the city would be receiving £102.3 million more to spend on public services. Is that fair? The answer has to be no.

What are the consequences of this long-term policy of reducing Government spending in real terms while need is actually growing? The council has done its best to protect the people of Liverpool and their services—it is an efficient council, it has shown a willingness to innovate, it has done its best to protect services for the under-5s; remarkably, it has protected Sure Start services—but there is now a new threat in the uncertainty around Government funding for maintained nursery schools. Abercromby Nursery School, in common with other such schools across Liverpool and the country, is fighting for funding so that it can continue its vital work and increasing achievement among underachieving pupils, who, at the start of every year, are often in a majority in areas of deprivation.

Liverpool has innovated in raising funding for schools. When the Government stopped funding, Liverpool went to the private sector and raised finance to build seven new schools. This is a council that wants to innovate and work with others. It has protected the arts as best it can, the arts being so vital to Liverpool’s economy, but none of these things can stop the reality of cuts, and neither the council’s innovation nor its determination to protect people can stop people suffering.

The council cannot stop destitution. Universal credit is causing massive problems in Liverpool. People are becoming destitute and more people are rough sleeping, although the council is making a valiant effort to address that and has had some success. People are suffering from Government cuts to social care. People in hospital cannot go home because adequate packages cannot be made available. Children need support, but vital preventive work cannot be undertaken as it should be.

The fact that cuts have continued year on year makes things harder. The council can try to protect people—and does to the best of its ability—but consecutive cuts year after year cannot protect the most vulnerable.

What should the Government do now? Looking ahead, they must recognise the needs of areas such as Liverpool which are high in deprivation but low in tax base. They must provide a fair council tax settlement for local services, protecting the poor, widening opportunities, and protecting and promoting the city of Liverpool. That is what the council wants to do and the Government should support it by enabling it to happen.