Local Government Finance

Luke Myer Excerpts

Wednesday 5th February 2025 Commons Chamber

[Jim McMahon]

Absolutely. Deprivation is a key part of the funding settlement. This is the first settlement in a long time, and probably the first since the area-based grant in 2010-11, in which deprivation is a measure by which the Government allocate money to the sector.

If we see this as only a local government problem, we will miss the prevention and reform agenda that we need. My hon. Friend and I often talk about this, but the Home Office is working on diversionary activities for young people. In many communities, gang activity, child criminal exploitation and knife crime are very real issues that draw too many young people into crime. We need those diversionary activities in the places where people live.

We need to address that, and it should be a whole of Government agenda. That is why we are marshalling our work around the Government’s missions, and our approach is anchored to the plan for change.

[Luke Myer (Middlesbrough South and East Cleveland) (Lab)]

I welcome the focus on deprivation. The Minister says he does not want to criticise the leadership of particular councils, but will he praise the leadership of Middlesbrough council? Mayor Chris Cooke has led the council out of a best value notice and produced the first growth budget in years, with increases in area care and much else. Will the Minister commend that work?

[Jim McMahon]

That work is demonstrated by the Department being able to remove the best value notice. We know that Middlesbrough is not at the end of the improvement journey, and the council itself would say that, but the characteristics of strong civic leadership are clearly on display. I appreciate that it is a lot easier to praise a council from the Dispatch Box.

When we consider funding for councils to deliver vital services, we must also consider the taxpayer. We are committed to keeping taxes on working people as low as possible. At the same time, we understand the immense pressure that councils are under, which is why we will strike a balance in maintaining the previous Government’s policy of a 5% referendum principle threshold, which includes a 3% core principle and a 2% principle for the adult social care precept. We all know that councillors, mayors, police and crime commissioners and councils will take into account the impact of increases on households, and it is right that they do so. For the vast majority of councils, those principles and the additional £5 billion in funding that we have announced will be sufficient to support them in setting their budgets. However, we know that some councils are in difficult positions, as we have heard today. For some, unique local decisions have had an impact on their financial stability. For others, over a decade of mounting pressures has finally caught up with them, and whatever they do, that is the reality. We are determined to work together to find a way through that, including by considering requests for additional council tax flexibility and requests from councils seeking exceptional financial support.