Local Authority Financial Sustainability: NAO Report

Debate between Mike Amesbury and Matt Rodda

Tuesday 20th March 2018 Westminster Hall

[Mike Amesbury]

I agree with my hon. Friend and former colleague on Manchester City Council.

Councils of all colours and types are near breaking point. Indeed, Conservative-run Northamptonshire County Council has already reached that point, although, as the report shows, any suggestion that its funding challenges are unique is wide of the mark. Some 10.2% of local authorities have less than two years’ reserves. They are at breaking point, and we could face another 15 being served with section 114 notices. It is only through the sound financial management of most councils that we have not seen more local authorities topple.

Warnings have come from councils across party politics and from the cross-party Local Government Association. The National Audit Office report confirms what those at the frontline of local government have been saying for years: funding is down by almost 50%, while demand for services such as adult and children’s social care and homelessness support rises. Lack of central Government support has meant that the tax burden has shifted to local taxpayers. The National Audit Office concludes that:

“As funding continues to tighten for local authorities and pressure from social care grows, there are risks to statutory services.”

Those findings are stark and should alarm us all, and not just in politics but well beyond. The picture that the report paints is familiar to Halton Borough Council and Cheshire West and Chester Council in my constituency, as it will be across the country. Pressures on some areas of children’s services have increased by 26% in Cheshire and by 83% in the more deprived Halton, as my hon. Friend the Member for Halton (Derek Twigg) pointed out, yet the recent Budget failed to offer more money for that vital area of responsibility. That would be damaging enough when taken in isolation, but when we consider the human and future economic costs of failing our vulnerable children, it is truly damning. By 2020 the shortfall for children’s services will be a massive £2 billion.

[Matt Rodda (Reading East) (Lab)]

One of the great problems for many children’s services departments operating in areas of high housing cost is that it is particularly difficult to recruit staff. We have a severe problem with that in Reading. We are outside the boundary for outer London weighting, which stops at Bracknell, even though that is an area of lower housing costs, and we suffer from a severe shortage of skilled workers to work in our children’s services departments. I understand that is a common problem for local authorities, and particularly for those in areas of high housing costs. There are issues with both pay for staff at those grades and the ability of local authorities to provide their own council housing. Reading had a plan to build 1,000 council houses, which sadly was stopped by George Osborne. Would my hon. Friend like to comment on the twin problems of low pay for key staff and the inability of local authorities to build housing for them?