Ministry of Housing, Communities and Local Government

Nusrat Ghani Excerpts

Tuesday 24th June 2025 Commons Chamber

(3) a further sum, not exceeding £19,023,317,000, be granted to His Majesty to be issued by the Treasury out of the Consolidated Fund and applied for expenditure on the use of resources authorised by Parliament.—(Jim McMahon.)

[Madam Deputy Speaker (Ms Nusrat Ghani)]

The debate will be opened by the Chair of the Housing, Communities and Local Government Committee.

--- Later in debate ---

[Several hon. Members rose—]

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. We have far too many speakers, because this debate must conclude at 7 pm. We will have a hard speaking limit of three minutes. Interventions are up to the lead speaker, but if they are not made or taken, I could get everybody in. That is something to keep you going for a bit. [Interruption.] Yes, the hon. Member for Harlow (Chris Vince) remaining quiet will help enormously.

[Wendy Morton (Aldridge-Brownhills) (Con)]

I rise to the three-minute challenge. We hear that this is the biggest investment in social and affordable housing in a generation. I am sure we all remember the day when we got the keys to our first home and how that felt. We are told there will be £39 billion over 10 years, but the real test is whether it reaches the councils and communities that need it the most. As ever, we need detail and clarity, and once again it is lacking from this Government and these estimates—I fear that is because of their pursuit of their ideologically driven utopia.

Will the Government commit to publishing the regional allocation of local authority housing and affordable homes programme funds, which is critical to understanding the impact on our own communities? We must ensure that funding flows to not just city regions, but towns such as Walsall and the Walsall borough, where my constituency sits. Local authorities must have fair access to the affordable homes programme and to infrastructure support.

I have previously expressed my concerns in a debate on the Planning and Infrastructure Bill about the lack of democratic accountability that this Government will create in their approach to planning. A further point, which has been expressed by the National Association of Local Councils, is that the Minister’s Department is not proceeding with commissioning new neighbourhood planning support services from 2025. I feel that that is just another kick in the teeth for local parish and town councils.

I know that the Minister is a good man and brings loads of experience to this place from his time in local government, but I do not believe that his Government are interested in local communities, preferring to drive a coach and horses over our precious green spaces. I look at how Birmingham’s housing targets are being slashed, yet ours across the Walsall borough are being hiked up. Maybe it is because Birmingham is incompetent and cannot empty its bins, but I will leave that for another day.

These are arbitrary, Whitehall-driven and centralised targets. I have long campaigned for development to happen on brownfield first, but that needs real funding for remediation, infrastructure and up-front costs. Under Andy Street’s leadership and a Conservative Government, we showed in the west midlands that we can remediate brownfield sites—look at the Caparo and Harvestime sites—and deliver for local people, but we need funding, which is lacking in this estimate. A failure to remediate is a failure to regenerate our towns, cities, communities and local economies. I have done it in less than three minutes, Madam Deputy Speaker.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Star pupil of the day.

--- Later in debate ---

[Dr Jeevun Sandher (Loughborough) (Lab)]

Thank you, Madam Deputy Speaker, for allowing me to speak. I thank, too, my hon. Friend the Member for Vauxhall and Camberwell Green (Florence Eshalomi) for bringing forward this debate, and for her excellent chairmanship of the Housing, Communities and Local Government Committee, which is evident from the contributions from across the House.

I am here to speak not only about how construction and building homes will help to create hundreds of thousands of good jobs, but about how we need to create millions more if we want everyone here to live a decent life. I am an economist, and I came to this place to ensure that everybody could earn a decent living and have enough money to pay the bills, but we are so far from that today. The average salary for a non-graduate is around £30,000. For two earners to raise two kids, they need to earn £35,000 each, but around 40% of full-time jobs pay less than that. That is 10 million workers who cannot afford a decent life, and those who cannot earn enough are turning away from Labour Members, as they have turned away from Conservative Members.

If we want everyone to have a decent job, the Government must help to create them. We are making a good start with house building. I welcome the £500 million that is going into affordable house building this year, and the £40 billion for the 10 years to come, because construction jobs are good non-graduate jobs. Building those 1.5 million homes means creating good jobs. A skilled construction worker earns £35,000. Around 300,000 of those jobs will be created when we build 1.5 million homes, and another 300,000 more jobs will be created in decarbonising buildings.

That is welcome, but we need to create a lot more good jobs if we want everyone to live a decent life. We need millions more—a lot more than the 600,000 jobs that will be created in the construction of homes and insulation. This is a job far bigger than housing and local government alone. Good jobs in healthcare, childcare and social care are all needed.

That is the path we should follow—the Government should create good jobs. We should not simply wish that enough good jobs will be created—that is the path we should not follow. In our technological era, growth alone does not automatically create enough good jobs where we need them, either for the people or places that require them. We came to this place to create a better life for all, but that is not possible for almost half of all workers because there are not enough good jobs. We can create hundreds of thousands of good jobs through construction, but we need to create millions more if we want everyone in this country to live a good life.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the Liberal Democrat spokesperson.

[Vikki Slade (Mid Dorset and North Poole) (LD)]

I refer Members to my entry in the Register of Members’ Financial Interests, as I am a councillor on Bournemouth, Christchurch and Poole council.

Local government funding is in crisis, from social care to special needs, homelessness to high streets. Our councils—whose work impacts us all and who are the backbone of local service delivery—are being pushed to the brink. While the estimate sounds positive, it is way more complicated, just like the work that councils do. The lack of funding is not a new problem. The hollowing-out of local government has been happening for a decade. In my home councils of BCP and Dorset, central funding through the revenue support grant was slashed by between 95% and 98% over that time. The Government’s announcement that central funding for councils with low tax bases will be weighted sort of misses the point. Many councils in the south receive no revenue support grant and are already raising their council tax by the maximum 5% each year. The Government need to talk to the councils they are targeting and review this proposal before they create a new problem.

Local areas are dealing with ageing populations and soaring house prices, and councils risk having no choice but to take money directly from services for the poorest, sickest and most vulnerable. The three-year settlements are welcome to help planning, and the headline £13.5 billion increase in Department funding by 2028-29 sounds positive, but measured against 2025-26 it is actually a real-terms cut of 0.6%. While MHCLG’s day-to-day spending will rise by £2.5 billion, much of this comes through transfers. For example, much of the £857 million for adult social care is reallocated from children’s social care, and the £515 million to cover increased national insurance contributions does not cover the demand.

Adult social care is now the largest spending area for upper-tier authorities. Meanwhile, tensions between the NHS and councils over who funds the sick and elderly are growing, leaving families stuck in the middle. Carers bear the brunt, often being forced to choose between caring and working, which has knock-on effects on the wider economy and carers’ wellbeing. The situation is made worse because independent providers are not covered for the NICs increase. The Nuffield Trust estimates that the increase in national insurance will cost independent social care employers £940 million this year. Many are handing back contracts, unable to make the numbers add up, which is piling pressures on to councils. I urge the Minister to look closely at the impact of this change. The Liberal Democrats want a social care workforce plan, a royal college of care workers to improve recognition, and a higher carer’s minimum wage. We call on the Government to complete the Casey review within one year instead of three. The elderly, disabled and our NHS deserve better than further delay.

The crisis extends beyond adult care, affecting our youngest children too. SEND provision is, as we know, inconsistent and underfunded. Parents are exhausted, teachers are overwhelmed, and children are being left behind. We are relieved, rather than happy, that the statutory override will continue for another two years, because many councils would face insolvency within months without it, but this merely defers the inevitable. As debts outgrow reserves, councils cannot invest in their communities or drive local growth.

The upcoming White Paper must guarantee every child with an EHCP the support that works for them, make mainstream education more inclusive so that children can stay close to home with their peers, and urgently reform the funding formula. The funding formula does not work. In some areas, the annual base funding per pupil is £2,500 less than in others. Schools have to fund the first £6,000 for any special educational support, but some schools do not get £6,000 a year for a pupil’s whole education. The Liberal Democrats really are begging for that to be resolved. In specialist provision, I have seen independent settings charge more than £100,000 to educate children with moderate needs when a state-maintained special school is doing the same for £20,000; but, without alternatives, councils are forced to pay.

The loss of the £100 million rural services delivery grant was a huge blow to rural councils, so I welcome the consultation on reviewing that, but those councils face not just higher delivery costs but recruitment challenges. It was wrong for the Government to suggest that rural communities do not face the same deprivation—tell that to some of my constituents who have no mains gas and no sewerage, no job opportunities and are miles from anything.

The Liberal Democrats welcome the £267 million for rough sleeping and £194 million for homelessness prevention, and we are pleased that that has been ringfenced, but without a target for social house building, councils remain burdened with the costs of temporary accommodation. It is not just about money: the Housing, Communities and Local Government Committee’s recent report revealed that temporary housing is detrimental to our children’s health, with it being a factor in the deaths of 74 children, including 58 infants, in the last five years. It also damages the developmental, mental health and life chances of every child in that situation. We therefore welcome the £39 billion investment in affordable housing, but we are disappointed to see how backloaded it is, meaning that many families will wait up to 10 years finally to get a roof over their heads.

Finally, I want to address devolution. The Liberal Democrats support genuine devolution, so we are disappointed that the Government have cancelled funding for neighbourhood plans and are discouraging the formation of new town and parish councils where there is local government reorganisation. Instead, we are seeing top-down area committees with no statutory powers. The spending review mentions funding for mayoral areas, but that benefits only those areas that are ready to go. What about the areas outside wave one such as Kent and Medway, or Wessex? Where is their support in the meantime? Our local councils deliver every day, but they cannot do it alone, so I urge the Government please to provide fair funding and real devolution for those areas.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the shadow Minister.

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

It has been a wide-ranging debate. I add my congratulations to the Chair of the Select Committee, the hon. Member for Vauxhall and Camberwell Green (Florence Eshalomi), for securing it and introducing it so well. I pay tribute to my Conservative colleagues—my right hon. Friend the Member for Aldridge-Brownhills (Wendy Morton) and my hon. Friends the Members for South West Hertfordshire (Mr Mohindra) and for Broxbourne (Lewis Cocking)—for sharing both their views, brought from their long experience in local government, and their great passion for their constituencies.

I will start with the striking speech by the hon. Member for Shrewsbury (Julia Buckley), who set out many of the challenges around local government finance in her constituency. I came away from that speech thinking, “Just wait until she finds out which party in government slashed the £8.8 million of rural delivery grant from her local authority, which has led it to say it is having to consult on reducing bin collections further—to just once every three weeks—and to literally turning the lights off in Shrewsbury to save the money necessary to balance the books following this local government finance settlement.”

When we come to the Chamber to debate the resource departmental expenditure limit and the capital departmental expenditure limit, it is really important, as hon. Members have done, that we set out the story behind that: what it means in our constituencies for our local authorities. When we started the debate, we knew that it was against a backdrop of a Budget last year that left councils net £1.5 billion worse off because of the rise in national insurance contributions. That alone took £1.5 billion out of local authorities’ capacity. Since then, we have seen a developing backdrop of rising inflation, which is now pushing 3.5%, and deteriorating economic conditions —in particular, rising Government borrowing—which may be one of the reasons why the Government are seeking to push back borrowing the capital that funds the housing programme in the hope that costs will come down in due course. But all these things are imposing rising costs on our local authorities.

I have enormous sympathy for the Minister, who I know has huge experience in local government. However, as Members from across the House have demonstrated in their contributions, the impact of the Department for Education’s decisions on SEND, the impact of the Home Office’s decisions on asylum funding—for Hillingdon, which serves about two-thirds of my constituency, that is, on its own, an additional £5 million per annum cost pressure—and the impact of Department of Health and Social Care decisions on public health, which have a significant impact on the costs local authorities face, are all accumulating.

That leaves the Minister and the Government with a series of difficult questions that they need to address. Having set out the existence of that substantial black hole in council budgets, and the black hole that a number of Members on all sides have referred to in housing delivery, the fact that the visible symptoms of council services, such as rough sleeping, are racing up—according to St Mungo’s charity, rough sleeping has risen by 27% in London alone—means we know that our local authorities face a significant challenge.

The questions that I hope the Minister will begin to address in his summing up are around the underlying financial assumptions behind the figures that are set out in the report. We know that there is always a tendency in Whitehall to see local government finance as an opportunity to centralise credit by announcing the positive things that we want to see money spent on and localising the blame by forcing councils to fund that through rising fees and charges or increases to council tax. When it comes to ensuring that the 1.5 million homes in our country that already have planning permission are delivered, there needs to be a relentless focus on getting that money out of the door and into the hands of local authorities and others to ensure that those homes can be delivered. The Opposition will scrutinise relentlessly, in search of the evidence that that is happening.

Our councils face this challenge against the backdrop of a potentially costly and disruptive reorganisation. We know that many councils have come forward with their own proposals for local government reorganisation. [Interruption.] The Minister says “All councils” from a sedentary position. All councils were asked, invited or, perhaps, required to put forward their proposals for reorganisation. However, we know that asking, for example, all the planning officers in the country to reapply for their jobs is unlikely to aid that focus on housing delivery.

Will the Minister clarify the following points in his response? First, will he set out the Department’s underlying assumptions on council tax rises, fees and charges, and discounts? It seems clear from the analysis being done by local authority finance officers that the underlying assumption is that all those things will rise in every council to the maximum possible extent, simply in order to stand still. What are the Government’s underlying assumptions about business rate rises, discounts and redistribution? I note, for example, that North West Leicestershire district council, because of the business rates reset, expects to lose 67% of its spending power in one go as a result of the Budget. What are the underlying assumptions about the housing revenue account, parking revenue account and other ringfenced council budgets, so our constituents know what is coming, not just in their council tax bill but in what they may pay for parking, permits, waste services and other essential day-to-day services?

Let us consider the individual cases coming in. I made reference to the impact on Shropshire of the loss of £8.8 million in rural services delivery grant, and South Holland, West Lindsey and Staffordshire Moorlands will see a 40% cut in their funding needs assessment as a result of the Budget. There are also authorities, such as Boston, that are seeing more than 40% of their budget driven to cover the costs of drainage boards. East Cambridgeshire district council sees a cut of £125,000 a year, and Fylde district council sees a rise of nil despite a headline announcement by the Government of 6.8%, once those calculations are taken into account. I know the hon. Member for Harlow (Chris Vince) was here earlier on, and Harlow reports that as a consequence, the core funding—the revenue support grant—is cut by 25% this year alone. All that has a huge impact on local Government funding and what our constituents will see.

I know that there are many in this Chamber with experience in local government. Our councils remain the most efficient part of our public sector, but it is clear from the many constituency-level issues and the insights we have gained in this debate that they deserve better from this Government in a much more transparent and open funding settlement, so that we know the underlying assumptions of Government and our constituents can understand what will happen to their council tax bills and their household budgets.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the Minister.