Provisional Local Government Finance Settlement
Debate between Nusrat Ghani and Jim McMahon(6 days ago)
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Jim McMahon
Let us talk about Birmingham, because the Opposition referenced the £3 million new homes bonus. The new recovery grant—£600 million of brand new money targeted at those councils with high deprivation and low tax bases—just for Birmingham is £39 million. That will start the repair work of rebuilding the foundations.
When we talk about fair funding and why it is needed, we will not do what the previous Government did, where they put party politics ahead of the national interest. Let me remind the Conservatives of what the previous Prime Minister, the right hon. Member for Richmond and Northallerton (Rishi Sunak), said in Tunbridge Wells in 2022:
“We inherited a bunch of formulas from Labour that shoved all the funding into deprived urban areas and that needed to be undone. I started the work of undoing that.”
That is a record of shame. It is nothing to preach about. To right the wrongs of the past 14 years and finally get money where it is needed, this Government will work for public service, not party interest.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Chair of the Housing, Communities and Local Government Committee.
Florence Eshalomi (Vauxhall and Camberwell Green) (Lab/Co-op)
I thank the Minister for outlining this much-needed funding uplift. I agree with him that councils up and down the country, regardless of their political persuasion, need the Government to support them, not to criticise and denigrate them, which is sadly what we have had in some cases over the past 14 years. He mentioned some of the authorities that still face those pressures, including Birmingham, Nottingham and Woking, which have already effectively faced bankruptcy. The Local Government Association has outlined that up to one in four councils is likely to require additional emergency support.
A Sky report has today outlined that families are stuck in temporary accommodation for an average of five and a half years. We should not be calling that “temporary accommodation.” Imagine spending the entirety of your school life in temporary accommodation because you do not have your own home. The funding that the Minister has announced for tackling homelessness is welcome, but it is a sticking plaster, if we are honest, because it does not give councils the tools to build social housing. Homelessness will end only if we build new homes, so what steps is the Minister taking to ensure that councils have those powers?
In the short term, the £18 billion boost to the homelessness prevention grant is a step in the right direction, but the Government must consider the unintended consequences. Local authorities are already reliant on that funding to plug gaps in temporary accommodation—many use up to 75% of it for that purpose—but the new rules mean that only 49% of the grant may be used in that way. How will that change not lead to a further reduction in funding for temporary accommodation, at a time when, as we all know, the system is broken?
Jim McMahon
I thank the Chair of the Select Committee for her question. We are all getting ready for Christmas and looking forward to time with our families and our own respite, but in the end it is hard to enjoy that moment given the prospect of just how many children in this country are in temporary accommodation. Some 159,000 children do not have a secure, affordable place to live and so are in temporary accommodation. In my own town, there are 500 such children. We do our best—we martial for the Christmas parties that charities put on—but it is no replacement for a secure family home.
There will be lots of differences in the exchanges that take place here, but we need to focus on why we are doing what we are doing. The reason we are building 1.5 million new homes is of course economic, and about decent, well-paid, working-class jobs—we talk a lot about that—but in the end it is about sorting out the housing crisis. If we sort out that crisis, we sort out the temporary accommodation crisis and the financial crisis in local government. If we sort out the crisis in adult social care, of course we sort out the financial crisis, but we will finally deliver on the promise of the state looking after the generation who gave so much. If we sort out the crisis in children’s social care, we finally deliver on the state promise to invest in the next generation.
Repairing the foundations is, of course, about financial foundations—that is important—but it is also about people and communities, and in the end that is what we are all here for.
Jim McMahon
I agree about the importance and significance of the statutory override—that is felt very acutely in the Department and in the sector. We are consulting now on a number of matters, including the statutory override, and we are in constant dialogue with the Treasury about how we deal with that in the long term. In the end, this is another example of the legacy we have inherited. We are taking very difficult decisions to reconcile, reform and repair the system—decisions that should have been taken earlier but were not. That issue is very much on our agenda.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call Lee Dillon, a member of the Select Committee.
Jim McMahon
I thank the former Chair of the Housing, Communities and Local Government Committee for that question. I can confirm that the core spending power of that element in this settlement for Sheffield will be 8.5%, which is before the additional funds that will follow. Sheffield gets a good settlement from this, but we recognise that it is in a context of growing demand, so we hope councils see that we are meeting them on the challenge they face.
On whether we will review council tax, I think every Government recognise that there are huge limitations with council tax, and also huge geographical variations. It is regressive, which is the nature of a tax based on property values rather than the income of the people in them. However, council tax is understood, its collection rates are high and it is really the foundation—although not the total, as my hon. Friend knows—of the funding of council services. The urgent issue we need to face is that previous Governments moved away from their role as the equaliser in the system. Whereas the revenue support grant used to be in place to support councils by reconciling lower tax bases, recent Governments have been missing in action. We are saying to councils of all political stripes, across every type of authority and every part of the country, that we will reconcile that and work with them to equalise the situation.
On the local audit office, we are absolutely determined that this will not be a return to the Audit Commission. We are trying to do a number of things. First, we want to rebuild the early warning system to make sure that we see any systemic problems developing in the system. However, we also recognise that the cost of audit has increased by 150%, which is a direct cost to taxpayers, and that there is fragmentation in the market, and we need to look at the fall-back position as opposed to auditor supply. There is quite a lot that we need to deal with, but this is very much about the provision of audit and making sure the early warning system is rebuilt; it is certainly not a blow to the inspection regime.
Madam Deputy Speaker (Ms Nusrat Ghani)
I know the Minister wants to give thorough responses, but I have absolute confidence that he can do that with fewer words.
Jim McMahon
That is exactly the reason core spending power in St Helens will increase by 8.6% just through these measures. Given the type of council, we could easily expect that to top 10%. That is our down payment to say, “We need time to prepare the multi-year settlement and we need to do the fair funding review, but we know that councils cannot wait for that, given the last decade,” as my hon. Friend described.
Madam Deputy Speaker (Ms Nusrat Ghani)
The last question goes to the ever-patient Mark Ferguson.
Bus Services: Greater Manchester
Debate between Nusrat Ghani and Jim McMahon(5 years, 9 months ago)
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The Parliamentary Under-Secretary of State for Transport (Ms Nusrat Ghani)
I thank the hon. Member for Oldham West and Royton (Jim McMahon) for bringing this important issue to the House, and I welcome the opportunity to debate it and to collaborate on how we can continue to support and promote buses. I was particularly touched by the throwback images and his first impression of a bus. We all had those back in the day.
Buses play a hugely important role in our transport system. As we heard, they connect our communities to the workplace and to vital public services. They support our economy, they help to tackle congestion and they have an important contribution to make in reducing emissions—I hope to come on to that. I share the hon. Gentleman’s concerns about bus passenger numbers, which vary across the country, but we must not forget that there are over 4.4 billion bus journeys a year and buses remain the most popular form of public transport.
It is interesting to know—this is why we are all here and championing buses—that passenger satisfaction remains consistently high, with 88% of passengers satisfied overall with their bus journey. I cannot think of any other public service that rates so highly. We should take a moment to thank bus drivers, who are key to good journeys, and good bus companies that operate a good service. The benefits of a reliable and innovative bus service are clear: greater productivity and communities that are connected, rather than apart. That is why the Government remain committed to improving bus services and expenditure on buses.
Each year, my Department provides about £250 million in direct revenue support for bus services in England via the BSOG—the bus service operators grant—scheme. Of that, about £43 million is paid directly to councils outside London to support buses that are not commercially viable but considered socially necessary. The rest goes to commercial bus operators. Without that support, fares would increase and marginal services would disappear. Government funding supports the approximately £1 billion spent by local authorities on concessionary bus passes every year. The Government have committed to protecting the national bus travel concession, so that about 10 million people get the support that they need to travel off-peak anywhere in England.
The hon. Gentleman raised the issue of younger travellers. The Government recognise that young people’s travel and the level of fares is a complex area. There is no statutory obligation to provide a discounted travel price to young people, but many commercial and publicly funded reductions are available. I was particularly pleased to see Transport for Greater Manchester introduce its Opportunity Pass, giving all 16 to 18-year-olds free bus travel. Since 2010, the Government have invested over £450 million in bus-related local authority transport schemes, including £32.5 million in the Manchester Cross City bus scheme, to deliver a range of bus infrastructure and congestion management measures. That was no doubt welcome in the hon. Gentleman’s constituency.
To support buses today and to help them into the future, the Government delivered the Bus Services Act 2017, which contains a range of options for how to improve local bus services in England. In addition to franchising, there are new and improved options to allow local transport authorities to enter into partnership with their local bus operators to improve services for passengers. Partnership working between local authorities and their bus operators achieves the best results. It is not always about funding. Bus passenger numbers are up 50% in Bristol, 36% in South Gloucestershire and 31% in Reading. In York, the city council and operators launched a customer charter setting out the standard of service passengers can expect, and have committed to a range of measures to encourage bus use. Those are just a few examples of how effective partnerships can work.
Partnerships may not be the best solution in all areas. The 2017 Act also gives local authorities the potential to use new powers to franchise bus services in their areas. Like the system in London, franchising will enable authorities to specify the services that passengers want and deliver an integrated network of services. Mayoral combined authorities such as Greater Manchester are provided with automatic access to franchising powers, reflecting the clear, centralised decision-making responsibility for transport they hold. All the powers needed for Greater Manchester to franchise its bus network are already in place. However, the Greater Manchester Mayor felt he needed additional powers to fully consider bus franchising for Greater Manchester. Buses fall under many Departments, so the order that will be debated in the House tomorrow to give the Mayor the additional powers he has requested is being managed by the Ministry of Housing, Communities and Local Government.
Jim McMahon
Just for the record, the additional powers the Mayor of Greater Manchester will receive through the statutory instrument tomorrow relate to precepting powers to pass the charge on. The Government have not provided the funding required to deliver bus franchising in Greater Manchester, so it now has to go on the council tax payers of Greater Manchester.