Local Government Finance

Owen Paterson Excerpts

Wednesday 22nd February 2017 Commons Chamber

[Sajid Javid]

My hon. Friend leads me directly to my next point, which is about ensuring that we all recognise that more money for adult social care is not the only answer. We want every area to move towards integration of health and social care services by 2020, so that it feels much more like one service. I welcome what I believe is a consensus on both sides of the House that we will need to develop reforms to make social care more sustainable and effective for everyone in the long term, so my hon. Friend’s point—that as we work towards integration, we should look at how we can best encourage that—is an important one.

Another key area concerns the fair funding review, through which we are devising a new funding formula for local government. It is nearly a decade since the current formula was looked at thoroughly. Some parts of it date back as far as 1991, when the Prime Minister was an up and coming young councillor. It is fair to say that a few things have changed since then: the demographic make-up of many areas has altered radically; an ageing population means that demand for different services has shifted; and we are entering a world in which local government spending is funded by local resources, not central grants. We are undertaking a fair funding review to thoroughly consider how to introduce a more up-to-date, more transparent and fairer needs assessment formula. It is vital that the new formula delivers, so we are working closely with local government to get it right.

[Mr Owen Paterson (North Shropshire) (Con)]

I welcome many aspects of my right hon. Friend’s statement, but he is aware that rural authorities were unhappy at the end of the last Conservative Government. The Labour Government then brutally shifted considerable funds to the inner cities. There is now a massive discrepancy not just in council tax raised, but in money redistributed from the centre and, above all, services. I will vote with the Government tonight without any great enthusiasm for the settlement, but I would like an absolute guarantee that this review will go back to basics, looking at the needs and significant changes on the ground so that when we discuss this next year, we will have a completely different settlement that reverses the trend and brings wealth back, fairly, to rural areas.

[Sajid Javid]

I welcome my right hon. Friend’s support for the settlement and I very much sympathise with the issues he raised about rural communities. He has been a passionate advocate of this for a long time. I am pleased that his local authority, Shropshire, is part of the working group that we have established to look at the specific challenges faced by more rural areas. I reassure him that the fair funding review must look exactly at the kinds of issues that he mentions and that he knows a lot about. We must make sure that we get it right this time.

As we conduct the fair funding review, we need to ensure that it is up to date, more transparent and brings a fairer, needs-based assessment. It is vital that the new formula delivers, so we are working closely with all of local government to try to get that right. We had hundreds of responses to the call for evidence published by my Department last year, and it is clear that people in all areas feel strongly about this, as we have just heard from my right hon. Friend.