Local Government Finance

Peter Aldous Excerpts

Tuesday 5th February 2019 Commons Chamber

[Peter Aldous (Waveney) (Con)]

I speak in two capacities: as a Member of Parliament representing a coastal constituency with wards that are among the most deprived in the country; and as chairman of the county all-party parliamentary group, whose role is to ensure that county areas receive sufficient funding to provide good-quality services that meet their residents’ needs.

The Government’s proposals for 2019-20 address the short-term challenges faced by councils in the area that I represent, and I am supportive of them, but there is also a need to think strategically and look to the long term. Although the Government have recognised the challenges that immediately lie ahead, there is much work to be done as we look to the future. Yes, the settlement provides councils such as Suffolk County Council and Waveney District Council with breathing space and vital short-term resources. The Government have recognised the immediate challenges that such areas face and have made resources available. The £180 million from the levy account that is being returned to local government is much needed and welcome.

This is the final year of a four-year settlement upon which the Government embarked in 2015. It has provided councils with some financial certainty, but it has also required them to drive through efficiency savings that, in many respects, have been a really tough challenge. There is now very little, if any, fat left on the bone. Although this settlement contains vital short-term support, it does not address the medium-term financial pressures that councils face, and nor does it provide long-term certainty. The uncertainty beyond 2020 is creating significant financial risks for councils in county areas. A failure to provide a significant uplift in funding for them from 2020 onwards will challenge the long-term financial viability of the services that they provide.

It is vital that local government is provided with a long-term sustainable solution. This should encourage autonomy, incentivise growth and provide sufficient money for adult social care and children’s services, both of which are under real pressure. The fair funding formula is critical to securing this solution. The present system of funding is outdated, unfair and opaque. Moreover, county areas receive the lowest amount of funding per head from Government grants and retained business rates—£153 per person compared with £225 for unitaries, £319 for metropolitan boroughs and £437 for inner London wards. This is notwithstanding the fact that it is more expensive to provide services in rural areas, that there is an increasingly disproportionate elderly population in counties and that, as the county APPG’s recent report on social mobility highlighted, there is a real problem of social mobility in coastal areas and county areas, where young people are missing out on opportunities that are available so readily elsewhere in the country.

In the short term, the settlement just about keeps the house wind and watertight, but in the longer term, we require underpinning, a radical overhaul and additional investment. I believe that the Secretary of State and the Minister for Local Government understand the challenges that such areas face. I recognise the various demands from Members that they will have to balance, but I do believe that county areas have been taken for granted and ignored for too long, so I urge the Minister to put that unfairness right through the fair funding review and the comprehensive spending review.