Rural Councils: Funding

Debate between Richard Foord and Gavin Williamson

Wednesday 29th November 2023 Westminster Hall

[Richard Foord (Tiverton and Honiton) (LD)]

It is an honour to serve under your chairship, Mrs Latham. Local councils are the workforces of our communities. They deliver vital services and aim to create thriving towns and villages for people to live in. This is often very serious work, with decisions being taken by people with great skills behind them, but often the officers and councillors are not very well remunerated for the hard work they put in. The changes they make can have a real and immediate impact on people’s lives. Councils are responsible for everything from bins to social care to potholes. Some people in my part of Devon would say that they need reminding from time to time that they are responsible for filling in the potholes, rather than just being responsible for them—but, in short, they do a lot of very serious and important work.

East Devon District Council and Mid Devon District Council are excellent examples of local councils. They work hard to improve people’s lives. But that work has been—to use a word I have heard Ministers use a lot in recent days—fettered by this Conservative Government. They have presided over a 31% fall in grant income for councils during their time in office. For some councils, the situation is worse. The settlement received by Mid Devon District Council last year was, in real terms, a little less than 50% of what it received in 2015-16.

The Institute for Government found that the biggest impact had been to shire districts, which saw their spending power fall by over 20%. That puts them at the bottom of the league for spending power by type of council. District councillors in Devon tell me that what they need from Government is some certainty about the future. They are often offered only one or two-year settlements, the most recent of which was in July 2022 when the Secretary of State for Levelling Up, Housing and Communities announced a two-year settlement for councils. That was inferior to the multi-year settlements they are after, which would enable medium-term planning.

[Sir Gavin Williamson (South Staffordshire) (Con)]

The hon. Gentleman makes an important point. Local authorities could deliver much better road improvements if they had a three or four-year plan and knowledge of what the funding would be, because they could make the money go so much further, and it would reassure a lot of local residents.

[Richard Foord]

I am grateful to the right hon. Gentleman for that intervention. I am hearing—from, for example, the finance lead on my local district council—that because they can only plan one year ahead, they cannot give certainty to providers, such as providers of social care. That is particularly true for councils in Devon that have been forced to make cuts because of funding cuts from central Government. In some parts of the country, we have seen that drive councils to the point of bankruptcy.

Councils are trying to be innovative in how they address these shortfalls and problems and, as I understand it, central Government have been encouraging them to be enterprising in seeking to make money. Some have been successful in that, but we have also seen some shocking failures uncovered in recent documentaries and scandals about solar farms or investments that have flopped.

In my own part of Devon, Mid Devon District Council sought to set up a housing development company—3 Rivers Developments—that is wholly owned by the council. I want my council to be very good at delivering social care and school allocations, and we already rehearsed the fact that it ought to be doing the recycling and filling in the potholes. I do not want it to be learning about how to be a building company because, frankly, we have seen enough building companies struggle to make ends meet; we do not need our councils to be in the same position.

Let me tell Members another anecdote. The former chief executive of East Devon District Council joked with officers and his Mid Devon counterpart that, despite Mid Devon being landlocked, they council ought to put up signs saying, “Beach this way” to enable them to hike up parking charges for the beach—which, frankly, is what enables East Devon District Council to get by right now. I am almost out of time, so my last plea is that the Government consider the fair funding review, which we have heard about from other hon. and right hon. Members. That would address the desperate need for rural councils to receive more money.