Local Government Funding

Rishi Sunak Excerpts

Tuesday 15th January 2019 Westminster Hall

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

It is a pleasure to serve under your chairmanship, Mr Walker. I congratulate the hon. Member for Birmingham, Edgbaston (Preet Kaur Gill) on securing this incredibly important debate. The range of topics covered by Members’ speeches illustrates the breadth and importance of what local government does, and I thank all Members for their very valuable contributions. I pay tribute to the work of local government and local councillors up and down the country.

I join the shadow Minister, the hon. Member for Oldham West and Royton (Jim McMahon), in paying tribute to parliamentarians’ faith in their communities and their interaction with local government. I gently chide him and say that not just Labour parliamentarians have pride in their communities; Conservative Members have considerable pride. Conservative councillors up and down the country represent communities with great passion and dedication, as we have seen in every local election in recent times.

My vision is for local government and a set of councils that drive economic growth, help the most vulnerable in our society and build strong communities. If Members allow, I will take those areas in turn, and deal with as many of the points raised as possible. I apologise in advance if I cannot cover every single question, but I will be more than happy to follow up in person or by letter to anyone whose point was not answered.

We heard a lot about cuts and funding. I agree with the hon. Member for Birmingham, Edgbaston that local government has faced a challenging set of circumstances over the past few years. We do not need to replay all the arguments for why, but the task that this Government faced in bringing public finances back under control was considerable. Local government played a very large part in doing that. It has done a commendable job in those circumstances and I pay tribute to the work of local government, parties and councillors of all stripes in delivering high-quality public services in a difficult financial climate.

As we turn to the future, I believe things are looking up. In the settlement just published for local government for the next financial year, core spending power—the overall metric that looks at all the different income streams and grants available to local government—is forecast to increase almost 3% in cash terms. That represents a real-terms increase for local government and the highest year-on-year cash increase in some time. I know that is welcomed as a step in the right direction.

Beyond cash, local governments play a key role, as we heard, in supporting local economic growth. In the long term, that is the only way to ensure the vibrancy of our local communities and to raise the vital funds we need to fund our public services. The hon. Member for Blackley and Broughton (Graham Stringer) said that local government should have the ability to raise its own funds; business rates retention is one such opportunity.

I am delighted that Birmingham in particular is in the fortunate position of keeping 100% of business rates growth that it generates; many local councils up and down the country want that. The hon. Lady asked whether we would and should pilot new forms of business rates retention; I am pleased to say that is exactly what this Government are doing. In the next year, 15 pilot areas covering 122 local authorities will benefit from being a 75% business rate retention area, generating in aggregate for the country £2.5 billion in incremental funds for local councils, to reward their effort to drive growth.

The hon. Member for Stroud (Dr Drew) asked about the future of the system. I am pleased to say that the whole country should enjoy 75% business rates retention for 2021. That system is being designed—not in secret, as seemed to be alleged, but transparently with the sector—through a system design working group. The consultation is out and I urge anyone with an interest to contribute to the design of that new system.

One of the most undeniably crucial roles that local government continues to play is helping the most vulnerable in our society. Local authorities support the elderly, the disabled and our children in need. We owe councils an enormous debt of gratitude for the incredible work they do in this area. We heard many passionate speeches about their role. This Government are backing local authorities to carry out those vital duties. As we heard last year, the Budget provided an additional £2 billion for social care and committed a further £1 billion of extra funding for local services.

The integration between social care and the NHS was raised by the hon. Member for Crewe and Nantwich (Laura Smith) and my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter). They are absolutely right to do that. I am pleased to say that we are taking very positive steps in that direction. The better care fund, which pulls together funds from the NHS, local government and social care, is working. Ninety three per cent. of local areas believe that the better care fund has improved integrated working between the NHS and social care. We are seeing that in the numbers: social care has freed up more than 1,000 beds a day since the February 2017—a 43% reduction in social care-related delayed transfers of care. I hope hon. Members agree that we are making progress in this vital area.

We heard about the changing demographics in places such as Essex from my right hon. Friend the Member for Witham (Priti Patel) and my hon. Friend the Member for Chelmsford (Vicky Ford). It is absolutely right that in the long term, as we look to a new funding mechanism for local government, capturing those kinds of rapidly changing demographics is something we must get right. We heard from many Members about the pressures on social care. I am determined to work with the sector to find a formula that reflects accurately and transparently what local councils face on the ground, so that all local councils of all stripes can ensure they are funded fairly.

On children’s social care, I want particularly to point out the incredible work that Essex has done. My hon. Friend the Member for Chelmsford put it excellently: we should focus on outcomes, not just the amount of money we pour in. Her council is a shining example of one that does that in children’s social care, displaying innovation, as we heard from my right hon. Friend the Member for Witham. I am pleased to have spent time with Essex County Council. Many councils can and do learn a lot from how Essex has brought down the number of children in need, through a focus on early intervention and prevention.

The hon. Members for Birmingham, Edgbaston, for York Central (Rachael Maskell), for Leigh (Jo Platt) and for Brighton, Kemptown (Lloyd Russell-Moyle) and others talked about the importance of prevention. I could not agree more with that sentiment. I am a passionate believer that councils can play a valuable role in ensuring that children do not end up in care, and that we can get to problems before they happen. My focus since getting this job has been on the troubled families programme. I am pleased to tell hon. Members that we have been working very hard to robustly understand the value that that programme brings and delivers on the ground in Members’ communities. We will shortly make more announcements about that, and I want to work with all colleagues across the House.

[Dr Poulter]

On delayed discharges from care, the Minister is right to say that progress has been made, but the challenge is that many local authorities can no longer co-operate with the NHS in the way they could before, by having embedded social workers in NHS organisations to prevent hospital admissions in the first place. That is a very big challenge, and it is driving up hospital admissions. Although the money may go to the acute sector, it will not prevent people from getting there in the first place. The Minister needs to look at that.

[Rishi Sunak]

Obviously, I defer to my hon. Friend’s knowledge of the NHS, but I thank him for raising the point and I will make sure we discuss that with colleagues in the Department of Health and Social Care as we design the iterations of the better care fund and related joint working practices.

Prevention is incredibly important. The troubled families programme is back with almost £1 billion of money over this cycle; it works with families facing very difficult circumstances, doing all the work we heard about from hon. Members. I hope they will join me in Parliament to make a strong case for investment in this type of programme for this type of service as we approach the spending review, to demonstrate to everybody what a valuable role those kinds of services and local government can play.

Local authorities build strong communities by being cohesive. They have been backed with a £100 million fund to ease local pressures resulting from migration. They do that by being connected, and they are being backed with a £420 million fund to ensure that the roads that our constituents use will transport them safely and quickly to where they need to go. They also need houses for all their constituents, as we have heard. That is why we have lifted the housing revenue account borrowing cap and are investing almost £1 billion in tackling rough sleeping.

It a pleasure to champion local government here in Westminster. It is a role that I relish, and I look forward to working with all hon. Members as we approach the spending review, to make a compelling case for why local government deserves funding to making such valuable change on the ground, whether that is driving local growth, caring for the most vulnerable in our society or building strong communities. Local authorities up and down the country do an amazing job and they deserve our support.