Housing, Communities and Local Government: Departmental Spending

Rosie Winterton Excerpts

Thursday 9th July 2020 Commons Chamber

(3) a further sum, not exceeding £22,567,364,000 be granted to Her Majesty to be issued by the Treasury out of the Consolidated Fund and applied for expenditure on the use of resources authorised by Parliament—(James Morris.)

[Madam Deputy Speaker (Dame Rosie Winterton)]

Before I call Clive Betts, I give notice that, again, there is time pressure on the debate, so I am likely to introduce an immediate three-minute time limit because we must finish by 5 pm.

--- Later in debate ---

[Mr Betts]

Normally I would give way, but Madam Deputy Speaker is looking askance at me, so I think I had better move on.

The second question is can the Government not bring forward a bit sooner the apportionment of losses from council tax and business rates? Waiting until the spending review introduces an extra element of uncertainty.

I have another question about compensation for losses in the leisure sector. Many authorities—about 60, I think—of all political persuasions do not provide leisure services directly; instead, they provide them through arm’s length arrangements. Sheffield does it through Sheffield International Venues and has some magnificent facilities, including Sheffield Arena and Ponds Forge, which is an international-class swimming pool, and lots of community facilities. What we need is an assurance that income losses for councils in that situation will be treated the same as income losses for councils that provide the services directly. That is an important point for many councils up and down the country.

It still feels like local government is on a life support machine, waiting for the next bit of revenue to trickle down from the next ministerial statement, rather than having the certainty that they need to plan. Many councils are now looking at making cuts and emergency budgets and talking openly about section 114 notices. Yes, okay, the Ministry has said, “Come and see us before you issue a 114 notice,” but that is too late. We do not want councils to reach the point where they are thinking about a 114 and planning for it. We want them to have the certainty of getting funding so they are not driven into that position.

This is not just about funding for this year; it is about funding for next year as well. Many councils, including Sheffield Council, have reserves to see them through this year, but using them will just postpone the problem to next year. Also, many councils had plans for efficiency savings, which have been put on hold as managerial expertise is put into dealing with the current crisis. Efficiency measures that have had to be put to one side for the time being are another loss for councils that needs to be recognised properly.

Let us have more certainty that all the costs that local authorities incur in covid-related matters will be covered by the Government. Let us have another discussion with the LGA and consider whether it is fair that councils should have to stand even 25% of income losses. Let us have an assurance that arm’s length arrangements for leisure will be covered. Let us bring forward the commitment on council tax and business rates to before the spending review. Let us not get to the point of discussions about section 114 notices by providing certainty of funding.

Finally, there is the future. What local authorities need is a proper long-term sustainable financial settlement.

The covid crisis offers a watershed, a turning point, an opportunity to change things, but I want to put down five markers for the Government, drawing on the Select Committee’s report in 2019. First, we want at least a multi-year settlement, to give that certainty. The last four-year settlement was welcome. I understand why it has not been repeated in the current crisis, but it is certainly needed.

Secondly, we need a recognition that local authorities need a significant real-terms increase in their funding. The Local Government Association’s calculation of an £8 billion gap, even before covid came along, has to be recognised. Thirdly, if we really are to end austerity, it is not just about funding local councils so they do not have to make more cuts; it is about giving them the money to restore many of the essential services they have had to cut.

Fourthly, we have to devolve to councils the power not merely to spend but to raise resources in the first place. If we do that, however, we must recognise that some councils are less able to raise resources than others, so if we devolve more spending arrangements to councils, we will need a fall-back position—a central fund for councils to deal with the equalisation problem.

Finally, let us have a proper, cross-party, long-term funding agreement for social care. The two Select Committees proposed a solution with a social care premium three years ago. Let us reactivate that. Giving councils that direct source of funding for social care will also release funding for other essential services. I say to the Minister: think of MPs here today arguing for extra funding as allies in the battle with the Treasury to get the money that councils need to fight the covid crisis, but to fight it in a way that does not produce extra cuts to essential council services already devastated by 10 years of austerity.

[Madam Deputy Speaker (Dame Rosie Winterton)]

We will start with a time limit of four minutes.