Council Tax and Revenue Support Grant

Sarah Owen Excerpts

Tuesday 31st January 2023 Westminster Hall

[Sarah Owen (Luton North) (Lab)]

It is a pleasure to see you in the Chair, Sir Mark. I think I might have caught my daughter’s cold, so forgive me if I am a little hoarse—I wish that the Minister had bought two Lucozades. I congratulate the hon. Member for West Dorset (Chris Loder) on securing the debate and highlighting the regional inequality that his constituents face. That is a reality for many areas across the country.

Council tax is a fraught issue in every part of our country, from Dorset to Durham. Sadly, local communities in rural, urban and suburban areas will have seen their neighbourhoods decline over the last decade while also seeing costs go up. Every household paying their council tax will increasingly feel the strain as we deal with the fallout of the mini-Budget and a looming depression. With the revenue support grant being withdrawn in many areas and rising running costs not being met with adequate funds, council tax seems to be all there is left for local authorities. That is all that they can rely on. As we heard from the hon. Member for West Dorset, more than 80% of local funds are raised through council tax. That is reflected nationally: since 2010, core funding for councils has been reduced by £16 billion, and yet council tax has increased—it has been forced to go up—by over £15 billion. What we see locally is happening nationally.

Following 13 years of relentless, debilitating cuts, councils desperately hoped for respite from the autumn statement, but no such support was provided. Instead, the Government laid more burdens on local authorities by forcing them to take the tough decision on whether to raise council tax further. That was a cop-out—a refusal to own and fix the holes that they have created in our communities. The Chancellor talks—all Chancellors talk—about taking tough decisions, but, to be blunt, they are not taking the tough decisions when it comes to local government. They are instead forcing difficult decisions back on local authorities and local people. After taking 60p from every £1 given to local authorities since 2010, this Government are now pushing councils to charge residents even more money—often for worsening services. That is not sustainable. The Chancellor’s plans to raise council tax in the way he has outlined will bring in an extra £80 per person in Surrey but just £39 per person in Hull.

Some have misunderstood levelling up or seen it as a bit of an empty slogan. Has it now come to mean that we are just creating greater economic divides than those that existed before? The hon. Member for West Dorset talked about rural areas perhaps not faring as well as everywhere else in levelling-up fund bids. I have asked before about the transparency over how levelling-up funding bids are allocated. Local authorities have not been told why they have been unsuccessful. As Ministers will know, MP after MP stands up in the Chamber or Westminster Hall to ask for their bids to be looked upon favourably, or to talk about how successful the bids are or where they are in the process. If we had a transparent process, we would know more, and local authorities and local areas could put in stronger bids. We need to end the cycle of beauty pageant crossed with Hunger Games-style bidding wars, which pits area against area, community against community and project against project, with no guaranteed outcome and without even tackling regional inequality. Instead, Labour would trust local areas and move towards longer-term funding settlements for councils and communities to use according to their priorities and make genuine long-term efficiency savings as they can better plan for the future.

After service after service has been cut, it is clear that local funds do not meet those needs. The hon. Member for Strangford (Jim Shannon), who is not in his place now, talked about demand outstripping supply and resources in local areas. We have seen councils’ desperate need to revive their youth provision or deal with increased levels of antisocial behaviour. Yet the funding does not make a dent in the amount needed to restore our crumbling high streets, prevent library closures or save local nurseries, and we all know it does not come anywhere close to plugging the gaps in the ailing, failing adult social care sector.

As has been stated, the hon. Member for West Dorset represents a rural constituency with a higher than average number of older residents, and that necessarily means higher demands on adult social care. I am sure he will appreciate that pouring more local taxpayers’ money into a broken care system is just not sustainable. Private companies are making huge profits off children in care and through contracts with local authorities that have been stretched so thin that they can no longer directly provide the services that are needed. There has to be another way.

I worked as a care worker. I know the hard graft, the long hours and the low pay, and I know the conflicting demands. Those who had funding support and those who paid privately were pitted against each other—often for minutes—regardless of need. The Government cannot continue to ignore the dereliction of this sector forever. Even the current Chancellor acknowledged when he was Chair of the Health and Social Care Committee that that was not sustainable. When the funding comes, it will be just another sticking plaster and will come nowhere close to healing the wounds of more than a decade of neglect of social care, as well as rising demand. Constituencies such as mine and that of the hon. Member for West Dorset are varied in their demographics and geography but alike in their need for stable, adequate funding. I sincerely hope the Minister can answer some of the questions that have been put to him today.