Local Government Finance

Shaun Davies Excerpts

Wednesday 5th February 2025 Commons Chamber

[Shaun Davies (Telford) (Lab)]

I declare my interest as a serving unpaid councillor at Telford and Wrekin council and an honorary vice-president of the Local Government Association.

I welcome the Government’s local government finance statement, and particularly the real-terms funding increase of 4.3% for local authorities across England. I am particularly pleased to see the £16.5 million of extra funding for Telford and Wrekin council—a 9% uplift. What a contrast that is with the last 14 years of Conservative Government, during which authorities were, in the words of the Institute for Government, “hollowed out” by austerity, with core funding per resident falling by 18% in that time. We have all felt the impact in our communities. A third of English libraries closed during the 2010s, the number of miles covered by bus routes has fallen by 14%, and the proportion of councils’ budgets coming from council tax has risen from 36% in 2010 to 53% today, hitting working people hard in the pocket. I say to the hon. Member for Thirsk and Malton (Kevin Hollinrake) that it is a bit rich for him to talk about council tax rises, given that council tax doubled over the last 10 years under the Conservative Government.

This settlement is a vital first step—I emphasise the word “first”—in the right direction. However, as we have been saying as a sector, and as I had been saying as the chair of the Local Government Association, local authorities need more funding, but they also need reform and a focus on prevention, because local government is the best preventive service that this country has. When it comes to housing vulnerable children and adults, local authorities and local government provide that housing. When it comes to social care and looking after elderly or disabled people, it is predominantly councils, not the NHS, that support those residents. Councils are essential frontline services that intervene to protect our most vulnerable, but they also keep our villages, towns and cities as places where people want to live and bring up their families.

I will address the financial situation that local government finds itself in. If 10% of NHS trusts anticipated that they would have to declare themselves bankrupt in the next year, it would be on the front page of every single national newspaper. But when it comes to councils, there seems to be a situation of normalisation. Over the last 14 years, more councils have gone bankrupt than in the entire history of councils in this country prior to that, and the normalisation of that needs attention. Councils do vital work in protecting vulnerable people, especially the young. That should be celebrated, but my council, like many others up and down the country, is now spending £8 in every £10 on social care, and some councils are spending up to half of their budgets on temporary accommodation.

[Florence Eshalomi]

My hon. Friend refers to the spend on temporary accommodation, which the Select Committee heard evidence about. He may be aware that, collectively, London councils—the 32 boroughs—are spending £4 million a day on temporary accommodation. Does he agree that that is just not sustainable?

[Shaun Davies]

I agree with my hon. Friend, the Chair of the Select Committee, that it is not sustainable. It is also bad for children, families, councils and communities. If children are in temporary accommodation, they genuinely do not know what school they will go to next term. That is bad for children, who are the next generation of citizens.

We need systematic change. Central Government need to ease the burden on local authorities and spread out the load; build enough affordable homes so that we do not have 354,000 people who are homeless every single night in England; move care into the community, as the Darzi report recommended; and resolve the systemic issues so that social care providers do not face funding crises every single year. I add my modest voice to the calls of other hon. Members: will the Government please communicate the public health grant to local authorities so that they can set budgets for the next financial year in a meaningful way?

[Anna Dixon (Shipley) (Lab)]

My hon. Friend makes a good argument about the amount of local government funding that has to go into adult social care. The cuts that we saw under the Conservative Government have hit disabled and older people particularly hard. Does my hon. Friend agree that the new Labour Government’s uplift to local government funding will go at least some way towards addressing the critical cuts that have affected disabled people and social care?

[Shaun Davies]

I thank my hon. Friend and recognise the contribution that she has made for that section of our society. I agree that far more needs to happen, and I know that the Minister is as ambitious as the rest of us to ensure that those 14 years of austerity are addressed.

Giving councils the funding that they need is a welcome change from the constant cuts under the Conservatives, and it helps us to address the emergencies in the short term, but it is also important that we have a Government who accept that the long-term systemic issues require transformation, who do not pretend that everything is fine, and who accept that things need to change and that local government is faster, cheaper and more agile in delivering services on behalf of our communities and our citizens. As I said earlier, it is the best preventive service this country has.

The Government’s missions are ones that I and many Labour MPs back, but almost all of them run through local government. Whether it is safer streets, housing, social care or reforms to the NHS, it requires a confident, healthy local government sector that is able to deliver those services. As I said, this is a vital first step. I know that the Minister, who has exceptional experience in the sector and huge amounts of respect, also recognises that, and I look forward to seeing what comes next.