Local Government Responsibilities: Public Services

Debate between Siobhain McDonagh and Jim McMahon

Wednesday 18th March 2020 Commons Chamber

[Jim McMahon]

I think that is right. When councils have to look elsewhere for funding, a risk naturally comes with that. The National Audit Office produced a report on this and the Government share these concerns. The Public Works Loan Board interest rate was doubled overnight by the Government, because they are concerned about the exposure that councils face in buying assets as investments. The NAO expressed the same concern. In a two-year period, councils have been buying investment portfolio assets of £6 billion. Why? Because they are desperate to see income from other places, but this is office accommodation and in retail, sometimes not even in the area that the council is responsible for. The Government response is to double the Public Works Loan Board rate instead of addressing the fundamental reason why councils have to look elsewhere for funding, which feels illogical. We have to make sure that the base funding for councils is absolutely where it needs to be.

We are coming to the greatest test of local government, public service and society that any of us have seen in our lifetime. It will test us all. It will test the fabric of society and test public services to breaking point, at a time when they are built on extremely weak foundations. I am genuinely fearful for how we can continue this in a sustained period. For a short time, they will make it work. They will roll their sleeves up and work together. They will create a partnership at a local level and find a way through it, but the Government know full well that this is not a crisis that will last weeks or even months. A sustained response will be required and the Government will have to make sure that they give local government the funding that they need to provide the critical response. We also need to manage public expectation.

[Siobhain McDonagh (Mitcham and Morden) (Lab)]

Is my hon. Friend aware that only today, local government has received a directive from central Government to provide street sleepers—homeless people on the streets—with self-contained accommodation? Great idea, but where are they going to find it?

[Jim McMahon]

It is also the case, as I hope most Members know, that solving homelessness is not just about providing a roof. That is a critical part of it, but it is about how the ecosystem of public service works to make sure that the alcohol and drug addiction services, mental health support and physical health support are in place. We need to make sure that this is not just about giving someone a set of keys for a property—by the way, if that was possible, why did we not do it before this crisis? —but making sure that the wider support is in place.

The Government need to be honest about the scale of the challenge that public services will face. I still believe that at this moment, the public of this country do not understand the scale of what may face us all and particularly the impact that it will have on public services, and not just for the workforce. We need to remember, when we talk about public services and the community over here, that public servants are the community. They live and work in the communities where we all do. If people are off work because they have to self-isolate, are ill or have caring responsibilities, that will have a direct impact on the local government workforce. Many will have partners working in the private sector, as well as the public sector, and they may well face redundancies and hours being cut in the family. They will go through the same financial stresses and strains, and there will be an impact on family life in the same way. The Government need to be honest about what that means for day-to-day public services, and what the public can expect when we really have to pull through to make sure that we can keep the most urgent critical care going in this country.

The Chancellor said that money will be made available, but we see a drip feed of those announcements in a way that is not helpful for local government. The public health settlement for next year was released only yesterday, 14 days before the end of the financial year. Local councils were not even able to plan ahead about what that meant. We cannot have that when it comes to a crisis of this scale.

I have always believed that our local government is the first line of defence and the frontline in delivering public services. I have always believed that they are the glue that holds our community together, that they are the leaders of place and that they can stir us to a better future. We have seen that in the way that they bring communities together, invest in their local economies and deliver decent public services. What we will demand of those people in the coming weeks and months will test us all, and it will test their resolve. It will not be good enough just to say, “Thank you for all that you do,” without addressing the fact that, for 10 years, they have had to shoulder a disproportionate burden of austerity. Surely, now is the time to say to those people, “We will right the wrong of making you take on that burden of austerity. You were not the bankers, you did not create the financial crisis, and it was wrong to place you in a position where you had to bear a disproportionate burden.” We need to put that right today.

We need not just money for the current crisis but sustained funding so we can rebuild public services, invest in our frontline and do more than just give those people one word. By the time we get through this, they will not be just the frontline that we respect; they will be seen for the heroes that they are.