Local Government Finance

John Bercow Excerpts

Tuesday 5th February 2019 Commons Chamber

[Andrew Lewer (Northampton South) (Con)]

I welcome most of the local government settlement for 2019-20 and its recognition of the work done by councils to provide hundreds of services to local residents. Given the rapidly expanding council funding gap, which the LGA reports will rise to £8 billion by the middle of the next decade, I urge the Government to use the 2019 spending review to begin clarifying their plans for sustainable funding for local government after March 2020.

Part of the way to achieve that sustainable funding would be to move to unitary councils across England, a change estimated to generate savings of nearly £3 billion, as revealed in a County Councils Network report. Based on an assessment of data across 27 two-tier local authorities in England, replacing them with unitary authorities could save between £2.4 billion and £2.9 billion nationally. Colleagues will know that process is already under way in Northamptonshire.

After 12 years as a district councillor and 10 years as a county councillor, including time as a county council leader, I know the great work that both tiers can do, but my experience has convinced me that unitary is the way forward to promote localism and democratic accountability, as well as efficiency. I take this opportunity to praise many colleagues at both Northampton Borough Council and Northamptonshire County Council.

Northamptonshire County Council has, to my dismay, become a shorthand for things going wrong, rivalling Venezuela in that regard. The current leadership who have taken on that profound challenge, such as county council leader Matt Golby, deserve our thanks for their efforts to turn things around ahead of the move to unitary. The Secretary of State’s announcement today on Northamptonshire County Council will, I am sure, be welcomed by council colleagues.

Coming back to the local government finance settlement, I welcome the additional £240 million allocated for adult social care, and £410 million for both adult and children’s social care, announced in the Budget. Although that is helpful in the short term, adult social care faces a funding gap of £1 billion in 2019-2020. I appreciate the Secretary of State for Health and Social Care giving us April to look forward to by announcing that month—instead of a season, which is progress—for the launch of the much anticipated social care Green Paper, but I need to say to him and the Ministry of Housing, Communities and Local Government team, through you, Mr Speaker, that after all these delays it had better be good. It had better be radical, open to fresh and non-statist ideas, and cognisant of not only just how big a challenge but what an opportunity getting adult care right could be. Nothing is more central to effective local government funding, and thereby to MHCLG, than getting this right.

[Mr Speaker]

The hon. Gentleman has made his point with considerable force and clarity, and it will have been heard by those on the Treasury Bench.

--- Later in debate ---

[Anna Turley (Redcar) (Lab/Co-op)]

It is a pleasure to follow the hon. Member for Thirsk and Malton (Kevin Hollinrake), a fellow North Yorkshire colleague. He made some powerful and thoughtful points, in particular on the disparity of funding between the north and the south. I enjoyed his contribution very much.

This is the second time today that I have had to stand up in this Chamber to fight against the unfair and disproportionate funding that is leaving my constituents behind. The funding formula is leaving them at the bottom of the table. Areas that are more deprived, as we have heard from so many Members across the Chamber, are not getting the funding and support they need. There is clearly unfairness in the funding system. It is vital that we make that point today. The Government have to look at it again.

Redcar and Cleveland Council has lost £90 million since 2010. That is 35% of our funding. How on earth can a council be expected to continue to provide the level of service it wants to provide for its residents, particularly in areas like mine with high deprivation and high child poverty, when it has lost 35% of its funding? Residents are seeing and feeling the impact. As many colleagues have said today, we have seen a huge increase in the crisis of social care for adults and for those with disabilities. There are huge challenges around mental health support, particularly for young people, and there has been a rise in the number of children being taken into care. The situation is just not sustainable. Something has to give. The Government must look again.

In Redcar and Cleveland, we have lost 1,100 jobs in the past nine years. We have faced not just the tragedy of those individual job losses, but the knock-on effect of spending power being taken out of the community. On top of other job losses, that is just not acceptable. In 2010, I worked for a local government think-tank. The big pressure around the cuts was the argument that said, “Councils have reserves. They can dip into their reserves and the cuts will hardly affect them.” Redcar and Cleveland has already had to spend £14 million of its reserves on trying to balance the books. There is nothing left. The cuts are going to the bone.

On top of that, Redcar and Cleveland lost business rates in the region of £10 million when we lost our steelworks. This is simply not acceptable. I have spoken to Ministers about the unfair system where Redcar and Cleveland was asked to pay £2.6 million for business rates relating to an industrial property that was revaluated that never even crossed its desk. It is not acceptable that Redcar and Cleveland has had to pay for business rates it never actually saw.

One in four children in Redcar and Cleveland are living in poverty. One in 10 four and five-year-olds are classified as obese, and that doubles by the age of 10 to 11. Currently 300 children—one in 10—are looked after. That has risen 35% since April 2017—a 35% rise in just two years.

I thank Sue Jeffrey and the Labour team in Redcar and Cleveland for their excellent work. They have done a superb job of dealing with the implications of the devastating cuts, protecting people on the frontline and supporting the most vulnerable people in our communities. They have kept our five leisure centres and all our libraries open. They have bust a gut to look after the poor and the needy. They are doing a superb job with both arms tied behind their backs.

Councils are at breaking point and this settlement gives the people of Redcar and Cleveland nothing. When people are already having to pay more council tax—an unfair tax—they are paying twice for services that are being cut to the bone. That cannot continue.

[Mr Speaker]

Four-minute speeches are now preferable—much more preferable.