Local Government Finance

Stephen Twigg Excerpts

Tuesday 5th February 2019 Commons Chamber

[Stephen Twigg (Liverpool, West Derby) (Lab/Co-op)]

It is a pleasure to follow the hon. Member for Bromley and Chislehurst (Robert Neill), who made a thoughtful, reflective contribution to today’s debate.

The publication of the latest Centre for Cities report last week confirmed what my constituents in Liverpool already knew: the city has been hit hard by almost a decade of austerity, with massive cuts in central Government funding hitting not only the council but police and fire services. Benefit changes have also hit the poorest communities the hardest. My hon. Friend the Member for Liverpool, Riverside (Dame Louise Ellman) has already spoken about what the report says about Liverpool, but I will repeat one of the statistics she quoted because it is so powerful. Since 2010, Liverpool has lost £441 million in Government funding, which equates to a per-resident reduction of £816 a year. That is the largest per capita cut across the whole country. As she said, our directly elected Mayor Joe Anderson and the Labour city council have shown enormous leadership in taking the city though that period despite the cuts, and have been doing their utmost to protect services for some of the most vulnerable communities in our city.

To illustrate all that, the city council spent £222 million in 2010 supporting adults who need help in the community because of age, infirmity or disability. That has now reduced to £152 million despite demand rising by 15%. Such has been the pressure on Liverpool’s adult social care budget that the council has had to spend almost its entire reserves simply to support social care spending. We also have some of the highest levels of looked-after children in the country. As we know, those numbers have been going up across the country in recent years. As a consequence, the city council overspent last year on vital services for vulnerable children and young adults by £7 million.

Against that backdrop, and despite the pressures on its funding, the city council recently adopted a radical new approach to delivering social care. It has been able to find an additional £7.7 million investment to employ 160 new staff to cut the case load of children’s social workers by half, and I pay tribute to the city council for doing that even in these difficult circumstances. The council says that its new model will reduce the number of children for whom each social worker is responsible, allowing them more time to work with children, young people and families. I pay tribute to the council for that important work.

We had an excellent debate on maintained nursery schools last Thursday, in which I spoke about the two outstanding nursery schools in my constituency—East Prescot Road and Ellergreen. I know this is a matter for the Department for Education and, ultimately, the Treasury, but I echo what my hon. Friend the Member for Liverpool, Riverside said about the crucial role played by maintained nursery schools.

I also echo the call from our city council for a royal commission to ensure a fair funding formula for local services. We have heard different points of view in this debate, each of us representing our own constituency. A royal commission could provide an opportunity for this to be looked at in a full, comprehensive and independent manner.

The Government’s own figures on core spending power show that, had Liverpool been subjected to the average level of cuts over the past nine years, our budget would be £71 million better off. We have seen Liverpool’s spending power per household cut by over £700 during a period in which Surrey has seen its spending power per household increase by £65.

My hon. Friend the Member for Denton and Reddish (Andrew Gwynne), the shadow Secretary of State, rightly said that the council tax base is crucial in determining what a local authority can actually spend. Liverpool City Council raises an average of £886 per chargeable dwelling. As such, we are in the bottom fifth of local authorities in the country. If we had the average tax base, we would have getting on towards £100 million more in council tax revenue. That is the basic injustice that hits the areas of the country with the greatest levels of poverty and inequality, which is why this settlement is unacceptable.