Local Government Finance (England)

Debate between Steve Reed and Andrew Gwynne

Wednesday 10th February 2016 Commons Chamber

[Mr Reed]

My hon. Friend is right, and devolving the blame for their cuts is part of what the Government are up to with this settlement.

Some funding for social care has been handed over to councils, which certainly sounds welcome. According to the Tory-led Local Government Association, however, the Government have handed over a £1 billion funding black hole. They have told councils to impose a 2% council tax rise every year for four years to plug that gap, but even that does not raise anywhere near enough to pay for the care that older people need. That increase raises the least money in the poorest areas that most need the funding. The Government have cut the funding then handed it over to councils to take the blame.

[Andrew Gwynne]

That is exactly the problem Tameside Metropolitan Borough Council finds itself with. This year, it has a £16 million social care deficit. Raising 2% on council tax—based on 100% collection, which is not going to happen—will bring in £1.4 million. The sums do not add up.

[Mr Reed]

I am grateful to my hon. Friend for making a very graphic illustration of the point I was making.

What this all means is denying vulnerable older and disabled people the home care they need. It means turning away frail, older people who cannot clean their own homes or cook their own food. It means closing down day care centres. It means cutting back on home care visits. It means leaving people stuck in hospital beds because they have no support to go to at home, with the knock-on effect of lengthening hospital waiting times for other patients.

--- Later in debate ---

[Mr Reed]

Barracking will not stop me saying what needs to be said.

I have a copy of the letter the Minister sent to councils with the provisional settlement. The spreadsheets it links to, which were sent to every town hall, include figures setting out the Government’s expectation that councils will put up council tax by 1.75% every year for four years and, on top of that, impose a further 2% rise to help plug the gap arising from the Government’s failure to fund social care properly. That is 3.75% a year more every year for four years. By 2020, it adds up to a council tax hike of well over 20%. That will cost the average band E council tax payer about £300 more a year. It is very hard indeed to square that massive Tory tax hike with the Tory manifesto pledge to keep council tax as low as possible. The Tories are breaking their promises—they are hiking council tax up.

[Andrew Gwynne]

My hon. Friend is making a very important point about council tax. During his statement earlier this week, the Secretary of State failed to understand that different councils have different council tax bases, and he told me to go away and speak to Trafford Council about how it is managing its affairs. There is a 27.4% difference between the council tax bases of Tameside and Trafford. Does my hon. Friend agree that such a difference is inherent in the unfairness under discussion?

[Mr Reed]

That is one of the many ways in which this settlement is deeply unfair to communities up and down the country.