Oral Answers to Questions

Debate between Steve Reed and Kris Hopkins

Monday 15th December 2014 Commons Chamber

[Mr Steve Reed (Croydon North) (Lab)]

17. What assessment he has made of the implications for his policies of the report published by the National Audit Office entitled, “Financial Sustainability of Local Authorities 2014”, published in November 2014, HC 783; and if he will make a statement.

[The Parliamentary Under-Secretary of State for Communities and Local Government (Kris Hopkins)]

Every part of the public sector needs to do its bit to pay off the deficit left by the last Labour Government, including local government, which accounts for a quarter of all public spending. The National Audit Office report recognises that local authorities as a whole have coped well with spending reductions, with many increasing their financial reserves. The Government will continue to support local councils to transform local services, cut waste, tackle fraud and achieve better outcomes for local people.

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[Kris Hopkins]

No local authority has not been able to secure its budget, and each year, as dramas and challenges have arisen, they have faced them and dealt with them. Furthermore, we should not forget that about £2.1 billion is lost to error or fraud and that, despite the challenges, local authorities have managed to grow their reserve base to £21.2 billion.

[Mr Steve Reed]

A transformation of services is fundamental to delivering savings on the scale required, but the NAO report states that the

“The Department has not…estimated the capacity of local authorities to carry out widespread service transformation. Nor has it estimated…the level of savings such projects could realistically make, how long this would take, or the potential impact on service users.”

Why did the Minister not ensure that this vital work was carried out?

[Kris Hopkins]

The money we put forward to support transformation in councils has been welcomed right across the country—in fact, more councils have applied than we have money for—and, as for outcomes, for every £1 put in, £10 is saved. We know what we are doing, and local authorities are leading the way in driving these savings.