Local Authority Financial Sustainability: NAO Report Debate

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Department: Department for Levelling Up, Housing & Communities

Local Authority Financial Sustainability: NAO Report

Wera Hobhouse Excerpts
Tuesday 20th March 2018

(6 years, 1 month ago)

Westminster Hall
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Andrew Gwynne Portrait Andrew Gwynne
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I agree wholeheartedly with my hon. Friend. As I said, I find it bitterly surprising. When we talk to Conservative Members in private, they are as concerned about what is going on in their own communities as Labour Members are. When we look at what is happening across local government, it is not just the Opposition raising concerns.

Wera Hobhouse Portrait Wera Hobhouse (Bath) (LD)
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I was a councillor for 10 years in a local authority in the north of England and I totally agree with the hon. Gentleman. It is time for everybody to speak up against the cruel cuts that completely demolish local authorities. People say, “The Lib Dems were also involved in this in the coalition years.” We need to take responsibility and say, “Yes, there was a point when we agreed to that, but enough is enough.” We have to stand up and say it is no longer acceptable. Our local services are no longer any services to speak of and everybody suffers.

Andrew Gwynne Portrait Andrew Gwynne
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I am grateful to the hon. Lady. I will be kind to her because she was my son’s German teacher at Audenshaw School. She is right to acknowledge the role that the Liberal Democrats played in this matter. I know she was not a Member of this House when the cuts were made, but some of the most damaging and deepest cuts made to local government happened under the coalition Government. Not a single Liberal Democrat Member of Parliament stood up, spoke out and voted against those cuts, so I am afraid the Liberal Democrats do have a responsibility for the state that local government is in today.

However, the hon. Lady is absolutely right to say that enough is enough. Local government is in crisis—and it is not the Labour party saying that, but the National Audit Office and the Tory-controlled Local Government Association.

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Heather Wheeler Portrait Mrs Wheeler
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The hon. Lady makes her point very elegantly, but I prefer the dress she is wearing today to ones I might imagine.

Alongside the £150 million for adult social care support grants, there is the freedom to access £9.4 billion up to 2019-20. I make it absolutely clear that real improvements are being made in adult social care services. That is in relation to the delayed transfers that have happened and the change whereby the NHS is working so much better by working hand in hand with local government. There has been such an improvement.

Like the NAO, we recognise the importance of investment in prevention and in high-quality children’s services. That is why the Government have invested almost £250 million since 2014 to help the children’s social care sector to innovate and redesign service delivery to achieve higher quality and better value for money. We have also invested £920 million in the troubled families programme, reducing the number of children in need.

I would like to say something about our work to deliver a fairer funding settlement for local government—I do appreciate the comments from the hon. Member for Denton and Reddish (Andrew Gwynne) on this matter. We all know that we live in a changing world. Over the years, the current formula for budget allocations has served councils well, but what is right today might not be right tomorrow. The conditions that councils face, including demographic shifts in some parts of the country and new risks, mean that the system of financing local government also needs to change. We need an updated and more responsive way of distributing funding that gives councils the ability to meet the challenges of the future. That is why we are currently working with councils to undertake a review of local authorities’ needs and resources. There have been widespread calls for a thorough review, and we will deliver that.

We are committed to using the most up-to-date data available and, as far as possible, taking an evidence-based approach to both current and future demand. What we are looking to do is very important. We want to devise a new funding system that more fairly reflects modern needs. The Government aim to implement a new system, based on their findings, in 2020-21. Alongside the new methodology, in 2020-21 the Government are committed to giving local authorities greater control over the money they raise.

Wera Hobhouse Portrait Wera Hobhouse
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Will the Minister ensure that no council gets less money as a consequence of the new funding formula that she is proposing?

Heather Wheeler Portrait Mrs Wheeler
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Much as I would love to do that, I think the safest thing I can do is refer the hon. Lady to the new funding for schools. Every single school has not had a reduction under the new fairer funding; every single school has had an increase of at least 1%.