Covid-19: Funding for Local Authorities

Zarah Sultana Excerpts

Tuesday 24th November 2020 Westminster Hall

[Zarah Sultana (Coventry South) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I thank my hon. Friend the Member for Bethnal Green and Bow (Rushanara Ali) for securing this important debate. I also thank and pay tribute to everyone at Coventry City Council who has worked tirelessly through the pandemic, as they did before it hit, to care for the city’s residents and keep services going, even as workloads have been stretched and budgets have been pushed harder.

The truth is that local authority budgets were in crisis way before the pandemic. They have faced a decade of brutal Tory cuts. In Coventry, that has meant a cut of £120 million to the central Government grant every single year since 2010, meaning a total reduction of funding of £1.2 billion to date. That amounts to nearly £350,000 in lost funding every single day.

It is a similar story across the country. The National Audit Office estimated that between 2010 and 2018 central Government funding for councils was slashed by nearly 50% in real terms. Those cuts have meant a decade of youth club closures and children’s centres having to shut down, and domestic violence refuges and homeless shelters being forced to close their doors. My inbox is inundated with people struggling on the housing waiting list, which now stands at 14,000 people in Coventry. That is what a decade of Tory cuts looks like.

Local authorities have now been rocked by the impact of the pandemic. Councils have been forced to spend more to meet rising needs, and their budgets have been hit by a loss of income in tax receipts and business activity. When we take into account the effects of austerity and covid on local authorities, we see how utterly inadequate the Government’s funding announcements truly are. Councils do not just need eight months of funding to be plugged; they need 10 years of cuts to be reversed.

The crisis has highlighted how fundamental our local authorities are and it has shown who our key workers really are, too. They are not the hedge fund managers or the City bankers, who have had it so good for so long. They are the carers looking after our older residents in Coventry, the refuse collectors and the street cleaners, and the working people who have kept our country going. I will finish by placing on the record my thanks to them.

I call on the Government not only to compensate local authorities for temporary funding shortfalls, but to give them the funding and the powers they need to tackle everything from the housing crisis to the social care crisis, to give low-paid staff the pay rise they deserve, and to truly meet the needs of our communities.