I beg to move,
That this House believes that local government has severely suffered as a result of almost eight years of brutal and devastating cuts; notes with concern that the Institute for Fiscal Studies estimates that between 2010 and 2020 local government will have had direct funding cut by 79 per cent; is concerned that the top ten most deprived councils in England are set to see cuts higher than the national average, with nine on course for cuts more than three times higher than the national average; believes there is a risk that services and councils are reaching a financial breaking point; calls on the Government to act on the warnings of the National Audit Office and initiate a review into the funding of local government to ensure that the sector has sustainable funding for the long term and to immediately provide more resources to prevent more authorities following Conservative-run Northamptonshire into effective bankruptcy; and further calls on the Government to report to the House by Oral Statement and written report before 19 April 2018 on what steps it is taking to comply with this resolution.
The motion calls on the Government to respond to the challenges faced by local government. I want to start by paying tribute to councillors of all political persuasions and none, and to council officers and staff, who have risen to those difficult challenges over the past eight years, making really tough decisions but ones that have often sought to protect public services. As I will come on to explain, all levels of local government are now saying that the cuts have to end or local government will collapse.
I am proud of my own roots in local government, having served on Tameside Metropolitan Borough Council for 12 years before coming to this House. My wife is a Tameside councillor approaching her 19th year of service. I know the very difficult decisions that she and her colleagues continue to have to make because of the decisions taken by Members of this House and this Government.
For those without the first-hand experience, the work of local government, as the Secretary of State recently put it, may seem small in the grand scheme of things, but to consider those working at the coalface in local councils as merely cogs in a machine to make the jobs of politicians in Westminster easier is a failure to recognise the real value, the responsibility and the pride shown by our local leaders.
In May, I will cease to be a councillor after eight years as a member of Redbridge London Borough Council. In my borough and, I suspect, every other Labour authority up for election this year, Conservative candidates will be out there attacking them for council tax increases that have been forced on them to protect public services from the savage cuts of this Tory Government. Is that not an example of the utter hypocrisy of the Conservative party: anti-cuts campaigners locally, while in this place cheering those cuts and voting them through?
My hon. Friend is absolutely right. Of course, part of the reason—two sides of the same coin—is that there have been eight years of cuts from this place to local councils, meaning that council budgets have shrunk. It is also this place that has allowed councils to increase council tax. This year it increased the limit by a further 1%, which means that it is merely shifting the blame on to local councillors of all political persuasions—and this is not a party political point.
I will give way in a moment, but I am responding to my hon. Friend the Member for Ilford North (Wes Streeting).
That is why it is so unfair: the Government have devolved the cuts and devolved the blame. They have sought to distance themselves from decisions for which each and every Member on the Conservative Benches is directly responsible.
And I remind the hon. Gentleman that council spending has been less in real terms since 2010. In the decade to 2020, my own local authority of Tameside will have lost close to £200 million of Government funding. That is unsustainable and he has some responsibility for that because of his votes.
My hon. Friend is making an excellent speech. Does he agree that particularly perturbing are the cuts to children’s services? Every single local authority leader, regardless of party, is screaming out for more money for children. Cuts to children’s services, particularly those for very young children, have such a long-term impact. We must give every single child the best start in life.
Not just yet, as I am still answering my hon. Friend the Member for Hornsey and Wood Green (Catherine West). What we are seeing in all councils that are responsible for children’s services is the real increase in demand, and I will talk a bit more about that later. This is coming not just from me but from the Tory-controlled Local Government Association, which says that children’s services require an extra £2 billion of funding. That is quite clear. It is coming from county councils, metropolitan district councils and unitary councils, and from the Special Interest Group of Municipal Authorities and the County Councils Network, as well as the Tory-controlled LGA. Everybody is singing from the same hymn sheet, yet when it comes to the priorities of this Government, when they were faced with a choice in the November Budget, what did they choose? A £5 billion tax giveaway through the bank levy and to vote down an Opposition amendment in which we pledged to put the £2 billion into children’s services—exactly where the Secretary of State’s own Tory councillors are saying it needs to go.
No, I will make a bit of progress. [Interruption.] I have taken three or four interventions already and I am only on page two of my speech. A little bit of patience is perhaps needed from Government Members.
The fact is that for politicians of all political persuasions and none in local government, the sense of pride and responsibility is why many of us came into politics—to make our world a better place for the people we grew up with, our neighbours, our family and our local communities. It is therefore saddening that this debate is even needed today.
I will just move on. The fact is that since 2010, local government has borne the brunt of the public spending cuts. Since 2010, 49.1% of central Government funding has been cut from local government—[Interruption.] It is interesting that the Parliamentary Private Secretary is giving his Back Benchers cue cards and whispering in their ears about what to say.
I will not—[Interruption.] If the hon. Gentleman cannot think of his own intervention without the help of the Parliamentary Private Secretary, it is probably not worthy.
Metropolitan district councils have seen a reduction in spending power of 33.9% in real terms—
Thank you, Madam Deputy Speaker. Metropolitan district councils have seen a reduction in spending power of 33.9% in real terms from 2010 to 2017-18. Over the same period, county councils’ spending power has fallen by 22.1%, but spending power masks the true scale of the cuts to Government grants. This is having a drastic impact on council services. Youth centres, museums and libraries are having to close. Our social care system is in crisis. Compared with 2010, there are now 455 fewer libraries, 1,240 fewer Sure Start centres and 600 fewer youth centres.
It is all well and good for the hon. Gentleman to talk about the difficulties from 2010, but the reality is that many of those difficulties have been caused by the Labour Government’s policies. I was a district councillor for eight years. I know how tough it was. Take some responsibility for what you delivered.
Will my hon. Friend give way?
I thank my hon. Friend for giving way and for his excellent speech—[Interruption.] No, I feel that the atmosphere in here ignores the very real consequences of what we are talking about. I have mentioned before that in my constituency there are 140 more looked-after children who have been taken into care because they have not had that early intervention and early support. Government Members can laugh and joke and make this into some sort of comedy show, but I am sorry; we are talking about the impacts on real people’s lives. Real people’s lives are being changed forever because of this Government’s actions, and I do not think that it is a laughing matter!
I thank the hon. Gentleman for giving way, because this is an important debate. Yes, the Liberal Democrats are now on the Opposition side—[Interruption.] Listen! We were on the Government Benches to say that we needed to tighten our belts, but for a long time now we have said that enough is enough. We are seeing the impact on our local services. We cannot stand by any longer. You all must have constituents coming—
Order. The Speaker referred to this the other day: we really must not use the word “you.” Hon. Members have to address one another through the Chair. There is a reason for that, so I urge the hon. Lady and all hon. and right hon. Members to ensure that that convention stands.
Thank you, Madam Deputy Speaker. The hon. Member for Bath (Wera Hobhouse) is right that these cuts have gone far too far. Many of my constituents, though, will not forgive the Liberal Democrats for the part they played in pushing through the deepest austerity in the coalition Government. Many of those hard choices have resulted in some of the increases in demand that we are now seeing, particularly in children’s services and adult social care.
Because it is a fact that the local government finance settlement went nowhere near the gaps that have been created by the hon. Lady’s party in local government. We do not support ongoing austerity. We want to ensure that we reinvest in our public services, and that is why I hope she will join us in the Lobby tonight. If she believes in defending public services and wants to see more money for our local councils, she can support our motion tonight, and I look forward to her being in our Lobby.
House building has fallen to its lowest rate since the 1920s and homelessness is rising. The number of people sleeping rough on our streets has more than doubled since 2010—[Interruption.] The Secretary of State can chunter, but I do not think that doubling the number of rough sleepers is a record for the Housing Secretary to be proud of. Older people are not living with the dignity and comfort that they deserve because of the cuts to social care. The outsourcing of public services has led to one scandal after another, and the collapse of private outsourcing companies such as Carillion has put services at further risk. Demand for children’s services is placing growing pressure on all councils. Central Government funding to support children and their families has been cut by 55% since the Conservatives came to office.
The fact is that—[Hon. Members: “Yes or no?”] The fact is that the privatisation of our council services has been a catastrophic failure. I can tell the hon. Gentleman that the next Labour Government will introduce new rules to allow councils that want to to fully in-source their services without let or hindrance by the Government, because we support publicly owned, publicly accountable public services.
I am grateful to the hon. Gentleman for giving way so generously. In Cumbria we had the opportunity for a devolution deal. It did not happen. In Cumbria we had the opportunity to reduce the number of councils and councillors, which would have meant savings of around £25 million, which could have been spent on frontline services. The reason for the failure was Labour councils and Labour council leaders. Does the hon. Gentleman not think that was a failure of the Labour party?
Of course, the hon. Gentleman did not want to tell me where the £1.7 billion for the shortfall in children’s services was coming from. I know that in Cumbria there is a shortfall in funding for children’s services, as there is in every other county council in England. Every metropolitan district council in England and unitary councils across England are all saying the same thing. Perhaps he ought to speak up for Cumbria and get the extra money for Cumbria’s children’s services.
The result of the cuts has been appallingly clear. Cuts to early years intervention have meant a record number of children, some 72,000—let us stop and think about that—taken into care last year. The number of serious child protection cases has doubled in the last seven years, with 500 new cases launched every day. More than 170,000 children were subject to child protection plans last year—double the number seven years ago.
Like my hon. Friend, I too was a councillor—for 25 years. Does he agree that the removal and slow cutting of early intervention services, specialist family services and support and grants for charities that support people and families in the community over the past seven or eight years is part of the reason why too many children are coming into children’s services, too late and with too many serious problems?
My hon. Friend is absolutely right. We had numerous debates in the Parliament from 2010 to 2015 about children’s services and in particular the cuts to Sure Start. I think Sure Start had the basis for being one of the previous Labour Government’s greatest achievements, had it been allowed to remain in place, fully funded in the way that Labour intended. What used to gall me the most was Member upon Member on the Government Benches saying that Sure Start was a waste of money and did not work. Sure Start was never intended to be a quick fix. Government Members can tell me in 20 years’ time, when the children and parents who went through Sure Start are parents and grandparents themselves, whether Sure Start worked or not. I believe that one of the biggest tragedies of the David Cameron era of Government was the slash-and-burn approach to early years.
One of the issues facing our schools is the number of children attending who are not classified as school-ready. There are increased numbers of children with oracy problems and children starting school who are not toilet trained, which increases the impact on our schools’ resources.
That is because of the lack of support for children from health visitors and Sure Start services. Does my hon. Friend not think it is time for the Government to reverse those cuts if they are genuinely committed to giving every child the best possible start? Or can only children from families with the money to pay for it have the best possible start?
When interventions transmute into speeches, some of us get a little frustrated. The point is that difficult decisions had to be made when in 2010, we were faced with the highest budget deficit since the war. The hon. Gentleman is effectively saying that we should have protected the Department for Communities and Local Government budget, just as we chose to protect the NHS. What taxes would he have increased or what other Departments would he have cut to pay for that?
I will take no lectures from a Member who voted to cut the bank levy by £5 billion. I politely point him towards the “Grey Book”, which we published with our manifesto, “For the many, not the few”—I am sure it is well thumbed on the Government Benches. In our manifesto we pledged to give, this year and every year, an additional £1.5 billion for local councils and where we—[Interruption.]
The Secretary of State says he will tell me. I am glad that he is looking into Labour policy development. Perhaps he ought to consider his own policy development on these matters, because the Government are so woefully lacking in any such proposals. Our proposal was fully costed, with £500 million for early years, £8 billion for social care—
Does my hon. Friend agree that it is about time that we bust the Tory myths about the economic shock that this country faced? The reality is that the economy was growing when Labour left office. It was the absurd austerity policies of the Tory party that prolonged the recession and made it worse, giving us what is now the longest recovery in our country’s economic history.
My hon. Friend is absolutely right, and it cannot be said often enough. When the Gordon Brown Government ended, the economy was growing again. That is a statement of fact. [Interruption.] The Secretary of State chunters again about “the deepest recession”. I think he will find that the global crash started in the United States of America—something that even his former Chancellor of the Exchequer, George Osborne, now acknowledges.
My hon. Friend is making some great points. Does he agree that the children’s services crisis has been worsened by the 1% pay freeze over the last eight years? I hope we hear good news at the end of this debate from the Minister about pay increases for those workers being brought in line with the NHS pay increases.
My hon. Friend makes a really important point. I will come to some of those issues later, but her point is very well made, because we have not only seen the hollowing out of our local services. We have also seen the impact of that on local government as a whole.
I know that is an inconvenient truth for Ministers, and I am sure that when the Secretary of State responds, with his pre-prepared speech, he will say that I am making overtly political points. That seems to be his stock answer. He seems to forget that it is the job of the Opposition to point out the Government’s failings, of which there are many in local government policy. However, it is not just the Labour party saying this; it is the National Audit Office. Surely the Government recognise the National Audit Office as a reputable organisation that knows what it is talking about. The NAO has told us what the Government’s policies mean. They mean that one in 10 councils with social care obligations will have exhausted their reserves within the next three years. They mean that the Government’s short-term fixes are not working and that local government still has no idea how its finances will work after 2020. It is about the cost of negligence being paid for by communities across the country. Vital services are cut, and because the Government shift the blame on to local councils, giving them so-called flexibility but then criticising them when they use it, council tax bills are increasing.
Planning and development, the National Audit Office has shown, has been cut by 52.8%. If we are to meet the Government’s ambitious targets for new homes, who will be the planners of the future? Who will identify the land to be built on? Who will process the planning applications? Who will be the enforcement officers to ensure that the homes and other buildings are built in accordance with the plans?
Funding for transport has been cut by 37.1%. These are our bus routes. These are the vital links between our communities. These are our roads, our pavements, our cycleways. I note that Conservative Members are now silent about that.
It is extremely kind of the hon. Gentleman to give way, but it must be said that he is continuing the same argument. When we had the deficit, we chose to protect the NHS and had to make other difficult choices. He is effectively saying that Labour would have protected the budget of the Department for Communities and Local Government. He must therefore tell us what other budgets he would have cut, or what taxes he would have increased, to pay for that protection.
I think that people listening to the hon. Gentleman’s intervention will find it hard to believe that he protected the NHS, for a start. However, I am glad that he has intervened on the issue of transport. It is rather ironic that he has come here and said that we would want to protect local government. He is damn right we want to protect local government, but so does his Defence Secretary. His Defence Secretary took to Twitter a couple of weeks ago decrying the fact that Conservative-controlled Staffordshire County Council was removing bus services from his constituency—the same Defence Secretary who voted for the cuts in this place.
One of the impacts of the transport cuts is the declining number of apprentices, who find it difficult to travel to college to complete their apprenticeships because of the cost of local transport. In their manifesto, the Conservatives promised to give apprentices subsidised local travel. This is another instance in which their promises have failed and they have failed to deliver, because they are apparently incapable of any joined-up thinking.
My hon. Friend is absolutely right, but this does not just apply to transport. It applies to food safety, and to day-to-day services such as street cleaning and the emptying of bins. It applies to our museums, our heritage, our cultural services and our libraries: the glue that holds together the fabric of our local communities. I do not support the Government’s notion that they can go on cutting vital day-to-day services without those cuts having an impact.
I will come back to the hon. Gentleman, if he will allow me. I need to draw my remarks to a conclusion, but I will take a few more interventions before I do so.
It is not just the National Audit Office that is making these comments. Back in 2015, the Institute for Fiscal Studies was warning that deprived areas were suffering from the harshest council cuts. The Government called for councils to spend their reserves and sell off their assets. Tory Northamptonshire followed that instruction to a T, and look where it got them.
As local government leaders warned of the coming crisis in adult social care, the Government said
“town halls are hoarding billions in their piggy banks”.
The Municipal Journal said recently, in response to this toxic situation:
“This is a wholly unsustainable position, and has already led to speculation about the long-term futures of four other counties which have used significant cash reserves in recent years: Surrey, Lancashire, Somerset and Norfolk.”
All I can say is that if the Surreys of this world are now struggling and pleading poverty to the Secretary of State, heaven help the Liverpools, the Manchesters, the Birminghams, the Tamesides and the Hulls of this world.
I thank the hon. Gentleman for giving way. He is very generous. Does he agree that if there is to be wholesale reform of local government funding, it should at least be fair, and should not punish areas that are already more deprived than others? There must be a fair funding formula, but that is not what is currently proposed.
My hon. Friend is making a very important speech. I should say that I am currently a member of a council, and as a councillor I know about the effect that the cuts are having. In Scotland, £1.5 billion has been slashed from local government since the Scottish National party came to power. Does my hon. Friend agree that the nationalists are simply a conveyor belt for the Tory austerity that is continuing in Scotland?
My hon. Friend can speak very well about his experiences in Scotland. Tory austerity south of the border is driving local councils to the edge of a financial cliff, and I am very sorry if that is being replicated north of the border by the SNP Government in Holyrood.
I must make a little more progress. I will give way once more before I finish my speech.
It is little surprise that when we talk to Conservative Members in private they are just as concerned about what is going on in their own local communities as Labour Members are in public. It is not just the Opposition who are expressing concern about what is happening across local government; the IFS, the NAO and the media that cover local government are all saying the same things, as are members of the Conservative party.
Ensuring that vulnerable children have the protection that they need should not be a party political matter, which is why I am grateful for the work done by the hon. Member for East Worthing and Shoreham (Tim Loughton) to highlight the crisis in children’s services. Both the hon. Member for Harrow East (Bob Blackman) and the current Minister for Policing and the Fire Service, the right hon. Member for Ruislip, Northwood and Pinner (Mr Hurd) have campaigned against library closures. As I said earlier, the Defence Secretary has expressed concern about the cutting of bus services by Tory-controlled Staffordshire County Council—and he is right.
The Government can talk the talk on social mobility, supporting apprenticeships and investing in local communities, but at the moment—as was pointed out by my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy)—people who live in rural areas and want to find work or apprenticeships cannot travel because there are no local transport services for them to use. I agree with the Defence Secretary. I only hope that he will be in the Lobby with us today, supporting his Twitter petition. For many years we have argued for a change of direction while the Government have stuck their head in the sand.
Does my hon. Friend agree that what has been displayed today, in the most spectacular fashion, is total Tory economic illiteracy about what this country has faced? Had the Tory party continued with Labour’s stimulus plan, we would have restored the public finances at a far faster rate than can be achieved through a self-defeating austerity project.
I will not give way again.
Today’s vote offers all Members on both sides of the House an opportunity to send a very clear message to the Government and the Secretary of State: the message that things must change as a matter of urgency, that our vital public services should be properly funded, and that our communities need and expect their councils to deliver the services that they want to see. I hope that all Members will join us in the Lobby to stand up for their communities, their public services, and—yes—their councillors, too. This is not just about Labour councillors, but about Conservative, Liberal Democrat and independent councillors: everybody who serves our communities in the town and county halls across England.
The Government need to think again about the impact of their reckless and short-sighted approach to council funding. Northamptonshire is the first, but it almost certainly will not be the last. For local government, money tomorrow is no solution to a crisis happening today. I urge all right hon. and hon. Members to support us in the Lobby. I commend this motion to the House.
I welcome the opportunity to respond to this debate and to set the record straight on the Government’s support for local government and the communities that it serves. First, however, let me take this opportunity to express my condolences to the family and friends of Councillor Clarissa Slade—one of the youngest councillors in the country, who died, sadly, earlier this week.
Every day, dedicated councillors and officers in local government deliver vital services on which we all depend: on that much, the shadow Secretary of State and I agree. I have the highest regard for them. They are, quite simply, at the frontline of our democracy and the foundation on which strong, thriving communities are built. That said, these have been challenging times for local government, although it has been notable how impressively many councils have stepped up to make hard-earned taxpayers’ money go much further—not just protecting services, but often improving them. The fact that satisfaction levels among residents have remained broadly steady is testament to that. However, I recognise, of course, that these hard-won gains have been achieved in a very difficult financial climate.
I hope that the hon. Lady will appreciate what I am about to come on to: an understanding of how we got into this situation and how we can avoid getting back into it. Liverpool City Council is part of the Liverpool city region, which has been getting a lot more money recently—especially for investments, to encourage growth and jobs. If other members of the Liverpool city region, such as Wirral, for example, stopped wasting a quarter of a million pounds every year on some council Pravda, perhaps they would spend money more efficiently.
My right hon. Friend mentioned a moment ago that he is going to explain how we got into this position. Will he elucidate what was meant by the last Labour Chief Secretary to the Treasury in the note that said that there was no money left?
I thank my hon. Friend, who brings me to precisely the point I was about to make, which will help explain exactly why the last Labour Chief Secretary left that note for his successor.
In considering how this climate was created, we need to step back and remember what the Government inherited in 2010: the biggest budget deficit in peacetime, of £150 billion, and Labour’s great recession—the deepest in almost 100 years. If that was not enough, there was also the biggest banking bail-out ever: just one bank bailed out to the tune of £50 billion.
I thank the Secretary of State for his joke. It is not down to Members who were not in the House to apologise.
What is the right hon. Gentleman’s Department’s estimate about how many more Northamptonshires we are going to see in the next four years? Will 10, 20 or 30 local authorities crumble? How many chief execs will have to write their own notes about there being no money left because of the Tory cuts?
The hon. Lady says that it is not for her to apologise, but she stands there supporting the party that brought this country to its knees economically. It was responsible for the largest, deepest recession that this country has seen for 100 years—a recession, by the way, that led to an increase in unemployment of half a million people. Go and tell them that it is a joke.
The Labour party fails to recognise the gravity of the situation that it created in this country and the legacy that it left behind. It is no exaggeration to say that thanks to Labour, our country was on the brink of bankruptcy. Had it been allowed to continue in office, had we continued down that road, all public services, including local government, would have been decimated.
I am grateful to the Secretary of State for giving way. This is obviously a rehearsal for the local election campaign.
As he knows, people on these Benches have held a mirror up to our party over the issue of anti-Semitism. The Secretary of State does not need any lectures about Islamophobia, not least given his recent experiences. However, I ask him to hold a mirror up to his party, given the disgraceful campaign in London two years ago and because of the dog-whistle politics already being seen in the London election campaign. Islamophobic material has even been shared by Conservative Members of Parliament. We all have to root out prejudice in our politics, and that includes the uncomfortable experience of holding a mirror up to our own parties and our own values.
I am not sure what that has to do with the debate, Madam Deputy Speaker, but I am happy to answer the hon. Gentleman’s question, if that is okay with you—he made the point in good faith. He is right about the importance of making sure that we all in the House, regardless of whether we are Back Benchers, Front Benchers or leaders of political parties, respect each other at all times, whether during election campaigns or not. I very much agree with him on that. I heard him speak very passionately just a couple of days ago in Parliament Square, when he rightly emphasised the point. I very much agreed with him then, too.
Following what my right hon. Friend has just said, I have seen—I think we all have—targeted and in some cases public campaigns against hard-working councillors and officers of councils by some, sadly, in the Labour party. Is my right hon. Friend concerned about reports that councillors are being intimidated simply for considering how best to deliver for their residents?
I am very concerned about the intimidation of councillors, which is, of course, wrong at every level. Decent Opposition Members will recognise the intimidation that there has been, especially in London, of Labour leaders. Just yesterday, there were reports of a meeting of the hard left neo-fascist Momentum group, which was trying to remove Wandsworth councillors. We have all heard about Claire Kober, who was removed from Haringey Council—and who, by the way, talked about the sexism, intimidation and bullying that she suffered, including the anti-Semitism in her own party that seems to be defended by the Leader of the Opposition at every opportunity. We have also heard about Warren Morgan in Brighton and Hove, and about Jon Clempner. The list goes on. I very much agree with my hon. Friend that we all have to end this kind of intimidation in politics, but this is particularly a lesson for the Labour party.
Along with every other Member, the Secretary of State must have noticed the rise in homelessness across our communities. This is happening not just in our cities but in our towns and even our villages. Does he agree that some of the cuts to peripheral services such as mental health services, housing services and Sure Start centres have contributed to this rise in homelessness, which had been greatly reduced under the Labour Government?
I share the hon. Lady’s concern about the rise in homelessness. It is almost 50% lower than it was at its peak in 2003, but it is still too high, and she is right to point out that it has been rising. All hon. Members should be concerned about that. This is why it is important that we should continue to help those programmes that can prevent homelessness and those that can help those who find themselves in that difficult situation. She might be pleased to know that a recent pilot in Southwark of some of the measures that will be put in place across the country in April as a result of the Homelessness Reduction Act 2017, which had cross-party support, has resulted in a one-third fall in homelessness acceptances. I hope that those are the kinds of measures that we can all support.
I tried to intervene on the shadow Secretary of State earlier to ask about Labour’s proposals to raise money for local councils through a land value tax, which is also known as a garden tax. Such a tax would see families whose properties were worth £300,000 paying an average of £4,500 a year. What is the Secretary of State’s view on those proposals?
I am pleased that my hon. Friend has raised that point. A moment ago, I talked about how Labour had brought our country to the brink of bankruptcy and how, given the chance, it would do it all over again. She has just illustrated that point. All that Labour knows is borrow, borrow, borrow and spend, spend, spend, and it wants hard-pressed taxpayers to pick up the bill. She mentioned Labour’s garden tax. It is interesting that the shadow Secretary of State did not want to dwell on that, but it appeared in Labour’s 2017 manifesto, and it was calculated at the time that it could result in a charge of £3,700 a year for the average home, which is roughly £2,000 more than the current band D council tax. That reminds me that the hon. Member for Derby North (Chris Williamson) was recently sacked from the shadow Front Bench for exposing Labour’s plans to double council tax. So the facts are out there, and my hon. Friend is absolutely right to raise that point.
I will give way in a moment.
It has taken titanic efforts to turn the situation round and rebuild our economy, with both central and local government having to find new ways of delivering essential services while delivering value for money. The country cannot afford a return to Labour’s ways of spend, borrow and bust.
I was not planning to intervene on the Secretary of State, as I am hoping to speak later, but the hon. Member for Lewes (Maria Caulfield) talked about Labour’s proposals for a land value tax, and I want to correct the record on that. The Housing, Communities and Local Government Committee is currently undertaking a cross-party inquiry into the merits of the land value tax, which has been tried and tested in many European countries and which has many variants. I hope that the Secretary of State will take seriously the recommendations of the Select Committee when we report in due course.
The hon. Lady gives me the opportunity to highlight Labour’s tax plans once again. She says that Labour is not considering a land value tax, but perhaps she is not aware of what Councillor Sharon Taylor of the Local Government Association Labour group said just a few days ago, on 20 March. She said that she would like to see increased freedoms for councils from day one of Labour Government and that this should include
“the ability to look at local taxes such as land value tax”
and a tourism tax. Labour’s plans are all about tax, tax, tax. That is the only thing it knows.
There is no doubt that local authorities are stepping up to the challenges that they face and demonstrating real ambition and creativity to drive efficiencies at the same time as protecting frontline services. Let me share a few examples with the House. Suffolk County Council has used advanced technology to understand what is behind the service pressures generated by troubled families. Since that work began, the council has saved some £10 million and increased the capacity of its system to focus on priority cases. South Cambridgeshire has set up its own housing company to provide innovative solutions to meet local housing need. The company will expand its portfolio of properties, investing approximately £100 million over the next five years. This will generate an additional £600,000 per annum for the council.
Many councils have taken a more radical approach to restructuring to do better for their communities. The benefits can be enormous when local areas look beyond lines on a map and party differences and find new ways to work together. That is what Suffolk Coastal and Waveney district councils have done to create a new district council: East Suffolk. That culmination of years of collaboration is expected to yield annual savings of more than £2 million. There are also mergers of Forest Heath and St Edmundsbury to form West Suffolk, which is estimated to generate a saving of over £500,000 each year, and of West Somerset and Taunton Deane to form Somerset West and Taunton, which will lead to transformational change and annual savings of some £3 million.
I gently say to the hon. Gentleman that he is demonstrating his ignorance of how Government financing works. If he really thinks that that is issue, perhaps he can explain why that figure includes £65 million for affordable housing returned by the Mayor of London? Has he asked his colleague that question? Perhaps he can also explain why in Labour’s last full year in office, when the current shadow Housing Minister, the right hon. Member for Wentworth and Dearne (John Healey), was the Housing Minister, £240 million of housing and regeneration funding was returned?
The right hon. Gentleman lists several initiatives by several councils, but how many of those initiatives will make up the £6.8 billion by which the cross-party LGA estimates that councils will be in deficit? His Government have kindly offered £1.3 billion, so how will all those initiatives make up that enormous gap? I do not believe that it is possible. Finally, what has he done to ensure that his Department is no longer the worst funded of all Departments? It is facing the greatest cuts, and the greatest number of services across the pitch are being affected.
I will come on to the local government financial settlement shortly, but if the hon. Lady is so concerned about the resources that local government receives, why did she vote against a real-terms increase for the next two years for local authorities? She can perhaps reflect on that while she waits.
Returning to the reforms that councils are making, some authorities are opting for unitarisation. In Dorset, for example, the nine existing councils will be abolished to create two new unitary councils, generating annual savings of approximately £28 million. I have announced that I am minded to replace the existing five councils in Buckinghamshire with a single council for the area, which could generate savings of £18 million.
Despite all the efficiency gains that some local authorities can generate, some authorities are in genuine difficulties, as we have seen in Northamptonshire. What advice would the Secretary of State give to Members and council leaders where councils are struggling to balance their budgets and are considering section 114 notices? How should such considerations be linked to Members of Parliament so that we can work together to tackle the difficult situations that many communities are dealing with?
I do not know whether the right hon. Gentleman was present for the statement I made yesterday on Northamptonshire County Council, but the independent inspector specifically concluded that the situation was not due to a lack of funds but to the mismanagement of funds and other issues. However, the right hon. Gentleman makes a wider point that councils can face certain financial difficulties even if they are managing their finances well, and those councils should rightly make maximum use of the available flexibilities. If they want to go further, they can try to get the support of local people through a referendum. In the longer term, we need a fair funding review, to which the hon. Member for Bath (Wera Hobhouse) recently referred, to ensure that the system distributes funding more fairly. The recently closed consultation received some 300 representations, and will be going through them.
In his comments on the wider fiscal position, the Secretary of State has failed to mention the former Chancellor of the Exchequer, who was sacked by the Prime Minister for gross incompetence—a decision with which the Secretary of State presumably agrees.
The Secretary of State for Health and Social Care and the Secretary of State for Defence have run very public campaigns for more funding for their Departments. When will the Secretary of State for Housing, Communities and Local Government develop some cojones and do the same for local government?
If the hon. Gentleman listens to the rest of my speech, perhaps he will appreciate the issues and challenges on financing and how they are being addressed.
I referred a moment ago to some of the changes that councils are bringing about in their structure, and it is important in all those cases that the changes are led from the ground up. Where that is the case, we will not hesitate to work with those councils and to take them seriously.
The quantum of local government finance and fair funding across the system is extremely important, but does the Secretary of State agree that how money is spent is also extremely important? I use the example of the appallingly run Labour Nuneaton and Bedworth Borough Council, which has overspent by £1.5 million on setting up a council depot. Does not money have to be spent in a better way?
Typically, my hon. Friend makes an excellent point. He speaks from his years of experience as a Local Government Minister, and he cites the excellent example of misspending by Nuneaton. Further up the road from Nuneaton, he could equally have picked Birmingham City Council, which has been in a shambles because of repeated mismanagement by a Labour administration. We shall see what the verdict of the electorate is in a few weeks’ time.
My right hon. Friend is making a fantastic speech about why local choices matter and about trusting councillors. We heard earlier about the Minister for Policing and the Fire Service campaigning against a library closure. That library, Hatch End library, is in Labour-run Harrow—the other half of his constituency is in Hillingdon—so Labour Members might want to speak to the shadow Chancellor, who enjoys all his libraries not only being open but having been refurbished over the past few years because his constituency is in Conservative-run Hillingdon. Local choices matter.
On a point of order, Madam Deputy Speaker. The hon. Member for Sutton and Cheam (Paul Scully) referred to my local authority and omitted to mention that Hillingdon Borough Council gets double the funding of Harrow Borough Council. How can I get that appropriately reflected in the record?
That is not a point of order but a point of debate. A lot of people want to speak in this debate, so Members should not raise spurious points of order. If the hon. Gentleman wants to intervene on the Secretary of State, he can do so.
Interventions should be short from now on, because there is a lot of pressure on time.
We recognise that our support to councils means nothing without the right funding and resources. To that end, we published the final settlement for funding local authorities in England a month ago. The settlement equates to a real-terms increase in resources to local government over the next two years—once again, it is worth reminding the House that it was a real-terms increase that the Labour party voted against. This settlement forms part of a four-year settlement that gives English councils access to more than £200 billion in funding in the five years to 2020. That gives councils greater freedom and flexibility over the money they raise, in recognition of the fact that no one knows their local areas—the opportunities, challenges and pressures there—better. This settlement strikes a balance between relieving growing pressure on local government and ensuring that hard-pressed taxpayers do not face ever-increasing bills.
Does my right hon. Friend share my frustration that, as happens on police funding and the NHS, on local government Labour raises lots of concerns about a lack of funding and then votes against the solution? Does he think that in the upcoming local elections people should judge the Labour party on its deeds, not its words?
My hon. Friend makes an excellent point. We saw the same again recently on the cut in stamp duty; Labour talks about helping people to buy their first home, yet it voted against a cut in stamp duty. There are many such examples and it is incumbent on all of us in this House to make sure we know what Labour really stands for.
The settlement comes in the third year of a four-year deal that was accepted by 97% of councils in return for publishing efficiency plans. As I said earlier, many councils have made the most of the certainty and stability this offers to plan ahead and drive commendable efficiencies. We will continue to work with the sector to not just deliver better value for money, but really transform services. In all, this settlement answers calls from councils, over many years, for greater control over the money they raise and the tools to make this money go further. This is the approach we have taken across the board: listening to local authorities and responding to what we hear.
I will come on to discuss the pilots in a moment, but the good thing about them is that all the local authorities involved, including Suffolk, will now be able to experiment and see what they can do to help raise those local rates by having more incentives for businesses and attracting more businesses to the area. One clever way of getting more revenue is by getting more businesses into the area.
As we look at the resources of local authorities, we need to start looking at creating a whole system of local government finance that will be fit for the future. The current formula for financial allocations had served local areas well over the years, but a world of constant change, with big shifts in demographics, lifestyles and technology, demands an updated and much more responsive way of distributing funding. That is why there are questions over the fairness of the current system, which is why I was pleased to launch a formal consultation on a review of councils’ relative needs and resources in December. That closed recently and I am grateful to everyone who responded. This was not just a paper exercise; we have an unparalleled opportunity here to be really bold and ambitious; to consider, with the sector, where the most up-to-date data and evidence lead us, and to create a new system that gives councils the confidence to fully grasp the opportunities and challenges that lie ahead. We aim to introduce this new approach in 2020-21.
That is also when the latest phase of our business rates retention programme will get under way. It is a programme that gives local authorities powerful incentives to grow their local economies, and so far it has been a resounding success. Councils will keep some £2.4 billion more of their business rates next year alone; this a significant revenue stream, on top of their core settlement funding.
The retention of business rates is indeed a huge opportunity for councils such as Somerset’s, which was so disappointed not to be part of the business rates retention trial. Will the Secretary of State reassure us that all that he has learnt from his review of the funding formulas will be applied to how business rates retention is baselined, so that county council areas with smaller economies are not disadvantaged by the retention of business rates when it is introduced in full?
Yes, I can give my hon. Friend that reassurance. I shall say more about how the system is going to work in a moment.
Our aim is to go further and for local authorities to retain 75% of business rates from 2020-21, as we work towards 100% retention. With that in mind, in December I announced an expansion of the 100% retention pilots that have proved so popular. More than 200 authorities came forward to bid for the new 100% business rates retention pilots that we are going to run in 2018-19. I was pleased to respond to that enthusiasm by doubling the number of initial pilots to 10, covering some 89 authorities. The 10 that we have selected, taken alongside the existing pilots, give a geographic spread to help us to see how well the system works across a broad range of areas and circumstances. The pilot areas will keep 100% of the growth in their business rates if they expand their local economies—that is double what they can keep now. There will also be opportunities for others to get involved, with a further bidding round for pilots in 2019-20, which will open in due course.
Like businesses, councils need stability, particularly with Brexit happening. Will the Secretary of State inform the House why his Department has not bid for any of the Government’s pot of funding to prepare for Brexit, to help councils?
My Department is very much involved in the preparations for Brexit. We have attended several recent EU exit committee meetings and we are involved. The hon. Lady should wait and see what happens. In due course, she will learn more about my Department’s approach.
In expanding the pilots, we have responded to what councils have told us, and we are doing the same in other areas. For example, the housing infrastructure fund recognises the crucial role that councils play in helping to deliver the homes that our country desperately needs, by providing billions in additional finance to support new development. We all know that we cannot achieve the new housing we need without having in place the right infrastructure, including schools, healthcare facilities, transport links and other essential types of infrastructure. We have received a staggering 430 bids, worth almost £14 billion, to deliver 1.5 million homes. That demonstrates the incredible ambition out there to tackle the housing crisis—an ambition that we are keen to get fully behind; hence our move to more than double the housing infrastructure fund at the autumn Budget, in which we dedicated an additional £2.7 billion, bringing the total to £5 billion. I was delighted recently to announce the first funding allocation of £866 million for 133 projects that will help to unlock some 200,000 additional homes. The work under way with a total of 45 local areas to deliver major infrastructure projects worth £4.1 billion could potentially deliver an additional 400,000 homes.
In his remarks earlier, the shadow Secretary of State talked about house building having fallen to its lowest levels since the 1920s—I think that is what he said. He is right about it having fallen to its lowest level since the 1920s, but he is wrong about when it happened. It happened in the last year of the previous Labour Government, when the current shadow housing Minister, the right hon. Member for Wentworth and Dearne (John Healey), was the actual housing Minister. Since then, it is up by more than 50%.
I recently announced almost £300 million of funding for housing deals in Greater Manchester, the west of England and Oxfordshire, and a housing deal for the West Midlands. The West Midlands deal backs the mayor’s ambitions to build some 215,000 homes by 2030-31. Isn’t Andy Street doing a fantastic job, Madam Deputy Speaker? You do not have to answer that. Those deals represent another important step towards meeting one of the defining challenges of our time, as do the measures we are taking on social care.
Since 2010—since the change in Government—more than 300,000 affordable homes have been built. The hon. Lady mentioned the previous Labour Government and social housing. Interestingly, she did not point out that under the previous Labour Government, who were in power for 13 years, the number of social housing units for rent fell by 421,000. If she was really interested in this, she would stand up again and apologise—
Does the right hon. Gentleman not recognise that the net loss of social rented housing was because of right to buy? I do not have a problem with the scheme in itself, but had the councils been able to replace the homes that had been sold under right to buy, there would have been no net loss of social rented housing in this country. Will he also answer the question that I just asked?
Order. May I say again that interventions need to be very short? I am sure that the Secretary of State will want to bring his remarks to a close soon without too many more interventions. If Members want to speak in this debate, they must bear in mind that we need to move on.
I apologise to my hon. Friend for not listing that particular fund; there are just so many places where we are taking action to make sure that this country deals with the housing crisis—the housing crisis that was left behind, as he knows, by the previous Labour Government.
Let me turn now to social care. I am under no illusions about the pressures that councils face in addressing this issue. It is one of the biggest social issues that we face in our country, which is why we have put billions of pounds of extra funding into the sector over the past 12 months. We have also announced a further £150 million for the adult social care support grant in 2018-19. That will be allocated according to relative needs, and will help councils build on the work that they do to support sustainable local care. It comes on top of an additional £2 billion that was announced in the spring Budget for adult social care over the next three years. With the freedom to raise more money more quickly for the use of the social care precept that I announced this time last year, we have given councils access to some £9.4 billion of dedicated funding for adult social care over the next three years. However, we know that there is still much more to do and that that funding alone will not fix this issue, as it is a long-term challenge that requires long-term systemic change. The publication of a Green Paper this summer on future challenges within adult social care will set us on a path to securing that change.
Another important issue is, of course, children’s social care. Although some £250 million of funding has been dedicated to that sector since 2014 to help with innovation and to deliver better quality services, the recent local government financial settlement, which will lead to a real-terms increase over the next two years, will also help. None the less, I do recognise that there are longer-term challenges, and that is something that my right hon. Friend the Education Secretary is taking very seriously.
Undoubtedly, these have been very challenging times for local government, but we know what Labour’s response to that would be: it would be throwing more money at the challenge without a second thought. Never mind the working people who actually foot the bill for raising that extra money through more and more taxes. Instead, we ask councils to raise their game as we strive to rebuild the economy after the disaster that we inherited in 2010, and we back those councils not just with funding, but with greater freedom, flexibility and certainty so that they can harness their invaluable local knowledge and transform services. Many have done just this—driving efficiencies and innovating while continuing to provide a world-class service, and delivering lower taxes in real terms since 2010. Services have not just been protected; in many cases they are improving. Communities are being empowered through billions of pounds of local growth funding and devolution deals. These councils are doing an excellent job, and the people they serve deserve no less.
Before I call the Scottish National party spokesperson, let me again say that there is huge pressure on time in this debate. Therefore, after the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) has spoken, I will impose a six-minute time limit to start with. I urge colleagues to bear that in mind.
I join the shadow Secretary of State and the Secretary of State in paying tribute to councillors across the nations of the UK for the work that they do. It is an undervalued job. Those who do it correctly often spend long hours serving their constituents diligently, and often at odd hours of the day and night. It is important for us all to reflect on that. As a former councillor and council leader, I am well aware of the pressures on individual councillors and on budgets.
The shadow Secretary of State quite rightly pointed the finger of blame for the problems of local government at the austerity that has been imposed on local government by this Tory Government. I absolutely agree with him. I was encouraged that he focused on that aspect when replying to the hon. Member for Coatbridge, Chryston and Bellshill (Hugh Gaffney), because I also want to talk about the situation in Scotland.
The UK Government Budget did not present a good deal for Scotland, as a consequence of real-term cuts to Scotland’s revenue block grant for day-to-day spending of over £200 million next year. Despite a commitment of over £300 million of resource funding for the NHS in England this year, Scotland will receive only £8 million in consequentials in 2018-19 due to UK Government cuts elsewhere. Of the additional money that the UK Government announced as being added to Scotland’s budget, over half—£1.1 billion—comes from financial transactions that the Scottish Government cannot spend on frontline public services and that have to be repaid to the Treasury.
Austerity has not ended. Over the eight years of this UK Government—between 2010-11 and 2017-18—and onwards to 2019-20, we will see Scotland’s discretionary budget fall in real terms by £2.6 billion. That is 8.1%. Scotland continues to be hit by UK austerity and the decision to leave the EU. The Scottish Government have actually protected local government budgets and vital public services in the face of this austerity onslaught. Compare what the Scottish Government have done with the 49% real-terms cuts to English local authority budgets.
In Scotland, total resource funding for local government has increased by a total of £170 million in this year’s budget, providing local authorities with an above inflation increase, before taking into account the ability to increase the council tax. Some £35 million will be transferred to local authorities this year using agreed distribution mechanisms. The remaining £135 million will be in the Local Government Finance (Scotland) Order 2018. This figure includes a specific resource grant of £10.5 million agreed with Orkney, which will receive £5.5 million, and Shetland, which will receive £5 million, to address funding for inter-island ferries.
While the Tories in Scotland propose cutting over £556 million from public services to pay for their tax cuts for the wealthiest, the SNP Government deliver for councils and protect the vital local services in the areas that we all hold dear, especially in my own constituency in the highlands. The SNP’s progressive reforms on income tax—with 70% of people paying less than they did last year and 55% paying less than they would if they lived south of the border—are vital for allowing this funding increase, despite the continued austerity that is being imposed.
My hon. Friend is making a very powerful point about taxation. Council tax on an average band A property in Scotland costs £1,208 per year, whereas a band A property in England costs £463 more, at £1,671. Is it not clear that England is the highest-taxed place in the UK?
My hon. Friend makes a good point. Indeed, the average cost of a band A property is some £400 more in England than in Scotland—5.1% up on last year.
The Scottish Government’s progressive budget also provides extra funding for our NHS, our education and—even though it is a reserved matter for this Parliament and Ministers here—the push to make sure that we have done more on broadband coverage in Scotland. There is more money for our economy, for research and for our environment, too, as well as for protecting important things like free university tuition, free personal care for the elderly, free school meals and free prescriptions—among many other items.
The hon. Gentleman describes the SNP’s recent budget as “progressive”. The Convention of Scottish Local Authorities says that councils need £545 million just to stand still, yet the budget settlement imposed by the SNP was just £159 million. That yawning gap has not been filled. How can that possibly be progressive?
I am delighted that the hon. Gentleman has intervened, because I was expecting him to do so. I was a former group leader at COSLA, so I have been watching for a number of years the Scottish Government manage to put money into local authorities in a way that could not be done down here. In fact, in the last debate on local government that I took part in in this Chamber, Tory MPs were talking about their councils having to hand back the keys to Treasury Ministers such were the cuts. Actually, one of the biggest challenges in Scotland is dealing with the private finance initiative legacy left by Labour in terms of the additional interest costs on all these different items that continue to drain local authority resources.
I want to turn to Highland Council, because it is on my own patch and I speak from experience. Highland Council’s resource budget for our services such as schools, roads and housing rose to almost £450 million for the coming year—an increase of over 2% compared with last year. While the Scottish Government protect local authority budgets, the UK Government leave them paying the price for the austerity agenda.
Highland Council is a good example of the impact of universal credit on local authority budgets. As many Members will know, the constituency of Inverness was a pilot area. We went through the live service and then full service roll-out in June 2016. Local agencies, the council and I have been voicing concern about these issues since 2013, and the measures introduced do not even scratch the surface of the process failings of universal credit. Our local authorities are paying the price now, and right hon. and hon. Members in this Chamber who go through full service roll-out will see the effect on their own local authorities.
Let me reflect on the cost to Highland Council of the impact of rent arrears. Average rent arrears for somebody on universal credit are now £840. Average rent arrears for somebody not on universal credit are £250. The effect of that is that in July 2016 rent arrears were £1.6 million. In March 2017, that figure rose to £2.2 million, and then in December 2017, it rose to £2.7 million, racking up the costs for local authorities, which are having to implement and deal with the effects of universal credit. This will have an effect on services as it starts to drain their budgets.
The extra resources needed for administering the change to universal credit are running into hundreds of thousands of pounds—money that is coming out of the council budget. The welfare support team do amazing work, but they are flat out with demand. Housing officers are also flat out with demand, as more people face housing crises. Some 29% of landlords already say that they have evicted because of universal credit rent arrears. People are becoming homeless, so the local authority has a duty to house them. It is a vicious cycle of costs for the local authority. The increased demand then affects other agencies such as Citizens Advice.
The impact on poverty is also very harsh. One in four children in Scotland is growing up in poverty as a result of this Government’s austerity regime. As household incomes are pushed, people find themselves relying more and more on local authority services. Highland Council, especially its welfare support team, has done incredible work in the face of the most trying difficulties.
The SNP Government are committed to mitigating Tory austerity wherever they can. Since 2013, the Scottish Government have spent more than £100 million a year to protect people from the worst aspects of Tory welfare cuts. We are fully mitigating the bedroom tax in Scotland, and we have pledged to abolish the tax completely when we have the powers to do so.
My hon. Friend is making the SNP’s fundamental point, which is that it would be far better for us as an independent country to be making the right decisions in the first place than having to spend £100 million to correct the Tories’ errors.
I am grateful to my hon. Friend for his intervention. As ever, he makes a telling point: choices would be different in Scotland. We would choose not to have to mitigate something as horrendous as the bedroom tax, which was so ill thought out that the Tories did not take into account the fact that there are virtually no houses in the highlands and islands that do not have more than one bedroom.
Since its establishment, the Scottish welfare fund has helped more than 275,700 households. The fund provides crisis grants when someone experiences a disaster or emergency and community care grants to enable independent living. We have also extended the Scottish welfare fund on an interim basis to mitigate the UK Government’s decision to remove housing benefit for 18 to 21-year-olds. In 2016-17, more than 17,500 applications for crisis grants were made because of delayed payment of benefits—that is around 10% of all applications. Between July and September 2017, that increased to 14%, clearly showing the impact of the Government’s harsh welfare cuts.
We have restored the council tax support cut in Westminster through the creation of council tax reductions, protecting the incomes of more than half a million people on low incomes. We have extended the child allowance in the council tax reduction scheme by 25%, benefiting 77,000 households by an average of £173 a year, or £15 a month. That boost for low-income families will help nearly 140,000 children across Scotland.
Following the UK Government’s decision to scrap the UK-wide scheme, we have safeguarded support for 2,600 disabled people through the Scottish independent living fund. We have now created an extra £5 million fund to support young disabled people to make the transition into adulthood.
To conclude, I urge the Minister to listen to hon. Members and to stop shifting the responsibility for his Government’s austerity agenda on to local authorities across the nations of the UK.
I listened carefully to the words of my right hon. Friend the Secretary of State, and I must say that his claims that the Government support local government and that they believe all changes should be led from the ground up will ring very hollow in Christchurch, where he has announced his decision to abolish an independent sovereign council, which has been in existence effectively since 1216, against its will. Back in November, he said that there was insufficient local consent. The local council then decided to hold a local referendum, in which 84% of the people voting were against the council’s abolition and the enforced merger with Poole and Bournemouth. Yet, despite that, the Secretary of State decided, after the poll had been announced, that there was now sufficient local consent.
The Secretary of State has asserted, incorrectly, that savings will be made all across Dorset as a result, yet we know that just on the issue of the negative revenue support grant, Dorset stands to lose over £10 million a year. Despite having received assurances in private from him that that would be sorted out, we have still to see the detail and see whether he will deliver on that assurance.
Back in December 2015, my right hon. Friend’s predecessor, who is now the Secretary of State for Business, Energy and Industrial Strategy, assured the House that the Government would not abolish councils against their will. The Government have reneged on that promise, to their eternal shame, and have in so doing encouraged council chief officers to be distracted from their responsibilities to deliver good-quality local services.
One of the perverse consequences of the Government’s policy drive towards unitarisation is the destruction of small local councils that have been prudent and are debt-free, as is Christchurch. Christchurch has raised from local tax payers the money that is necessary, while the neighbouring authorities—Poole and Bournemouth—that are now going to take it over, together with its assets, artificially held down their council taxes for many years. The consequence is that the council tax in Bournemouth and in Poole is about £200 less at band D than it is in Christchurch. Those authorities are being rewarded for putting forward false budgets, while Christchurch is being penalised for having been prudent and responsible.
The Secretary of State is intent on adding insult to injury by forcing tax payers in Christchurch to carry on cross-subsidising those in Poole and Bournemouth even after the unitary authority is established. That will, for example, force my constituents in one of the poorest council estates in the whole of the west country to subsidise people living in Canford Cliffs and Sandbanks.
It is totally unacceptable and, frankly, a cause for shame that I, as a Conservative Member of Parliament who campaigned against this, have been let down very badly by my own Government. This has not been helped by the fact that the Department has kept on moving the goalposts. Originally, officials at the Department assured section 151 officers across Dorset that harmonisation, as it is called, over 20 years would be perfectly acceptable. Last autumn, they changed their view, and their advice then was that it would be for a maximum of five years, while I was told by a departmental official that it would be two years at the longest, and that it might be less.
We still cannot get any firm information from my right hon. Friend or his Department about the period of harmonisation they have in mind. However, it seems that the consultation that went out some 18 months ago, based on a 20-year harmonisation period, was a false prospectus. It has caused people across Dorset to reach a conclusion on the basis that they would all be much better off financially, when in fact they will not be; that particularly affected people in Poole.
My right hon. Friend has told me that he will try to limit exit payments for local government officers to £95,000, in accordance with the Government’s pledge. At my behest, he did go off and ask council officials in Dorset about that, and the response from them was, “Bollocks!” and “We have worked our bollocks off—no way are we going to allow our exit payments to be limited to £95,000.”
The savings being suggested are unreasonable, and this is all leading to a failure and breakdown in good-quality local government. As I think I have probably made clear during my speech, I am an extremely dissatisfied bunny as Easter approaches, because I believe in localism.
I rise to support the motion in the name of my right hon. Friend the Leader of the Opposition and other right hon. and hon. Friends, in particular the part that suggests that
“councils are reaching a financial breaking point”
and calls on the Government to
“initiate a review into the funding of local government to ensure that the sector has sustainable funding for the long term”.
I am sorry that the Secretary of State is leaving at this point, because I hoped he might listen to what Back Benchers have to say—but apparently not. I think the level of cuts is too great and threatens the very future of local government as we know it.
Two councils cover my constituency of Garston and Halewood. Liverpool has lost 64% of its central Government funding, or £420.5 million in real terms since 2010. At the beginning of the Lib Dem coalition Government—I am sorry the Lib Dems have absented themselves, because they cannot absolve themselves of responsibility for the cuts that have happened and that continue to happen as a consequence of the Government they supported and were in—we lost £350 million from Building Schools for the Future, £127 million from the housing market renewal initiative, and all the money that recognised the levels of deprivation in Liverpool.
Consequently, the council now has 3,000 fewer staff. It has taken out most of its middle management and saved £5 million a year by cutting the performance-related bonuses of its remaining staff. Councillors’ allowances have been frozen since 2010 and special responsibility allowances have been cut by 10%. There remains a £90 million gap to be filled over the current three-year period.
The other authority, Knowsley, is smaller but has been bashed equally hard by the Government. It has lost 45% of its Government funding so far, which is over £100 million. That is £485 for every person in the borough, which is double the England average of a loss of £188. Consequently, the authorities are struggling to meet the requirements they have to support their residents.
The future the authorities face will be even more difficult, because by 2020 Government grant will be cut further and they will have to rely on council tax and business rates. Liverpool has the further disadvantage that 60% of its properties are in band A—the lowest yielding council tax band—and 90% in bands A to C. The money raised by council tax in Liverpool is £72 million below the average UK figure. It can raise only £1.4 million for every 1% increase in council tax.
The council tax base is such that it will never be as easy for a city like Liverpool to do as well as more affluent areas on the basis of council tax and business rates alone. Last year, 72% of Liverpool City Council’s funding came from Government grant and only 11% from council tax. It has to spend more on adult social care than it can raise in council tax. That is the situation it faces. It is doing what it can. It has built almost 11,500 new band D properties since 2010, yielding an extra £13.5 million a year in council tax. It is doing its best to grow the council tax base, but it is difficult.
Knowsley has made particular efforts to grow its local economy to deal with similar issues, and has managed to do so pretty well. However, it has to spend 80% of its resource on statutory services that it cannot avoid and adult social care, so there is not much space for it to make further savings. It can raise only £477,000 for each 1% increase in council tax. It is therefore fantasy for the Secretary of State and Government Members to argue that this is about efficiencies and just doing things a little bit better. It is far more fundamental than that.
When the Minister responds, I wonder if he might deal with the admitted errors that have been made in section 31 grant calculations in respect of authorities such as Knowsley. Apparently the council was told, after the legal deadline for setting its budget, that there was going to be clawback, because the Department had miscalculated the money due under section 31. To repay that money, Knowsley Council might have to raise council tax by an extra 2%. It cannot do so, however, as it has already set its budget. I hope the Minister will deal with the mistakes made by his Department. The effect on poorer councils such as Knowsley and Liverpool could be devastating. It is bad enough to lose 64% of resource and bad enough to lose 45% of the money used to carry out statutory duties, but to then have further monies clawed back because of a mistake by the Government is completely unconscionable. I hope the Minister in his reply will at least be able to give me some assurances about that clawback and what the Department is going to do about it.
I welcome the funding settlement approved by this House last month, which will see my own local authority of South Gloucestershire given an additional £3.2 million in funding. This will have a number of positive consequences, based on the budget agreed a week after this funding was announced.
The school improvement fund will double, meaning that more help will be available to ensure our children get the most out of their education. I am most proud of the fact that the extra £3.2 million will allow the council to act to help care leavers, meaning that they have increased opportunity to meet their own potential. As well as receiving council tax relief, care leavers will benefit from a programme to encourage apprenticeships. I have spoken many times before about the power of apprenticeships to encourage social mobility. I am very proud to see the money being put to such good use, so our youngsters can fulfil their true potential.
The Conservative leaders of South Gloucestershire Council have ensured that the budget is balanced for this year. It is regrettable, however, that that balance was achieved with a 5.99% increase in council tax. The introduction of council tax referendums from 2012 was the expression of a key Conservative principle that taxation should be by consent, with a mandate and as low as possible. It is, however, no surprise that when the threshold for a referendum is a 6% increase, we see a number of councils raising tax by 5.99%. A cynical observer may suggest that they do not want the public scrutiny that would come with a debate and a referendum. The lesson of Northamptonshire County Council is that financial obligations cannot be dodged and that the political leadership of our councils cannot be abandoned.
Order. Just one second. We are not going to be able to get Members in. Members have had six minutes each and I have now dropped the limit to four minutes. We are in danger of being self-indulgent if we are not careful. Some people will not get in and that is unfair when this issue matters to every constituency.
Apologies, Mr Deputy Speaker. I was just being polite.
South Gloucestershire Council managed to balance its budget, but if councils are struggling to balance their books and need more money, they should not be afraid to make that case to their residents and ask them to fund the services they need. That would require real political leadership and potentially expose some uncomfortable facts, but it would be the responsible course of action. I sincerely hope that, buoyed by the funding increase this year, South Gloucestershire Council takes this opportunity to look carefully at the governance of the council and how effectively it works.
I am grateful to my hon. Friend for giving way. Does he agree that one thing councils should not do if they are trying to raise money is increase in-town and in-city parking charges? In her report, Mary Portas clearly identified that as a disincentive to the public to shop in our town centres.
There has been a big debate in my own area about parking at the Mall at Cribbs Causeway, which remains free. It is always a tough balancing act. Decisions have to be made at a local level to match the circumstances of any particular local authority.
When it works well, an experienced team of senior officers can provide vital support and advice for a council, and they can be an invaluable resource for the elected leaders of councils. However, the dangers can be significant. Too many councils fall into the trap of being officer-led, rather than councillor-led. The leadership of South Gloucestershire Council needs to show political courage. For instance, I do wonder whether South Gloucestershire Council requires a chief executive who is paid more than the Prime Minister, at £158,885 per annum. Indeed, I find myself wondering whether South Gloucestershire Council needs a chief executive at all. As the Department for Communities and Local Government said in 2014:
“the traditional model of chief executive, with a wide public role and a significant salary, is unnecessary and can weaken the ability of a council’s political leadership to set a direction through elected members.”
We must also be alert to the dangers of councils with significant layers of highly paid senior officers putting a real burden on budgets for frontline services. South Gloucestershire Council should really be looking to make sensible savings, for example by sharing back-office costs wherever possible. As well as having a chief exec paid more than the Prime Minister, not to mention a deputy and supporting back-room staff, the council has 15 permanent heads of service. These are joined by one temporary head, four permanent directors, one deputy director, one temporary director and one managing director. Based on pay data published at the end of last year, that amounts to a minimum of £2 million per annum on just 23 senior officers.
This is the kind of scrutiny and debate that councils would face if they held referendums on sizeable council tax rises. They would have to justify officer pay and reduce it where appropriate, and elected councillors would have to regain their role as strategic leaders. Therefore, as much as I welcome the £3.2 million provided to South Gloucestershire Council, I would also welcome any move towards councils having to publicly justify their rising costs through a referendum, trusting the verdict of the people.
I feel like this is one of those debates where there may be less disagreement than usual, given the appalling cuts that almost all our councils have faced over the last seven years. Let us be clear that council budgets are at breaking point. There are very few places left to cut. We are talking about our councils struggling to stay financially viable. There is little to nothing known about their sustainability from 2020 onwards, and there is real fear in our communities as we begin to lose services that are essential to people’s wellbeing. The truth is that the Government have put so much pressure on councils that statutory services have never been on a more insecure footing. They have put ever-increasing pressure on councils such as mine in Bradford and in other areas that sadly face the reality of deprivation.
In February in this Chamber, the Secretary of State for Housing, Communities and Local Government said that
“local government delivers vital services for the communities they serve—services that many of us take for granted, provided by dedicated, often unsung councillors and officers in places that we are all proud to call home. As such, as I have said before, local government is the frontline of our democracy and deserves the resources it needs to do its job,”
which is to
“deliver truly world-class services.”—[Official Report, 7 February 2018; Vol. 635, c. 1561.]
So the question is: why do the Government treat our tremendous councils, councillors and officers with such contempt, expecting them to provide world-class services that people desperately need with crumbs from the table?
Bradford will have seen a near 30% reduction in its funding by 2020. It will have lost in real terms nearly £65 million from its budgets, and all the Government can do is tell it to manage and keep providing essential services. The difficulty—this has been true of many councils for a long time—is that there is no room left to cut. We are at breaking point, with councils having to lose frontline services at a rate of change that leaves some of the most vulnerable in our communities at risk. In Bradford alone, we face some of the most difficult decisions yet, and that is before we need to find another nearly £30 million in savings in the next year.
A local group, Bradford Families Against Children’s Services Cuts, is fighting to try and save the special educational needs and disability and children’s services provision in the city. These real families are directly affected by the cuts, but the council is in an impossible position: instead of the expected £15 million funding from central Government, it will receive only £7.5 million. Let me be clear: this is at the Government’s door—they are deciding that these services are not worth protecting. The same is true for our early years children’s services, where, because of the extreme savings required by the Government, we are likely to have to lose nearly 200 members of staff. This is the grim reality for councils up and down the country while they strive to provide the most important services with less and less money.
This is not sustainable, and as the National Audit Office report on the financial sustainability of local authorities highlighted in no uncertain terms, as pressures grow, there are real and immediate risks to statutory services. Sadly, the Government seem content to keep dividing people. The chair of Solace and chief executive of Doncaster council wrote in The Guardian that councils can take no
“more shocks to what is already a shocked system.”
They are being thrown over a cliff edge, and Northamptonshire Council is one of those examples. The Government can wrap it up how they want, but the fact is that the situation is due to their cuts and their austerity policies. They really need to take stock and change those policies.
Like many hon. Members, I started out in politics by serving as a local councillor. I served four very enjoyable and informative years on Cornwall Council, including as part of the cabinet. There is no doubt in my mind about the importance of local government in delivering essential services to our communities, and they are some of the services that our residents care about the most. However, as with all parts of the public sector, it is vital that local government is held to account to ensure that it delivers value for money for the taxpayer.
In recent years, when we have been dealing with record deficits and have needed to bring the public sector finances back into balance, given the mess we inherited in 2010, it is right that local government has also had to cut back its spending. That has largely been a positive process for both councils and the taxpayer. Councils have had to make efficiencies, innovate and, where appropriate, work together to find the savings required. That has pushed councils into finding better and more efficient ways of working to deliver those services—ways that they might otherwise never have considered. It has also encouraged councils to focus on delivering the core services that residents really want their councils to deliver, rather than wasting money on what are often vanity projects.
However, even with the financial challenges that councils face, there are often still cases of councils wasting money and getting their priorities wrong. Just last week we learned that Liberal Democrat Cornwall Council spent over £46,000 on sending five officers to a property developers conference in Cannes. That is a huge sum of money, and it included £23,000 for renting an apartment for four days for those officers. For people in Cornwall, where the average salary is £17,000 a year, that is a huge amount of money.
That spending might have been questioned even when councils had plenty of money, but my office contacts Cornwall Council virtually every week to ask it on behalf of residents to re-paint some yellow lines, cut some grass or trim some hedges, and the answer we get time and again is, “We don’t have any money to do that because of central Government cuts.” It is funny that the council still manages to find money to do the things that it wants to do. It is therefore important that we continue to focus on councils to ensure they are getting their priorities right, delivering value for money and the things that the taxpayer wants their hard-earned tax pounds to be spent on.
I am sure that the Minister would be surprised if I did not use the time I have left to mention the underfunding that we have experienced in rural councils for far too long. I do not have time to go into all the figures—I know that he is familiar with them—but rural residents pay more in council tax, receive fewer services and on average earn less than those in urban areas. That inequality is unacceptable and has gone on too long. The Government need to deliver on the needs review to make sure we get the baseline right before it is hard-baked in, when 100% retention of business rates is introduced, so that rural councils get a fair deal and receive the funding they rightly deserve. They face increased pressure on their budgets—often far more than urban councils—particularly with the huge rise in social care costs that we are experiencing. I urge the Minister, ahead of the next settlement period for local councils, to get the review in place, reset local government funding and give rural councils a fairer deal.
I am grateful for the opportunity to speak in this important debate. I would like to add my support to the comments made by my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) and many other Opposition Members. I would also like to steer the debate gently back to reality and away from the comments of the hon. Member for St Austell and Newquay (Steve Double), who somewhat contradicted himself by talking about the need for more spending and less spending at the same time.
As we have heard, grants from central Government to local councils have been cut by nearly 50% since 2010, and there has been a 28% real-terms reduction in local authorities’ spending power. In my constituency, Government funding has been cut by nearly £58 million. In 2010, the council was relatively well supported by central Government, but after 2020 it is looking forward to a future with no central Government grant whatever. I am sure all Members are concerned about the fact that the Government have no long-term funding plan for local authorities. There is absolutely no clarity about how local government will be funded when the four-year deal runs out in March 2020, just two years from now.
Let me return to the impact of the cuts on my constituents in both Reading and Woodley. While Government funding has fallen, the cost of providing services has risen and continues to rise. Reading Borough Council has a strong track record of maintaining necessary services for residents. Unlike neighbouring Conservative-run West Berkshire council, it has kept all its libraries open. It has maintained award-winning parks and a council-owned theatre, as well as a wide range of the vital frontline services that ensure—as other Members have pointed out—that vulnerable children, adults and families are protected. However, like many councils throughout the country which have a statutory duty to provide adult and children's social care, Reading is forced to make cuts to other services just to balance the books.
A recent National Audit Office report on the sustainability of local authorities found that, nationally, the knock-on effect of such cuts is a reduction in spending on other hugely important services on which we all rely, such as planning and development, highways and transport, and housing. Housing is a vital service in Reading, as it is in many other English towns. Local people rely on and expect councils to be able to provide a wide range of high-quality public services, including services for the elderly and for children, and care for vulnerable adults.
I agree with everything that my hon. Friend has said so far. I am sure he has noticed the tone of today’s debate. The Conservatives are blaming Labour local authorities while shifting on to them expenditure that central Government should be funding, and then telling us that we are spending too much money.
I wholeheartedly agree with my hon. Friend. I am sure that the situation in Coventry is very similar to that in my own area.
I am proud of the achievements of my Labour-led council, which provides vital services for the people of Reading while under intense financial pressure, but the current funding situation is not sustainable in the medium or the long term. The Government have failed to stand up for local communities. They have forged ahead with their failed austerity agenda, and—as has been pointed out by my hon. Friend the Member for Coventry South (Mr Cunningham) and many other Members—have left councillors to make the most painful decisions about which vital services will be cut.
Sadly the Secretary of State is no longer present, but I say this to the Minister. Surely it is time for the Government to listen to local authorities—to listen, indeed, to some of their own local councillors—and to deliver the fair and adequate funding for local councils that we all know they deserve.
Like many other Members, I have had real experience in local government. While I listened carefully to what was said by the hon. Member for Reading East (Matt Rodda), I am sorry that he was, from my perspective, the voice of doom and gloom. In my time in local government I saw many positives, and I think it important to take account of that in the context of funding.
Basingstoke and Deane, one of the local authorities that I represent, froze council tax year after year while I was cabinet member for finance and property and, latterly, deputy leader. We managed to do that by identifying efficiencies that we could make without hitting the services that we were providing. We delivered £9.7 million of year-on-year savings over seven years, amounting to 20% of the underlying gross budget. At the same time, 96% of residents said that they were happy with where they lived. Reducing cost does not have to equal reducing services, but Labour Members just do not get that.
Protecting taxpayers’ money is critical. Putting people first means ensuring that their hard-earned money is spent well by local councils. It does depend on the scale of the council, but we achieved real innovation, and I think that councils should do much more of that in the years ahead. We invested in economic growth, delivering a Waitrose and John Lewis and a Costa Coffee on council land and putting money into shopping centres in our area. Even now, there is a plan to create 4,000 new jobs, adding £233 million of gross value to the economy per annum. That is good news. I am afraid that Labour Members want to talk down local government and its achievements. [Interruption.] Any Member who wishes to intervene is more than welcome to do so.
Hart District Council, my other council, is much smaller. Decisions taken by the Conservatives when they were in control have meant that council tax has been kept low and services have been made more efficient. Outsourcing through a five councils initiative, with councils across the country, has meant that even though the revenue support grant has been declining—and I support the idea that councils should become more responsible for their income and expenditure—the council remains viable and prosperous and continues to deliver the services that people want. However, I raise one point with the Minister: the negative RSG being proposed is a different matter. I hope he will be able to reassure me on that point later.
The five councils initiative demonstrates that scale is important. The county council has been so successful because of its scale. It has analysed ways in which greater efficiencies can be made: savings to the tune of £791 million, according to a Deloitte report—almost a billion pounds could be saved through closer working across the county and the cities. I urge Ministers to work with Members here to identify sensible ways forward to deliver that closer working; perhaps combined authorities could be the first step towards that.
There are opportunities for further efficiency from devolution as services such as health and social care could be integrated more closely, delivering a better outcome for people while saving money for the taxpayer. That focus is what underpins my interest in this area. Better services and lower taxes—that is what the Conservatives are doing. We will put the people first. That is what we have done, and it is what we are going to get on and do.
Many of us have first-hand experience of the responsibility on local authorities to provide services on a budget. The local authority of a Member who was, like me, elected to Parliament in 2010 will have less than half the Government grant now than it had then.
As councillors, we knew about the need for services such as adult social care for vulnerable people and services that families needed, such as children’s centres. There is a need for the bins to be emptied, the roads swept, the pavements repaired, the libraries and leisure centres kept open, planning applications processed, local businesses supported, child protection services sustained and many other things that local residents take for granted.
People are now noticing the differences—potholes, grass verges, graffiti, fly-tipping, antisocial behaviour and many other things basic to everyday life come to mind. Ministers may rightly say that my Labour Stockton-on-Tees Borough Council is a good council. Several times in recent years it has been shortlisted for, and even won, the council of the year award. Our social workers are winning national awards. We are getting gold awards for animal welfare. Our high street won the “rising star” award. We won “client of the year” for our partnership and building projects. We are winning engineering awards, fostering and adoption campaign awards and awards for protecting the most vulnerable.
Those are all being achieved in the face of adversity—in the knowledge that the day is beckoning when either funding is provided or councillors in Stockton will be delivering the most basic of services, stripped to the statutory minimum and rationed. Stockton Council has done the right thing—focused on protecting the areas and people most in need—but that does not negate the growing pressure on children’s and adults’ social care services, which now take up 57% of the council’s cash. It is no wonder. People are living longer and there is an increased dependency on services such as respite provision and community nursing. Demands for adult social care services are increasing, yet Stockton will see a £74 million a year cut by 2019-20 compared with 2010-11.
Given that local authorities have such a key role to play in people’s day-to-day lives, it is even more absurd that our model of funding is so unstable that it changes frequently and is then topped up with enforced council tax increases and the Tory Government’s social care precept. Do not try to kid me that the Tories are the party of low tax on hard-working families when they dump those central Government costs on council tax payers.
I am sure that what Stockton wants is reflected in many councils across the country. It wants a fair funding review that is just that—fair. I remember the £300 million of extra funding allocated by Government last year; the vast majority of it went to Tory southern authorities. It wants an end to the huge pressures in children’s services and a full recognition of the evidence linking deprivation and the numbers of looked-after children. That must be acknowledged and built into any new model, to ensure that children are kept safe and can receive services and support.
Councils want certainty over future budgets. They want a dose of honesty from the Government, who have reneged on their responsibility to fund councils properly and passed the buck to local councillors, who have to raise council taxes higher and higher in order to maintain statutory services. Northern councils want recognition that most of their properties are in the low council tax bands, which limits their ability to raise substantial sums through small increases. We do not have developers building blocks of 200 apartments costing £500,000 or even more, which can raise hundreds of thousands, if not millions, of pounds for the likes of Westminster and Wandsworth. This is not just a case of the north whingeing. The National Audit Office has confirmed the perilous position in which most councils find themselves, which could mean unsustainability for many of them. After eight years in power, the Conservatives must take some responsibility—in fact, all the responsibility—for this. They must realise the impact of their decisions. They are culpable for the funding crisis in most of our local authorities: it is no one else’s fault.
My old sales manager used to say that when you point the finger at someone, you get three fingers pointing back at you. We have just heard that all this is apparently the Government’s fault, but we know what the Government are actually doing through the Localism Act 2011. It was this Government who introduced the Act, under which they trust councillors and make them accountable for the services they provide at the lowest possible layer, closest to the residents that they serve.
This settlement is clearly a crucial issue for local authorities. As has been said, councils of all colours have been talking about the squeeze on local finances, and we have to look at that. It is important that the settlement should strike the right balance between relieving pressure on local services, including social care, and the ongoing need to service our debt, while recognising that families face their own pressures. The Government recognise the fact that we need to move to a formula that allows for fairer funding and tackles the issue of negative revenue support grants.
I said in an intervention that local choice is absolutely massive. If we are going to trust councillors to deliver local services, we have to let them be responsive to their electorate and also accountable to them. Hazelbourne Road is in south London. Anyone who lives on the Wandsworth side of the road will spend 664 quid less on their council tax than someone who lives just opposite on the Lambeth side. There is a stark difference in the way in which different councils are responding to this backdrop. Let us look at the council taxes that were announced yesterday. Conservative-controlled councils in London charge an average of £148 less than Labour-controlled councils on a band D home. Labour councils have hiked up their bills the most. In 2018-19, Labour councils in London imposed on average an inflation-busting 4.3% on bills, compared with 2.7% for Conservative councils. Residents can see that stark difference, and they understand that it is their council that is taking that decision.
Let us take Kingston Council as an example. Unless something changes drastically over the next few weeks, that council will not get any Government funding from this coming year. Despite that, however, it has been able to freeze its council tax. It has also been able to offer 30 minutes’ free parking, and it has opened two new schools with another one coming along. It has also bought 12 police officers, to make its borough even safer, in response to its residents. Barnet Council has frozen its council tax for seven years, but it still has weekly bin collections and it has invested £7 million in technology to keep its libraries open.
Hillingdon has frozen its council tax for 10 years, but despite that, the shadow Chancellor can enjoy the fact that his libraries have been refurbished, unlike next door in Labour-run Harrow, where Hatch End library is under threat of closure. Hillingdon Council has invested £10 million in its roads and footpaths, as well as exceeding its new housing target. Then I look at my own area of Sutton, where the bin collection has developed its own national hashtag—#suttonbinshame—and the council has sold off a heritage building for £600,000, even though the charity that bought it has managed to take out a £2.5 million mortgage on it. These are local choices, and residents do not need to settle for second best.
I was elected to Southwark Council in 2010—just as the Tory-Lib Dem coalition Government came to power—and I served on the council until May 2016. We knew in 2010 that David Cameron and George Osborne’s response to the impact of the global financial crash would shrink the size of government at the expense of vulnerable people and that things were not going to be easy. We knew that funding was going to be cut and that there would be difficult decisions to make as a consequence. However, we could not have anticipated just how much the burden of Lib Dem-Tory austerity would be made to fall on local councils.
Both the councils that serve my constituency—Lambeth and Southwark—have lost more than 50% of their grant from central Government. Lambeth alone has had to make savings of more than £200 million. In that context, both Labour councils have been striving to continue to protect local services, to continue to deliver for local residents and to act as a shield between their local communities and the Government’s austerity programme.
Lambeth has protected funding for specialist women’s refuge services, which is in contrast with other parts of the country, where 17% of specialist refuges have closed since 2010. Lambeth has maintained a commitment to some of the most vulnerable women in our community. Such services are largely invisible to all but those who rely on them, and I am extremely proud of Lambeth’s commitment.
Southwark has sustained a commitment made in 2010—in the face of vociferous opposition from local Lib Dems and Tories—to fund universal free school meals for primary-age children. Unlike this Government and their partial, miserly approach to free school meals, Southwark has recognised the benefits that come in attainment and social development from ensuring that every child in the borough has at least one healthy hot meal a day, that children from diverse backgrounds eat together, and that no child is stigmatised because of poverty.
Both councils were among the earliest adopters of Unison’s ethical care charter for social care, which is a commitment to pay all care workers the London living wage and to ensure that they are paid for travel between appointments, have sufficient time to care and are well trained. That is a commitment to fairness and to doing the right thing by the borough’s most vulnerable residents despite, not because of, the Government’s approach.
I am proud of those commitments and of the thoughtfulness and hard work of both councillors and council staff that has gone into delivering them. Lambeth and Southwark have shown remarkable resilience and commitment, but both are under intolerable pressure—pressure also experienced by councils across the country—and Government Members who doubt the severity of the crisis must listen to the words of their Conservative council colleagues. Sir Paul Carter, the Conservative leader of Kent County Council recently told the Housing, Communities and Local Government Committee:
“Local government and county councils, which have had the steepest financial challenge of any part of local government, have done extraordinarily well to help national Government start to restore the country’s public finances. We are all finding now that we really are eating into the bone”.
He went on to say that
“there are so many unfunded pressures that are building up across the piece in local government...The elastic is fully stretched.”
The Conservative chair of the LGA, Lord Porter, commenting on the Government’s decision to allow councils to raise council tax, said:
“The extra income this year will help offset some of the financial pressures they face but the reality is that many councils are now beyond the point where council tax income can be expected to plug the growing funding gaps they face.”
Those are the words, not of the Government’s political opponents, but of its friends in local government—councillors who have campaigned to get Conservative MPs elected—who clearly agree that the Government have quite simply been weaponising local councils to mete out the misery of its austerity agenda.
As I pay tribute to my Labour councils for their commitment to shielding our local communities from austerity as best they can in impossible circumstances, I call on the Government to recognise the vital role that local government plays, to heed the warnings from their own council colleagues, and to adopt an approach that seeks to empower local authorities, who know their communities best, to take decisions in the interests of the residents they serve.
I welcome the opportunity to speak in this debate, but is it not ironic that the very Members who called for this debate are those who voted against a real-terms increase for local councils in the local government funding settlement?
Let us look at some of the multitude of reasons why councils have tough funding decisions to make. East Sussex County Council, which covers my constituency, is a rural authority, and rural authorities have been significantly underfunded for decades compared with urban areas, something which was never addressed by the previous Labour Government. Rural authorities such as East Sussex receive 45% less funding per head of population. They get 41% less police grant and 32.4% less fire authority grant than urban areas. That is something that was never tackled under Labour but which this Government are looking at.
On need, East Sussex has the highest number of 85-year-olds in the country, and that puts pressure on our adult social care. The House should not be misled by southern areas being comparatively rich. I have some of the most deprived coastal regions in the country, with people earning 85% less than those in urban areas. There is real deprivation and real need in those areas, and the Government have come up with a solution. There will be an increase in the rural services delivery grant in 2018-19, meaning an overall increase of £81 million. That is the highest ever increase, delivered by a Conservative Government. The fair funding review is long overdue, and Labour Members should ask themselves why they did not do it when they were in government.
It is not just about the money that is being given; it is about the use of the funds that are available. When I talk to my constituents, they say that they want their local councils to deliver social services, to collect the bins, to build more housing, to fix the potholes and to get the schools into good and outstanding ratings, but let us look at what some Labour councils are delivering.
Bradford City Council recently spent £1.2 million on a swimming pool strategy that was ditched at the last minute, and it spent £15,000 on a new statue for the town centre. When Northumberland County Council was under Labour administration, it gave £1 million via its property development arm to Ashington football club, which was unearthed only when the Tories took over control last year.
We need to hold councils to account for the money that they spend, but it is not just money spent on pet projects that is often wasted. Figures revealed by the TaxPayers Alliance show that 539 senior council executives across the country earn more than the Prime Minister, and 2,314 senior council executives are on more than £100,000 a year— an 11% increase. Of the 10 councils that pay their executives the most, 70% are Labour controlled. Those councils are paying between £350,000 and £650,000 a year per post, which tells us where the money is being spent.
I welcome the increase in local government funding, but let us look at the record of Opposition Members. They voted against 60,000 young first-time buyers being exempted from stamp duty. Last week, they voted against 50,000 young children getting access to free school meals and, once again, we have seen them vote against councils getting more funding. Their actions speak louder than their words.
Despite already achieving savings of £94 million, Bedford Borough Council must find further savings of £23.5 million by 2021. The council has protected frontline services as far as possible, and in doing so has shielded the majority of the public from the depth of the cuts it has experienced. The public think their council tax just pays for the council, but it also pays for the fire service, the police and town councils.
Local authorities face a range of new demands and cost pressures, but their statutory obligations have not been reduced. The revenue support grant from central Government to Bedford Borough Council has fallen by 90% since 2010, and demand for local council services, especially social care, is rocketing. The Homelessness Reduction Act 2017 will increase pressure on the council, but the council will not be given sufficient money to administer the Act in the long term.
Bedford Borough Council received just over £30 million of revenue support grant from central Government in 2015, which will fall to £5.8 million by 2019-20—the grant is falling by £6.8 million this year alone. It is one thing to make efficiency savings and quite another not to give councils the money they need to cover statutory services. The public pay their income tax and council tax, and they rightly expect a decent service in return.
It is totally unfair that the only way councils can now plug the funding gap caused by central Government is to raise council tax contributions. The Government are passing their responsibility on to the taxpayer, but why should the public pay more for a reduced service? I only hope they know to point the finger for the decline they see around them at central not local government. The decimation of public services and the destruction of local government is damaging communities, and it is time the Government put an end to all the uncertainty surrounding public services funding and realise that the cuts they are making to local services are really hurting the people they are elected to protect and represent.
I start by paying tribute and giving great thanks to the councillors and officers at East Sussex County Council, Wealden District Council and Rother District Council, who represent my constituents so ably. They have had a challenging few years, but they have tackled that challenge with aplomb and I want to pay respect to them in this House.
I listened to what the shadow Secretary of State had to say. I am not sure which orifice he was speaking through, but there was certainly plenty of bare cheek on display this afternoon, because to talk about the challenges faced over the past eight years without showing any form of culpable sympathy to those councils for the role played by his predecessors in government up to 2010 was extraordinary. That type of demonstration ensures that the Labour party stays on the Opposition Benches, as it has done over the past three elections.
However, I want to talk to our local government Minister; the Under-Secretary of State for Housing, Communities and Local Government, my hon. Friend the Member for Richmond (Yorks) is one of the finest minds of my intake and also one of the nicest. I want to talk about the challenges faced in East Sussex, a county of just over 500,000 people. It has a challenging demographic. We are delighted to welcome so many people who retire to the county, but as one of the leaders of my local district council put it, “When people retire to the constituency, they tend to have to take out more than they are able to contribute.” That is what happens to us. In my constituency, 28% of my constituents are over 65, whereas the national average is only 17%. That will show the Minister the challenges we face. So I welcome the commitment to fair funding. I hope that each county will be looked at to see its demographic and the challenges it faces, particularly rural counties that have a higher than average retired population, in order to ensure that we are funded appropriately.
In addition, we need investment. We need more houses for people to live in and work from, so that we balance our economy. Although East Sussex has had great success, with an increase of 5% in its economy over the past few years, we still have a long way to go. That is why we are asking the Government to commit to give funding to improve the A27, on which a campaign is being led by my hon. Friend the Member for Lewes (Maria Caulfield); the A21, where my colleague and neighbour on the other side, my right hon. Friend the Member for Hastings and Rye (Amber Rudd), is involved, as the road badly needs investment; and high-speed rail. If we had the right transport in our area, we would be able to grow our economy on our own and not be constantly asking the Government for more.
I come back to the retirement age in my constituency, because the crucial issue for us pertains to social care. While it remains a locally funded service, it causes great pressure for council tax payers in areas where social care is most used. I would like the Government either to fund social care at the national level, as the NHS is funded, or to look again at increased funding for social care for areas to which more people tend to retire. If we do not do that, the situation will become unsustainable. I have seen the figures from my county council on where council tax or business rates would have to go to without reform and it is not a pretty place at all.
I want to end, as I started, by saying thank you to all the amazing district and county councillors and officers, who do such a great job to look after us in East Sussex, but I would also like the Government to do more and help them in their quest.
I am grateful for the opportunity to contribute to this debate on a critical issue for the future of the UK and, indeed, the integrity of many of our communities that have faced hardship in recent years.
I wish to pay particular attention to the issues that affect my constituency, which come under the Scottish Government’s purview. It was interesting to hear the Scottish National party Front-Bench spokesperson, the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), grandstanding and railing against the cuts that are coming to Scotland, and talking about how the SNP has been stretching every sinew to mitigate Tory cuts. Indeed, he referred to the block grant cut, yet why did SNP Members abstain on Third Reading of the Tory Finance Bill just a few weeks ago? They could have prevented that cut. It is clear that in reality they are not doing much to mitigate the cuts.
Local government in Scotland is now the most centralised system of government of any country in Europe. We have seen a continued strangulation of local government finances. The SNP has slashed £1.5 billion from local councils since 2011, merely acting as a conveyor belt for Tory austerity.
The reality facing local government in Scotland is that the SNP has taken Tory austerity and more than doubled it, passing it on to local government. From 2013-14 to 2016-17, the local government revenue budget decreased at a much faster rate—minus 4.6%—than the Scottish Government’s revenue budget, which declined by only 1.5%. If we look at the local government finance order figures for 2016-17 to 2017-18, we see that the revenue budget for local government continues to fall, by 2.2%, while the Scottish Government revenue budget falls by only 0.6%. That is a conveyor belt and amplification of Tory cuts; it is certainly not mitigating Tory cuts in Scotland. That is very much clear from the SNP’s attitude.
The SNP budget was passed on 21 February, with the support of the Scottish Green party. The budget deal struck by the SNP and Greens does not stop Tory austerity, tackle poverty or redistribute wealth and power. For the second year running, Green Members of the Scottish Parliament have backed a nationalist budget, which will leave councils’ lifeline services further squeezed. It is a backroom stitch-up deal that fails to fund a proper pay rise for council staff or to deal with the child poverty that our councils face. As I have mentioned before, the Convention of Scottish Local Authorities said that it needed £545 million just to stand still, but the latest budget deal delivers only £159 million. I do not see much mitigation of local government cuts in that settlement.
Faced with a different path from that of the Tories’ austerity, the SNP has ignored it and rejected the progressive, radical package brought forward by the Labour party in Scotland. Audit Scotland has confirmed that in November last year accounts revealed that there is increasing strain on local government finances throughout Scotland. In 2016-17, a total of 19 out of the 32 councils in Scotland used cash from their revenue reserves—up from just eight that did it in 2015-16. This dipping into reserves is really going through the fat and into the bone. It is totally unacceptable. Indeed, over the course of the year, the overall amount held in council rainy day funds, or reserves, fell by £32 million. The Accounts Commission said:
“Councils are showing signs of increasing financial stress. They are finding it increasingly difficult to identify and deliver savings and more have drawn on reserves than in previous years to fund change programmes and routine service delivery.”
That is extremely worrying.
Labour’s alternative plan for the Scottish budget would deliver a nearly £l billion stimulus for the Scottish economy, by saving lifeline local services; increasing child benefit by £5 a week to put money back into the pockets of working-class families; and delivering an extra £100 million for our NHS. We also have a more radical tax policy than the one the SNP has proposed, despite the Scottish Government’s having unprecedented tax powers. The top 1% in Scotland own more wealth than the bottom 50% put together, but the SNP’s proposals on income tax just tinker around the edges, putting a penny on the top rate. Labour’s radical alternative would match the SNP’s starter rate, but would drop the threshold for the 45p rate to those earning more than £60,000 and introduce a new 50p rate for those earning more than £100,000.
Prospects would improve massively under Labour’s proposals. The SNP says that it cannot mitigate, but we have seen no effort to remove the public sector pay cap for local government. Public sector workers have faced years of cuts to their wages thanks to the pay cap. The current SNP proposals do not fully fund a pay rise and do not include all public sector workers—including those in local government. Labour’s proposals would. It is a radical package of proposals from the Labour party in Scotland. In addition to our tax plans, the further investment could be used to deliver more radical decisions on income tax and new economic powers to local authorities, including the ability to levy a tourist tax and a land value tax on vacant and economically inactive land. The latter is critical to my constituents, where 10% of land is vacant and derelict. Those are radical proposals from a radical Scottish Labour Government-in-waiting.
Like many colleagues, I will concentrate my speech on the effects of the cuts on my local council in Leeds. I must declare an interest: I am still a city councillor until 3 May.
I pay tribute to the imagination and innovation of our Labour administration and to our great set of council officers who have brought forward many new and radical ways of working despite the difficult circumstances. None the less, the depth of the cuts means that many services are at breaking point. The people of Leeds have borne the burden of maintaining services, which should be paid for from the local government grant. Leeds is a proud and compassionate city with a robust economy. I am incredibly proud of the council’s approach, which, in the words of our city leader, Judith Blake, is to
“put the needs of our most vulnerable residents first, to improve our communities and bring people together in a peaceful and cohesive society and to boost the life chances of our young people by giving them the best opportunities we possibly can.”
By 2020, Leeds City Council will have seen its grant cut, year on year, by £267 million, and the budgetary pressures are not just restricted to revenue budgets either. The city faces a gap in Government funding for capital school projects of approximately £71.7 million. To make matters worse, the Government leave it to the market of free schools and academies to choose where to build new schools. The city has responsibility for placing children in schools, but does not know where those schools will be placed.
I wish to move on to the legion achievements of Leeds City Council since its return to Labour control in 2010. The adoption of a civic enterprise approach paid dividends in the early years of the austerity Budgets, and brought with it the insourcing of housing and housing maintenance, school meals, fleet services, cleaning, catering and plant nurseries. The council also created Aspire, a staff-owned, not-for-profit social enterprise, which provides care and support services to people with learning disabilities; it is the largest co-operative in Leeds.
The council, under the most difficult of circumstances, has delivered new social housing, with a £108 million council house growth programme, which aims to deliver 1,000 new homes by 2020. Personally, I am delighted that the right-to-buy programme and the use of £3 million of prudential borrowing has meant that our great homeless charity, St George’s Crypt, is developing 45 affordable supported living units for people who are homeless or in housing need.
The Labour administration has had to make some hard political choices, but Leeds is the only local authority in England to keep all its children’s centres open. These are invaluable facilities, which helped my own children in their early years. The council has also removed charges for burials and cremations for children under 16. It is compassionate indeed. Leeds has by far the lowest funding for special educational needs of all core cities, with £378 per head against a core city average of £472. I call on the Minister to revisit that gross injustice.
I wish to concentrate my final remarks on the city’s work on climate change. As the deputy executive member for climate change and sustainability, I proudly played a part in the city’s work until my election to this place. Before the historic Conference of Parties 21, Leeds was the first authority to commit to 100% clean energy by 2050. The city has begun many projects to achieve that ambitious environmental goal. In my first few months in office, we installed more than 1,000 solar roofs on council homes and buildings, but we could not continue the programme owing to the Government’s cut in the feed-in tariff for solar. The council has had an extensive programme of replacing diesel with electric vehicles and now has a fleet of more than 70 electric vehicles.
The city is installing a district heat and power network after securing nearly £6 million in European funding. The network will heat 22,000 homes, including high-rise blocks, which are in fuel poverty. The city’s plans on clean air are ambitious, unlike those of the Government who have been dragged kicking and screaming through the courts four times by ClientEarth. Leeds has grasped the nettle and is the first city to go to consultation on a zone to cover all roads in the outer ring road, which is a very large clean air zone, and its proposals are already affecting behaviour, with First Bus investing in cleaner Euro 6 diesel vehicles.
The council needs to achieve much more on air quality, and cannot do so without Government support. I am still waiting for a real commitment from the Government to support us in Leeds. Leeds has done everything asked of it—
I thank all Members who have participated in this debate. It is fair to say that local government finance is not always the thing that enthuses people, but what we have learned today is that finance is there for a purpose: to deliver essential public services—or, in the words of the Secretary of State, “vital services on which we all depend.” To be fair though, that is probably where the Secretary of State’s understanding ends. He gets the principle, but not the true impact of austerity.
The best preparation for this debate would have been completely wasted because it would have missed the gift that keeps on giving, which is that the Secretary of State’s testbed for local government seems to be the sinking of the Titanic—a vessel that went out 106 years ago not fit for the journey ahead, without enough life rafts for the people on it and completely misunderstanding that there was an iceberg ahead and the damage that it would cause. Now, Northamptonshire might be the tip of the iceberg in local government terms, but the truth is that many councils are really struggling beneath the surface.
We have heard from my hon. Friends the Members for Garston and Halewood (Maria Eagle), for Bradford West (Naz Shah), for Reading East (Matt Rodda), for Stockton North (Alex Cunningham), for Dulwich and West Norwood (Helen Hayes), for Bedford (Mohammad Yasin), for Glasgow North East (Mr Sweeney) and for Leeds North West (Alex Sobel). The thing that ran through all those contributions was the human and community cost of taking money from public services. We hear that 64% of the Government grant has been taken away in Liverpool. That is not just a number on a balance sheet. It was money for essential services that existed to support a community that needed support to grow, develop and prosper. But that rug has been completely pulled from under the people of Liverpool.
We heard from my hon. Friend the Member for Reading East that local councils have very little clarity about what is heading towards them beyond 2020. It is true that many came forward as part of the multi-year settlement, but it is also true that the fair funding settlement is sending shivers down the spine of many local councils because they know exactly what it means. We saw it with the deletion of the area-based grant in 2010, when money directed at areas of high deprivation was completely taken away. Over recent years, the introduction of the transition grant and the rural services delivery grant have targeted mainly Tory shires. We know what fair funding really means to the Government.
Well, actually, it does not. I will give the hon. Lady an example. If a county area that had a strong council tax base was given £1 in central Government funding and 90p of that £1 was taken away, the area was treated favourably in the transition grant and the rural services delivery grant. If a metropolitan area had £100 and £50 was taken away, far more money that was delivering public services in that area has been taken away—£50 versus the 90p taken from the rural area—because the starting point is very different.
We cannot compare an area with a strong council tax base of high-value properties due to the way in which that area has developed historically—nothing to do with the local authority—with a post-industrial town where the council tax base is predicated on low house values. In my area, 87% of properties are in band A and band B, so there is a very low starting point. That is why far more is needed in council tax from those areas to generate the same amount of money.
This ought not to be a fight between areas of high deprivation in our urban core and recognising that some services cost more to deliver in rural areas. Labour is calling for a genuinely fair funding settlement that would take into account deprivation, differential service delivery costs and the very particular circumstances of our coastal communities, which feel very much left behind. But we have no faith at all that that is where the Government are going. The Government are trying to redistribute a diminishing resource; we are seeing the redistribution of poverty under this Tory Government. The money just does not exist to fund public services where the demand is growing, which is in adult social care and children’s safeguarding.
We heard earlier that Basingstoke and Deane is a paradise of local government where residents have seen no impact of cuts whatever. That is unless, of course, they remember the 46% reduction of net expenditure on pest control, the 45% reduction on environmental protection, the 33% reduction on food safety, the 66% reduction on recreation and sport, the 27% reduction on open spaces or the 17% reduction on street cleaning.
The hon. Gentleman clearly loves my former council very much. Would he agree, then, that actually only 6% of the budget comes from council tax, while the rest comes through well-managed finances and excellent use of our resources? We have created thousands of jobs whereas his party in that council has backed the wrong policies, turned down the economy and chosen to back vested interests in the unions.
It is true that this district council has increased spending in some areas, but unfortunately that is because of homelessness. One of the few budget lines that has increased is homelessness spending, which has gone up by 21%. As a result, the neighbourhood services that most people in the community would believe they pay council tax for have seen huge reductions. That council, which has no responsibility for adult social care or children’s services because those are delivered by the county council, has had to take money away from neighbourhood services. Yet this is meant to be the council that we hold up as a paradise of public services under the new settlement.
I am not sure that the hon. Gentleman understands the difference between a county council, a district council and a county area. Would he then welcome the fact that Hampshire is now getting more money as its core spending power than it had in the past? Will he reflect on why the Labour party voted against that?
Most people who understand local government finance recognise that the budget lines in total net expenditure include huge sums of money that the local authority has almost no control over in its everyday spend. For instance, education services are included in controllable spend, but the local authority has no freedom or flexibility at all to direct where that money goes. Since the disbanding of primary care trusts, the public health transferred spend has been included as part of core spending power for local government, but there are new pressures and responsibilities that councils are expected to deliver on. The Government have tried to offset cuts to basic neighbourhood services and the lack of funding in children’s services and adult social care through the smoke and mirrors in their calculations.
Let us see what this means in practice. Across England, since 2010, there has been a 54% cash reduction—not even a real-terms reduction—in spend on support for public transport routes. These are the neighbourhood services that our communities rely on. Tory MPs who will not support this Opposition day motion should think about the community bus services in rural areas that have been cut because the money simply is not in the system to provide those routes. Recreation and sport, essential for a healthy and thriving population, have had a 44% cash reduction; open spaces have had a 23% reduction; and trading standards, which provide essential community security, have had a 34% reduction.
In the last reshuffle, the Tories were like rats fleeing the sinking ship, but who would guess that rats are being protected because pest control has been cut by 49%? Only rats are safe under a Tory Government, it seems—that is, if they are not in one of the areas that has had to hike up the charges. In areas of deprivation, low-income families who cannot afford to pay the charges to keep away vermin are absolutely excluded from living in a safe and clean environment.
The hon. Gentleman is very generous. I have two points. First, pest control still supports those on income support who need help, and indeed some of the older people in our community. Secondly, does he welcome the fact that Basingstoke and Deane Borough Council spends over £600,000 on community transport and public transport schemes?