Skip to main content

Local Authority Budget Reductions

Volume 648: debated on Tuesday 30 October 2018

Motion made, and Question proposed, That this House do now adjourn.—(Michelle Donelan.)

I am grateful for the opportunity to speak on the effects of the reduction in local authority budgets, Mr Speaker. I rise this evening as someone who, both as a Member of Parliament and also now as the Mayor of the Sheffield City Region, works closely with our local authorities. Not only do I get to chair the mayoral combined authority of Barnsley, Doncaster, Rotherham and Sheffield, with the Derbyshire Dales, North East Derbyshire, Chesterfield, Bolsover and Bassetlaw as non-constituent members, but, through the Yorkshire Leaders Board, I get to work closely with all of Yorkshire’s local authority leaders, many of whom will be very well known to the Minister. I can tell the House that the work that those local authorities do is of the highest standard of public service, but for too long the reputations of local authorities have been smeared with accusations of profligacy; their councillors have been accused of a lack of concern for value for money and their workers have faced accusations of idleness. In my experience, all these allegations are unfounded, and have served only to undermine the important role that local authorities play in our communities and to serve as justification for eight years of budgetary cuts.

Councils and councillors are improving people’s lives, every day. The work that they do is community-led public service at its best. Although austerity has forced them to make difficult choices, councillors have stretched and continue to stretch every pound available. They listen to the communities that they both serve and live in, and they work tirelessly to shield the most vulnerable from the worst of the austerity agenda. Labour councils, in particular, have refused to buy into the narrative that they are simply “managing decline”.

I apologise for missing the first minute of this debate, Mr Speaker. My local authority in Torfaen has been doing precisely that—cushioning the impact of universal credit. Does my hon. Friend agree that one problem is that if austerity continues in the way it is, local councils simply will be left with only the money to fulfil their statutory functions?

My hon. Friend is exactly right. That is the risk. The stakes in all this are incredibly high.

It is important to make the point that even at the height of austerity, Labour councils’ innovations have seen them deliver new community facilities, form groundbreaking energy networks and use technology to improve social care services.

If funding continues in the same way, local authorities may not even be able to fulfill their statutory duties. Britain’s adult social care system is deteriorating; the reduction in funding is leading to fewer people getting care. That affects quality and increases pressure on the NHS. Does my hon. Friend agree that local authorities need increased Government funding to place adult social care on a stable and sustainable footing? If things continue like this, we will not even be able to provide the basics in the 21st century.

My hon. Friend makes an important point. The reality is that councils receive more than 5,000 new claims for adult social care support every single day. The additional funding on offer from the Government is the equivalent of £350 for each new claim. That is significantly less than the cost of a week’s stay in a care home. The announcement of an additional £650 million of grant funding for adult social care is not even half what is actually needed. That only serves to show that the Government are not addressing this massive public policy challenge.

We have seen some examples of innovation by local authorities throughout the country, despite the difficult economic circumstances in which they find themselves. I include among them my own local council, Barnsley, which has established a warm homes campaign that seeks to tackle fuel poverty. Doncaster Council has set up an education and skills commission, with a view to shaping a system that works both for the people of Doncaster and for local businesses. Local authorities are making a difference and giving people in our communities support in difficult and testing times. Their accomplishments are a testament to the hard work of councillors and staff. That should be recognised, not only by the local communities that they serve but by a national Government prepared to trust and empower public servants at the most local level of government.

Does my hon. Friend agree that things are particularly difficult in two-tier areas such as Gloucestershire, where my local authority, Stroud District Council, lost all its rate support grant? Although we are part of the business rates initiative that the Government have introduced, we are still very much on the back foot and have had to cut back on staff and a lot of local initiatives.

I absolutely agree. My hon. Friend makes an important point about a common experience right around the country. The reality is that councils are facing a funding crisis. In my area, since 2010, Doncaster and Barnsley councils have both had to make £100 million of cuts; Rotherham has had to make £177 million of cuts; and Sheffield City Council has had to make £390 million of cuts.

I congratulate my hon. Friend and parliamentary neighbour on securing this important debate. On his point about funding cuts, he will know that our local council is doing a fantastic job, despite difficult times, but has he, like me, noticed the number of charities—often small, volunteer-led charities offering bereavement services, youth services or support for victims of domestic violence—that just cannot rely on the previous level of funding so have had to cut back the support that they offer to our local community?

My hon. Friend and parliamentary neighbour is absolutely right that the cuts to council funding have a much wider impact on our society. They simply mean that councils do not have the vital match funding that keeps so many worthwhile local organisations going. The reality is that austerity has caused huge damage to communities up and down the UK. It has undermined the way we protect children at risk, disabled adults and vulnerable older people. It has reduced the quantity and the quality of community services, such as street cleaning, libraries and rubbish collection. Reduced funding also means reduced capacity to invest in prevention and, as such, these cuts represent no more than a false economy. If councils are unable to fund sufficient support for older people—

Motion lapsed (Standing Order No. 9(3)).

Motion made, and Question proposed, That this House do now adjourn.—(Michelle Donelan.)

If councils are unable to fund sufficient support for older people, more of them will end up being admitted to hospital. Less money for children’s services means that our young people will only get by rather than thrive. Failing to invest in public transport stifles economic growth, isolates communities, reduces social mobility and damages our environment. These are just a few examples of an austerity agenda that lacks any form of long-term strategy.

I am proud of the way in which Labour-run councils have dealt with these challenges, even in the face of unfairly distributed funding. The poorest local authorities, which tend to be Labour run, have had their spending cut by £228 per person since 2010, while the richest councils have had their spending cut by only £44 per person. These cuts are not just affecting local residents. Years of pay freezes and below-inflation increases mean that some of our council workers are resorting to food banks, are over-reliant on credit and are asking for financial help from family and friends. Unpaid overtime is now essential to keep services going. Nearly half of our council staff are now thinking about leaving to do something less stressful.

Recent research by my union, Unison, found that 83% of council staff do not think that the quality of services delivered for the public have improved and seven in 10 council employees across South Yorkshire think that local residents are not receiving the help and support that they need. Those are figures that should concern us all.

Following eight years of austerity and some £7 billion of cuts, yesterday’s Budget offered little comfort to our local authorities. Local councils face a funding gap of £7.8 billion by 2025 and are still going to be cut by £1.3 billion next year. Yesterday’s Budget offer of £650 million for the coming year is nowhere near enough to close even the funding gap for social care, let alone address the shortfall in other services.

Once again, local authorities have to make do with short-term fixes. The creation of yet more short-term funding pots is no way to get value for money from public spending. Unless meaningful changes are made, the most vulnerable in our communities will continue to suffer. Central and local government need to work together on the fundamental reform of the way community services are funded. If the era of austerity is truly coming to an end, it needs to feel that way to our local residents.

It seems to me that we live in a time of increasing disenfranchisement and distrust. Across the UK, only 27% think that our system of government is working well and only a similarly small number feel that ordinary people have a big say in decision making. When I look at my home county of Yorkshire, it is easy to understand why. Government spending is nearly £300 per person lower than the national average; transport infrastructure investment is one 10th of that in the capital; and income is only 80% of the national average. These concerns cannot be addressed by the piecemeal redistribution of income that we saw yesterday. They can be addressed only by redistributing power. The Government should be working to empower communities by devolving decision-making closer to the places that it will affect.

I thank and congratulate the hon. Gentleman on bringing this matter forward. Just yesterday, the Chancellor announced £350 million for the Belfast city deal, which will benefit my constituency of Strangford. My council of Ards and North Down got together with adjoining councils to make this deal a reality. Does the hon. Gentleman agree that, where possible, if councils can come together to secure a city or a regional deal, it is a great and a good way of securing extra funding for the local areas? I spoke to him beforehand, and he knew that my question was coming.

I am grateful for the hon. Gentleman’s intervention; he makes a very important point. I think back to many of the conversations I had with members of the public during the referendum campaign, many of whom used it as an opportunity to vent their frustration against a political system that they felt had not served them well. If we are going to address those feelings of disenfranchisement and alienation, the closer that we can place political decision making to the people who will be affected by those decisions, the better. That is why devolution provides a really important opportunity for the Government to engage with those communities and place not just political power but resources closer to the communities who will be affected by the decisions that are taken.

My hon. Friend is making an excellent speech. Does he agree that we are also seeing greater inequality as a result of the way in which devolution is being dished out? Some places are advancing with a devolution deal, yet for Yorkshire, where the local authorities desperately want to advance into devolution, it is apparently being denied.

My hon. Friend makes a really important point to which I will return in a moment. I am very grateful for her intervention.

I was talking about the redistribution of power and how, together with investment, this will lead both to better public services and to the re-engagement of people in a common sense of community purpose. I believe that devolution does offer the opportunity to do this. Whether it is a mayoral or an assembly model, when we get devolution right, it offers a fairer and more democratic means of governing and delivering—one where working people have a greater say in the choices that affect their lives and a greater stake in the services on which they rely. We can seek to achieve radical transformative change in the communities that we serve only if those communities control their own destinies. That means this Government listening to those communities, and to the leaders they have elected to represent them.

My hon. Friend the Member for York Central (Rachael Maskell) referred to devolution. Will the Minister say when the local authorities of Yorkshire—I know that he will take a very close interest in these matters, for obvious reasons—will get a response to the recent Yorkshire devolution proposal submitted by me and the council leaders? It is not just a matter of basic courtesy that this happens soon; it is in everybody’s interests—the Government’s and all our local authorities across Yorkshire—to move it forward as quickly as possible.

I said that it was important for the Government to listen to the communities that they are there to serve. Well, I have been listening to what the Government have been saying. I know from ministerial responses to parliamentary questions that I have recently tabled that the Minister’s Department intends to publish what is being referred to as a devolution framework. When will this be published, and what consultation has taken place to underpin it? The Minister is obviously very welcome to say what is going to be in it, although I suspect that he may not wish to take up that opportunity. Whatever is in it, I very much hope that it will be driven by what communities actually want. “One size fits all” will not work in this regard.

If we are to enable the right level of devolution to take place, we need to abandon an economic and political model in which the only hope is for wealth to trickle down and prosperity to ripple out. We must replace it with a three-tier system of government—local, regional and national—giving each tier the powers and resources it needs to make a difference in the communities for which it is responsible. Only if we do this correctly will we put the right people at the heart of decision making, end the status quo whereby so many people have become disenfranchised, and allow communities to overcome the challenges they face and to thrive. Greater funding and stronger powers for our local authorities should be the first stage of that journey—but yesterday’s Budget represented, I am afraid, another missed opportunity.

I congratulate the hon. Member for Barnsley Central (Dan Jarvis) on securing this important debate. His pride and commitment to his local area is clear. I share his passion for local government and join him in paying tribute to the incredibly important work that our local councillors up and down the country do every single day. As someone who is passionate about local government, I thank him for sharing his knowledge and experiences of his area. It is always important for me to hear from colleagues about their areas and what they feel is happening on the ground.

Before I respond to the hon. Gentleman’s points, I will set out my vision for the role of local government, which consists of three broad areas: first, driving economic growth; secondly, helping the most vulnerable in our society; and, thirdly, building strong communities. I will take those three areas in turn and deal with the questions and points raised by the hon. Gentleman, as well as talking in particular about the area that he has the privilege to represent.

I will start with economics and finances. In this financial year, councils in the Sheffield city region, including Rotherham, Sheffield, Doncaster and Barnsley, had aggregated core spending power of just over £1 billion. Core spending power is the standard measure of a local authority’s financial resources. It rightly includes money not just from the central Government grant, but from locally raised council tax, the local area’s share of the business rates pot, and specific Government grants for things such as adult social care and the new homes bonus. Core spending power across the Sheffield city region is up every year since 2016, and across the country core spending power will see a real-terms increase in this financial year.

Beyond grants from central Government, driving economic growth is the only sustainable way to ensure the vibrancy of our local communities and to raise the vital money that we need to fund our local public services. Business rates retention is one such opportunity. Indeed, across the Sheffield city region, local authorities will generate around £16 million in additional funds this year as a result of keeping the proceeds from the economic growth that they have helped to create. Next year it is estimated that that figure will increase to £24 million.

That is not the only incentive for local growth, however, as it sits alongside the Government’s other work to support local authorities’ wider ambitions through local growth and devolution deals. For example, £52 million has been invested in a business investment fund, which will unlock direct investment in small and medium-sized enterprises across the Sheffield city region. An additional £3 million has been invested to speed up the delivery of the state-of-the-art Supertram network, which I was delighted to see launched last week by the hon. Gentleman and the rail Minister, my hon. Friend the Member for Orpington (Joseph Johnson). Finally, a further £36 million has been invested in the region’s integrated infrastructure plan, opening up new employment sites, delivering new homes and fuelling the growth of the advanced manufacturing innovation district between Sheffield and Rotherham. As evidenced by the devolution deal, which I know the hon. Gentleman is passionate about, and the £30 million a year in incremental funding that will come with that deal, the Government will continue to work hand in hand with the new Mayor to back the Sheffield city region and to drive local economic growth to fund local services.

I turn to my second theme. One of the most undeniably crucial roles that local government continues to play is helping the most vulnerable in our society. As the hon. Gentleman said, it is local authorities that support the elderly, the disabled and our children in need. We owe councils an enormous debt of gratitude for the incredibly important work that they do, and this Government are backing local authorities to carry out those vital duties. Last year’s Budget provided an additional £2 billion for social care. Just last month, another £240 million was announced for social care winter funding this year, and at yesterday’s Budget, the Chancellor announced that a further £650 million will be provided for care services in the next financial year.

It is not just about money. The increased collaboration that this investment has fuelled between local authorities and the NHS has delivered real benefits on the ground in local communities. I am pleased to say that social care has freed up 949 beds a day since the February 2017 peak, which represents a 39% reduction in social care delayed transfers of care. In the Sheffield city region, Barnsley is among the best performing local authorities in the country, achieving zero social care delayed transfers of care according to the most recently available statistics. I pay tribute to the local authority, and others in places such as Doncaster and Sheffield, for their terrific work in this regard.

The Government’s troubled families programme is another area in which we are making amazing strides to support our society’s most vulnerable families. Indeed in Barnsley, the safer neighbourhood service and the early start, prevention and sufficiency service are bringing together council services—including family centres, targeted youth support, education and the youth offending service—to improve outcomes for local residents. We have heard about the importance of prevention, and indeed across the Sheffield city region the troubled families programme is working with over 13,000 families and benefiting from the more than £25 million of available funding.

One of the unique privileges I have as the Local Government Minister is to travel around the country to talk to families participating in this programme and to see at first hand its life-changing work. I am proud to say that £1 billion of funding has been committed to the troubled families programme over this spending cycle. Nationally, more than 130,000 families are already achieving significant and sustained progress. For example, for families on the programme six to 12 months after the intervention, the proportion of children designated as children in need has decreased by 14% compared with the period just before the start of the intervention. In almost 17,000 of these families, one or more adults had succeeded in moving into continuous employment. The programme has ensured that work, and the transformative effects that it can bring to a whole family, is never off the table.

Finally, we can all see that local authorities’ work in building strong communities that thrive and move forward together is beneficial not just to them, but to wider society as well. This work, as the hon. Gentleman mentioned, is absolutely vital. Strong communities are cohesive. It is with that in mind that the Government have announced a £19 million fund to help to ease pressures on local services resulting from recent migration. The fund has already committed £484,000 to Barnsley Council, partly to support activities to understand communities’ concerns and to help to address them.

Strong communities need to be connected. The roads that our constituents travel on every day form a key part of our daily experiences. That was why my right hon. Friend the Chancellor announced yesterday that £420 million will be made available this year for local authorities to fix potholes and carry out other road repairs, which will ensure safer and better roads across our communities. Strong communities also need vibrant high streets to bring us together and to ensure that our towns have beating hearts. That is why the Government have just announced a £675 million fund to support high streets, which local authorities will take the lead in developing.

Lastly, strong communities nurture and celebrate their open green spaces—providing sanctuary from the busy world, enabling us to come together to keep fit and healthy, and helping to make our areas more pleasant places to live. The pocket parks fund, which was launched two years ago, has helped to transform neglected and derelict spaces. It has led to the creation of more than 80 new green spaces for communities to enjoy in urban areas across the country. I am delighted that Barnsley is home to one of these pocket parks—the community pocket park at Bradford Forster Square. I am also pleased to say that the Government intend to build on this success with a second round of funding for pocket parks, which will provide access to new smaller parks and vital green spaces for our communities in areas where there are limited opportunities today.

The hon. Gentleman asked a specific question about devolution. He will know that I am not the Minister with particular responsibility for that, so I hope he will bear with me when I cannot give him the exact response he wants. My understanding is that the Government and the Minister responsible are considering the matter of One Yorkshire devolution, which the hon. Gentleman rightly identifies as being of some personal interest to me. There is no fixed timeframe for a response that I am aware of, but if there is one, I will be sure to write to him in short order.

On the hon. Gentleman’s broader question about the devolution framework, my understanding is that the Minister with responsibility for devolution and the northern powerhouse will publish that towards the end of this year. However, again, if the hon. Gentleman will bear with me, I will write to him when I can get the exact date from my colleague, if one has been published.

On that note, I agree wholeheartedly with the thrust of the hon. Gentleman’s argument about devolving power to local people. He is obviously an exponent of that, and I hope he will agree that this Government have undertaken an ambitious and significant devolution programme to bring government closer to people up and down this country. I think that we are all excited to see that programme continue.

In conclusion, I thank the hon. Gentleman again for calling this important debate. It is a real privilege for me to have this job and to champion local government in Westminster. Whether it is driving economic growth, caring for the most vulnerable or building stronger communities, local councils in Barnsley, throughout the Sheffield city region and across the country do an important and incredible job. I am grateful for their dedication, and I will continue to ensure that their voice is heard and that they get the support they need and deserve.

Question put and agreed to.

House adjourned.