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Local Government Funding

Volume 651: debated on Monday 10 December 2018

4. What steps his Department is taking to ensure fairness in the allocation of funding to local government. (908089)

We are undertaking a review of local authorities’ relative needs and resources to address concerns about the fairness of the current system. That will determine the new baseline funding allocations for local authorities through a more up-to-date, transparent and fairer funding formula.

My right hon. Friend will be aware of the extra pressures on local authorities in rural areas with sparse populations and many miles of road network. Will he assure me that the Government will factor in those pressures when allocating funding to rural areas such as Lincolnshire?

I recognise my hon. Friend’s point about remoteness and accessibility, and the impact of journey times on things like labour costs. My officials are working with the Department for Transport to look at how the extra costs can be taken into account.

Fifty per cent. of Oxfordshire County Council’s budget is spent on social care. Many of the things that my constituents discuss with me, such as potholes and school funding, are directly or indirectly related to local government funding. What steps are being taken to ensure that regional differences are addressed so that rural areas like West Oxfordshire get the funding that they need and deserve?

We will use the best available evidence to ensure that the relative needs and resources of councils up and down the country are properly taken into account to reflect a number of the important points that my hon. Friend and others have made. We are working closely with representatives across local government to do that.

Lambeth Council and Southwark Council have lost £6 in every £10 of Government grant they had to spend in 2010, yet across London the population is rising faster, levels of deprivation are greater, and the cost of delivering services is higher than anywhere else in the country. Will the Secretary of State guarantee that the fair funding review will restore funding to London councils and not result in further cuts?

We will certainly look at the available evidence on how the relative review of resources is affected throughout the country, and we will take account of evidence from London councils and others. Equally, I hope that the hon. Lady will recognise the announcement in the Budget of additional funding for things like social care. An extra £650 million will go around to councils to help to make that difference.

Reeling from the biggest cuts in local government history of £650 million, with another £123 million to come, Birmingham has put forward a powerful case for fair funding. Now, an announcement has been delayed. When will the Secretary of State make his announcement? Will he listen to Birmingham, because frankly Birmingham has had enough?

I am sure that the hon. Gentleman will be able to make his points in relation to the provisional settlement for local government, which I look forward to delivering very shortly. He will have an opportunity to make representations for Birmingham and others on the fair funding review, and there will be further opportunities. I look forward to engaging with the hon. Gentleman and others in that regard.

The budgets of the local authorities that serve my constituency are under particular strain because of the increasing number of looked-after children. What additional resources are likely to be made available to cover that need?

We are very conscious of the pressures on areas such as children’s social services, which my hon. Friend highlights and, equally, of some of the differentials that exist around the country. He will, however, note the additional funding that was committed in the Budget to these issues and we therefore continue to work with him and others and look forward to the spending review next year.

The Daily Record reported recently that councils in Scotland have set aside £24 million to deal with the impact of universal credit, including £2.5 million in Glasgow, £3 million in Edinburgh and £4.5 million in South Lanarkshire. How can it possibly be fair that, when central Government decisions are having a huge impact on local government funding, we can do nothing about it?

A clear mechanism is in place in relation to what are known as the new burdens on local government and therefore we take that into account and reflect further on the costs that local authorities may have in relation to other governmental activities, and that is what we do.

The record is clear: Northamptonshire bust; other councils edging towards the cliff edge; and no end to austerity, with cuts to council budgets continuing. Last week, senior officials told the Public Accounts Committee that their measure of a council’s financial sustainability is now based solely on the delivery of statutory services. Our councils are at breaking point. Is the Secretary of State not even slightly embarrassed that his Ministry has let the cat out of the bag on the decimation of local public services on his watch?

Yes, local authorities have had to bear a cost and have made some incredible efficiencies and savings as a consequence of the need to deal with the problems that we inherited from the previous Labour Government. I say to the hon. Gentleman that, when we come to the discussion over the settlement, he will see that our work will ensure that local councils have a real-terms increase in their funding and services and therefore what we are doing to ensure that councils are viable and have a positive future.