[Mr Charles Walker in the Chair]
Colleagues, I am extremely sorry for disrespecting your very precious time. You can admonish me afterwards, one after the other—it is unforgivable. I hope that you accept my apology, but I will understand if you cannot.
I beg to move,
That this House has considered local government funding.
It is a pleasure to serve under your chairmanship, Mr Walker. I declare an interest as a vice-president of the Local Government Association, a superb organisation that fights for the interests of local government on many levels, delivering services, empowering communities and investing in our future.
The Government’s obsession with austerity has targeted many areas of people’s lives in the UK, but the largest proportion of cuts has fallen on local government. I applied for this debate in order to ask the Government to recognise the folly of that approach and truly end austerity. As a councillor and council cabinet member, I have experienced the cuts at first hand. I have taken part in extremely difficult budget discussions and decisions in the face of increasing demand, which itself has been brought about by other Government policies that have made life harder for my constituents. I have also worked with local communities to try to offset and alleviate the most damaging impacts of Government policies.
To achieve real co-operative change in transport, housing and economic growth, however, councils and local communities need to be given sufficient resources and power. Under this Government, the opposite has happened: local authorities have had to cut staff levels, scale back many non-statutory services and try to save money in other ways. After nine years of cuts, first from the coalition Government and then from the Conservative Government, I am glad to see that the Government have now managed to find more money: an extra £1.6 billion has been found for 2019-20 in comparison with the initial funding plans set in 2016.
I congratulate my hon. Friend on securing this debate. Does she agree that on a day on which the House is debating Brexit, it is particularly galling that £4 billion is going into some sort of no-deal black hole while our children’s centres, libraries and important council services are all desperately at risk?
My hon. Friend is absolutely right. The Government can do it when they try—instead of wasting that money, which is the kind of money that local government absolutely needs right now.
I am sure the Minister will tell us that the extra £1.6 billion is a great success that shows that the Government are listening, but can he tell us why has it taken them so long to acknowledge the failure of their own funding plans? Before he says that everything is going to be okay, let us look at some of the facts: 361 of Birmingham’s 364 schools are facing cuts, almost a quarter of West Midlands police funding has been cut and, as a result of scything cuts since 2010, Birmingham City Council has lost £642 million from its annual budget and is expected to be forced to make further savings of £123 million per annum.
I thank my hon. Friend for securing this debate. Lewisham Council has had to make cuts of £165 million since 2010. Despite its best efforts, it now has to make difficult decisions about things like grants to the voluntary sector, libraries, street sweeping and lollipop people. Does she agree that central Government need to fund our councils properly so that they can serve the community properly?
My hon. Friend rightly describes the plight of her council, and it is the same for many councils up and down the country. I hope that the Minister will really take stock of hon. Members’ contributions today; it is great to see so many Members present to debate local government finance, which is such an important topic.
I thank my hon. Friend for securing this significant debate. As my hon. Friend the Member for Lewisham West and Penge (Ellie Reeves) rightly says, Lewisham Council has experienced significant cuts since 2010. Those cuts have had an effect on our Lewisham population; social workers’ caseloads have increased and we are seeing difficulties in securing beds for people with mental health problems. Does my hon. Friend the Member for Birmingham, Edgbaston (Preet Kaur Gill) agree that the Government need to stop making these silly cuts and start investing in local government?
My hon. Friend is absolutely right. I hope that the Government really listen to what Members say today about the devastating impact of cuts to councils in their constituencies.
Does my hon. Friend agree that the problem is not just the direct cuts to councils, but the extra services that councils are expected to take on? In my area, the NHS has stopped funding the low vision clinic, so Labour-led Brighton and Hove City Council has had to pick it up—whereas my other local council, Conservative-led East Sussex County Council, is refusing to do so, leaving partially sighted people with nowhere to go for the vital adaptations that they need.
My hon. Friend’s important intervention tells us about the plight of councils as a result of non-statutory services not getting the investment that they need. We will end up with councils delivering only statutory services, which will by no means meet the needs of our diverse communities.
In the context of Birmingham’s projected population growth of 121,000 by 2031, the cuts will mean even less money in real terms per person. Nor is the situation unique to Birmingham, as we have heard from many hon. Members across the country. The Institute for Fiscal Studies reports that
“funding from government grants, business rates and council tax is still set to be 1.4% (£0.6 billion) lower in real-terms than in 2015–16, which is equivalent to 4.2% per person after accounting for forecast population growth.”
Whatever the Minister and the Secretary of State may say, that means that councils will have less money to deliver services. This is not about the need to find minor efficiencies following a period of high spending; it follows a period of dramatic and coalition Government-enforced reduction of 22% per person, in real terms, in council spending on services between 2009-10 and 2015-16.
My hon. Friend is making a very strong case about the damage that is being done to local services by cuts in the Government grant. Does she agree that there is no resilience in local government’s tax base, which is strangling local democracy, and that there needs to be a reversal of the changes that were made in the late 80s and early 90s to councils’ abilities to raise their own money?
My hon. Friend raises an important point, which I will touch on later.
Not only was that devastatingly large amount taken across the country, but the spending cuts hit more deprived areas far harder than other areas, a point which I will come back to later. The Government often mock Members asking for more money for a particular cause, but that misses the point. These cuts are not just about money; they are about what the money allows local government to do, or not to do—it is about the services and support that local government can provide to empower communities and support individuals to fulfil their potential.
New research by Unison shows that 66% of local councillors do not think that local residents are receiving the help and support they need at the right time. Does the Minister understand that that is not because councillors and council workers are not working hard enough? Does he agree that the reductions of £16 billion to core Government funding between 2010 and 2020 have led to that situation? Will he make public all the data and analysis his Department have put together on the scale and variation of local responses to cuts, as well as on the impact of almost a decade of austerity on local government, and the inequalities it has reinforced and perpetuated?
What does the Minister say to Lord Porter, the Conservative chair of the Local Government Association? In the most recent copy of First, the magazine for local government—I have a copy that I am happy to share with the Minister—he said:
“Next year will continue to be hugely challenging for all councils, which still face an overall funding gap of £3.1 billion in 2019/20.”
That figure is not what is needed to make progress or to invest further in the future of our families and communities—that is just to stand still. Does the Minister agree with Lord Porter?
I know that universal credit is not the Minister’s brief, but I hope he will take the opportunity to discuss his understanding of the problems that universal credit is causing for citizens and therefore for local government. What analysis has the Department done of the impact on local government of rent arrears from council tenants on universal credit? Residential Landlords Association research reveals that the number of private landlords with tenants receiving universal credit and going into rent arrears rocketed from 27% in 2016 to 61% in 2018, with the average amount owed in rent arrears by the universal credit tenant rising 49% between 2017 and 2018. If there are similar findings for council tenants—there is no reason to think universal credit impacts differently on council tenants from those in private accommodation—local authorities will be put under further pressure by a failed Government initiative.
This is not party political. This is not about Labour councils wasting money, or Conservative councils being frivolous. Lord Porter said:
“Councils can no longer be expected to run our local services on a shoestring.”
Does the Minister think that those Conservative councils that have gone bust or reduced services to the legal minimum have received enough funding? Will they receive enough funding through the latest funding settlement? If so, does he think that they went bust because of their own failures—and will he outline those failures?
When the Prime Minister took office, she promised that the mission of her Government would be to tackle injustices. Since 2015-16, the most deprived councils have seen a cut of 2.8%, while the least deprived have seen a small real-terms increase of 0.3%. That is not tackling an injustice—that is embedding and reinforcing one.
My hon. Friend is making a fantastic speech. In Central ward in Hull, more than 47% of children live in poverty. That is one of the highest rates of poverty in this whole country. More people in Hull claim jobseeker’s allowance than the national average. At the same time, there have been £120 million of cuts. Does my hon. Friend agree that that could never be justified by any Government that are serious about giving every child equality of opportunity?
My hon. Friend makes a really important intervention. The figures are harrowing. I hope the Minister is listening carefully and will respond to Members’ interventions at the end of the debate.
Local government is not homogenous. The service needs of their populations, ability to raise revenue locally and reliance on central grants all differ substantially. Proposed and existing policies such as business rates retention and council tax limits will mean different councils can raise significant amounts, which may not match the spending pressures those councils face.
As academics from Cambridge pointed out in October 2018, the Government’s austerity politics have led to
“a shrinking capacity of the local state to address inequality...increasing inequality between local governments themselves and...intensifying issues of territorial injustice.”
Local authorities vary in the needs of their population for services, their reliance on central grants and their ability to raise local revenue. With the Department planning to introduce 75% business rates retention for all local authorities, and access to public services for citizens increasingly reliant on the local tax base—whereby poorer areas are not as able to provide as many public services or the same quality of infrastructure as areas with healthier, more wealthy tax bases—without a strong redistributive element, the under-investment, or even lack of investment, in communities and the people who live there will see them unable to prosper.
Will the Minister ensure that no council has its funding reduced as a result of a new distribution system? What actions will he take to that end? The National Audit Office has highlighted the dangers of bringing in a business rates retention model that has not been fully tested. Will the Minister commit to making public a full and thorough evaluation of the pilot schemes before committing to any further roll-out?
I could raise any number of areas where Government cuts to local government are causing immeasurable immediate and long-term damage—from homelessness to fire safety, from crime prevention to children’s services and public health. Reductions in any of those areas are not impact-neutral, as they influence and prohibit the capacity to prevent and support. As I was cabinet member for public health at Sandwell Council, I will focus on public health, and I hope my colleagues will pick up on other areas.
Councils’ public health budgets are being cut by £531 million between 2015-16 and 2019-20. The Government are taking with one hand, while, at the same time, putting more money into the NHS. Preventing illness and catching problems early so they do not develop further down the line will save the NHS and social care money, so the short-sightedness of cutting public health funding must be due either to ignorance, or to a political choice to undermine councils’ abilities to improve the health of the public. Which is it?
My hon. Friend is making an excellent speech. The underfunding of social care is a travesty in itself, but it also has consequences for our hospitals, including avoidable hospital admissions and delayed transfers of care. Does my hon. Friend share my concern that the cuts to local government funding are far-reaching and could have a profound impact on our NHS?
My hon. Friend raises an important point. The NHS spends only about 5% of its funding on preventive measures. That just cannot be right. As she rightly says, social care costs will soar, and that makes no sense at all.
The Government have announced that they will phase out the public health grant after 2020-21. Instead, they expect business rates retention to entirely fund public health spending. Health inequalities will increase. While they have proposed some kind of top-up system, as with many areas concerning local government, it is unclear how that would work and to what extent that top-up would support the local authorities that need it.
Does my hon. Friend agree that one area of particular concern is sexual health services, which are being particularly hard hit?
My hon. Friend makes a really important point. We need to invest more money in public health and not siphon it away from councils, for issues such as sexual health, drug and alcohol strategies, mental health—there are a number of issues, and I could go on.
Does the Minister agree that preventive services and approaches are the most efficient and effective way to improve outcomes for our residents and tackle many of the issues that they face? If so, does he agree that local government needs appropriate and sufficient funding to achieve that goal by providing frontline services and working with civil society to develop and sustain multi-organisation and agency approaches? If he agrees on those two points, does he believe that, as things stand, our local authorities have the resources necessary to deliver those services and approaches now and in the future?
I thank all Members who have attended this debate and who are waiting to contribute. The turnout reveals the depth and strength of feeling about this important issue. We all work with our local councils and know the vital services they provide and the work they put into care for our multitude of residents and citizens, particularly support for families, protection of children and care for older and disabled people. We all know that the Government’s current attitude and approach are not sustainable, and we need this Administration to wake up to that fact and address it properly.
I have waited until now to mention Brexit, which we must discuss and examine, if only briefly. The Government have committed billions to many Departments in preparing for Brexit. With the Treasury giving the Department only £35 million for preparations, will the Minister allay the fears of councils around the country by promising that any additional financial commitments and burdens that are placed on councils as a result of Brexit are fully funded by central Government? We need fully funded local government to drive many of the things that make Britain a great country in which to live and work. With councils already facing a funding gap of £7.8 billion by 2025, the Government must take the opportunity of the final settlement and the 2019 spending review to deliver truly sustainable funding to local government. Are they up to the challenge?
I apologise again to colleagues for my unforgiveable lateness. We will start winding up at 3.40 pm, so everybody should keep their speeches quite short, because there are about 13 speakers.
It is a pleasure to speak in the debate and to serve under your chairmanship, Mr Walker. I congratulate the hon. Member for Birmingham, Edgbaston (Preet Kaur Gill) on securing this debate, and I thank her for her remarks. It is fair to say that she has covered a full gamut of aspects of local government. Like her, I pay tribute to the many thousands of councillors up and down the country who work tirelessly in their community as public servants, delivering some very difficult portfolios and in some very challenging parts of the country. At this time of year, councils across the country are in the process of finalising their budgets for the next financial year, which is why the hon. Lady’s debate is so timely.
My constituency covers three lower-tier authorities—Braintree District Council, Colchester Borough Council and Maldon District Council—as well as an upper-tier authority, which is Essex County Council. I pay tribute to all my colleagues at all the authorities, particularly Essex County Council, who are faced with a number of pressures, including growing demand on services—it is a theme that no doubt we will hear throughout the debate—and the overall impact of the Government’s financial settlements on them and on councils across the country. My colleagues at Essex County Council work very well with the Local Government Association, which has campaigned clearly and robustly on areas where more needs to be done. There is always scope for innovation, efficiency and transformation. Naturally, these local councils look to central Government to provide more certainty on the future of their finances and the level of support they receive from the Government.
Does the hon. Lady accept that one way central Government give certainty is by letting authorities that had the benefit of the retention of business rates know what the Government’s plans for the future are? At the moment, it is very uncertain.
I will touch on business rates later. The hon. Gentleman is absolutely right, and councils need to be getting on with their own plans.
With the comprehensive spending review taking place later this year, rate reform and the fair funding review—I know the Minister is well aware of this—the Government have the opportunity to consider carefully the various submissions and representations from local authorities. Compared with other local areas, we are underfunded in Essex not just through local government, but through our police and health services. I very much hope that the Minister and the Government will be sympathetic and understanding, and that they will use this as an opportunity to rebalance resources towards our county, particularly our county council, which has the responsibility for adults and children. Essex County Council is experiencing considerable budgetary pressures, which the Government will know about from the various representations that my colleagues across the county and I have constantly made to the Department.
Essex faces significant financial challenges in adult social care, which accounted for 45% of the council’s total spend from a budget of £646 million in 2017-18. The council is collecting over £82 million in fees and charges from residents, but budgets are being squeezed and it already faces demographic pressures and challenges. The number of people aged over 80 is set to grow over the next decade by 61%, and those over 90 by 100%. The council is facing rising costs as it seeks to provide support to around 4,000 residents with learning disabilities, including cases that are very complex to resolve. Its objective is to provide those residents and all citizens with a good quality of life.
On top of those pressures, provider costs for care packages are increasing while the supply of beds and residential accommodation by providers is falling. Some 362 beds were lost to the market in 2018 as seven care homes closed, and contracts from domiciliary providers have been handed back. These are continuous pressures on funding social care. We know that money has been put aside for social care, which is of course welcome, but it is not meeting the growing pressures and demands in Essex and around the country, too.
I hope to work with the Government and my councils to look at how we can constructively address these pressures and constraints. The council faces pressures on education and special needs in addition to social care. I appreciate that this issue rests primarily with the Department for Education, but resources are being squeezed and I have many concerns. I have a vast number of constituents coming to me, and it is pretty clear that their needs, challenges and concerns are not being met in the way that we as a Government would like. The council has been proactive in its own representations to Ministers, and I very much look forward to the Government working with it.
The hon. Member for Birmingham, Edgbaston made a strong and important point on public health. Across the country—I see this in Essex—we are seeing pressures on public health. We can do much more to prevent many of the pressures on A&E, our hospitals and GP surgeries. One of the greatest challenges that we face, which relates directly to planning, is that the population of my constituency, and the number of houses, is growing. We have to meet those challenges by ensuring that the right kind of support goes into public health and infrastructure provision, so that we can get a new health centre for primary care in Witham and invest in our roads and in other aspects of local amenities and public services, too.
I come back to the point on education. When the provisional settlement was announced last month, Essex County Council was very keen to ensure that it was part of the pilot round for local business rates. It was pretty disappointed not to be, and I make a plea to the Minister for some kind of reconsideration or to ensure that Essex features in future schemes.
Essex is a county that constantly innovates. We want to strive for excellence while delivering value for money and meeting our service requirements to deliver to the public. There are endless pressures. Across the county of Essex, there are some big challenges that we want to work on with central Government to look for innovative solutions and ideas about how we can address many of those concerns.
It is a great pleasure to serve under your chairmanship, Mr Walker. I pay tribute to my hon. Friend the Member for Birmingham, Edgbaston (Preet Kaur Gill) for securing this important debate. It is a pleasure to follow the right hon. Member for Witham (Priti Patel).
We have heard many worrying examples today of how eight years of Government-imposed austerity and cuts to local government funding have damaged communities up and down our country. Sadly, and not surprisingly, that is also the case for our community in Enfield. Since 2010, Enfield Council’s central Government funding has been slashed by £178 million—a cut of £800 per household in the borough. If we had known that in 2010, we would have dismissed it as completely unsustainable.
Enfield’s adult social care budget has been gutted by £30 million since 2010, and there was a loss of £3.2 million from Enfield’s youth services budget between 2011 and 2016—a reduction of more than 57%. Almost every school in Enfield faces further cuts to their already stretched budgets. By 2020 they will have lost £12.5 million due to central Government cuts—a reduction of £273 per pupil. The Government’s willingness to cut those services is denying a generation of young people the best opportunities in life, and making it much harder for them to realise their potential and achieve their aspirations.
On top of that, Enfield Council is being forced to find another £18 million of savings next year. To put that in context, £18 million is more than the council’s current combined net spend on housing services, parks and open spaces, leisure, culture and library facilities. Our Labour Council is doing all it can to protect our local public services, and squeezing every penny to make ends meet, while having to cope with increasing need and the demands of a growing and ageing population. Some 34,000 young people in Enfield are now living below the poverty line, food bank usage has rocketed by 13% in the past three years, and the borough now has the highest eviction rate in London. That is the background to the cuts.
When the Government make cuts to Enfield Council’s budget, they are making a clear choice: they do not see the needs of local people as a priority. That is also reflected in their position on community safety. The cuts have had no greater impact than on our police service and the safety of our communities. Whenever I talk to people on the doorstep about crime in Enfield, as I did this Saturday morning—nobody in north London is unaware of the situation—many residents tell me how concerned they are about rising crime in Enfield. They have good reason to be concerned, as violent crime has soared by more than 90% since 2010—the figures sound unreal. In the year to November 2018, there was a 20% spike in knife crime offences in Enfield, compared with a 1.1% rise across London. We are at the top of that league table, where nobody wants to be. In the same period, our borough saw the highest serious youth violence rate in London—up almost 9%, in contrast to a decrease of 5.2% across the capital. I think we can make a special case for Enfield, alongside the case for London and the rest of the country.
Neighbourhood policing should be at the heart of our communities, but the Government have cut the Metropolitan police’s budget by £850 million since 2010, resulting in the loss of 3,000 police officers and 3,000 police community support officers across London. The Met is expected to make a further £263 million cut by 2022-23. That has led to the loss of 241 uniformed officers from Enfield’s streets over the past eight years.
Enfield’s Labour council has funded 16 police officers from its own budget to ameliorate that loss and tackle crime and antisocial behaviour. By working with the Mayor of London, Sadiq Khan, the council has secured a second dedicated police officer patrolling the streets in every ward of Enfield. We cannot blame the people of Enfield for thinking that Ministers are reducing the priority they place on keeping our young people and our communities safe, given the Government’s staggering cuts to the police budget.
To tackle the rise in violent crime, we need a fully-funded, multi-agency approach. That means properly and adequately funding the police and local government, which has an important role to play. As I have set out, those agencies and our public services are being put under severe financial pressure. The Government should be ashamed. The effects of eight years of austerity have been laid bare. They must end the cuts to Enfield’s public services and invest in our communities and in our children’s futures. Until that happens, I fear that the safety and aspirations of people in Enfield will continue to be put at risk. We will continue to see rising crime, youth violence, knife attacks, loss of life, serious injury, robberies and muggings.
No matter what Enfield Council and the Mayor of London do to address the situation, the ultimate responsibility and solution rests with the Government. Only they have the resources to provide our communities and our public services with the financial support they desperately require. I hope that the Minister will address those issues, and that the Government will prioritise properly funding our councils and public services.
There are still plenty of Members who want to speak, and the winding-up speeches will start in 35 minutes. I will let the debate run for an extra two minutes—I will not deprive Members of two minutes—but we need to manage time a bit better.
It is a pleasure to serve under your chairmanship, Mr Walker, and to speak in this debate. I congratulate the hon. Member for Birmingham, Edgbaston (Preet Kaur Gill) on securing it. She made some excellent points, particularly about the challenges that local government faces in prioritising public health spending. In respect of any contributions relating to health, I draw hon. Members’ attention to my entry in the Register of Members’ Financial Interests: I am a practising NHS doctor and a member of the Royal College of Psychiatrists.
It is undoubtedly the case that when austerity began almost a decade ago there was a need, in view of the economic situation that the country faced, for some belt-tightening and efficiency savings in local government and elsewhere in the public sector. We all have to accept that that was inevitable at the time, but nobody envisaged that the period of belt-tightening would last almost a decade. During that period we have seen an unprecedented squeeze on NHS and local government finances.
The Government talk about devolving powers to local authorities, but it is very difficult to give local authorities the responsibility to deliver more services without adequately funding those services and those that local authorities are already delivering. There is talk of improved integration between health and social care, and between the NHS and local authorities, but in fact we have seen a retrenchment of the delivery of services by many local authorities. As their budgets are squeezed, they have not had the money available to better join up and integrate services with the NHS. Patients have suffered as a result, particularly those with long-term conditions and disabilities, at both ends of the age spectrum.
I will talk briefly about some issues that are important to all Members, including the challenges that local authorities face in delivering improved care for people who are homeless or street homeless, which is a growing problem throughout the country, including in Suffolk and Ipswich; the challenges faced by addiction services; and the challenges faced by social care. The Government are rightly talking a good game on homelessness—they want to do more—but street homelessness is continuing to rise. The failure to tackle it is a result of both a lack of joined-up thinking and a lack of funding in the right places.
In particular, funding for addiction services has been squeezed. Many people who are street homeless have challenges with drug and alcohol dependence, but the funding to help them address those problems is simply not there. In addiction services, access to and funding for certain medications is being severely squeezed. Housing pressures, particularly in urban areas, mean that long-term solutions to tackle street homelessness are not there. The welcome changes that the Government put into place have failed to manifest in any meaningful change, and street homelessness continues to rise.
At the same time we see addiction services cut off completely from NHS care and working in a silo. There is a complete failure of joined-up thinking. I know that the Minister is scrolling through his iPad, but he would do well to listen to this point, because there is a failure and a lack of integration between what is happening in the NHS and mental healthcare and addiction services. There is a silo mentality in commissioning; local authorities commission addiction services and mental healthcare is commissioned by the NHS. That was a failure of the Health and Social Care Act 2012, and I urge the Minister to look at that if he wants to meaningfully improve care for people with addiction problems and begin to tackle the problems that a lot of street homeless people face.
Finally, on the issue of social care, we have an ageing population with multiple medical comorbidities—some 3 million people in England now have three or more medical comorbidities. That is a huge financial challenge not only for the NHS, but for social care. In spite of that growing challenge, at the other end of the age spectrum, thanks to improvements in modern healthcare, children with what would have been considered terminal illnesses often now live into their teenage years and sometimes into adulthood. Because of those twin challenges, the social care system faces unprecedented financial demands in delivering better care, yet funding for social care has been reduced by billions of pounds over the past few years.
Without that funding, the integration that the Government speak about will simply not happen. There will not be integration of health and social care. Money will continue to be diverted into acute services. One-off spending on winter pressures is all very well, but it does very little to address the chronic financial and human challenge that this country faces in improving and joining up better care for people with long-term conditions.
Welcome soundbites from the Government are all very well, but we need to see delivery on the ground. We need legislative levers to help drive better integration and we need the funding to back it up. Without the money, local government will be unable to deliver improved care, let alone continue to deliver the care that it does at the moment. I urge the Minister to look at the local government funding settlement, at the legislative levers and at what more can be done to support local authorities to raise additional money at a local level to help fund important local services.
It is a pleasure to serve under your chairmanship, Mr Walker. I congratulate my hon. Friend the Member for Birmingham, Edgbaston (Preet Kaur Gill) on securing this important debate. Local government services are integral to building the vibrant, inclusive communities that our constituents deserve. They are also vital for safeguarding the most vulnerable in our communities and ensuring that no one is left behind. It is for precisely those reasons that I am sure many Members will share my frustration at seeing their communities’ potential sapped by wave after wave of Tory austerity. As a former councillor in my constituency, I know only too well the scandal of local government underfunding. Warrington Borough Council has faced budget cuts of £122 million since 2010, and by 2020 it will have to save at least another £38 million.
In Scotland the situation is exactly the same with Tory austerity cuts, and the Scottish National party simply follows the Tory line in Scotland. I hear exactly the same stories all over Britain. It is time to give the councils money and get poverty off the streets.
I agree totally with my hon. Friend.
Warrington is one of the lowest funded of the 91 unitary and metropolitan authorities outside London, and it is the second lowest funded in the north-west. Cuts have been imposed on the local authority while pressure on services is growing. People are living longer and the borough’s population continues to rise. I commend Labour councillors from my constituency who, despite having to make difficult decisions in such challenging circumstances, have always tried to put fairness and the need to protect vulnerable people ahead of politics. Sadly, that is not enough to stem the tide of disastrous Tory cuts. Critical services such as adult social care and children’s services are coming under severe strain. Preventive measures that seek to reduce the long-term overall cost to the council have to be cut. The Government must surely recognise that that is not the way to provide services to an ageing population with increasingly long-term needs.
The Government have also tried to offload blame for their cuts on to local councils by shifting the burden on to the taxpayer. My constituents face council tax rises of 6% to mitigate the impact of the cuts. However, in order for services to run effectively, the council would still require an additional £30 million because of cuts in central Government funding. Warrington taxpayers are paying more and getting less because of the Government’s austerity agenda. In October last year the Prime Minister declared that austerity was over, but I cannot see that it is over. How does the Minister justify that statement to my constituents, who face yet another round of spending cuts and tax increases in the new year?
While the Prime Minister was announcing the end of austerity last October, more than 5,000 councillors signed the Breaking Point petition, calling on the Government to cancel their planned cuts for the new year and immediately invest £2 billion in children’s services and £2 billion in adult social care to stop those vital services collapsing. The Government must heed the advice of local representatives from all over the country by investing properly in our communities.
At the general election, Labour pledged £8 billion extra to fund social care, alongside an additional £500 million a year for Sure Start and early intervention services. If the Government are serious about ending austerity, that is the kind of investment that local government requires to rejuvenate our communities after eight years of crippling austerity.
We have an east of England flavour on the Government side of the Chamber. It is a great pleasure to be the second Essex woman to speak in the debate and a great pleasure to be an Essex MP. I am constantly impressed by the exceptionally good work in my parish councils, and in Chelmsford City Council and Essex County Council. The county council has been ranked in the top 10 of the most productive councils in the country and is celebrating a huge achievement in getting an outstanding rating for children’s services. The Ofsted report for children’s services talks about the inspiration provided by senior leaders and the importance of the political support given to them. It discussed their tenacious ambition for our children and how social workers are passionate about improving outcomes for them. Such tireless work is absolutely vital to focus on the most vulnerable. The outstanding ranking is for preventive services and the focus on getting early help to those who need it. In Essex, we know that top-class services are not just about pouring more money into the system. It is also about being really focused on the outcomes.
I agree with the hon. Lady that the issue is not just about pouring money into services, although I wish we had the money to do that. It is also about having the funding to employ and skill up a workforce. Does she agree that we face not only the loss of frontline services, but the skills and knowledge of local government officers, many of whom have been made redundant in many of our local authorities, such as Colne Valley, my authority? The skills and knowledge are not there to advise local communities because all the local knowledge has been lost.
I agree about the importance of local services, but the lesson from the restructuring of children’s services in Essex was that they became an outstanding service through a focus on the most vulnerable, who most needed support. When they were focused more broadly, and were not necessarily so targeted on the vulnerable, they did not achieve the same outcomes for the young people who really needed them.
I shall not say that there is not a challenge in Essex County Council. Indeed there is. There is huge pressure from population growth, inflation growth and increasing demand for services. The county council is announcing today that it will increase council tax by just under 4%. It would dearly have liked to be in the pilot scheme for business rate retentions, and is disappointed not to be. There has been some more money from the Government, which is welcome, for winter pressures, social care and highways, but those have been short-term amounts. They are not for the long-term planning that is needed.
As my colleague and neighbour, my right hon. Friend the Member for Witham (Priti Patel) pointed out, the impact on adult social services is severe. About 45% of the county council’s budget is spent on adult social services. We are expecting a nearly two-thirds increase in the number of over-80s in the next decade, and a doubling in the number of over-90s. Seven care homes have been closed and while the county council has tried to minimise the impact of that, and to support those who are affected, the impact on residents is necessarily huge. We need a longer-term solution for the funding of adult social services. The council is making quite sensible, radical changes in its thinking on insurance schemes, lifetime individual savings accounts, possibly more of a local sales tax, and other ways to take the business rate retention scheme to the next level. We need to focus on that.
We are a rapidly growing part of the country. In Chelmsford, it is planned to build about 18,000 homes. We need those new homes. People want to come and live in the county, and we need to help young people on to the housing ladder, but we need the infrastructure to go with it. The county council is spending about a quarter of a billion pounds this year on roads, and primary and secondary school places, but there are some long-term projects, such as our second railway station and the north-east bypass. Those are infrastructure projects for which people have waited decades, and they are vital to go with the housing. I wanted to pick up on the point about homelessness raised by my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter).
Order. Will the hon. Lady begin to wind up, just to be generous to other Members?
Yes, I will, Mr Walker; thank you.
There are huge pressures in tackling homelessness. Local charities work hard, but they need more support from Chelmsford City Council. It is the only city that has not had extra support for homelessness. We have projects to secure more social lettings and supported housing, and more help for those at risk of becoming homeless. I hope that the Minister will see that those funding bids are granted.
We have seven speakers in 16 minutes, so I shall let colleagues divide that among themselves.
It is a pleasure to serve under your chairmanship, Mr Walker. I declare an interest as I am a vice-president of the Local Government Association. I congratulate my hon. Friend the Member for Birmingham, Edgbaston (Preet Kaur Gill) on securing the debate. I have the enormous pleasure of co-chairing the Labour friends of local government group with my hon. Friend. I hope that the group will use opportunities such as this debate to shed light on the funding realities that councils face.
As a former councillor, I know at first hand the enormous pressures that councils face. I became a councillor in 2012, just as the austerity measures were about to be implemented. In 2014, I was appointed to the cabinet with the children and young people portfolio. It was not an easy time. Owing to the cuts, some difficult decisions had to be made. One included Sure Start. I was adamant that we were not going to lose our much-valued Labour policy, but I knew that changes were needed to ensure its survival. Those difficult decisions are made every day by councils, but they do not often receive the same publicity and attention as the decisions we make here, despite the enormous consequences for our constituents’ lives.
The coalition Government of 2010 knew that. They knew that if they heaped responsibility on to local authorities without the funding to deliver, councils would take the blame for cuts. There have been budget cuts of £160 million to the budget of our local council alone. That means that every year, £160 million has been taken. It would have provided services that we rely on. The £160 million has been found from libraries, roads, bin collections, social care and children’s services. Those are the stark decisions that councils are forced to make, and they all have far-reaching consequences. To put the challenge into perspective, by the end of the year, local authorities will have lost 60p in every pound from the funding that Government used to provide.
There is no light at the end of the tunnel. The Government want councils to be more and more self-sufficient, which means there will be less in grants from Government. Under the Tory proposals, areas less able to raise council revenue will have less to spend. Areas with the highest demands and council pressures will not have the budgets to cope. It is likely that in areas with the least pressures there will be council tax reductions. The Government tell us to trust them on the funding formula that we have yet to see, but with their record how can we possibly trust them?
Such pressing challenges are the reason why my hon. Friend the Member for Birmingham, Edgbaston and I established the Labour friends of local government group last year. It brings together councillors, MPs and stakeholders to call out the Government for their recklessness, and so that we can support one another and share ideas on how hard-working Labour councils can continue to deliver quality services despite Tory austerity. Most of all, we came together with one united message: hard-working Labour councils are not to blame for austerity and we have a duty as Labour MPs to make that crystal clear.
Councils are critical to our constituents’ social mobility, and to boosting young people’s life chances, but the Government’s contempt for local government, which is shown in their underfunding and under-resourcing, is restricting the economic and social transformation that town economies such as Leigh desperately need. I welcome the debate as an opportunity to highlight the damage caused from Westminster by Tory handling of local government, and the enormous challenges that the next few years will present to councils. We desperately need a fair funding settlement for councils that will not just give them the bare essentials to cope, but will utilise our incredible councils to get the best out of their areas.
Will everyone do three minutes each? The Opposition Front Bench has given me back six. Clive Lewis, three minutes—please.
I thank my hon. Friend the Member for Birmingham, Edgbaston (Preet Kaur Gill) for securing this debate on an issue that affects communities and constituencies across the country. The latest stark example of what we are talking about is the plan by Conservative-led Norfolk County Council to close 38 out of 53 children’s centres, including three out of five in my constituency. At the same time, without a hint of irony, the Government have designated Norwich an opportunity area, to increase social mobility. I politely advise the Minister that trying to improve social mobility while targeting early years provision for such cuts is a bit like trying to fill a bath without a plug—an impossible, Sisyphean task.
There is no doubt that the proposals will hurt some of the most vulnerable people in the city. At a Norwich children’s centre I heard from a mum how, following a difficult and traumatic birth, support from the centre protected her mental health. Another parent who had fled domestic violence told me that her centre was a safe place to go when she needed it most. No one judged her and she was able to get specialist help safely and quickly to protect her children. I also spoke with a mother who had a learning disability and epilepsy. She told me how the outreach provided by her centre before her child’s birth gave her the skills and confidence to join the ante-natal class. She said, “It made me feel normal, like the other mums, like I fitted in. I made friends”. Where are they expected to go if their local centres close? What is the future for their children if the centres are shut?
A long, complex path has led to where we are today. Between 2011 and 2019 Norfolk County Council made £364 million of cuts. Over the same period, the council had to absorb additional costs of £386 million. Despite facing huge cuts under the previous coalition Government, between 2013 and 2016 the Labour-led administration at County Hall managed to keep every children’s centre open and protect the budget of £10 million a year. Tories at Norfolk County Council now want to halve the budget for children’s centres to £5 million a year.
Local Conservatives are trying to con us by stating that they can make such a cut and close most of our children’s centres but still provide a good service, and they justify the closures by saying that replacement services will get to the people who need them via outreach. Given that those centres already provide outreach, as well as helping people who come into the centre, how can we expect them to provide the same level of support when funding has been decimated?
It is well known that for every £1 invested in early intervention and in places such as children’s centres, the state saves £13 further down the line. Children’s centres plug the gaps left by other services that have already been cut. People in my city do not want their children’s centres to be shut. It is beyond doubt that closing so many centres will cause great harm to parents and children in Norfolk, and there was a bitter irony in Tory county councillors citing cuts by their own Government as the reason for those closures. They may try to pass the buck, but the blame rests with them both.
Let us consider the challenges that this country and our children will face in the coming century, such as climate change, the loss of biodiversity, rampant inequality, threats to our democracy, and undreamed of technological changes. Surely it is nothing less than criminal to pursue policies that will cut the social and educational tools that people will need to navigate their way through those coming challenges.
Fantastic. There are five speakers left, which means about two minutes and 25 seconds each. Let’s go.
Thank you for chairing this debate, Mr Walker. Although £44 million has already been wiped from York’s budget, another £4.1 million will go this year—hardly austerity coming to an end. Local authorities are the game changer for introducing early intervention and prevention into a system. Thanks to a perverse decision by my local authority, the budget to tackle substance misuse was slashed by 25%—a £2 million budget lost £500,000—even though we have the highest level of deaths due to substance misuse in the country. We see the consequences of such cuts across York, and I can give many such examples.
York also has the worst funded education in the country. Schools are on tight budgets, and that is matched with the highest level of attainment inequality in the country. Such a diminution in funding has consequences that are harming my community, and I implore the Minister to put his money where his mouth is and end austerity by ensuring that local authorities have the resources they need to transform our communities.
Labour councillors across York are ready to transform our city, with incredible ideas about early intervention and prevention. Without those resources, however, they will be constrained, and if we are to see a game changer in the way our society works, we must make the right choices. In particular, I reflect on housing investment in our city. Hardly any social housing has been built in York since 2015, and that has had serious consequences for many other factors. We need only turn to the work of Michael Marmot to know the impact of such policies on public health. We need not only resources but the right leadership to make real changes in our community. This debate is just a start, and it is important to follow it up. I would welcome a meeting with the Minister to talk about the difficult issues and challenges our city faces, because the funding formula is not working across the board.
Finally, the business rates system has failed our community. It is driving people away from the high street, which has a perverse effect on the income received by local authorities. We urgently need the review that was promised two years ago, and I implore the Minister to speak to Treasury colleagues so that that comes to fruition.
Last year’s bankruptcy of Northamptonshire County Council was the first of many, and although the Government’s answer to it may have been well meaning, it involved a totally pointless reorganisation that was a little like shuffling the deckchairs on the Titanic. A crisis in local government is also coming to my local authority. East Sussex County Council, which covers just over a third of my constituency, is following a similar path. It has declared that it can make only a core offer to meet its basic statutory duties to the very vulnerable, thereby undermining the principle of universality and its social contract with residents. The most vulnerable people will still be affected by cuts in East Sussex, with cuts to meals on wheels, which have gone in many places, the end to the locally supported bus service, and the closure of libraries and many residential centres—we have about heard that in other areas as well.
It is shocking and shameful that the most vulnerable and lonely in our society are being forced into further isolation, and it has been reported that the cash shortfall at East Sussex will leave the county bankrupt in under three years. We will see the human consequences of that dire situation for many years to come. Recent cuts to services for disabled children have led to the charity Embrace East Sussex being forced to pick up the pieces, and parents now have to crowdfund for clubs and support for their children. Local parish councils have to provide the medical support for disabled children that would otherwise have been provided by the local authority. How have we arrived at a situation where our communities rely on voluntary groups and crowdfunding donations to support our children?
East Sussex County Council has planned to cut £854,000 from safeguarding services such as training programmes, and numbers of social workers are to be slashed, leaving families vulnerable. We are literally putting our children in harm’s way. The council acknowledges that more children will now be subject to child protection plans and stay longer in care because of those cuts, which in the end will cost both us and our children’s future more.
Both in Westminster Hall and the main Chamber I have spoken regularly about the £1 billion cuts to youth services nationally, which is a real problem. In Brighton and Hove the local authority spends all its council tax budget on adult social care. We need a new funding formula. Funding for adult social care needs to come directly from the Government or the NHS. We must transform the way it is funded.
Since 2013, Nottingham City Council’s main Government funding has been cut by three quarters, from £127 million to £25 million. Even worse, at the same time as the Government have been handing out extra cash to some Tory shires, cities such as Nottingham that cope with high levels of deprivation have been disproportionately hit. For example, in 10 years Surrey gained £19 per household while Nottingham lost £529.
The cuts come at a time when the council faces rising demand for its services, especially adult social care and child protection, and that inevitably means cuts to vital frontline services. Last year the city was forced to cut public health programmes to help people lose weight or stop smoking. It cut youth and play services, and there have been new restrictions on bus passes for disabled people. Fares on supportive buses have increased, and there are higher fees for leisure centres and other services. It is all short-term and self-defeating in the long run, as it will place extra burdens on our NHS, police, and other local services.
One of the most visible changes is the increase in rough sleeping. In 2010, when Labour left government, Nottingham city had an estimated three rough sleepers per night. This year that number has risen to 43. Despite the fantastic work done by the council, it faces an incredible challenge. That is just the most visible element and affects only 5% of the total number of people who need help with housing. In Nottingham, 15 families a week present as homeless. Is that any wonder, when the local government’s housing allowance cap has been frozen since 2016 and will not rise until at least 2020?
The Government say that properties can be found for £42 or £54 per week, but recent research by Advice Nottingham found that the cheapest house was £63 a week—£20 more than the Government claim. For a family of four who need a two-bedroom house, Advice Nottingham found only two homes in the entire city that fell within local housing association rates. Social housing is an ever-rising demand to add to that list.
The cuts keep coming. Nottingham City Council is currently undertaking its budget consultation for this year—I wonder whether the Minister can advise us which vital services he would cut next. I hope that he is listening and will consider the damage that cuts to local government funding have already done and will continue to do to my constituents and my city. It is time for that to change. It cannot go on.
I call Jamie Stone, who has three minutes, before Emma Hardy, who will also have three minutes.
Thank you, Mr Walker. I congratulate the hon. Member for Birmingham, Edgbaston (Preet Kaur Gill) on what was a very eloquent speech indeed. Much of what I am about to say has been summed up in a characteristically pithy intervention from the hon. Member for Coatbridge, Chryston and Bellshill (Hugh Gaffney). As a Scottish Member, the question for me is: “Where are the Scottish Government in this debate?” It perhaps speaks volumes that we do not have any Scottish National party Members with us today—enough said.
It would not be normal if I did not talk about the remote far north of Scotland, so I will do so again. We face enormous problems in the Highland Council, of which I was a member until I was elected to Parliament: we have a sparse population, huge distances, inclement weather; and the sheer cost of services and goods. Those elements militate against running the council cheaply. Over the last four years that I was a councillor, I found the cycle of going through budget cuts year after year a sickening process, because we felt that we were cutting right into the flesh, blood and bone of what we were trying to do for the good of constituents.
Of course, I take heed of that fact that it is a devolved matter, but I want to make two points arising from it. First, the settlement that the Scottish Government give councils such as the Highland Council is questionable, but they are not here to answer that point. Does the settlement from the Treasury to the Scottish Government accurately reflect the needs of Scottish local government? Would the Minister consider an audit of the money that goes to the Scottish Government and how much is actually delivered to councils to become council services?
As I want to leave some time, my second and final point is simply this: I recognise that local government is the foundation stone and building block of proper democracy. If the public’s faith in local government is damaged, we damage something that is so important to the way the country works: our democracy. Even on tempestuous days such as today, that democracy is hugely important and, I believe, an example to the world.
Thank you. Last but not least, I call Emma Hardy.
Thank you very much, Mr Walker. I stand here to represent an incredibly proud city. I hope that the Minister bears that in mind, because I am asking not for the Government’s pity about the poverty faced by people in my city, but for fairness and justice, and for the Government to acknowledge that not everybody lives in the leafy shires. I am sorry, but the suggestion that one solution could be greater investment in ISAs is so breathtakingly out of touch that it shocked me.
In my city of Hull we have the lowest average weekly wage in the country, at only £376 a week. The cuts to local government are devastating my city and creating a huge problem for the children living there. The Government talk a lot about the importance of social mobility, but those are meaningless words if people are not given equality of opportunity. My point about fairness is that there is deeply entrenched regional inequality, which is shameful to the country.
In an earlier intervention I mentioned that in one of my wards—Central ward—over 47% of people live in poverty. In my constituency there is an average life expectancy difference of nearly 10 years—the number of years that someone is expected to live a healthy life is lower in Hull than in other areas of the country. That should shame the Government into action.
Another problem is that we have £1,300 less per pupil spending on schools than in the rest of the country. We cannot rely on increasing local council tax to plug that gap. Hull City Council is 81% reliant on Government funding grants, and when that money is taken away it has a greater impact in Hull than it does in other areas of the country. Some 86% of people in Hull live in a band B or band A property, so a 1% rise in council tax would bring in only £2.90 per person in Hull, compared with £7.08 in the City of London, or £6.33 in the wonderful South Hampshire. For a city such as Hull, with highly significant deprivation, a very low tax base and limited ability to generate its own income, it is essential that the Government’s future financial settlement calculations recognise and make allowances for that. I ask the Minister not for his pity, but to give Hull its fair share of money and the money it needs. I ask him to reverse the cuts.
We heard today that Marks and Spencer is leaving the city of Hull. Our high streets are being decimated, so will the Government take action quickly and do something about business rates as well? To pull the funding from Hull—and from under the feet of the people of Hull—without making proper and necessary investment was always going to be a disaster. The Minister has the opportunity to own the Government’s past mistakes, recognise the failings of his predecessors, and do something about them.
Order. I call the shadow Minister, whom I thank for his generosity with his time.
Thank you, Mr Walker; it is a pleasure to serve under your chairmanship. I thank my hon. Friend the Member for Birmingham, Edgbaston (Preet Kaur Gill) for securing this absolutely critical debate at such a critical time, as local authorities enter their budget-setting cycle. The council meetings will take place over the coming months, and councils will be forced again, for another year, to make absolutely devastating cuts to their local communities.
That is what this is about. When we talk about council cuts, it does not gain a lot of interest, but when we talk about people and communities, the impact on the future life chances of our young people and the way older people are cared for, it absolutely matters and is crucial to our communities. In truth, the fabric our communities—the very foundation on which the Government are trying to rest future English devolution—is fragile and near breaking point.
There has been passion in the room today: 16 speakers on the Opposition Benches and four speakers on the Government Benches, including the Minister, who will speak shortly. That shows the real interest in the issue. None of us comes to Parliament to make our communities worse off. We have heard the desperate pleas from hon. Members who really care about the impact of the cuts on their communities, not for political advantage or to try to embarrass the Government, but because we live in our communities and see the impact on our neighbourhoods: the lack of funding in our schools, the effect on all those who cannot get the social care that they need, and the young people who have been denied the best possible start in life because children’s centres are taking cuts or being closed entirely.
One of the Minister’s colleagues has said that the way to revive our high streets is to open libraries on them, when hundreds of libraries are closing every year because the money is just not in the system. We need radical change and radical reform, because quite frankly, we have seen tinkering around the edges far too often, and that does not get to the crux of the issue. The crux of the issue is this: council tax and business rates have a role to pay—they are important property taxes—but both have limitations and will be pushed to breaking point if the Government do not do something.
Council tax is a hugely regressive tax. It takes 7% of low-income families’ incomes, compared with just over 1% of higher-income families’ incomes. The more pressure that is applied to council tax, the greater the pressure that is applied to low-income families. Time and again, the Government duck their responsibilities to provide central Government funding to support local communities, and the burden falls on council tax payers. Council tax will again be increased this year to the maximum level of 6%. On top of that, more money is required to go to the police, and in the case of combined authorities or mayors, even more money is applied to that precept as well, because the Government are walking away, saying, “Well, it’s not our problem,” when it is a problem absolutely of the Government’s making. Those are political choices.
It was absolutely right that austerity meant that every Department had to take its fair share of cuts, but the evidence says that local government has lost 800,000 members of its workforce—it is at its lowest level since comparable records began—while the central Government workforce figure is at its highest level since comparable records began. That is not a fair distribution of cuts or austerity. Local government continues to take the pain and the burden.
Many important points have been made today and I would love to go through the list of hon. Members who spoke. One thing that inspires me about Parliament is just how rooted in community our parliamentarians are—particularly Labour parliamentarians. I congratulate my hon. Friends on giving their communities a voice. The Minister, who is respected in local government—I am not trying to make a ding-dong match out of this, some real questions need real answers—has an opportunity to set out his stall, to say what he stands for and what he believes in, and to stand up for the pressures that local governments face. Any Minister at the Ministry of Housing, Communities and Local Government who presided over a local government family that can barely afford to make ends meet would not be fulfilling their responsibilities.
Thank you. I will call Ms Gill to make her final remarks at fifteen seconds past four. I call the Minister.
It is a pleasure to serve under your chairmanship, Mr Walker. I congratulate the hon. Member for Birmingham, Edgbaston (Preet Kaur Gill) on securing this incredibly important debate. The range of topics covered by Members’ speeches illustrates the breadth and importance of what local government does, and I thank all Members for their very valuable contributions. I pay tribute to the work of local government and local councillors up and down the country.
I join the shadow Minister, the hon. Member for Oldham West and Royton (Jim McMahon) in paying tribute to parliamentarians’ faith in their communities and their interaction with local government. I gently chide him and say that not just Labour parliamentarians have pride in their communities; Conservative Members have considerable pride. Conservative councillors up and down the country represent communities with great passion and dedication, as we have seen in every local election in recent times.
My vision is for local government and a set of councils that drive economic growth, help the most vulnerable in our society and build strong communities. If Members allow, I will take those areas in turn, and deal with as many of the points raised as possible. I apologise in advance if I cannot cover every single question, but I will be more than happy to follow up in person or by letter to anyone whose point was not answered.
We heard a lot about cuts and funding. I agree with the hon. Member for Birmingham, Edgbaston that local government has faced a challenging set of circumstances over the past few years. We do not need to replay all the arguments for why, but the task that this Government faced in bringing public finances back under control was considerable. Local government played a very large part in doing that. It has done a commendable job in those circumstances and I pay tribute to the work of local government, parties and councillors of all stripes in delivering high-quality public services in a difficult financial climate.
As we turn to the future, I believe things are looking up. In the settlement just published for local government for the next financial year, core spending power—the overall metric that looks at all the different income streams and grants available to local government—is forecast to increase almost 3% in cash terms. That represents a real-terms increase for local government and the highest year-on-year cash increase in some time. I know that is welcomed as a step in the right direction.
Beyond cash, local governments play a key role, as we heard, in supporting local economic growth. In the long term, that is the only way to ensure the vibrancy of our local communities and to raise the vital funds we need to fund our public services. The hon. Member for Blackley and Broughton (Graham Stringer) said that local government should have the ability to raise its own funds; business rates retention is one such opportunity.
I am delighted that Birmingham in particular is in the fortunate position of keeping 100% of business rates growth that it generates; many local councils up and down the country want that. The hon. Lady asked whether we would and should pilot new forms of business rates retention; I am pleased to say that is exactly what this Government are doing. In the next year, 15 pilot areas covering 122 local authorities will benefit from being a 75% business rate retention area, generating in aggregate for the country £2.5 billion in incremental funds for local councils, to reward their effort to drive growth.
The hon. Member for Stroud (Dr Drew) asked about the future of the system. I am pleased to say that the whole country should enjoy 75% business rates retention for 2021. That system is being designed—not in secret, as seemed to be alleged, but transparently with the sector—through a system design working group. The consultation is out and I urge anyone with an interest to contribute to the design of that new system.
One of the most undeniably crucial roles that local government continues to play is helping the most vulnerable in our society. Local authorities support the elderly, the disabled and our children in need. We owe councils an enormous debt of gratitude for the incredible work they do in this area. We heard many passionate speeches about their role. This Government are backing local authorities to carry out those vital duties. As we heard last year, the Budget provided an additional £2 billion for social care and committed a further £1 billion of extra funding for local services.
The integration between social care and the NHS was raised by the hon. Member for Crewe and Nantwich (Laura Smith) and my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter). They are absolutely right to do that. I am pleased to say that we are taking very positive steps in that direction. The better care fund, which pulls together funds from the NHS, local government and social care, is working. Ninety three per cent. of local areas believe that the better care fund has improved integrated working between the NHS and social care. We are seeing that in the numbers: social care has freed up more than 1,000 beds a day since the February 2017—a 43% reduction in social care-related delayed transfers of care. I hope hon. Members agree that we are making progress in this vital area.
We heard about the changing demographics in places such as Essex from my right hon. Friend the Member for Witham (Priti Patel) and my hon. Friend the Member for Chelmsford (Vicky Ford). It is absolutely right that in the long term, as we look to a new funding mechanism for local government, capturing those kinds of rapidly changing demographics is something we must get right. We heard from many Members about the pressures on social care. I am determined to work with the sector to find a formula that reflects accurately and transparently what local councils face on the ground, so that all local councils of all stripes can ensure they are funded fairly.
On children’s social care, I want particularly to point out the incredible work that Essex has done. My hon. Friend the Member for Chelmsford put it excellently: we should focus on outcomes, not just the amount of money we pour in. Her council is a shining example of one that does that in children’s social care, displaying innovation, as we heard from my right hon. Friend the Member for Witham. I am pleased to have spent time with Essex County Council. Many councils can and do learn a lot from how Essex has brought down the number of children in need, through a focus on early intervention and prevention.
The hon. Members for Birmingham, Edgbaston, for York Central (Rachael Maskell), for Leigh (Jo Platt), for Brighton, Kemptown (Lloyd Russell-Moyle) and others talked about the importance of prevention. I could not agree more with that sentiment. I am a passionate believer that councils can play a valuable role in ensuring that children do not end up in care, and that we can get to problems before they happen. My focus since getting this job has been on the troubled families programme. I am pleased to tell hon. Members that we have been working very hard to robustly understand the value that that programme brings and delivers on the ground in Members’ communities. We will shortly make more announcements about that, and I want to work with all colleagues across the House.
On delayed discharges from care, the Minister is right to say that progress has been made, but the challenge is that many local authorities can no longer co-operate with the NHS in the way they could before, by having embedded social workers in NHS organisations to prevent hospital admissions in the first place. That is a very big challenge, and it is driving up hospital admissions. Although the money may go to the acute sector, it will not prevent people from getting there in the first place. The Minister needs to look at that.
Obviously, I defer to my hon. Friend’s knowledge of the NHS, but I thank him for raising the point and I will make sure we discuss that with colleagues in the Department of Health and Social Care as we design the iterations of the better care fund and related joint working practices.
Prevention is incredibly important. The troubled families programme is back with almost £1 billion of money over this cycle; it works with families facing very difficult circumstances, doing all the work we heard about from hon. Members. I hope they will join me in Parliament to make a strong case for investment in this type of programme for this type of service as we approach the spending review, to demonstrate to everybody what a valuable role those kinds of services and local government can play.
Local authorities build strong communities by being cohesive. They have been backed with a £100 million fund to ease local pressures resulting from migration. They do that by being connected, and they are being backed with a £420 million fund to ensure that the roads that our constituents use will transport them safely and quickly to where they need to go. They also need houses for all their constituents, as we have heard. That is why we have lifted the housing revenue account borrowing cap and are investing almost £1 billion in tackling rough sleeping.
It a pleasure to champion local government here in Westminster. It is a role that I relish, and I look forward to working with all hon. Members as we approach the spending review, to make a compelling case for why local government deserves funding to making such valuable change on the ground, whether that is driving local growth, caring for the most vulnerable in our society or building strong communities. Local authorities up and down the country do an amazing job and they deserve our support.
I thank the Minister for his response and for paying tribute to councils up and down the country. I also thank him for acknowledging the real challenges local government faces. Although I welcome the £1 billion for the troubled families programme, there is still so much more to be done.
I thank my hon. Friend the Member for Oldham West and Royton (Jim McMahon), who reminded us about the people and communities these cuts impact, and I thank all other hon. Members for their contributions. The right hon. Member for Witham (Priti Patel) touched on social care and the funding settlement. My right hon. Friend the Member for Enfield North (Joan Ryan) spoke about knife crime and youth violence in her constituency, and the decimation of neighbourhood policing up and down the country.
I thank the hon. Member for Central Suffolk and North Ipswich (Dr Poulter), my hon. Friend the Member for Warrington South (Faisal Rashid) and the hon. Member for Chelmsford (Vicky Ford), who talked about the outstanding social work practice in Essex despite the pressures on social workers on the frontline. As an ex-social work manager, I know those pressures only too well, but I commend Essex for its work in that respect.
My hon. Friend the Member for Leigh (Jo Platt) co-chairs Labour Friends of Local Government, ensuring that the voice of local government is heard loud and clear in the House. My hon. Friend the Member for Norwich South (Clive Lewis) mentioned the plight of some of his constituents and funding cuts to early years services. My hon. Friend the Member for York Central (Rachael Maskell) made the excellent point that local authorities are the game changers, and my hon. Friend the Member for Brighton, Kemptown (Lloyd Russell-Moyle) talked about his council facing bankruptcy within three years, which is shocking.
My hon. Friend the Member for Nottingham South (Lilian Greenwood) made the point that cuts to preventive services mean paying more in the long term. We also heard from the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) and my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy), who made a passionate speech about fairness. I thank all hon. Members and I thank you, Mr Walker.
Motion lapsed (Standing order No. 10(6)).