I advise the House that I have selected the amendment in the name of the Prime Minister.
I beg to move,
That this House notes that the Government’s proposed changes to local authority funding will dramatically downgrade the importance of deprivation in deciding the distribution of funding to local authorities and will have a devastating effect on local adult social care funding; further notes that proposed changes will cause even greater reductions in foundation funding and children’s social care; and calls on the Government to scrap its Review of Local Authorities’ Relative Needs and Resources and to ensure that local authorities are properly funded through a fairer system that properly takes account of deprivation, need and differing council tax bases.
The state of local government finance is desperate. Our councils are not just at breaking point; many of them are broken. The Government’s so-called fair funding review could be about to make matters worse for some of them.
My hon. Friend is making an excellent start to his speech. How many councils does he think will fall like Northamptonshire County Council, in the next five years?
Of course that is the worry, because several councils are edging ever closer to the cliff edge, and the number that will drop over that cliff edge is very much dependent on the actions of this Government. If they honour their word and put resources into the local communities that need them most, hopefully we can avoid more Northamptonshires. However, if they continue along the lines that I fear they will, removing resources from the areas with the greatest need but the least ability to raise their own finances, I fear for the future of the local government sector.
I am sure my hon. Friend has had a chance to read the Local Governance Research Unit’s excellent annual survey of local government finances, which shows that 10% of councils are worried that their resources will be insufficient to meet their statutory duties. We could reach that clear tipping point unless the Government act.
My hon. Friend is absolutely right. I will touch on that report later in my speech, but it highlights the impact of 10 years of cuts to our local councils and public services at a time of rising demand, particularly for adult social care and children’s services—the expensive people-based services. Given that the councils with greatest social need and the worst health inequalities have a limited tax base to make up for any financial losses, the problem is that the so-called fair funding formula could be what tips them over the edge.
I know that the Minister for the Northern Powerhouse and Local Growth, the right hon. Member for Rossendale and Darwen (Jake Berry), will stand up and pronounce that the finance settlement that we are set to agree next Wednesday shows that he is investing in local services, but he is a lone voice in saying so. That shows just how detached the Government are from the sector that they are here supposedly to represent, because the truth is that since 2015—just five years—local government funding across England has fallen by 32%.
Does my hon. Friend agree that local government is also fearful of last week’s rumours that the Chancellor will ask Departments to cut another 5% from their budgets?
That is very worrying, and I hope the Ministry of Housing, Communities and Local Government will stand up against it. Those of us who have been a Member of this House for some time will remember that the former Secretary of State for Communities and Local Government, Lord Pickles, was only too keen to offer up the maximum cuts from his Department, meaning that local government in England was the part of the public sector that was clobbered the hardest.
It is even worse than the 32% fall over five years because, since the Conservative party entered government in 2010, funding for local councils has been slashed by more than half. We have all seen the consequences of that neglect: the unrepaired roads, the uncollected bins, the cuts to adult learning and the closed children’s centres. Under Conservative leadership, almost a fifth of our libraries have been forced to close because of cuts to funding. One of the previous Labour Government’s greatest achievements, the Sure Start programme, has had its funding slashed in half, forcing as many as 1,000 Sure Start children’s centres to close since 2010.
The hon. Gentleman is worried about the impact on the local authorities he mentioned because they cannot raise as much money through council tax. Does he accept that the shire districts get much less local government funding, so their council tax has to be much higher? It is only right that we consider a fairer funding formula, so that everybody pays a fair amount and receives a fair amount.
I will come on to the specific point of funding adult social care.
I will happily provide the statistics, but Liverpool, Knowsley, Blackpool, Kingston upon Hull and Middlesbrough are the five most deprived local authorities in England. Since 2010, Blackpool has lost 21% of its funding; Knowsley 25%; Liverpool 23%; Kingston upon Hull 22%; and Middlesbrough 21%. A 5% maximum increase in council tax in each of those local authorities will raise nothing like their loss of grant funding. That is not fair. If the fair funding review is carried out in the way that the Local Government Association suggests it might be, those most deprived communities will see even greater reductions in funding, and we know they will never be able to plug the gap through council tax alone.
I thank my hon. Friend for speaking about the cuts to children’s centres. Does he agree that when we hear about rising knife crime, we have to attribute much of that increase to the year-on-year cuts to local government finances, youth services and youth justice? We should focus on investing in children’s provision, and especially in education and work opportunities.
My hon. Friend is absolutely right. I have been a Member long enough to remember the last Labour Government introducing Total Place, under which all the responsible agencies—the police, the housing associations, the local authorities and the central Government Departments—worked together to tackle many of these issues in the round. One of the devastating impacts of austerity over the past decade has been the breaking away from that collaboration, that partnership approach, to a situation where each agency tends to cost-shunt. Those agencies are making cuts, so it becomes somebody else’s problem—they push it on to another part of the public sector.
The hon. Gentleman is making some important points about the situation in England. He may be aware of the fiscal analysis by the Wales Governance Centre at Cardiff University, which shows that there has been about a £1 billion cut to local government finance in Wales over the past 10 years. I know this is a block grant situation, and that the block grant has been reduced in real terms, but Labour Ministers in Wales have decided to swing the axe at local government.
As the hon. Gentleman states, the block grant is set by this place, so the Welsh Assembly Government have had to ensure that their spending meets the money granted by Westminster. I have been sent a budget briefing from the Welsh Government about their intentions not only to increase the adult social care budget in the year ahead, but to give a real-terms increase in local government spending. I welcome that overwhelmingly, because Welsh councils, like English councils, need good public services.
Durham County Council has lost £224 million in core spending since 2010, and the Government’s direction of travel has been to move the expenditure on to the council tax precept. The problem for County Durham is that more than 50% of its properties are in band A so, irrespective of how much the council tax is put up, it will do nothing to plug the gap left by the reduction in core spending.
My right hon. Friend is right on that. Councils cannot change their council tax base overnight. If their properties are predominantly in bands A and B, that is the council tax base for that local area. Governments of all political persuasions over the years have always recognised that not every council has the same baseline and the same ability to bring in enough money for basic, decent statutory public services, which is why we had the rate support grant in the 1980s and the revenue support grant from the 1990s onwards. Those things were in recognition of the need for a redistribution of funding to areas that cannot generate enough funding from council tax and business rates alone.
May I gently say to the hon. Gentleman that not all deprivation is found in urban areas, and that places such as Cornwall, which have had a raw deal on central Government funding because of the formula put in place by the Labour party, have for decades received lower levels of funding, despite being some of the poorest parts of England? It is this Government, with the fair funding review, who are going to put that right.
I suspect that the hon. Gentleman does not understand the fair funding review. I have never said that deprivation exists only in urban areas. Deprivation is a fundamental part of the formula that exists now, so if there is deprivation in his constituency—and it is more likely that there is—his council will get an element of formula attributed to that deprivation. But to take money from some of the poorest communities in the country in order to give it to the richest communities in the country, which have the ability to raise sufficient locally, is not one nation—it is reverse redistribution, and it is penalising the poorest councils and the poorest communities. He should reflect on what he has said.
I will give way a little later on, because I have been generous so far.
The Tory-led Local Government Association estimates that if we continue on this current course, the funding gap will grow to £8 billion by 2025. That is an £8 billion gap not to rebuild our services after 10 years of cuts, but just to stay still: just to prevent already heavily stretched services from falling apart under the weight of growing demand, rising costs and wage inflation. I reiterate: it is £8 billion more needed just to stay as we are today. So, even if this £8 billion funding was provided, in full, by 2025, it would barely keep the sector’s head above water, allowing councils to continue delivering services at current levels, with no capacity to meet the growing need for services. It would be interesting to know whether the Minister considers that a sustainable way to finance the sector. As my hon. Friend the Member for Sheffield South East (Mr Betts), the Chair of the Select Committee, has mentioned in an intervention, research published today by the Local Government Information Unit shows that 73% of councils would not agree with Ministers. The Chief Executive of the LGIU has warned:
“Our social care system is no longer on the edge, it’s fallen off the cliff. Our children’s services aren’t at breaking point, they’re broken.”
That has real-life consequences: Age UK estimates that in the past two years alone, 74,000 older people died waiting for care. An average of 81 people a day, equivalent to three every hour, died before they received the care that they needed. This is not a political point; it should shame each and every one of us, on whichever side of this House we sit. Age UK states that 1.4 million older people are not getting the help that they need to carry out essential tasks such as washing themselves, dressing and going to the toilet. That is not just unacceptable; it is appalling. It is a stain on this House—on all of us—and on our country.
My hon. Friend is making a powerful speech. Birmingham City Council and the great city of Birmingham have been hit hard by the biggest cuts in local government history—cuts of £700 million—with children’s centres and youth clubs closing, and social care and special needs provision being cut. Does he agree that it is fundamentally wrong, not only that the vulnerable have been hit as hard as they have, but that Birmingham reels from those cuts while the leafy shires of Surrey get yet more?
I agree with my hon. Friend, who has been a champion for not only local government across the country, but that great city of Birmingham, fighting the devastation that has befallen that great city. On the LGA’s own statistics, a further £48 million in adult social care funding could be removed from Birmingham to add to the devastation that has already hit his city. That is why the fair funding review is so unfair and wrong.
According to the King’s Fund—so this is not coming just from the LGIU—by the end of the next decade the number of older people who need adult social care support is predicted to increase to 4.1 million. That is piling even more cost pressures on our local councils, which is why the LGIU also highlights the increase in financial pressures on children’s services, as adult social care is only one part of the very costly equation that is people-based services—the services that councils, by law and by right, have to provide. Mrs Smith, on any street of any town in any shire, thinks that her council tax increases are going towards ever-reducing bin services, and she sees parks not being maintained and libraries closing. That is because she never sees the impact on adult social care and children’s services.
On children’s services, the LGIU argues that councils are no longer able to shield vulnerable children from the worst of the budgetary pressures that councils are facing. More than one in three councils said their inability to protect vulnerable children was their biggest concern. We know that there are unprecedented demand pressures on children’s services. The number of children in care has hit a 10-year high, but without the funding to support that increase in demand.
From 2009 to 2019, the number of section 47 inquiries—that is, where a local authority believes that a child is suffering, or is likely to suffer, significant harm—has increased by 139%. The Local Government Association warns that children’s services alone are facing a £3.5 billion funding gap by 2025. It is these pressures on people-based services that are pushing many councils towards the cliff edge, and sticking plasters will no longer suffice. The Minister will no doubt say that he gave £1 billion to be shared by adult social care, children’s services and provision for NHS winter pressures. That is not enough.
We have discussed this before, but does the hon. Gentleman agree that we should have cross-party talks on adult social care? One of the Select Committee’s key recommendations was that adult social care funding should be removed entirely from local authority pressures and we should adopt a German-style social insurance system. Does he agree that we should have cross-party discussions and that that should be one of the options on the table?
As I have said in previous debates, it is incumbent on the Government to come forward with proposals. We are still waiting for the Green Paper promised in the last Parliament and the Parliament before that. The fact of the general election is that the hon. Gentleman’s party is in power and it is incumbent on Ministers to come to this House to explain how they are going to try to resolve this crisis in adult social care.
We will sit down with Ministers. We have our own ideas. We will share ideas with the Government. We will come to some kind of consensus if we can. But of course the history on this is not great; I remember the former Health Secretary, Andy Burnham, having cross-party talks in the dying days of the Labour Government, and it looked as though we were getting agreement with the shadow Health Secretary, Andrew Lansley, and the Liberal Democrat spokesperson—until the general election came, and then there were posters everywhere saying, “Labour’s death tax” and “Andy Burnham’s death tax”. We have to move away from that and tackle this issue seriously.
Further to the intervention by my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), a few weeks ago I intervened on the shadow Health spokesman, the hon. Member for Leicester South (Jonathan Ashworth), to ask whether he would support social insurance. He flatly ruled it out. All we are asking is that if we are going to have cross-party talks, surely all credible options should be on the table.
I reiterate what I just said: it is for the Conservatives to come forward with their proposals. We will view those in the round with other ideas and see whether we can reach a consensus. I know that there are different views on both sides of the House about a system of insurance, but I am not personally in favour of that. I think that actually the easiest and quickest way to resolve the social care crisis in local government is to make sure that we fund social care through local government.
I want to come on to the issue that could make the situation that I have set out even worse for many of the same local authorities that are already at breaking point. The research from the Local Government Association has exposed the so-called fair funding review for what it really is: a cynical plan that risks leaving more sick and vulnerable people without the care they need. If implemented in the way that the LGA has calculated—and MHCLG apparently told the LGA that its assumptions were along the lines that the Ministry is going—then funding for social care for older people is due to drop in London, the west midlands, the north-east and the north-west, while the south-east and the south-west will see an increase in many areas. For young adults, the largest decreases will be seen in the north-west, the north-east, Yorkshire, the east midlands and west midlands, while the south-east and east of England will see some of the largest increases.
This research from the Tory-led LGA has shown that many of the areas that voted for, and put their trust in, the Conservatives for the first time in 2019—the so-called red wall seats—will see some of the largest cuts to social care funding if the plans go ahead in the way that has been outlined. Indeed, three quarters of those red wall constituencies—the seats that gave the Prime Minister his majority—will see millions of pounds of funding diverted from their hard-pressed councils to another part of the country. The LGA Labour group estimates that that is £300 million of funding that will be funnelled from less affluent councils to the more affluent communities.
But even worse than both those factors is the effect that there will be on the most deprived communities. The 10 most deprived local authorities in England will see, on average, a 13% cut, while the wealthiest communities in England will see their budgets grow by 13%. This model was devised back in 2014 at the height of coalition austerity; perhaps it was then politically expedient for the Conservatives to divert funds to leafy Tory shires at the expense of more deprived metropolitan and urban communities. But given that the Prime Minister’s claim that austerity is over, divvying up an ever-shrinking pot differently is so last Parliament—in fact, it is so the last two Parliaments before the last Parliament—and it is certainly no longer politically expedient.
Last week, I wrote a letter, with council leaders, to the red wall Members on the Government Benches, urging them to speak out against a plan that will see cuts to adult social care—one of the largest cost pressures facing all local councils, particularly those in deprived areas. I know from some of the responses that Government Members have given to the press that the calculations from the LGA have been dismissed as speculation. I say to those Members that this analysis was produced by the cross-party LGA and was released officially to support councils as they plan their budgets in the coming years. The analysis that the LGA produced was also informally shared with MHCLG, whose officials privately confirmed that the assumptions in the analysis are sound.
This new research is also consistent with what we already knew. Last year, researchers in Liverpool warned that removing deprivation from the funding formula would see the 20% most deprived areas lose £390 million a year. The Institute for Fiscal Studies has warned that removing deprivation from the formula would likely hit councils in inner London and most other urban areas, like Manchester, Birmingham, Newcastle, Bristol and Kingston upon Hull, where deprivation tends to be not just concentrated but over-concentrated. The IFS states that
“proposals by the government to base assessments of councils’ needs for spending on services like homelessness prevention, public transport, waste collection, libraries, and planning on population only would shift funding from councils serving deprived areas to those serving more affluent areas.”
It has also warned that the evidence base to justify this decision is weak.
Will my hon. Friend give way?
I will give way one last time.
It is not just about social care. County Durham, under the formula that is proposed, is likely to lose £39 million in public health funding, whereas Surrey County Council will actually increase its budget by £14 million. I look forward to my new Conservative colleagues in County Durham arguing how that can be fair to County Durham.
My right hon. Friend is absolutely right. It is not just about social care, but the LGA has published the fair funding review calculations based on social care. It has also done the calculations for children’s services, for the foundation formula and for the public health grant. I would hazard a guess that they show exactly the same trends. He is absolutely right about County Durham, because the LGA’s analysis shows that the change in funding there since 2015 alone is already 29% down. The change in funding from the fair funding formula would equate to another 6.71% reduction—a £10,327,679 cut—for his constituency. Contrast that with Beaconsfield, for example, where there would be a 17.5% increase—nearly an extra £15 million of funding. That is not fair by any stretch of the imagination.
The issue is really straightforward for the Government. If they do not agree with the analysis, the response is simple: follow up on the promise made by the Under-Secretary of State for Housing, Communities and Local Government, the hon. Member for Thornbury and Yate (Luke Hall), at the LGA conference in January and publish the exemplifications of the funding formula so that we can see exactly what the impact is. It really is that simple. If the LGA assumptions are now wrong, show us. Let councils, councillors and Members of this House see the exemplifications; we will then know how fair the fair funding review is to the different parts of England.
My worry is that what we know is just the thin end of the wedge. We know that the five least-deprived local authorities have, on average, seen their budgets grow—the least deprived local authority, Wokingham, saw its budget grow by 18%—but that has been gained at the expense of the most deprived. The top 5% most deprived local authorities face cuts of 22% on average. That is not fair. As I said at the start of my contribution, we know that those same local authorities do not have the same ability to raise income from council tax.
This is a scandal for those who claim to be one nation Conservatives. I genuinely believe that across all political parties not one of us stood for election to come to this place and introduce measures that will make life more difficult not just for the people we represent but for the poorest communities in this country. I like to give the benefit of the doubt even to Members from the Conservative party, so I hope that today Members from all parties will support our motion, or at the very least intensively and strenuously lobby Ministers and take a stand against what could cause misery for their constituents. This will be a major test of Conservative Members’ commitment to their constituents. I am sure that local people will not forgive or forget if they fail to stand up for those who put their trust in them at the election, knowing what we already know.
Finally, I say this to Ministers: be open, be transparent and publish the exemplifications. If they are anything like what the LGA, the LGIU and other local government experts fear, scrap the scheme and go back to the drawing board. A fair funding review that is genuinely fair will have our support.
I hope you will bear with me a moment, Mr Speaker, because this is the first time that I have had the opportunity to speak in a debate with you in the Chair as Speaker. As the MP for an adjoining constituency and a fellow Lancastrian, I congratulate you on the amazing start you have made as Speaker. You have restored gravitas to the office of Speaker and you are doing an excellent job.
I beg to move an amendment, to leave out from “House” to the end of the Question and add:
“welcomes the Government’s provisional local government finance settlement, which will deliver the biggest year-on-year real terms increase in councils’ spending power for a decade; recognises the pressures on adult and children’s social care as well as critical local government services, and welcomes the additional £1.5 billion available for social care in 2020-21; notes that the Government has listened to calls for a simpler, up-to-date, evidence based funding formula and has committed to consult on all aspects of the formula review in spring 2020; further welcomes the Government’s ambition to empower communities and level up local powers through a future Devolution White Paper; and welcomes the Government’s progress on this agenda already with the £3.6bn Towns Fund and eight Devolution Deals now agreed.”.
As we entered a new decade, this country voted emphatically for a new Government and a new approach. People discarded the politics of division and deadlock that had beset the previous Parliament for so many years. It was the people who gave a new mandate to my right hon. Friend the Prime Minister to drive forward his vision for our nation—a vision that will see communities levelled up and opportunity spread equally throughout the country, just as talent is already spread. We will level up every single nation of the United Kingdom and drive forward our Government’s agenda.
What have we heard today from the Labour party and the Opposition spokesman? They have learned nothing from their December drubbing—nothing from the people of Redcar in the north-east, nothing from the people of Heywood and Middleton in Greater Manchester and nothing from the people of the Don Valley in Yorkshire. Each of those areas, which had been Labour—[Interruption.] I know that Labour Members do not want to talk about the general election, which was the worst Labour performance for a generation, but we have a mandate and I intend to set out what that mandate means, in line with our amendment. Each of those areas, which had been Labour for a generation, rejected the politics that we heard from the Opposition today.
Let us not forget—although I bet he wishes we would—that the hon. Member for Denton and Reddish (Andrew Gwynne) was the general election campaign co-ordinator for the Labour party. Like a Japanese soldier emerging out of the jungle decades after they have lost the battle, he has chosen to return to Labour’s failed policies of division and deadlock. We heard him pit urban areas against rural areas, towns against cities and local government against national Government. It is absolutely clear that only the Conservative party—
Will the Minister give way?
Not at the moment. It is absolutely clear—
I will give way in a moment.
It is absolutely clear that only the Conservative party has a mandate to unite our nation as we move forward from a decade of recovery to a decade of renewal.
With the greatest of pleasure, I give way to the hon. Lady.
I am really grateful to the right hon. Gentleman for giving way. Can he let me know where the Secretary of State is while we are discussing local government finance? I am grateful to see the right hon. Gentleman in his place, giving us a speech, but I would quite like to hear from the organ grinder what is going to happen with local government finance.
I am disappointed that the hon. Lady thinks I am the monkey.
Well, I am not the organ grinder, as she has pointed out, so I must be the monkey. We have a broad team, and given that a lot of the claims made by the hon. Member for Denton and Reddish relate directly to the north of England, I think that as the Minister for the Northern Powerhouse I am the most appropriate Minister to respond to this debate.
My right hon. Friend’s mandate extends to God’s own county of Hampshire, where we are very much looking forward to the fair funding review on the grounds that we get to spend £1,650 per person, but we look north to the local authorities that have been enumerated today that have an additional £500 per person. We spend—
Order. Sir Desmond, you are usually very good and ask the shortest of questions and make the briefest of interventions. I do not know what has gone wrong but I am sure the Minister will have a grasp of what you were saying.
As my right hon. Friend knows, the fair funding review is under development, so we are unable to say today whether Hampshire will benefit more than any other area of the country, but his point about having a fair funding review that makes sure that we accurately reflect need throughout the country is absolutely right.
I am confused on that exact point. The new funding formula has not been published, yet the Labour Front-Bench team claim to know exactly what it is going to be. They also claim that the shires are going to benefit, yet Leicestershire and Rutland are the worst funded in the country, so the idea that the shires will do best out of this is most inaccurate. Does my right hon. Friend agree?
I do agree. I wonder how much attention the hon. Member for Denton and Reddish pays to his horoscope, because that prediction that has as much accuracy as the figures he has gone through today. Of course, the LGA itself said—in what was an extraordinary intervention from its chairman—that the figures were based on an old formula. It acknowledged that a new formula was being worked on and that therefore no further predictions could be made from those figures.
I am grateful to my right hon. Friend for giving way; the Opposition spokesman refused seven times.
Gloucester City Council provisionally gets 1.4%, compared with 6.3% for the country as a whole and 3.4% for all second-tier councils. While my right hon. Friend is doing the consultation, will he look closely at whether second-tier councils, particularly city councils with small amounts of space with which to benefit from the new homes bonus, could be given special consideration? Also, could he raise the council tax referendum limit from 2% to 3%? That would help us to raise funds locally.
I will get on shortly to the issue of council tax referendum limits. We continue to engage with colleagues across our local government family, on both sides of the political divide. If we have not engaged directly with Gloucester yet, I will ensure that we do so as part of our discussions.
Building on the mandate given in December to my right hon. Friend the Prime Minister, I want to set out how we will unite and level up our nation. We will devolve more power, money and influence back to communities across England. We will restore opportunity to our towns through our £3.6 billion towns fund, and we will work with every single local authority to make sure that they are the engines for economic growth in their community. This will be supported by the most generous financial settlement for a decade, while always ensuring that they have the resources to support the most vulnerable in society.
This Government are proudly the father and mother of English devolution to our regions. In the past three years, we have seen the creation of powerful metro Mayors in Liverpool, Cambridgeshire and Peterborough, Sheffield, Manchester, Newcastle North of Tyne, the West of England, the West Midlands and Tees Valley. Together, those mayoral combined authorities have access to £6.35 billion of investment funding, more than £1 billion of the transforming cities fund, and £1.5 billion of the adult education budget.
We understand, however, that it is not possible to measure how well devolution is working simply by looking at how much money is being received. The real power of devolution comes through putting power back in the hands of local people, and that is why devolution works.
I am fully supportive—as we were during the coalition—of the Government’s plans to devolve power to the regions of England and to local authorities. Does the right hon. Gentleman agree, though, that if this is about local people making local decisions, they should not be forced to accept a Mayor or, if they are a rural community, a particular urban-type structure in order to get those powers?
I am sure the hon. Gentleman will welcome the recent discussions that have taken place with local authority leaders across Cumbria. I know that he has influence over his own local authorities, and I am heartened by the open-hearted and open-handed way in which they have approached those discussions. My right hon. Friend the Prime Minister has been clear that we should seek mayoral combined authorities across the entirety of the north of England. It is my view that if we want to truly empower communities, a powerful, locally elected, singularly accountable individual is the best way of doing it. I hope that we will shortly be able to progress further devolution deals and discussions across Cumbria.
As I have said, devolution does work. It is already paying dividends, with funding and metro Mayors delivering programmes that local people want. The hon. Member for Denton and Reddish might want to listen to this. I am sure that the completion of the A6 relief road to Manchester airport in Greater Manchester has assisted him and his constituents to get around the north-west of England. I know it helps me. It was done by the Labour Mayor for Greater Manchester, Andy Burnham.
In Liverpool, we are supporting new rolling stock on Merseyrail. That is important to me—I went to school on those trains and did not know that 35 years later people would be going to school on the same trains. There is a new train maintenance and technology training academy and the largest rolling stock modernisation facility in the country, creating hundreds of new high-quality, high-skilled jobs, in co-operation and collaboration with Steve Rotheram, the Labour Mayor of Liverpool. In the west midlands, the extraordinary Andy Street is investing £207 million to extend the West Midlands Metro system, re-opening railway lines and stations. That is all being done by metro Mayors.
Of course, those decisions could have been made in Whitehall but, I think as everyone knows, the process would have been slower, they would not necessarily have reflected local priorities, and crucially, picking up on the hon. Gentleman’s recent comments, they would have lacked the local democratic legitimacy of decisions made by single accountable elected individuals. It is precisely because devolution works that we intend to go further and faster. We will unleash the potential of all of our regions, delivering on the priorities of this people’s Government to level up everywhere.
May I begin by thanking the Minister for his continued support for devolution to the Sheffield city region and south Yorkshire? I think we have just about got there. That is very welcome.
The Select Committee on Housing, Communities and Local Government has in the past commented on the fact that, so far, devolution has been about powers being transferred to mayoral combined authorities in certain areas. Initially, the Government were going to allow 100% business rate retention, which would have meant more money and more powers to local government across the country. Will the Government have another look at that proposal, to see whether all councils should now benefit from devolved powers?
I am very pleased that we are making such good progress in south Yorkshire. The hon. Gentleman and I, along with many colleagues across the House, welcome that. He is correct to say that mayoral combined authorities have retained their 100% business rate retention for next year. Following the successful pilots, including in areas such as Lancashire—the hon. Member for Blackburn (Kate Hollern) and I have benefited from that—any further business rate retention will be part of the spending review process.
Devolution is particularly pertinent to areas such as south Yorkshire. Every deal so far has been bespoke, but as part of our ambition to level up powers we have written to every existing regional Mayor and asked them to take on new powers so that they can truly drive the ambition for the region. I am delighted to tell the House that one of the first to respond was Ben Houchen, the Mayor for Tees Valley. Not only has he made the Tees fly again, by saving Tees Valley airport; he is also making his economy fly again, by working with the Government on a suite of new powers to unleash the full potential of Teesside and everyone who lives there. In addition, the Government are talking to Cumbria, West Yorkshire, East Riding, Hull, County Durham and Lancashire about their ambitions for change in their areas.
Already, 50% of communities in the north have, to coin a phrase, taken back control through devolution. More areas want to be part of our devolution revolution, and we will ensure that they get that opportunity. Later this year, the Government will publish their devolution White Paper, setting out the Government’s ambition for full devolution across England. Through this White Paper, we will work with everyone in our local government family to ensure that they are truly empowered to be partners in growth.
As this Government unite and level up cities, towns and coastal and rural areas across our country, we acknowledge that our town centres are absolutely at the heart of a growing economy. They are the ground on which local jobs are created and small businesses are nurtured, and they inject billions of pounds into the local economy. That is why, through our £3.6 billion town deal fund, we are directly intervening in local communities. We are working with local areas and councils on more than 200 investment plans that have the potential to transform their economies.
The local Member of Parliament is able to sit on the town deal board in each and every one of our town deal areas. That ensures that Members of Parliament from across this House, whichever party they represent, have the opportunity to be an active part of the conversation in driving local growth in their communities. This is a new approach that I cannot recall previous Governments taking. It is about drawing on the talents of every single Member of this House with a town deal.
I now want to briefly mention the hon. Member for St Helens North (Conor McGinn)—this will probably ruin his career. He attended his first town board meeting on 23 January. He then approached me just outside the Division Lobby, fizzing with enthusiasm.
On a point of order, Mr Speaker. I might be wrong but I thought this debate was entitled “Local Government Finance”. My hon. Friend the Member for Denton and Reddish (Andrew Gwynne) on the Front Bench made a very good speech about finance, but we have heard very little about it from the Minister, who has talked instead about devolution and other things to do with local government. Could I have some advice, please?
I think if we look in detail at both speeches, we will see that they are around the finance package and the delivery of different projects. I think there is an interconnection there, but I am sure that if we did drift too far the Minister would come straight back into line. For the moment, I am more than happy.
I suggest to the right hon. Member for North Durham (Mr Jones) that he read page 8 of the Order Paper. The Government’s amendment says that the Government will set out the devolution White Paper and mentions
“the £3.6bn Towns Fund and eight Devolution Deals now agreed.”
He is a very experienced Member of this House, so I am surprised that he has not yet learned to read the Order Paper in the morning.
Order. The right hon. Member for North Durham (Mr Jones) has done exactly what he wanted to, Minister, which was to get you riled. That is why his experience is best ignored at times.
Well, we are having fun.
As I was saying, the hon. Member for St Helens North approached me outside the Division Lobby, fizzing with excitement. He is embedded on his town board, and is putting aside political differences to work closely with this Government, challenging us on our towns fund and ensuring that he can deliver real benefits for his community.
It is only because this Government had the determination to deliver the will of the British people and we have now left the European Union that we can seize the opportunities that lie ahead. We will drive devolution, and level up our communities and nations, while at the same time beginning an era of new investment in public services. Back in 2010 we were forced to make some difficult decisions, but we had inherited the highest deficit in the nation’s history and an economy struggling to recover from the worst recession in 70 years. The public purse was overstretched, the overdraft limit had been reached and the credit card was maxed out. In truth, there was no money left and the economy was on the brink. It is exactly because we took those difficult decisions that we can now bring forward our ambitious plans and aims for local government finance for the months and years ahead. I am determined that local government will receive the resources it needs to support its communities, and continue to innovate and deliver cost-effective services for its residents. This year will see a spending review in which we will move forward with a longer-term settlement, providing the sector with the certainty and confidence it needs to properly plan for the future.
As the shadow Secretary of State mentioned, we also plan to review the formula used to distribute money between local authorities in order to ensure that we can use the resources in the most efficient and effective way. I will say more about that later. However, I briefly want to address why the Government brought forward a one-year funding settlement for local government. In advance of leaving the European Union, it was right that we sought rapidly and urgently to bring stability and certainty to our local government sector. This meant carrying out a one-year spending review at record pace, followed by a post-election local government finance settlement, which we published as soon as we could after the election. Building on that settlement, we now have a series of bold and ambitious plans for a local government finance settlement in the financial year 2020-21 that has been devised in close collaboration with colleagues across the local government sector.
Under these proposals, core spending power for local authorities in England will increase from £46.2 billion to £49.1 billion in 2020-21. This equates to a 6.3% increase in cash terms, or a 4.4% increase in real terms—the largest increase for a decade. The shadow Secretary of State spoke at some length about adult social care, and this Government are steadfast in our commitment to protecting the millions of people who rely upon those essential services. That is why we propose to inject an additional £1 billion of new funding into the social care grant, with £150 million used to equalise the distributional impact of the adult social care precept, and continue the £410 million of the previous year’s allocations. Overall, that means that local authorities will have access to £6 billion across adult and children’s social care next year. However, our commitment to boosting social care and investment spans much further than just that one-year settlement, which is why we pledged to maintain the £1 billion of new funding to the social care grant for the duration of this Parliament, enabling local authorities to continue with long-term planning and driving improvements in the essential core services.
It was deeply irresponsible for the shadow Secretary of State to scaremonger about the figures from the LGA. He knows that those figures are at best an estimate and that they are based on old formulas, including the old area cost adjustment, which we are changing. If we thought it worked, we would not be doing the fairer funding review, so he should think on before he scares some of the most vulnerable people in society with stories about cuts and figures that are not based on the true formula.
The shadow Secretary of State claims to be a great champion of local government, so I will give him the opportunity to intervene on me in a moment. I wonder whether he can recall what he was doing on the evening of 10 February 2016—would he like to intervene? He cannot remember. I can remember. I was in the Aye Lobby with my colleagues, voting for the social care precept, enabling local councils to prioritise social care. He was in the No Lobby, voting against more money going to councils to finance social care. That one measure alone has raised an estimated £7 billion for adult social care since it was introduced. Perhaps when he is lecturing Government Members about support for adult social care, he should recall what he was doing when local authorities and the vulnerable in society needed him; he was pursuing narrow, party political lines and voting against the social care precept.
If we are throwing accusations about, perhaps the Minister can tell me what the social care funding gap in Tameside Metropolitan Borough Council is this year, and how much the social care levy raises.
I am not throwing accusations around. I suggest the hon. Gentleman checks Hansard because whatever the funding gap may be, it would have been much bigger if he and his colleagues had got their way. He voted against more funding for social care, and I suggest he remembers that when he is giving out the lectures.
In addition to helping councils address the complexity around the delivery of social care, I recognise that councils in rural communities face some unique challenges. The services they provide are often delivered over a long distance, to disparate communities. That is why we are proposing to continue the rural services delivery grant at £81 million—the highest ever to date. This funding will continue to support residents in rural counties— including Labour-controlled Cumbria, which is a beneficiary of it and which I am sure welcomes the funding, given the challenges it faces around rurality—and people who live far from local services so rely on them being delivered by their council.
We have consulted widely on negative revenue support grant, and have concluded that eliminating negative RSG through business rates income, at a cost of £152.9 million, is the right thing to do. This will deliver on the Government’s long-term commitment to the principle of sustainable growth incentives in the funding settlement.
The new homes bonus is a very important part of how we fund local councils. It rewards councils that do the right thing by building new houses to help tackle our housing crisis. We want to ensure that they continue to be incentivised, which is why we will provide £907 million of new homes bonus allocations this year.
Council tax for the average dwelling went up by 112% under the last Labour Government. That’s right—Labour doubled people’s local council tax. Of course, in Wales they have managed to triple it, but they only doubled it here in England. That is why this Government have made a commitment to give local residents the final say on excessive council tax increases. We are determined, in a way that no Labour Government ever were, to protect the interests of hard-working taxpayers while granting local authorities the flexibility they need to raise resources to meet their needs. For this reason, we propose to continue with the council tax referendum limits.
You can’t have it both ways, Jake.
If we double the council tax that is paid by local people, then I will start to take lectures from the hon. Gentleman about what we should do. He should remember his own record. He entered Parliament in 2005 and was here when all this was happening; perhaps he would like to recall that.
Taken as a whole, this protection will mean that we see the lowest average council tax rise since 2016, ensuring that taxpayers continue to receive the breadth and quality of services that they enjoy today without, as they had under former Labour Administrations, the imposition of crippling tax hikes and rocketing monthly bills.
As we look towards future settlements, the Government intend to conduct a full multi-year spending review. We are already putting more money in this year, but the spending review will give us the opportunity once again to look at pressures in the round and provide councils with the certainty they need. We have committed to a fundamental review of business rates. As part of that work, we will need to consider carefully the link between the review and retention by local councils. We will of course continue to discuss that and the future direction with our partners in local authorities.
Everyone in this House wants to refresh the way we allocate funding, so that it reflects the most up-to-date needs and resources of local areas. That is key work to achieve the agenda set out by the Prime Minister, because dealing with local government finance is part of levelling up our entire country. We have made good progress with the review of relative needs and resources—or the fair funding review, as it is known—and I want to take this opportunity to thank Members on both sides of the House, some of whom have made constructive contributions to the process. The direction of the review has been welcomed by many, including many in local government, but now we have to deliver a sustainable approach, and we look forward to continuing to work with the whole sector.
The review is a large and complex project. Expectations are high on all sides, which is why we are committed to sharing emerging results with local government as soon as possible. We plan to share significant elements for technical discussions in the coming weeks and months. That will include formulas in the review that represent a majority of local government spending. However, I should remind Members that needs formulas represent only a small aspect of the review. As the LGA pointed out, it is simply not possible to predict the overall outcome for individual local authorities or groups of authorities and therefore the extent to which funding may move between authorities. Of course, we will need to consider the review in the context of the outcome of the planned spending review. We look forward to working with colleagues and sharing those results with the sector and the House shortly. I also look forward to updating the House once we have finalised proposals for our new and exciting settlement for local government. Finally—
I have more—I can keep going.
I welcome the subject of today’s debate, because it gives us an opportunity to look at the exciting programme that this Government have for devolution, levelling up and supporting our towns. However, it would be remiss of any Member not to take this opportunity to thank everyone who works in local government. I often feel that being a councillor is a thankless task, and I want to ensure that they hear a clear message from this House today that, on a cross-party basis, we thank them and support them in their work. Of course, councils are not just run by locally elected politicians. They have fantastic officers who support the work of the council and local communities. [Interruption.] While the Labour party seems to think it is funny that I want to thank people who work in local authorities for their work, Conservative Members think that it is important to do so.
Will the Minister give way?
I will not; I am concluding.
Let me finish by thanking our councillors and our officers, as well as the Opposition for calling this important debate and giving us an opportunity to discuss the Government’s exciting agenda.
I am not putting a time limit on speeches right at the beginning of the debate, but I advise Members to keep an eye on the clock and not to go beyond nine minutes. You do not have to do nine minutes, of course; you can do less. I call Mr Clive Betts.
This is a very important debate because these services affect millions of our constituents up and down the country. The reality is that local government has had bigger cuts to its funding than any other part of the public sector since 2010, with a 50% cut in Government grant and, even by the Government’s figures, a 25% cut in spending power. No other part of the public sector has had that level of cuts. We know that the biggest cuts have fallen in the poorest areas in the north of the country. It will be interesting to see how the Government respond to the pressures on services in areas such as South Yorkshire and the north-east following the general election; perhaps they have a bigger interest in defending those areas in the future.
Clearly there are massive pressures on social care. We know from the LGiU survey, which my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) mentioned, that the biggest pressures now identified by councils are on children’s services, followed by services for the elderly. The Housing, Communities and Local Government Committee, which I chair, published a number of reports in the last Parliament. We know that the funding gap could be up to £10 billion if it is not addressed by the end of this Parliament.
We also know the impact of the attempt to prioritise social services. Council spending on social services has risen from 45% of total spending to 60% between 2000 and 2020, which has squeezed out spending for all other important services. Spending on road safety, libraries, leisure, buses, housing and environmental services—things that are really important to the vast majority of our constituents—has been cut by 50% or more. As I have said before, there is a challenge to democratic accountability at a local level when, despite what the Minister said, people see their council tax rising every year, yet the services that most families who do not get social care use are being cut as they pay more for them. That is a fundamental challenge, and it has to be addressed; I will come on to how we might do that in a minute.
I turn to the other problems, one of which is council tax. Council tax has not been revalued for 20 years. Its bands are fixed in concrete, and it is becoming increasingly regressive and out of touch. The Select Committee made recommendations in 2019 on how to address that, and I am sorry that the Government did not feel able to accept them. Business rates are, again, determined by central Government, with no say at a local level. Last night, the Government changed the basis for calculating business rates increases from the retail price index to the consumer prices index. Do the Government really think that, in the longer term, business rates growing at 2% as the major funding source for local government can deal with the rising pressures on social care? It simply does not add up, and that message has come not from other Members of this House but from local councils—from the LGA and the County Councils Network. Paul Carter, when he was leader of Kent County Council, made this point powerfully to the Select Committee. We cannot continue to fund social care simply from a business rates increase based on CPI. It just does not add up, and the Government have to address that at some point.
More money has been put in this year, which has been generally welcomed. Sheffield City Council told me that, for the first time in many years, it is not having to make in-year cuts because of the extra money that has come in. It had about £10 million extra for social services, which has taken the immediate pressures off. But looking ahead, the council does not have certainty. It was worried by the report that came out the other day indicating a possible £30 million cut as a result of the fair funding review. I know that there is disagreement, and it depends which analysis we read, but that fair funding review has to recognise the issue of deprivation right across the formulas, including the foundation element. In the end, this is about distributing money according to need and the ability to raise money at a local level, and that has to be reflected in all elements of the fair funding review.
Looking to the future, there seem to me to be some key issues that have to be addressed. First, local government needs the certainty of a three or four-year funding settlement. That was welcomed in the last Parliament, and we need it again. As I have said, we need a fair funding review that is genuinely fair. However, we cannot have fair funding for local government unless the totality of the funding is sufficient for all councils, and that is the reality. All the reports we did on the Select Committee have shown this gap of up to £10 billion, particularly on care services, by the end of the Parliament. This is about making sure that local government as a whole gets a fair deal, not just every individual council.
If we are to sort that out, we have to say, as the joint report of the two Select Committees—the Housing, Communities and Local Government Committee and the Health and Social Care Committee—did in the last Parliament, that we need a specific agreement and settlement for social care. We cannot continue to fund social care out of business rates and the council tax. It simply is not going to work.
We recommended a social care premium, and I still stand by that. We went for a citizens’ assembly and set one up—the first time for a Select Committee—and we were told, “We don’t mind paying more, but we want to know that that money goes into social care”. Let us make it clear: we did not recommend a private insurance scheme, where people only get out what they pay in. We recommended something very similar to the German system, where people pay a premium—it could simply be an increase on the national insurance premium, or it could be a completely separate premium that goes to something like a friendly society, which administers the money on behalf of the Government—but, whatever happens, that money has to be separate, accountable and shown to go into social care. Social care would continue to be administered through local councils; this is not the centralisation of the social care system. There would be a move eventually—eventually, as money comes in—to having free personal social care. That was the cross-party recommendation, and I hope we can have cross-party discussions on that basis. I am certainly willing to enter into them, and I am sure that people across the House would do so if we look at this on that basis.
I would say to the Government that we ought to be able to improve local taxation. They should have another look at the whole issue of council tax bands. I know revaluation is a really difficult issue, but they should have a look at some reforms. Business rates retention is desperately complicated. It is so complicated that I think the Government have to separate out the mechanism for the redistribution of money within local government, which is what they are now trying to do through business rates retention, and the incentives to local councils to encourage local economic development. The two are separate, and the Government must do that.
In the end, there is a really big challenge when we come to devolution. I hope the Select Committee will go back to the inquiry on devolution that we started in the last Parliament. I am a passionate believer in more decisions being made at local level not just by councils, but by local communities. The real problem is that this should not just be about transferring powers down; it should be about transferring the ability to raise money and to make decisions at local level. The real difficulty—and it is not something that anyone has an easy solution for—is that that is very difficult to do in this country because of the great inequalities we have here. In Sweden, people have a much greater ability to raise money at local level, and they can do that because the country as a whole is much more equal. The differences in wealth and resources between different parts of Sweden are much less than they are between different parts of this country. That is the challenge: how to devolve powers, but also the ability to raise money in a country where inequality is so great that raising money at local level results in a big difference in the amount that can be raised from any individual tax. I know that is a challenge, and it is a challenge that I hope the Select Committee will now take up with a report on devolution. I hope the Government are prepared to listen and to be much more radical than they have so far indicated they are going to be.
It is a pleasure, as always, to follow the Chairman of the Select Committee, the hon. Member for Sheffield South East (Mr Betts), whose speech was characteristically thoughtful, and I think that, across the House, we all recognise his expertise in this matter. I can start by agreeing with him on the last part of his speech, which is in urging my right hon. Friend the Minister to be ambitious in our devolution agenda. The fair funding review is necessary and right, and I urge the Government to move forward with it. However, the Minister is right, in the wording of the Government amendment, to link this to our ambitious devolution agenda, which gives us an opportunity to break out of the straitjacket that has bedevilled local government funding for many years—throughout my time in the Department and my time as a councillor.
I am delighted to be making my speech with my new constituency neighbour, my hon. Friend the Member for Orpington (Mr Bacon), sitting just in front of me. He had a most distinguished career in local government—in the London boroughs and on the London Assembly. I think his expertise in this field will be very welcome to this House, and I am really pleased to see my friend here.
That comes back to the point: the pressures local government has had to contend with have been real, despite the fact that the sector is staffed by dedicated people at all levels, as the Minister acknowledged, and I very much welcome what he said about that. Historically, it has also been the most efficient part of the public sector, and we need to build on that strength. However, it has suffered, as the Select Committee Chairman pointed out, from the fact that it has, compared with most other countries, a very narrow tax base or revenue base from which to fund itself. I therefore hope that we will be prepared to think outside the box to some degree when we look at devolution.
The devolution of function is really important and the devolution of legal power is important—as my right hon. Friend the Minister will know, that is something my good friend the noble Lord Pickles, I and others sought to do in the Localism Act 2011—but the third bit of the equation is the devolution of resource. If we are going to be serious about devolution, we have to talk in terms of fiscal devolution as well. I commend to the Minister and colleagues the work of the London Finance Commission. It has published two reports, the first of which was in 2013. The commission was established by my right hon. Friend the Prime Minister when he was Mayor of London, and I know from personal experience that the Prime Minister himself is a convinced devolutionist.
I hope that we can look again at some of the sensible and practical recommendations for fiscal devolution in that first report. For example, there is the devolution of stamp duty land tax and perhaps of other property-based taxes. That also reflects another point made by the hon. Member for Sheffield South East. Yes, there are more disparities of resource in the United Kingdom than in other countries, but at the same time there are disparities of costs as well. The cost of running a local authority service in London and the south-east is exceedingly high, and perhaps a measure of fiscal devolution to a regional level would enable greater nuance in the way we approach those matters. It is an important topic, and it seems to me that we need to think that through very carefully.
Among the other specifics I want to touch on is the need to look sensibly at the formula itself. When I was the Minister I think we had 270-odd bits of regression analysis in the formula, and I pay tribute to the officials who grapple with that. However, it is complex and opaque, and we need something that is much more transparent to those who are its recipients. For example, we could look at a couple of practical issues. I very much welcome my right hon. Friend the Minister’s commitment to eliminating negative rate support grant. It seemed to me scandalous that a well-run and efficient local authority such as Bromley would, if we had not taken steps, have been penalised by negative RSG. I ask the Minister—I sure he will do this because he looks at all this carefully—to look at the London Borough of Bromley’s submission to the consultation, which set this out in some detail and with real expertise.
Another important area is that at the moment the formula is based almost entirely on a needs versus resource matrix, and there is nothing in the current arrangements that rewards efficiency. If we want to change behaviours in local government for the better, surely we can find some incentive that we can build into the funding mechanisms to reward local authorities that have a track record of being historically efficient and historically low-cost. Bromley is exactly such an authority, but it actually loses out in consequence. As it has been efficient, any reduction made on a simple pro rata basis bears more heavily on it, because there is less slack. We need to bear in mind that, in some cases, historically high spending may be the result of historically high funding, but not necessarily the consequence purely of need or of the efficient use of resource. Therefore, we need a formula that is more nuanced in capturing those distinctions.
I hope we can look seriously at the operation of the area cost adjustment. In my experience, that has proved to be rather arbitrary in a number of areas. We have an artificial distinction in London between inner and outer London boroughs. As many Members of the House will know, that does not reflect the way London has changed. There are now areas of considerable affluence in inner London, but as they are counted as inner London boroughs, they get a more generous rate of funding than outer London boroughs, whereas many of the London suburbs are facing increasing social and economic challenges. Getting rid of that distinction would be good, and moving to a more up-to-date system of calculation would also be valuable. I often wonder whether we should be looking at assessing need on the basis of disposable income and costs once housing costs are taken out of it, because housing costs are a significant distortion across the country and perhaps some element can be put in the formula to look at how we deal with that. Again, that bears heavily on efficient outer-London authorities such as mine.
We could also look at the way that benefits data are handled in this calculation. Should we be looking at benefits data making allowance for the level of take-up, which will vary? Doing it on a flat basis can, again, potentially distort the reality on the ground. That is why taking deprivation levels after housing costs may give us a better and more realistic assessment of disposable income in local authority areas.
I shall make my final point, because I know that there is much more that we need to touch upon. We have always maintained that we would honour the new burdens doctrine, but I am not sure that that has always been possible to achieve in practice over the years. There are still about 1,100 statutory obligations on local authorities and those have grown, sometimes for good reasons of social policy—the Homelessness Reduction Act 2017 is one example—but they can, again, bear heavily on some areas, particularly in London, because for a raft of reasons over which local authorities have no control, London is inevitably a magnet for new arrivals, so there will be greater pressure on London boroughs in terms of the costs of housing policy. Something that is more nuanced, which I am sure is achievable given modern data collection, would be welcome and advantageous.
I very much welcome the move back to multi-year settlements, and I hope we can look at having four-year or so settlements going forward. It was necessary to do what we did this year—I think everybody understands that—but let us get back to multi-year settlements to give greater certainty for people.
If we give local authorities more powers, as we did under the Localism Act 2011, can we look at the rules governing the way in which they can approach raising revenue for investment in capital projects? There are a number of restrictions around that at the moment? It would also encourage them to use their powers—also provided under the Localism Act—to take on more commercial activities and to do so in a more commercial manner. The take-up of that has been somewhat patchy thus far, so what can we do to encourage and assist local authorities to do more of that for the benefit of their communities?
So actually there is an ambitious agenda here, and this is an ambitious and important topic. I welcome the opportunity for us to have this debate. With respect to the Opposition, I should say that it is not simply about putting more money into a system, because, at the end of the day, the system is no longer capable of responding to the complex needs and pressures that modern local government must deal with. That is why the Government are right to have this review. They are right to be ambitious and to link it with the broader devolution agenda. Therefore, I have no hesitation in supporting the amendment.
My hon. Friend the Member for Sheffield South East (Mr Betts) highlighted what has been happening over the past 10 years, which is that local government as a sector has taken the biggest cuts. Added to that, Departments might have to find another 5%, and no matter what the Minister says in his reply about levelling up and making promises to northern councils, it will be very difficult, because this Government and the coalition Government had a clear policy to move funding from more deprived to more affluent areas.
Interestingly, the Minister said in reply to an intervention by my hon. Friend the Member for West Ham (Ms Brown) that he was here because he wanted to make the point that he was the Northern Powerhouse Minister. With one sole exception, the hon. Member for Keighley (Robbie Moore) has been the only new Conservative northern MP who has sat through this debate. We had a brief interlude from the hon. Member for Bishop Auckland (Dehenna Davison), who stayed for about 10 minutes, and I did spot briefly the hon. Member for Darlington (Peter Gibson). If this new army—supposedly—of new Conservative MPs want to argue for their region, they should be doing it in here and they are not setting a very good example. I will work with them to argue why the Government got it wrong on local government finances over the past 10 years.
It is not just me saying that: the National Audit Office and the Centre for Cities have clearly demonstrated that money has moved from northern councils—the more deprived areas—to the more leafy suburbs in the south-east. That has not been done by accident; it has been deliberate design and policy. If the Minister levels up the system and makes it fair, I will fully support that, but that would be very unpopular among some of his colleagues in the south-east.
We have a situation now, after the last 10 years, where County Durham has lost £224 million in grant. Core spending per dwelling in County Durham stands at £1,727, whereas the figure for Surrey is £2,004, so it is clear that deprived areas such as County Durham are getting less core spending, and that has been deliberately designed by this Government.
The cover for that is the so-called “fairer funding formula”. That is complete nonsense, because it is fundamentally flawed in two respects and it is a disguise to use the word “fairer”. It starts from the premise that the needs of every single area and council are the same, when that is clearly not the case; I will give examples later. As my hon. Friend the Member for Sheffield South East highlighted, it also works on the basis that each council has the ability to raise local finance on an equal basis; I am sorry, but they don’t.
I will give way in a minute.
They don’t, because, for example, in County Durham over 50% of our properties are in band A, so, no matter how much we put up the council tax, we will not—unlike more affluent areas, with larger numbers of Ds, Cs and even Gs in some cases—be able to bridge the gap that has resulted from the withdrawal of core funding.
Will the right hon. Gentleman give way?
I give way first to my hon. Friend, as I always call him—the hon. Member for Thirsk and Malton (Kevin Hollinrake).
I am grateful. The right hon. Gentleman seems to imply that somehow shire counties are getting a better deal from central Government in terms of spending allocation than metropolitan areas, but that is absolutely the reverse of the truth. The reality is that the shire counties get less than half as much as the metropolitan areas allocated from central funds, and that is why our council tax is, in some areas, twice as much.
Yes, but I have to say that in the hon. Gentleman’s area, North Yorkshire, the ability to raise council taxes is a lot better than in County Durham and others. I am not talking about a metropolitan council; I am talking about County Durham. In Surrey—Woking—and other areas in the south, the core spending has not been reduced at all. So the hon. Gentleman should be shouting from the rooftops about the unfairness of the current formula.
The other issue—
I will give way in a minute; I know the Minister gets very excited when I make speeches.
The other issue is the ability of local councils to raise finance through, for example, the distribution of business rates. To be fair to County Durham, it is trying some ambitious plans for economic development to get business rates up, but Durham’s ability to raise extra funding through business activity is not at all comparable with that of, for example, the City of Westminster.
I just wonder if I could recommend to the right hon. Gentleman’s reading the Government’s December 2018 fairer funding review consultation, in which we specifically deal with the point he has raised about differing council tax bases. So it is not correct to say that this is not dealt with in the fairer funding review. The relevant paragraph is 3.2.2 on page 50 of the December 2018 consultation document.
The Minister says that, but then he actually has a situation such as the following one, based on the funding figures put out at the moment—I accept we have not had the final decision. Under the formula for public health funding—and I supported public health funding going back to local councils—County Durham was forecast to lose £19 million, or 35% of its budget, whereas Surrey will increase its budget by £14 million. I am sorry, but that just cannot be right when comparing the two areas in terms of deprivation and health needs. The Minister may say what he likes, but in the past 10 years that has been the direction of travel. If he levels it up and changes it suddenly as Northern Powerhouse Minister, he will have my 100% support, but I doubt whether he will be able to do that. The promises that he and others have made to northern councils are going to be very limited.
On the point about need, there are two areas with which all local councils have been struggling—adult social care and looked-after children. Again, to work on the basis that need for all councils in those areas is the same is to start from the wrong premise. For example, since 2010 demand for children’s social care has increased by £7.2 billion but central Government support has halved. That has pushed demand on to local councils, which have had to make very difficult decisions. As my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) said, these services are not optional—they must be provided, by law. If we look at the national figures, in 2010, 54 children per 10,000 of population were in social care. By 2019, that had risen to 65—an increase of 20%. If we look at the figures for the north-east, the figure is 101 children in care per 10,000 of population. In the south-east of England, the figure is 53, and in Surrey there are only 37 children in care per 10,000 of population.
The demand on councils such as County Durham and others in the north-east, and in other urban areas, is far greater than it is on Surrey. Demand for statutory services, which councils have to provide, is going up and they are very costly. At the same time, core funding from the Government is being taken away from some areas and redistributed to areas such as Surrey, which is not just flatlining but receiving an increase in funding. I am sorry, but that just cannot be fair.
I said at the start of my speech that the direction of travel has been pork barrel politics of the worst type, doling out money to people who vote Conservative in certain parts of the country. The problem for the Conservative party is that the pork barrel has got bigger. The big test will be whether the Government can actually spread that around the country and meet all the pledges they have made. I doubt whether they can, because this has not just happened in local government funding. On fire and police, the direction of travel has not just been cuts, but moving revenue collection to local taxpayers. For example, the Government announced an increase in the amount of money going into policing, but that has been moved on to local taxpayers. Councils like Durham County Council are less able, because of their council tax base, to raise that type of financing.
I do not like using the phrase “fairer funding formula review”, because I do not think it is that at all. I doubt whether the new system will be, either. A lot of promises have been made and we shall have to wait and see whether they will actually be met. I will work with anyone to ensure that County Durham gets a fair hearing. I am sad that my new Conservative colleagues are not here today to join me in demanding fairer funding for County Durham, but I will certainly press the case for County Durham to receive the fair funding deal it wants.
I will end with a point raised by the Minister. I came from local government. I was a councillor for 11 years. I respect, and am very grateful for, the work done by councillors of all parties. They are remunerated at a very low level for the amount of work they do. However, I find it a bit difficult to take it from this Government, who have demonised certain people in local government over the past few years and used them as scapegoats for decisions that have been taken—[Interruption.] The Minister says codswallop, but I remember—as I am sure we will witness again in the next few weeks in the local government elections—the Government using the issue of pay and so on in local government to argue that local councils were being profligate. Those are diversionary tactics to remove attention from the core issue, which is that the Government have decimated local government over the past 10 years. We shall wait and see happens in the review, but I shall continue to make the case to ensure that the people of County Durham get the funding and services they require from what is a very good council, and to ensure that the Government have a formula funding that is not only fair but equal across the country, and recognises need.
The best piece of advice I was given on delivering my maiden speech was, “Don’t worry”—easier said than done, I guess—“treat it like a love letter”—I have not written one of those for a few years—“only that it is back to your constituents.” My wife told me—I should be careful about what I say because she is watching—that I did not have a romantic bone in my body, so that might be quite tricky. But it should be easier for me because this is to my home, to where I grew up and to the place that I love so much. It is a genuine love, and it is exactly why I stood to be the Member of Parliament for North Norfolk.
It has been said before in this Chamber quite a few times, but this time listen up: North Norfolk is the most beautiful constituency. [Laughter.] And I am going to prove it. Where else would we see some of the most iconic and beautiful parts of the country all in one area? From the miles of stunning coastline, taking in areas such as Holkham, Wells, Blakeney and down to the easterly end of Horsey, we have no fewer than six blue flag beaches. There is also the rural countryside, full of beautiful landscapes, quintessential villages and names like Baconsthorpe, Happisburgh and Sloley, which I will admit reflects somewhat the slightly easier pace of life we have in North Norfolk. We also have the glorious Norfolk Broads. It is idyllic, stunning and breathtaking in every inch of its 400 square miles.
It is, of course, no surprise that we see 9 million tourist visitors every single year, bringing in £500 million through the tourism sector. Indeed, in this House many Members have grabbed me in the Tea Room and said, “I remember holidaying in North Norfolk when I was a child.” Even more have grabbed me and said, “Can you recommend somewhere good to go in the recess?” Sooner or later, you will have gone on holiday to Sheringham or Cromer and tasted the world-famous delights of the Cromer crab. Its heritage takes some beating, too, for this is Nelson’s county.
Then there is my home town of Holt for which, I will agree, I have something of a soft spot. It is famed for its Georgian beauty and its independent high street. It is very much where the journey started for me to become an MP. I went into politics to help others: to help the people I grew up alongside and lived with. Over the past decade, I have cut my teeth in the cut and thrust of Holt Town Council and North Norfolk District Council, never once doing it with an eye to becoming a Member of Parliament, but getting involved because you genuinely care enough to help others and make a difference to your home. On that journey, I was at one stage the portfolio holder for revenue and benefits on North Norfolk District Council. I welcome the Government’s £2.9 billion funding, or 4.4% increase, to local authority spending, which is one of the highest in the past decade.
I believe that the passion to help others not only led to my election success, but very much cemented my predecessor, Sir Norman Lamb, in the seat for over 18 years. There can be very few Members of Parliament who command the level of respect that Sir Norman garnered. Indeed, whether in Parliament or on the door- step, he continues to be commended for his hard-working, considerate and kind nature. I thank you, Sir Norman, for your hard work over the years, and I know—putting all partisan colours aside—that we will work together, cross-party, on projects for the good of our constituents. Indeed, the best compliment that I got when I knocked on one door was, “Ah, you’re like a young Norman”— 25 years ago maybe—but I will take that, knowing the high regard that he is held in.
I could not fail to mention in my maiden speech the amazing people who put me here. I have worked with many incredible charities across the years, and friends and colleagues have worked so hard to get me elected—not least those who voted for me. I am truly humbled by a result that I never saw coming, which gave me the second biggest swing in the country. I pay tribute to all those people.
All of us know that a life of public service is a sacrifice. That really hit home in the middle of last year when my young daughter was heard saying in the playground at school that she did not like the Conservative party. [Laughter.] She is getting a bit embarrassed. When her friend said, “Why is that?”, she said, “That’s because if my daddy wins, they’ll take him away to London” —so thank you.
Now we need to set about making the constituency even better, not just for today but for tomorrow. We are the oldest constituency demographic in the country, and I will fight for the health services that we need, the right housing across our region and the infrastructure, and I will strive to protect our precious natural environment. But we can have none of that, in my view, without a strong economy of jobs and growth. That is what I want to mention because I believe that, in 2020, we will see just that: a better future for our country, with optimism, our new standing on the world stage and our ability to work in partnership with the European Union but not be governed by it.
Business is my background; I grew up in a family that ran independent businesses—not multinationals, but small and medium-sized businesses. They are the lifeblood of the economy. I know that it probably broke every health and safety law there is, but I started off life with a broom in my hand at 10 years old, sweeping up the shop floor. I think that is where I learned the essence of hard work. That was instilled in me by my stepfather, Michael Baker, who built a business up for 46 years to what it is today. He was my inspiration. He passed away before I became an MP last year.
Entrepreneurs like my stepfather are not alone. There are people like him up and down the country who drive small businesses forward, including those on the high street. Indeed, here in this country we have nearly 6 million private sector businesses. Three fifths of our employment comes from those types of businesses and they account for well over 95% of all businesses. To me, without business, entrepreneurs and risk-takers, we would have nothing, because we would not have the economy to pay for hospitals, schools and infrastructure, and nor would we have the jobs that give us the ability to buy a good home, settle down and live a fulfilled life. Our businesses and high streets—those that create jobs in this country—should be supported and revered, and I very much want to be a voice for them.
There is more to do but I am confident that in this Parliament, we will achieve it. Already, business rate cuts extend from one third to 50%, as the Government commit to levelling up and supporting high streets. With better broadband across our country, a mobile signal in every corner and investment in young people, we will nurture and grow our SME sector and produce the next wave of industry that will inspire the next generation of entrepreneurs and business leaders.
Across my constituency, I have the most incredible businesses across a raft of sectors, whether that is tourism, agriculture, manufacturing or retail. Talent abounds in every corner. I want to see more apprenticeships for young people. I want to see more opportunities for young families to excel together and promote the ability to work and live in my wonderful region. That is what I am going to do: support those entrepreneurs, those small and medium-sized businesses—those risk takers.
Finally, I thank my family for their unwavering support —my wife is watching—and my stepfather, who inspired me and unwittingly started me on this path to Westminster but died before I could be here. I stand here wearing your shoes—my feet are killing me. [Laughter.] I am wearing your watch, so you are with me today. I know that you will be looking down and I know that your proudest achievement came true: we got Brexit done.
Thank you, Mr Deputy Speaker, for giving me the opportunity to make my maiden speech today. It is a great honour to serve in this House. It is also the greatest honour of my life to be elected to represent the constituency of Jarrow, and I would like to thank the people of Jarrow for putting their faith in me. I pay tribute to my predecessor, Stephen Hepburn, and thank him on behalf of the constituents of Jarrow for his 22 years of unwavering support for the place where he was born and raised. I wish him well for the future.
It is fitting to be called in this debate because as a councillor for the past 10 years, I have fought for local government funding and services, hit by unending cuts to local authority budgets. I am blessed to represent such a fantastic part of our country. The constituency of Jarrow is not just the town of Jarrow; it is also Hebburn, Boldon, Cleadon and parts of Gateshead. It is also the only constituency beginning with the letter J.
Jarrow, with its proud history, powered the industrial revolution, built as it was on coal, shipbuilding and metal works, but that was to change. Palmers Shipbuilding and Iron Company closed in the 1930s, Leslie’s yard at Hebburn stopped shipbuilding in 1982 and the last pit in Jarrow closed in the 1980s. Successive Tory Governments, from Thatcher to Johnson, have decimated industry and come after our communities—not just in Jarrow but across the whole of the north. Many good, hard-working, decent people were discarded, and we are still living with those scars to this day. The closures and the misery they caused were and will always be a tragedy. They are a constant reminder of what Thatcherism brought to our region.
Sadly, like a lot of the country, particularly in the north-east, we now have food banks, high unemployment, poverty and struggle, but the people of Jarrow are resilient and proud of their history, community and working-class solidarity. They never give up, and I say to this House and them: neither will I.
There is no better example of this resilience than the MP for Jarrow from 1935 to 1947, Red Ellen Wilkinson. To be the first woman MP for Jarrow since Ellen fills me with pride, and it is only right and proper that I pay tribute to her here today. Ellen, outraged by injustice and the transgression of power at home or abroad, sought to do the right thing. She was and still is a legend. As a young trade unionist, she helped to organise the suffrage pilgrimage in 1913, where more than 50,000 women marched to a mass rally in Hyde Park. In 1935, as the MP for Jarrow, Ellen played a key role in organising the Jarrow march, an iconic protest against the unemployment and poverty in Tyneside. Like me, she would be outraged that today around 2,500 people are having to claim unemployment benefits in Jarrow.
Ellen, as an internationalist, condemned General Franco and supported the Spanish Republicans. She also, in no uncertain terms, denounced Neville Chamberlain’s appeasement of Nazi Germany. Here at home when she became Education Secretary, she had the monumental task of rebuilding Britain’s schools after six years of war. A pioneer, she raised the school leaving age from 14 to 15 and introduced the school milk Act of 1946, which gave free milk to schoolchildren. Her powerful speeches can be read in Hansard today. I would encourage all Members to have a read.
Sadly, Ellen died a year before the Labour Government’s greatest achievement, the national health service, and she would be disgusted by the systematic dismantling of this vital service. The crisis in our NHS means that staff are overstretched, GP waiting times are longer than ever, and mental health services are lacking. I would like to assure this House and the people of Jarrow that I will never stop fighting for our NHS. I will continue the fight to save South Tyneside Hospital and to make sure we have palliative care within the constituency after the closure of Saint Clare Hospice. I will fight against precarious work, zero-hours contracts and unemployment, and I will fight for skilled, unionised, well-paid jobs.
Like Ellen, I will fight for our children and young people to have the education they deserve. We need increased funding for our schools and investment in further education. I will not shirk one of the biggest battles still confronting us today, and that is against universal credit, a catastrophe that has had a cruel effect on our most vulnerable families. There are vulnerable children in need across the country—children without a stable environment to call their home—and it was in order to provide these children with a much-needed lifeline that I became a foster carer. I strongly believe communities should look after each other. In Jarrow, we understand what being a community really means. We know all about solidarity, collectivism, trade unionism —all values that I hold dear.
I have been a trade union rep all my working life—I worked for Royal Mail for 25 years, on the frontline, as a Unite representative—but now I will shift my focus by holding this Tory Government to account. I will defend our public services, our NHS and our hard-won rights, and I will fight for equality and social justice—for a society in which nobody is left behind. To the people of Jarrow, I say: I won’t let you down.
It is a pleasure to make my maiden speech as the new Member of Parliament for Keighley and Ilkley and to be making it in a week full of optimism, as we go forth as an independent nation.
It is an awesome feeling to be standing here speaking in this place, having started my role in politics in local government. I will never forget the moment when I walked in here for the first time, with goose bumps on my shoulder, and took my place on these Green Benches. But before I go any further, I would like to pay tribute to my predecessor, John Grogan, an incredibly decent and kind gentlemen. John served the constituency well for two years after being elected in the 2017 election, and I wish him the best in his new endeavours beyond politics.
It must be said that of all of my colleagues in this place I am honoured to be the one who represents the most incredible part of our country. Keighley and Ilkley has a little bit of everything, from the windswept heather and moor, farmed courageously and with passion by many farmers, to the urban landscape of Keighley, once the epicentre of the textile industry and now harbouring fantastic businesses at the forefront of manufacturing, engineering and technology. We are home to the Keighley and Worth Valley railway. We have the first public library in England funded by Andrew Carnegie. We are home to the mighty Keighley Cougars and to Timothy Taylor’s, which produces some of the finest ale this country has to offer. We have many talented and hard-working people from across the world in my constituency, from the many Italians and eastern Europeans, to the Indian population and the strong and proud Pakistani community. Striving for peace and respect for the rights of my constituents’ families in Kashmir will be one of my priorities in this place.
Towards the north of the constituency lies the beautiful spa town of Ilkley, with an array of independent shops, and even a Bettys tea room. Across the constituency, whether in Keighley, Ilkley, the Worth valley, Riddlesden, Silsden or Steeton, it is the people and their passion for and pride in the place that shines through. I think of people such as Ben Barns, a constituent in his early 20s in the process of setting up his first business, as a butcher in Keighley’s market hall, or Steve Kelly and his team at Keighley College, who are passionate about ensuring the young people in my constituency have the very best start in life—I was inspired by their “can do” attitude and willpower to raise aspiration on a recent visit—or the Ilkley Clean River campaign group, who through their own drive and determination have made national headlines by applying pressure on Yorkshire Water and the Environment Agency to ensure that our River Wharfe flows sewage free and has bathing water status. I could go on. It illustrates that it is incredible people who are the real catalyst for driving positive change. I am honoured to represent a constituency that has so many.
On the subject of this debate, local government is vital, but it must work and deliver for those on the ground by being truly representative of what people want. In Keighley and Ilkley, things are not quite working. For too long, Keighley has sat in the shadows of Bradford, with a feeling of being forgotten, undervalued and on the periphery of any real, tangible local investment offered by the Labour-run council administration, but things are about to change. Under this one nation Conservative Government, we will get on and get things done, and we are seeing that already, through our towns fund project. I will be bold and aspirational for my constituency. I am going to put Keighley back on the map as the No. 1 place to live, work and thrive. We need to revive and revitalise our town centre and get businesses booming again. We have a rich history, but our potential is so much more exciting. We have world-class manufacturing businesses based in Keighley, and now is the time to go forth and seize new trading opportunities, to become nationally—in fact, internationally—recognised as a centre of engineering excellence.
Some of our schools do need improving, and we need more special educational needs provision. Our much-loved Airedale Hospital needs a financial boost. However, all that is achievable under this Conservative Government.
I want to see Keighley as the beating heart of the northern powerhouse—the sparkplug that fires up that northern powerhouse engine. I want to see our farmers, who produce the very best food in the world, get the credit and recognition that they deserve. I want Ilkley to go even further, and to flourish as the ultimate white rose of Yorkshire. After all, it is the proud home of the official Yorkshire anthem. But in getting there, I will not be frightened of addressing some of those darker challenges that come before us. Drug crime in my constituency is a big problem which needs tackling, and the underlying issues surrounding grooming still remain and must be called out. I will not shy away from these responsibilities.
So I use this maiden speech not to talk about me, and my reasons and drivers for coming to this place. I use this key speech—my first speech in the House—to say a huge thank you to the people of Keighley and Ilkley for entrusting me with their faith to be their voice in this place. It is that trust which is lent at the ballot box, and which must now be earned. So as the only ginger male MP to enter the House through the new 2019 intake—[Laughter]—I look forward to using the inherited red fire to crack on, roll up my sleeves, graft hard to deliver real, tangible outcomes through this one nation Conservative agenda, and put Keighley and Ilkley back on the map.
Thank you, Mr Deputy Speaker, for giving me the opportunity to speak in this crucial debate. Let me first congratulate all those who have made their maiden speeches today and represented their constituencies so well, and wish them good luck for the future.
Once again, we have come to the Chamber because the Government are failing the people of the United Kingdom. Money is being kept from those who need it. While local authorities in Conservative areas are awash with money, Labour areas lag behind. The typically Labour metropolitan boroughs are set to lose, on average, £300 million under the Tories’ so-called fair funding formula, while—as my right hon. and dear Friend the Member for North Durham (Mr Jones) pointed out—leafy, well-off shire counties such as Surrey and Buckinghamshire will find the vast majority of that money funnelled into their already gilded pockets. The former Secretary of State, the right hon. Member for Tunbridge Wells (Greg Clark), agreed in 2016 that this iniquity should not continue unabated. The Conservatives have repeatedly cut the budgets of local authorities since 2010. Councils in London have been the hardest hit, having seen a decrease in core funding of more than 60%.
Does my hon. Friend agree that the huge cuts of £142 million resulting from central Government settlement funding assessments for Birmingham between 2015 and 2020 are unsustainable, and that any consequent reductions in services should be firmly and resolutely laid at the door of the Conservative Government?
I completely agree, and that is the story of every borough and every area in the country.
My own local authority, Ealing Council—where I served as a councillor for more than 25 years—now has only 34p for every pound that it could spend in 2010. Austerity and government cuts mean that less money goes to those who need it, particularly vulnerable children and adults who rely on social care services. Mental health and child safeguarding services have all been put at risk by the Government’s plans. Ealing is the third most populous and fastest-growing London borough, yet it has no maternity unit. My hon. Friend the Member for Ealing North (James Murray) raised the parlous state of GP surgery provision in our borough. With an ageing population and a homelessness crisis in London, demand for services is set to soar beyond sustainable levels.
Funding for youth clubs and youth workers has also been slashed. The link between cuts in youth spending and the knife crime epidemic has been made clear by the all-party parliamentary group on knife crime. Youth clubs in the heart of my constituency that once welcomed young people are now shuttered. Young people need safe spaces and positive role models to prevent them from sliding into a cycle of criminality and poverty that will follow them throughout their lives. Far from saving money, local government spending cuts have driven the costs of policing and welfare ever higher and have proved to be a false economy, not just in terms of the social cost but as an added drain on the public purse. They have made our streets less safe and have put our young people at risk, and it is incumbent on the Government to do more to make our streets safer. However, it is not just our young people whom this Tory Government are hurting; it is also the elderly and vulnerable, who rely on strong social care and public services to live independent, dignified, full lives.
Throughout his time as London Mayor, the Prime Minister supported a Government who oversaw swingeing cuts in the London boroughs that he was supposed to stand up for. More recently, when he first took office as Prime Minister, he promised that he would fix the social care crisis once and for all. That undoubtedly lofty aim cannot be reconciled with the reality of this paltry local government finance settlement. London is home to some of the most deprived areas in the country, and Tory cuts have only made it worse as successive Conservative politicians have pursued frivolities such as the Garden Bridge.
Local government is the only part of government that most people experience. It means their everyday life: bin collections, potholes, schools, and green spaces. After a decade of neglect and years of undue pressure to make savings, this Tory Government have pushed local government to the brink. The funding settlement favours Tory shires, and takes from the most in need. Our society needs investment to get rid of the inequalities that are so rife in this country. The Government must act, and offer more money for our public services, more money for our young people, more money for social care, and more hope for those who are still faltering under a decade of austerity. That is why I will vote for the motion tonight.
I should like to start by congratulating the hon. Member for Jarrow (Kate Osborne) and my hon. Friends the Members for Keighley (Robbie Moore) and for North Norfolk (Duncan Baker) on their excellent contributions to the debate. I must say that I envy them the huge relief that I am sure they must now be feeling. I look forward to feeling it myself in a few minutes’ time.
I rise to speak as the seventh Member of Parliament to be elected to represent Orpington since the constituency was created in 1945. I follow some distinguished predecessors, who are noteworthy for a variety of reasons. Time does not permit me to talk about all of them, but I will touch on a couple. The first is William Sumner, who represented the seat between 1955 and 1962. The reason that I mention William is that he did something very rare indeed. In order to secure the Conservative nomination, he defeated a young lady called Margaret Thatcher. That defeat led her to resign from the candidates’ list and to temporarily abandon her political ambitions. Fortunately, however, history shows that she recovered reasonably well from the setback. Baroness Thatcher, as she later became, and the values that she championed are what drew me into public life. She made Britain great again, and we on these Benches are the inheritors of her world-shaping legacy.
I directly follow in some famous footsteps, because my immediate predecessor was Jo Johnson, a man with impeccable family connections. However, he is significantly more than merely the sibling of his famous older brother. He is known for his great intellect, his glittering academic achievements and his distinguished career in journalism. He rose to high office in Government and continues to be highly regarded for having been extremely diligent and hard-working for his constituents. This was shown most clearly by the fact that he quadrupled the majority of slightly under 5,000 that he inherited when he was selected to almost 20,000 at the last election he contested, in 2017. I truly have a tough act to follow.
The Orpington constituency was included in the boundaries of the newly formed London Borough of Bromley as part of the London Government Act 1963. While officially part of Greater London, it is in reality a collection of idyllic villages in the county of Kent. Country lanes, country pubs, village churches and farmers’ fields are spread across great swaths of the area. That is what makes it the best place in the country—contrary to what I heard earlier—to be a Member of Parliament. It is the largest geographical constituency in Greater London, and two thirds of it are rural. The Darwin ward alone is larger than the Royal Borough of Kensington and Chelsea.
Given the rural nature of large parts of the constituency, much of Orpington has not received adequate broadband investment over the years, so the Government’s pledge to roll out full fibre and gigabit-capable broadband to every home and business across the UK by 2025 is especially welcome. I will be pushing for this to be expedited locally as swiftly as possible. Similarly, the rural nature of Orpington means that I have a keen understanding of the huge benefits that open green spaces bring, and any attempt to dilute or remove planning protections for outer London’s green belt would have significantly adverse consequences for my constituents. I will therefore lobby for such attempts to be resisted. The main town centre has a vibrant high street, ably supported by the Orpington 1st business improvement district, and I will always stand up for my local businesses.
Orpington has had its fair share of famous residents. The aforementioned Darwin ward is named after its most famous resident. Charles Darwin lived in the village of Downe, where he wrote his groundbreaking work, “On the Origin of Species”. Challenging orthodox thinking is not restricted to historical figures, however, as the constituency is home to contemporary figures who have made an impact on public consciousness. By a quirk of fate, that same village has been home to one of my new constituents—a certain Nigel Farage, who, although never a Member of this place, has had an undeniable impact on British and European politics.
We are fortunate to have some of the best schools in the country, and I am looking forward to visiting those that have kindly invited me to do so. St. Olave’s Grammar School can trace its roots back to 1571 and its long list of notable alumni includes my hon. Friend the Member for Croydon South (Chris Philp). Its counterpart, Newstead Wood School for girls, has as its most famous alumna the reigning women’s 200-metre world champion, Dina Asher-Smith, who grew up locally and of whom we are extremely proud.
Orpington has also played its part on the national and international stage, including in the hour of this country’s greatest peril. Biggin Hill airport is now a general aviation airport that caters mostly for private aircraft, but during the second world war it was an RAF base and played a major role in the battle of Britain. Spitfires and Hurricanes from a variety of squadrons were based there, and its fighter pilots destroyed more than 1,400 enemy aircraft. Many of the nearby housing developments are named after those RAF personnel who gave their lives to defend their country. Reading of those pilots’ exploits, and in particular of the age at which so many of them made the ultimate sacrifice, is truly humbling.
I shall turn now to the business at hand: local government finance. With the fair funding review ongoing, this is an opportune moment to examine that subject, and I speak as someone with 22 years of local government experience. The economic shambles left behind by the previous Labour Government in 2010 obliged the incoming coalition Government to make significant reductions in public spending. It is true to say that local government has had to share a considerable portion of that burden, but careful management of the country’s finances over the past decade means that this Conservative Government are now able to address the long-term structural problems that the Blair and Brown Governments created.
Critically, there is now an opportunity to review historical baseline funding and to recalibrate it, with particular consideration being given to factors such as current population levels and future growth projections. A number of qualitative actions can also be taken, such as conferring greater flexibility on local authorities to raise and spend their own resources, as well as improving business rate retention. Most importantly of all, we need to recognise and reward those local authorities that have delivered high-quality public services while continuing to make efficiencies, such as my own excellent London Borough of Bromley.
The scale of the Conservative victory in Orpington on 12 December, with more than 63% of the vote, was a ringing endorsement of our campaign to “get Brexit done” so that we could move on to the people’s other priorities. In sending me here to represent them in this place, the people of Orpington have done me the greatest honour of my life. It is a great privilege to be here and I pledge to serve them, and my country, to the best of my ability in the years to come.
Order. I am not going to impose a time limit, and if everybody behaves, we will get everyone in with a decent time for their speeches before the wind-ups begin.
I will characteristically endeavour to behave, Mr Deputy Speaker. It is a massive honour to follow the hon. Member for Orpington (Mr Bacon). I hope that he is now feeling the relief that he was looking forward to earlier. The combination of Orpington and nerves rings a bell with me. I spent the night in Orpington before Blackburn Rovers won the league in 1995, and I could not sleep. I got the train back home, and the rest is history. I am also, by the way, the sixth-great-nephew, by marriage and adoption, of Charles Darwin, so it is a delight to know that I had a famous relative in the hon. Gentleman’s constituency. It was also a delight and an honour to listen to the maiden speeches of the hon. Members for North Norfolk (Duncan Baker) and for Jarrow (Kate Osborne), and to engage in some ginger solidarity with the hon. Member for Keighley (Robbie Moore). I wish them all the very best for their time in this place.
Turning to the matter in hand, local authority funding cuts are the easiest for any Government of any colour to make. They make the savings, then someone else gets the blame. It is a transparent tactic, but I am not sure that it is as politically risk-free as Governments tend to think it is. It has certainly caused serious harm to families and communities right across the country. In my time serving in this place since my maiden speech—which I think was recorded on Betamax—our county council, our district council and our two national parks, the Lake District and the Yorkshire Dales, have suffered significant cuts. It is worth bearing it in mind that national parks unofficially form part of the local government family, although they have no council tax-raising powers. The Lake District is the national park with the biggest population of any in the country, and it acts as a local authority in relation to some housing, planning and environmental matters for anyone who lives there. With that lack of ability to raise money of its own, those cuts are felt more keenly, to the extent that the Lake District national park is even talking about selling off iconic pieces of land.
Cuts are not without consequence. Our police service also has to live with the cuts that have effectively been imposed upon it. Our police and crime commissioner has been forced to raise additional council tax just to prevent the Conservatives’ cuts from getting any worse over recent years. Our police are left increasingly vulnerable, with a mere handful of officers—sometimes as few as six at any given time—left to protect my constituency, which covers an area the size of Greater London.
Owing to the Conservatives taking money away from our councils, most head teachers in South Lakeland have had to lay off staff, reduce teachers’ hours or merge classes. The Conservatives take advantage of the fact that heads want to be professional, disguise their financial hardship and protect children and parents, so those cuts are often safely hidden, but they hurt. They hurt children with special needs the most, but that is apparently okay so long as the Government can find a way to escape the blame and pass it on to local government.
Like the constituencies of all today’s maiden speakers, my constituency is stunningly beautiful, but it is also vast, and its communities are dispersed. Public transport is vital to keeping people connected, preventing isolation and loneliness, and ensuring that people can get to work, school or college or, indeed, go shopping. Government council cuts mean that Cumbria no longer has any subsidised bus services. We recently successfully fought to protect under-threat services in Arnside, Levens and Cartmel, but we should not have to fight tooth and nail to save every single route. We should have a settlement that underpins a vibrant, affordable and reliable bus service right across the south lakes and Cumbria.
The Government have even slashed funding in areas where they promised investment. Just over a year ago, having loudly proclaimed their commitment to preventive health care in the NHS long-term plan, the Government then cut public health budgets by £85 million within a matter of weeks. That means that Cumbria’s spending is now set to drop to just £36 per head. That is barely half the national average of £63 per head and ridiculously lower than the £241 per head per year that the City of London receives.
The impact of that has been tangible. With the loss of school nurses, children have been left vulnerable to slipping into bad mental, dental and physical health, and the Government’s cuts mean that Cumbria now spends only a pathetic 75p per child per year on preventive mental health. We know that proper investment in public health budgets would allow us to place a mental health worker in every school, which is key to young people being resilient and healthy and to ensuring that problems do not become so severe further down the line. This is also the Government who promised a specialist one-to-one eating disorder service to the children and young people of south Cumbria, but they have still failed to deliver that service four years on.
The motion rightly mentions both adult and children’s social care. As we speak, a 96-year-old constituent of mine has been stuck in a care home for more than 10 months because the council has been unable to put a care package together. At his advancing age, he is being denied the ability to live out his time in familiar surroundings with the ones he loves. Social care is now threadbare. A lady who had life-changing injuries, rendering her severely disabled, has sought my help on many occasions when carers have not turned up, leaving her completely unable to access food or water. It is, of course, always the most vulnerable who are hit first and hit hardest by the loss of services. The omission of deprivation from the Government’s calculation of funding seems to be a case of the Conservatives looking at the injuries that they have caused and then choosing to throw insult on top of them.
According to the usual metric, my constituency is not the most deprived. We have unemployment at less than 1%, although 2,300 children are living in poverty, which is a reminder of the growing number of people in work and in poverty, and other parts of Cumbria, especially in the west, will be hugely hit by the Government’s choice to ignore deprivation. But the Government have made a choice, and it is to be cloth eared to the needs of rural northern communities such as mine. Local government funding is not some dry municipal concern; it is about the people who need care, the children in our schools, and the safety of our communities. That is why fairness matters. The Government must do a U-turn on their cuts to rural northern communities, because Cumbria deserves better than this.
It is a pleasure to follow the hon. Member for Westmorland and Lonsdale (Tim Farron), whom I always listen to with care, and the several maiden speeches from both sides of the House, especially those of my hon. Friends the Members for Keighley (Robbie Moore), for Orpington (Mr Bacon) and for North Norfolk (Duncan Baker). It is great to hear such strong voices on the Government Benches, and I look forward to further contributions.
Local government in Dorset has changed significantly over the past year, with nine councils merging into two in the run-up to the elections. My constituency is one of only two that covers both new unitary authorities. Of course, there were many reasons for the changes, but one of the main drivers was financial. Back-office savings, the rationalisation of office space, and a reduction in the number of senior staff have been painful but necessary decisions to ensure that frontline services can continue to be maintained.
Despite the changes, both Dorset Council and BCP Council remain in a challenging financial position. Additional funding is welcome, of course—I always say that—and it has added to both councils’ spending power. However, that is often offset by greater demands, not least in relation to adult social care and children’s services. Dorset has many advantages. It is a great place to live and work, but is also a great place to retire to, with an above average 17% of the population over the age of 70. That proportion is growing, so we are facing adult social care challenges. Social care is by far the largest part of the budget, placing considerable strain on our local councils.
I therefore welcome the Government’s promise to produce a social care Green Paper. A long-term solution is absolutely required, and I particularly welcome the recognition in the Prime Minister’s amendment this afternoon of
“the pressures on adult and children’s social care”
and the move to a fairer funding formula. Much has been said by Opposition Members about the fairer funding formula, but it will be absolutely crucial for residents in Mid Dorset and North Poole. We need a fairer settlement that reflects the challenges of living in rural areas. My hon. Friend the Member for St Austell and Newquay (Steve Double) made an intervention at the outset of the debate noting that deprivation was not only found in inner-city areas, because it is found in all our constituencies and in rural areas.
However, despite what we have heard from Opposition Members, the majority of the increases in council funding this year have been seen in urban areas. Once again, shire counties have received comparatively less. The shadow Minister, the hon. Member for Denton and Reddish (Andrew Gwynne), refused to take my intervention earlier, so I will tell him now—I am pleased to see him still in his place—that rural and shire counties receive an average of £240 per person. That is the point that my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) was making in several interventions, but he is better than I am at intervening. Rural and shire counties receive £240 per person compared with £419 for metro- politan and city authorities and £601 for inner-London authorities. That is why it is crucial that the Government grapple with this issue in their fair funding review, as I know that they are doing.
Does the hon. Gentleman agree that councils of all political persuasions are already, as he said, in severe financial trouble following 10 years of savage cuts by the Conservative Government? The Government’s new adult social care funding formula, which will actually see Birmingham lose almost £50 million, will further exacerbate inequalities both within and between councils.
I am grateful for the hon. Lady’s intervention, but I do not accept her point. My point is that we need to look more broadly. The funding given to rural areas is not enough, including in my constituency of Mid Dorset and North Poole. I do not accept or recognise her figures. Indeed, I am sure the Under-Secretary of State for Housing, Communities and Local Government, my hon. Friend the Member for Thornbury and Yate (Luke Hall), will dispute those figures, as the Minister for the Northern Powerhouse and Local Growth did in opening.
My hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill) said that our local authorities needed greater security through a longer-term financial settlement. I understand what he says, and he makes a valid point about the need for a one-year settlement, but we need a longer settlement to give councils the greater financial certainty that is required. That will mean they can move on and be more strategic in future, so I welcome what the Northern Powerhouse Minister said in opening.
I hope the Under-Secretary will echo and re-emphasise the importance of this funding and reassure my councils in Dorset and Bournemouth, Christchurch and Poole that he recognises the need for a longer-term financial settlement.
Councils in Dorset have taken the brave and commendable steps to reorganise and to ensure that frontline services are given the greatest priority. Ever-increasing council tax is not a long-term solution, as I know Ministers recognise. I welcome the amendment in the name of the Prime Minister, and I will support it in the Lobby this afternoon.
I am pleased that we are having this Opposition day debate on a topic that directly impacts on all our constituents’ day-to-day lives. The aim of any Government should be to ensure that people’s day-to-day lives are improved and to give people a greater stake in society. To achieve that, we must empower the collective voice of our communities—our local councils.
Instead of listening to and supporting our councils, the past 10 years of Tory austerity have seen their resources cut, with no account taken of deprivation and demand-led need. Many services have been pushed to breaking point. It has created an impossible task for local councils so, rather than looking to improve lives, as councils want to do, they are now desperately trying to sustain the safety of local people.
We have a brilliant Labour-led council in Luton that listens and responds to its local community, but it can only do so much when, year on year, central Government funding is cut, which has led to over £130 million-worth of cuts since 2010. Spending has needed to be redirected to address the increasing demand for adult social care and children’s services, on which much has already been said, and to address the disgraceful rise in homelessness, which is particularly affecting Luton. Both issues require a national strategy, not just local sticking-plasters.
Since 2010, Luton has seen spending on libraries, museums and heritage services cut by 55%; spending on transport and local bus services cut by 55%; and spending on community safety cut by nearly 30%. This Government have completely dismantled our local councils’ ability to improve communities on the frontline. Now our councils’ simple aim is to best soften the blow of austerity.
These irresponsible cuts have directly led to the suffering of vulnerable people in my constituency. By cutting the revenue support grant and central funding, the Government are increasing the emphasis on regressive taxation such as council tax and business rates. In areas such as Luton, we cannot raise as much council tax due to the size of our houses—the majority are band A and band B properties. Even if we could raise council tax, we know that many people are struggling to pay it. We cannot raise much income through the new homes bonus because we are a very urban area and cannot build many more houses.
The Government profess to be increasing spending as part of their council funding review but, as has been repeatedly said, a simple increase in per-head funding would not be based on need. In our area, such an increase represents a giveaway to the Tory leafy shires—I could go on—at the expense of more deprived post-industrial towns, which have disproportionately higher levels of deprivation. The situation is stark in my constituency, which differs from the constituency of the hon. Member for Mid Dorset and North Poole (Michael Tomlinson).
The whole of Luton South deserves investment. Will the Minister explain to me and my constituents why the Caddington area of my constituency, which falls under Central Bedfordshire Council—a more rural, Tory council—will receive an indicative 20% increase, whereas the Luton Borough Council area of my constituency, which covers many more areas of deprivation, will receive only a 1.5% increase? Taking those figures another way, can he explain why people living in Luton Borough Council’s Biscot ward, where child poverty is at 55%, do not deserve at least the same increase as those living in Caddington, where child poverty is at 15%? Are children in Biscot worth less than children in Caddington? I say not. In my constituency we are all equal. Funding needs to be allocated based on people’s needs, not on political giveaways.
Decisions made in Whitehall are completely detached from the streets of Luton. I ask the Minister, or any of the ministerial team, to come and visit Luton—it is a short hop on the train, so it is easy to do—to see the difference. Come and visit Biscot, Dallow, South or Farley and tell my constituents that they do not deserve increased investment in their services.
If the Government’s latest funding announcement actually represented a fair funding review, I guarantee that Luton would be receiving a much higher funding increase than 1.5%.
I congratulate all my colleagues who have made their maiden speech today, including the hon. Member for Orpington (Mr Bacon), who is no longer here, with whom I serve on the London Assembly.
As a former councillor and a current member of the London Assembly, I am delighted to speak on an issue that is so important to us all. Local government may not be the hottest topic on everyone’s lips, but the decisions made by our councillors on local regeneration, housing, bins and potholes are important—many councillors have been taking pictures with potholes for their council websites—and they matter to the people we all represent.
Our local councils play a crucial part in all our communities and make a massive impact on our day-to-day lives, but the reality is that local government has suffered over the last 10 years under this Conservative Government and the coalition Government before them. Councils up and down the country have been crippled by budget cuts, and in Lambeth we lost over half of our core funding from central Government between 2010 and 2018. Lambeth Council has been forced to make over £200 million of savings just to make the books balance.
At the same time, the pressure on our councils has shot up. Social care has become a massive issue across the country. In Lambeth, we have also seen the number of families in temporary accommodation almost double between 2012 and 2019, at a time when the cost of housing and temporary accommodation has increased. Councils in England are spending 78% more on temporary accommodation than they did five years ago.
One of the biggest challenges we have seen in Lambeth has been the response to the Grenfell fire disaster. Lambeth has 122 medium-to-high-rise blocks and although the £600 million fund from the Government to remove dangerous cladding is welcome, that is just a small pot. The money must be spread across the entirety of the country and it will not be enough to cover the vital work to provide the fire safety improvements that residents deserve, nor will it reduce the horrific amount of time that it has taken some private block owners to remove hazardous cladding from their buildings. Councils and local authorities were not responsible for the regulatory failures that led to Grenfell, yet they are having to pick up the pieces, out of squeezed budgets, to make their areas safer. It is time for the Government to support our councils and provide the funding not just to remove dangerous cladding, but to provide other critical safety work needed in social blocks and to give powers and funding to councils to confiscate private blocks that fail to remove cladding and make their residents safe.
It is not just on the council level that the Government are failing administrations. Here in London, the Government are passing the buck to the Greater London Authority. Unfortunately, we have seen a stark rise in violent crime in the capital over the past few years. The Metropolitan police are taking the issue seriously, but they have been let down by this Government because their funding has also been cut. Thankfully we have a Mayor, in Sadiq Khan, who recognises the need for urgent funding. Just last week, he announced an increase to the City Hall precept in council tax, which will provide almost £15.7 million to fast-track the introduction of 600 new officers. I am sure all Londoners will welcome that change and I applaud our Mayor for taking that action, but why should a Labour Mayor be raising taxes to pay for a Conservative manifesto promise? If the Conservatives party wants authorities to deliver on its manifesto promises, perhaps it should give councils and authorities greater powers to raise funds through sensible borrowing for investment or through progressive taxation systems, instead of tying their legs and forcing the ideology of austerity on councils.
What links all these things is the fact that the Government continue to pass the buck on many of the issues that have a big impact on people’s day-to-day lives. It is councils that take the blame when council tax goes up but bin collections go down because our authorities have to fill the gaps left by the Government. In London, it is the Mayor who has taken the flack for increasing his council tax precept when the Government have cut the funding for the Met police since 2010. This is not bold governance; it is political opportunism, at the expense of hard-working councillors and local authorities. I urge the Government to take responsibility and give our local government bodies the funding they urgently deserve.
It is a pleasure to speak after the hon. Member for Vauxhall (Florence Eshalomi), who made some interesting points, particularly on Grenfell and the cladding situation, which I have spoken about many times in this Chamber. I agree with some of the points she made about that. It was also a great pleasure to listen to the hon. Member for Jarrow (Kate Osborne), who made an excellent maiden speech, as did my hon. Friends the Members for Orpington (Mr Bacon), for Keighley (Robbie Moore) and for North Norfolk (Duncan Baker), who are no longer in their places. I have definitely tasted some Cromer crab in my time and probably more than my fair share of Tim Taylor’s Landlord beer.
It is good to see that the Opposition acknowledge the need for a fairer system of spending distribution, and I concur with that. The Government started on this road to try to make the system fairer, as it is certainly not fair at the moment. It is not fair in the amount of money allocated to shires and to cities; there is a huge disparity there. We are talking about more than twice as much money—in some cases, almost three times as much—per capita in cities compared with counties. Let us look at overall spending power. North Yorkshire, if we add in both tiers of local government, has about £770 of spending ability per capita, whereas in London—in the top 10 authorities—the figure is about £1,000 to £1,100. That is despite the fact that their populations are younger and better-off than my local populations in North Yorkshire. It is simply an unfair system and it needs to be rectified.
Council tax in many shires, including in North Yorkshire, is almost twice as high as in many places around the country. The Opposition say, “That means you can raise more money more easily by increasing council tax.” That is, of course, true, but there is a failure to see the irony: the iniquity whereby, despite getting less money, we contribute much more locally for our services ourselves, because lots of these cities are getting a far bigger slice of the pie from central Government moneys. That is where the iniquity lies.
I am glad the Opposition see that we need a fairer system, as I agree with that. We also need to make the system fairer progressively. I do not think it is right to rob Peter to pay Paul, but that is not what this consultation is about. It is about introducing extra money over a period of time, so all boats are lifted in a rising tide. That is exactly where we need to be. The system has to be progressive so that those who are not getting a good deal now are better treated than those who are getting a much larger slice of the pie today, and, as the consultation says, it happens over time—three to five years. I absolutely accept that it would not be right for some people’s share to go down, but that is not what the consultation is saying.
The key to all this is that the biggest area of discretionary spend by local authorities is in adult social care. That is the major problem that we need to solve. The Government are absolutely right to say that we need to do that on a cross-party basis, because that is the only way we will get a sustainable solution. Otherwise, the Opposition will say at the next election that they are campaigning to do it differently and the issue will become a political football again. We need to move away from that and agree on something cross-party. The Government have said that, and I absolutely accept that we need to bring forward a Green Paper so that we can look at the options.
However, it is not right when someone like the shadow Health Secretary says, “We’ll agree to cross-party talks as long as you agree to our preconditions before we start; we want our solution to be the solution.” I have heard that from Opposition Members a number of times, although I do not think that this shadow Minister is of the same view, and I have been given that answer on the Floor of the House. It is simply wrong. We must have cross-party talks on the basis that everything is on the table, we sit down and discuss it, and we see where we can find common ground.
We do that, of course, in Select Committees. The most constructive thing that any of us do in this place as Back Benchers is to sit on a Select Committee where we discuss things cross-party. I have served on the Housing, Communities and Local Government Committee for four and a half years. It has a fantastic Chair in the hon. Member for Sheffield South East (Mr Betts). We have done dozens of inquiries over that time and have never had a single falling-out: all the reports are published with unanimous support. That means that we can get to a position where we can agree on some basic principles to take policies forward, which is what we have to do with social care.
Last year, the HCLG Committee held a joint inquiry with the Health Committee on future funding of social care. In our report we came up with a number of options, all of which we should discuss in the cross-party talks. One of them was to adopt a social insurance-style system similar to the one introduced in Germany in 1995. It is great to see Opposition Members nodding in agreement with that. Until that point, Germany also had a local authority-funded system, but that was seen as an inappropriate way to raise money to pay for social care because there was no correlation between the need for social care and the money that could be raised at a local level. They need to be totally separate. We held a long inquiry. In fact, the HCLG Committee visited Germany to look at its system, which is simple, scalable, and—critically—will stand the test of time.
We cannot solve the issue through general taxation. A report by the Office for Budget Responsibility said that if we carry on taxing things as we do today in terms of the need for things like social care, healthcare and pensions, our debt-to-GDP ratio will rise from 80% to 280%. The taxpayer simply cannot pay for that out of general taxation; we have to find a different solution. For me, an insurance-based solution is the best thing. We developed a similar system for pensions with auto-enrolment, although that is not mandatory and this does need to be mandatory. So we do have a precedent in the UK for something that is scalable and sustainable.
The 22 members of the Select Committee, cross-party, endorsed the German system. It is a very good, simple system. It is based on about 2.5% of earnings, some paid by the employer and some by the employees. The basic principle is that everybody gives something so that nobody has to give everything. In my business life, whenever we were faced with a big problem, we always looked for somewhere else that had solved it. This has been solved over in Germany. The biggest benefit of the system is that when someone needs care, they are independently assessed and choose either to take that care from a provider such as the local authority or to draw down the money and pay it to a relative, neighbour or loved one who can look after them. It is by far the best system. We need to develop this whole policy area cross-party, and I look forward to doing that with Opposition Members.
First, I congratulate hon. Members who have given maiden speeches, particularly my hon. Friend the Member for Jarrow (Kate Osborne)—I loved her stuff about Ellen Wilkinson, who has always been a massive heroine of mine. I also congratulate the hon. Members for Orpington (Mr Bacon), for Keighley (Robbie Moore), and for North Norfolk (Duncan Baker). I was reminded of my husband complaining to his business partner after I said that I had booked a weekend away in Keighley. He said, “What, we are going to Bradford?” Never mind.
As we heard from my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) and other hon. Friends, the Government’s rhetoric about levelling up is not really going to do much for the constituencies that they won in December. To be honest, I am worried about what it is going to do in my constituency too.
I would like to set the scene a little bit and introduce Government Members to Newham, which is one of areas worst damaged by austerity. If the proposed funding settlement is approved, Newham’s grant will go from £244 million in 2013 to £148 million in the coming year. In that period, our population has grown by 15%, so the cut is almost 50% per person over seven years. We have the second-highest child poverty rate in the country, made worse by cuts to children’s services. We have terrible problems with knife violence, made worse by a decade of cuts to youth services. We do have, thank goodness, strong communities, but they are struggling after a decade of across-the-board cuts.
Today I want to focus on just one point, because time is short. I talk regularly about the harm that homelessness in temporary accommodation does to our children. Going into temporary accommodation means losing a sense of security. It means losing a safe, warm home. It often means parents losing jobs, and losing the support network of family and friends, because people are moving away from their family, often miles and miles away, with no choice whatever. It means having to change schools constantly, or travel for hours to keep the one little thing that is solid and secure in a child’s life—a place at their secondary or primary school. More and more often, it means being moved halfway across the country.
We should be clear about why this is happening—it is because of low wages, extortionate private rents, and slashed housing support. That is not all the responsibility of the Secretary of State—I get that, and it is a shame that he is not here to hear it—but if council homes were available, like the one I had when I was growing up, none of those causes would lead to the extent of homelessness that we now see. In Newham, we have 27,000 families on the homelessness waiting list. They need and deserve a safe and affordable home, but they are denied that home because council houses were sold off and never ever replaced. Grants to replace those homes have now been cut. The rise in temporary accommodation has causes in Government decisions.
That has massive consequences for council finances. Our local authorities are spending over £1 billion a year on temporary accommodation, often at absurd prices for dire quality. The net temporary accommodation bill for Newham has reached £5.5 million a year. The scale of the crisis is absolutely massive. There are 7,725 children in temporary accommodation paid for by the London Borough of Newham. Newham covers 36 sq km, but we have more children living with that form of hidden homelessness—poverty, and poverty of opportunity —than entire regions of England. Let me be clear: that means Yorkshire and the Humber, north-east England, south-west England and the east midlands combined. Greater need, and greater costs for the council, are located in 36 sq km than in 63,000 sq km.
I thought the Secretary of State might be present for this debate, so I looked at his local authority, Newark and Sherwood District Council. There is deprivation and unfairness in the Secretary of State’s patch—I have seen the deprivation map—but overall the number of children stuck in temporary accommodation in Newark is 16. That is 483 times lower than the figure in Newham, so how exactly is it fair to prioritise places such as Newark over places such as Newham? Newham and Newark are not the same—none of our places are the same—and different places do not have the same level of need. They do not have the same deprivation or the same projected population growth for the very near future as we have. They do not have the same living costs for council staff, the same numbers of old people or the same numbers of children needing care. As we know, those latter two services are the most expensive council services of all. Different places cannot raise an equal amount of revenue. In Newark, a 4% rise in council tax raises £14 million; in Newham, it gets us just £3 million.
This is not actually about fairness. All these fine words are cover for a massive transfer of resources from historically Labour areas—including the seats just won by Conservative Members—to the Tory shires. The Government’s plans will not help areas like mine, and they will not solve our problems or heal our divisions, either. To be honest, they are only going to deepen them.
I am grateful, at this point in the debate, for my experience in local government, where a three-minute limit is standard when speaking in chambers. Mindful of the time, I wish to focus on a key point for Ministers to consider as we welcome the consultation.
The Local Government Finance Acts of 1988 and 1992 are the main underpinnings of what happens in this country when it comes to local government finance decisions. Local authorities’ duties are driven largely by the legislation passed in this House over the years, including the Health and Social Care Act 2012, the Children Act 1989, the Children (Leaving Care) Act 2000 and many others. We can all recognise that over many years the funding level has not kept pace with the legal obligations imposed on local authorities by the duties agreed in this House. It is therefore welcome that the Government are beginning to think of a funding formula that is fair in that it addresses the fact that, in many parts of the country, funding now lags significantly behind the legal obligations that local authorities have to deal with.
My own constituency of Ruislip, Northwood and Pinner is no exception in having significant numbers of elderly residents who are asset rich but cash poor, for whom the local authority has a legal duty to provide social care but who would not be recognised in any of the funding formulae we saw under the previous Government, which prioritised poverty in general as opposed to local authorities’ specific duties arising out of their obligations.
When they take forward the consultation, I urge Ministers to consider the broader picture of local government finance, because the core grant—the revenue support grant, as was—is only a small part of that picture. We have heard Members mention council tax and business rates, but of course elements such as the housing revenue account are a significant factor in local authorities’ ability to deploy resources. Indeed, one challenge we have seen is that the benefit of the new homes bonus has in many areas accrued to district councils, while the costs of providing adult and children’s social care services has to be met by counties. That is one reason why the pressure has become so acute.
Across the picture, we see a situation in which local government resources are under significant pressure. More flexibility about how we deploy those resources and more recognition of the innovation and entrepreneurial approach that many local authorities have brought to the issue would be welcome, as would an approach that recognises that, given that resources are tight, we must prioritise the meeting of local government’s core legal obligations to our citizens, which is absolutely a fair approach to dealing with local government funding. I commend to the House the approach that the Government have taken.
It is a privilege to wind up this important debate. We all believe in the power of local public services, but you can’t do it on the cheap.
May I congratulate Government Members who have made their maiden speeches today? The hon. Members for North Norfolk (Duncan Baker), for Keighley (Robbie Moore) and for Orpington (Mr Bacon) all displayed a real sense of place and community.
May I also thank my fellow Labour Members for their contributions? My hon. Friend the Member for Sheffield South East (Mr Betts) is, of course, the Chair of the Housing, Communities and Local Government Committee, which has done a great deal of work on local government finance and devolution in particular. He was very clear that unless we address the crippling pressure on adult social care and children’s services, there will be a £10 billion funding gap. He also commented on the real pressure on and costs for neighbourhood services, which we all see in our communities. Many of the services on which we rely have had to be removed so that adult social care and children’s services can be kept going.
My right hon. Friend the Member for North Durham (Mr Jones) pointed out that the red wall Tories were all absent from this debate, even though the areas they represent—[Interruption.]
The hon. Member for Sedgefield (Paul Howell) is waving, but he has not been here for most of the debate.
Better late than never. The hon. Gentleman has missed contributions highlighting the impact of austerity and cuts on many of the seats now represented by Conservative MPs. It is little wonder that the actual formula—the data, analysis and impact—has not been shared with the House at all. Why is that? The answer is that the Government realised that they need to go back—[Interruption.] I am going to continue, so that the Minister has time to respond.
Council tax increases generate very different amounts of money, depending on the locality and its funding base. A 5% increase in Wokingham would generate £5.2 million, while the same percentage increase in Knowsley would generate just half that amount, even though both areas have a similar population base. That is no way to fund adult social care. There is a genuine postcode lottery whereby house price valuations that are nearly 30 years old determine whether somebody gets looked after in their old age. I just do not think that is a fair way to do it.
I congratulate my hon. Friend the Member for Jarrow (Kate Osborne) on her fantastic maiden speech. What stood out in particular for me was the sense of the power of community. In spite of deindustrialisation and the real pressures faced through austerity, it is the power of people and place that binds and makes communities. The Government just need to be a bit more on their side in future, compared with the past 10 years.
My hon. Friend the Member for Ealing, Southall (Mr Sharma) highlighted that £300 million has been taken from his local authority budget, and noted that the fair funding review is far from fair. It takes money from areas of high deprivation and directs it to more affluent areas, which is absolutely the opposite of fair.
My hon. Friend the Member for Luton South (Rachel Hopkins) highlighted a £130 million cut and its impact on neighbourhoods. My hon. Friend the Member for Vauxhall (Florence Eshalomi) highlighted the important role that councillors play in making sure that we have strong local leadership, but they need Government on their side. Far too often, when we ask the Government to step up and to do what is right, they are late in doing so, like some Members arriving in the Chamber. The example was given of the Government being far too late in responding to the cladding issues facing many tower blocks. I am afraid that that is just not good enough.
The truth is that the Government do not want to talk about finance. They know that they are not on strong ground on that issue. They certainly do not want to give any detail about the fair funding review, because it would highlight just how unfair the review really is. I am glad that the Ministers are sitting down, because this will surprise them: we are not going to accept the amendment tabled in the Prime Minister’s name. It does not mention finance; it talks about devolution. The Prime Minister wants to be able to pretend that his flavour of devolution is all about giving people power, but that is not what we have experienced.
Under this Government, many parts of this country have been denied devolution. There is no clear framework to enable local areas to know exactly what types of powers can be devolved to them. What we see with this Government is a flavour of devolution that goes from Ministers to Mayors, whereas Labour recognises that to give real power to communities, we need to start off in neighbourhoods and work up to the nation. Neighbourhoods and communities have not been central to the Government’s devolution agenda, and that has been the hallmark of all we have seen from this Government. I am glad that Labour Mayors are using their powers to ensure that the worst excesses of this Government do not filter down as strongly through to their communities they serve.
We have talked about the town centre fund. Clearly, all of us want to see investment in our town centres. We recognise their importance at the heart of our communities, and the decline that many have seen while retail has struggled to catch up with the online world. But frankly, we will never make progress if the Government are not willing to recognise that the business rates system is actively harming our high streets and town centres. It is not good enough to give just the local independents a boost. Of course that is welcome, but it does not go far enough. Doing only that massively underestimates the importance of anchor stores to bring footfall into big town centres.
I think the shadow Minister said that the business rates system is driving the change on the high street. I speak as somebody who has a number of properties in my business, and that is not what is driving this change. It is a change in consumer behaviour that is driving the change on the high street.
It is right to reflect that the high street will always evolve. It will never be what it was, and it will of course be different in the future. But that does not mean that we should just give up and accept that decline is inevitable. The types of spaces that are often talked about are bespoke spaces. It might be possible to reuse a single shop front, but how it is possible to reuse a whole shopping centre that was built to be a retail core?
The Government’s agenda of only supporting independent traders massively underestimates the impact of anchor stores such as Debenhams or Marks & Spencer, which bring footfall through a town centre. How can it be right that companies such as Amazon can have very clever accountants to hide their profits away from Her Majesty’s Revenue and Customs—which cleaners in their factories would not be able to do, by the way? How can it be right that Manchester airport’s warehouse distribution centre pays half the business rates of Debenhams in Manchester city centre? Where is the fairness in that system? If the Government really want a future for town centres and high streets, they really have to address that issue.
The Minister for the Northern Powerhouse and Local Growth, the right hon. Member for Rossendale and Darwen (Jake Berry), was right to thank local government, but I am afraid that it will be beyond ironic to many that these thanks came from the Minister who has lorded over austerity and who tries to ignore the fact that the last 10 years have been under a Tory Government, whether in coalition or not. I am afraid that it is not good enough for him to disown the last 10 years as if they had never happened.
Most councils have done a fantastic job to survive. It has been the hard work and leadership of local councillors that has meant that many areas have not just been about decline, but have been offered hope. Council officers have worked so hard to ensure that public services can be delivered. But while thanking them, maybe we should give consideration to the fact that there are more than 900,000 fewer council officers today than there were in 2010; they have been sacked and sent out the door because councils do not have the money to pay them. That is the reality on the ground.
When we were told that austerity was over, I do not think that anybody really expected that we would go back to 2010, but nor do I think that anybody expected the cuts to go even deeper even faster, and that is exactly what will happen under the fair funding review. I challenge the Minister—if he is so confident that that his fair funding review is well thought through and genuinely fair, and that the evidence base is robust and can be tested, what is there to hide? Why not place the data in the Library by the end of the week, so that every Member of this Parliament can hold the Government to account?
I want to start by thanking all Members who have contributed to the debate. It has been a lively and, at times, fiery debate, but certainly a constructive one, and we had some genuinely important issues to discuss.
I would like to congratulate all Members who made their maiden speeches today. The hon. Member for Jarrow (Kate Osborne) gave a passionate speech about the industrial heritage and history of her community and the inspiration that Ellen Wilkinson provided. I congratulate her on what she said about fighting for the principles she believes in and for health services, children’s services and workers’ rights. From her maiden speech, her constituents will be assured that she will be a passionate and doughty champion for them in this House.
My hon. Friend the Member for North Norfolk (Duncan Baker) talked about his 14,000 majority, which I am sure all of us are jealous of. He started his speech by explaining that it would be a love letter to North Norfolk, and it certainly was. He talked passionately about his work on both the town council and the district council. He mentioned that he was nicknamed “a young Norman” during the campaign; I am sure that that will follow him in the House. He talked passionately about his late stepfather, who built up a business and was an inspiration to him. I am sure that everyone who heard his speech agrees that his stepfather would be proud of him.
My hon. Friend the Member for Keighley (Robbie Moore) talked about the beautiful rural and urban landscapes in his constituency and the unanimous support in the House for the Timothy Taylor’s beer produced there. He talked about how local government must be representative. From his speech, we will all be reassured of the excellent representation he will provide in this House as a Member of Parliament, and I know that he will succeed in putting Keighley and Ilkley on the map.
My hon. Friend the Member for Orpington (Mr Bacon) talked passionately about his predecessors and the big shoes that he had to fill. He was right to pay tribute to Jo Johnson, a hard-working local MP, and to mention his belief that his constituency is the best place to live in the country, although I am sure that there will be 649 other opinions on that. He also talked about the importance of the fair funding review. I am sure that we will come on to talk about that, but I know that we will all benefit from his 22 years of local government experience, and we are grateful for his contribution this afternoon.
Local government has a unique and far-reaching role to play in our communities. It delivers services that we rely on day in, day out, and debates on the funding of the sector and the challenges and opportunities ahead for it are some of the most important that we have in the House. We will provide the funding for social care, education, transport, housing, health and local growth to flourish, and that is why core spending power for local government will increase from £46.2 billion to £49.1 billion in 2020-21—a 4.4% real-terms increase across the sector.
A number of Members talked about the pressures facing adult and children’s social care. My hon. Friend the Member for Mid Dorset and North Poole (Michael Tomlinson) gave an important speech about the pressure on social care in his constituency and the unique challenges faced by parts of the country with high levels of internal migration. The Chairman of the Housing, Communities and Local Government Committee, the hon. Member for Sheffield South East (Mr Betts), was right to talk about the importance of cross-party discussions on this matter getting under way and how the work that he and the Committee have done on ways to make progress could be an example for talks. The right hon. Member for North Durham (Mr Jones) talked about the pressure on social care, and my hon. Friend the hon. Member for Thirsk and Malton (Kevin Hollinrake) highlighted the importance of cross-party work and support.
It is absolutely true that councils face pressures on adult and children’s care services—that is something we are hearing from the sector and from councils across the country. This settlement, when it is put before the House, will address that. We have given almost £6 billion of dedicated funding across social care. That includes the extra £1 billion grant for adult and children’s social care, on top of the continuation of existing social care grants worth £2.5 billion.
It is not just about the grant funding that we have provided. Councils are paying for their services through locally raised revenue. That is why we have proposed a 2% adult social care precept, which will enable councils to raise a further £500 million for social care. That will help local authorities to meet rising demand and recognises the vital role that social care plays in supporting the most vulnerable adults and children in our society.
I will touch on the fair funding review in a minute, but it is worth saying that, as part of the initial consultation, we have developed a new formula for children and young people’s services that uses world-leading research and up-to-date data from a strong evidence base for assessing relative needs and then distributing the funding accordingly.
As part of the injection of £14 billion into primary and secondary schools over the next three years, a package of £700 million was provided for supporting children with special educational needs and disabilities. One of the best ways to improve outcomes for children is to remove the need for them to enter the care sector in the first place. That is why we have committed to a further year of the troubled families programme in 2020-21. In addition to the resource injection in social care through the settlement, the NHS’s contribution to the better care fund—the purpose of which is to increase health and social care integration—will increase by 3.4% in real terms, in line with the additional investment in the national health service in 2020-21. However, we of course want to think about the long term, and that is why we are committed to fixing the crisis in social care once and for all to give people the dignity and security they deserve. We will seek to reach across the Floor and build cross-party consensus to ensure that we do have a long-term solution.
One of the other main themes of this debate has been the fair funding review. We heard from the hon. Member for Luton South (Rachel Hopkins), from my hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill) about his long experience in local government and the importance of simplifying the formula, and from my hon. Friend the Member for Ruislip, Northwood and Pinner (David Simmonds) about delivering the formula. I think we should be clear that the sector has asked us for a simpler, up-to-date, evidence-based funding formula, and that is what we are going to deliver.
The figures we have heard this afternoon are pure speculation. They use out-of-date cost adjusters and out-of-date population data, and they are pure speculation. It is worth saying that this should be a completely evidence-based review. It is being developed hand in hand with leading academics; it is not a simplistic exercise. I understand why hon. Members have raised it today, but this is not about north versus south, rural versus urban or Labour versus Conservative. It is about developing a needs-based formula that takes into account deprivation, rurality and other cost drivers; that is weighted appropriately and adjusted for the costs of delivering services in different areas; that is balanced with the resources available to different authorities to fund those services; and, of course, that is considered against any transitional arrangements the Government may wish to make. It is simply not possible to predict the overall outcome for individual authorities or groups of authorities based on one or couple of these formulas.
Ultimately, this review should be a collective endeavour with our colleagues in local government, and it is underpinned by real analytical rigour. Very soon, in the next few weeks—we hope to do so by the end of this month—we will share the emerging results with the sector, and we will go to full consultation in the spring. I will keep Opposition Front Benchers fully informed about the progress of that. It is hugely important that we deliver this cross-party to make sure that it works for all of the communities that we represent in this House.
A number of colleagues spoke about the importance of delivering for rural communities. Again, we heard from my hon. Friend the Member for Mid Dorset and North Poole about the pressures on his areas. It is important to note that we will maintain the rural services delivery grant at its highest ever level of £81 million in the coming year. It will be distributed using the same methodology as last year, which distributes funding to the top quartile of local authorities on the super-sparsity indicator.
This will form part of the fair funding review, which will include factors such as rurality and sparsity, but also the other geographical factors that affect the cost of delivering services across the country, and it will take account of them in a robust manner. In the December 2018 consultation, we set out the initial proposed approach to the area cost adjustment, which will include the adjustment for additional service costs associated with sparsity, isolation or market size. For example, if an authority has longer journey times from service points to households, they will have to pay their staff for more hours in order to deliver the equivalent level of service. That will be reflected in the review.
The hon. Member for West Ham (Ms Brown) raised the importance of tackling homelessness last week, and she did so again today with passion and vigour. I have met the Mayor of Newham to discuss funding, and I would be very happy to visit Newham with her and the Mayor to look at this issue and talk about it in greater depth.
A number of colleagues raised the importance of policing and the work we are doing to tackle this issue. This is a clear priority for this Government: 20,000 more police officers on the streets, with 6,000 in the coming year. It is also why we have launched the £25 million safer streets fund, which will support areas disproportionately affected by crimes such as burglary and theft to implement well-evidenced measures tackling security, street lighting and other issues that affect their communities.
This is a settlement that injects significant new resources into protecting the most vulnerable adults and children in our care. It maintains grant funding and increases core funding in line with inflation, and it does all of this while protecting council tax payers from excessive increases that they neither want nor often can afford.
It is clear that everybody across this House wants to see local government not just properly funded, but able to adapt, innovate and improve the services it provides for residents for generations to come. Through the reforms that we have outlined this afternoon, that is exactly what we will deliver: a 4.4% real-terms increase across the sector; an extra £1 billion for social care; over £900 million for new homes bonus allocations; and the highest ever rural services delivery grant, at £81 million.
I look forward to further discussing these issues when we meet in this place next week to debate the most comprehensive and generous settlement for a decade.
Question put (Standing Order No. 31(2)), That the original words stand part of the Question.
5 February 2020
The House divided:
Question accordingly negatived.View Details
Question put forthwith (Standing Order No. 31(2)), That the proposed words be there added.
Question agreed to.
The Deputy Speaker declared the main Question, as amended, to be agreed to (Standing Order No. 31(2)).
That this House welcomes the Government’s provisional local government finance settlement, which will deliver the biggest year-on-year real terms increase in councils’ spending power for a decade; recognises the pressures on adult and children’s social care as well as critical local government services, and welcomes the additional £1.5 billion available for social care in 2020-21; notes that the Government has listened to calls for a simpler, up-to-date, evidence-based funding formula and has committed to consult on all aspects of the formula review in spring 2020; further welcomes the Government’s ambition to empower communities and level up local powers through a future Devolution White Paper; and welcomes the Government’s progress on this agenda already with the £3.6bn Towns Fund and eight Devolution Deals now agreed.
On a point of order, Madam Deputy Speaker. At oral questions earlier today, the Prime Minister assured me that the Government had responded to the tragic case of Errol Graham by creating a new independent serious case panel. Last week, the Department for Work and Pensions admitted that, far from being independent, the serious case panel was composed entirely of DWP officials. I understand that this afternoon the Department has indicated that the panel will now include some members independent of the Department. Madam Deputy Speaker, have you received any notice from DWP Ministers that they intend to make a statement on these new arrangements?
I thank the hon. Lady for her point of order and for giving me notice of it. Obviously, the content of Ministers’ replies is a matter for them, not the Chair, but I am sure that if there was any inaccuracy in anything the Prime Minister said, he will want to make a correction at the earliest opportunity. I am also confident that those on the Treasury Bench will have heard her concerns—I am looking at the Whip—and will ensure that her comments about what was said at Prime Minister’s Question Time are fed back so that if anything needs to be corrected, it can be done quickly.