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Council Budget Deficits

Volume 744: debated on Monday 22 January 2024

The Department works closely with the local government sector and other Departments to understand specific demand and cost pressures. The provisional local government finance settlement for 2024-25 makes available over £64 billion—an increase in core spending power of almost £4 billion or 6.5% in cash terms. We stand behind councils up and down the country to deliver the services that their communities look for.

It was recently revealed that Devon County Council is using its broadband clawback money to close its deficit. That £7.8 million was intended for improving broadband across rural areas. Countryside connectivity is key to boosting businesses so that they can pay their taxes, so what does the Minister plan for next year, when Devon County Council’s finance minister puts his hand down the back of the sofa, only to find he has spent the millions intended for broadband on paying day-to-day direct debits?

If the money from that Department is ring-fenced, it is not at the discretion of the county councillors where they use it; they have to use it for that purpose. I would take the hon. Gentleman’s concern a little more seriously if he had taken part in the parliamentary engagement, as 97 colleagues across the House did, including the hon. Member for Bath (Wera Hobhouse), or attended the Westminster Hall debate about Mid Devon Council funding, secured by my hon. Friend the Member for Bridgwater and West Somerset (Mr Liddell-Grainger).

I appreciate the time that the Minister took to answer my questions at the drop-in session. We will not cut NHS waiting times without good, well-resourced social care. My Liberal Democrat council colleagues in Bath are on track to bring social care back in-house, which means better care that is better delivered locally and long-term savings. However, even Bath & North East Somerset Council, as he knows and as I have already pointed out, is under severe financial strain. Will he therefore commit to extra funding to allow it to deliver the vital social care that my constituents so desperately need?

Adult social care is a demand on all upper-tier authorities. I commend BANES Council on the work it is doing; that is precisely the demonstration of flexibility and innovation in local government that we look for to deliver quality services in a cost-efficient way, and it deserves our approbation for that. With the Department of Health and Social Care, we keep under review precisely those policies relating to adult social care, to make sure that those who are most in need receive the services that they need in a timely fashion.

Would the Minister like to put on record that he shares my thanks to Councillor Lezley Picton, the leader of Shropshire Council, who has done a fantastic job despite the challenges in trying to get down the deficit there? The council has found significant efficiency savings, but there is still more to do. Ahead of the local government finance settlement announcement, could the Minister look at the rural services delivery grant and see what more can be done for large rural counties such as Shropshire, which he will know is the largest landlocked county in England?

I am grateful to my hon. Friend and for the work that Councillor Picton does as the leader of his council. He is absolutely right to point to the continued importance of innovation, change and reform to ensure value for money—that is key—and to highlight the importance of the rural services delivery grant. My right hon. Friend the Secretary of State and I remain committed to that and we hope to be able to make that announcement in due course.

Rural councils face a disproportionate triple whammy from the rising cost of energy due to the Ukraine war, with rural councils and rural public services having to pay higher heating, energy and labour costs. Could I have a meeting with my hon. Friend to talk about the fair funding formula, to make sure that rural councils are properly funded in this next settlement?

As a rural Member of Parliament, I am tempted to tell my hon. Friend that he will be preaching to the choir, but of course I am happy to meet him. He points to the challenges that rural councils face in delivering services in areas that are wide in geography and sparse in population.

The reality is that more and more councils are being pushed to the financial brink. It stands as a fact that more councils issued bankruptcy notices last year than in the previous 30 years combined. Those councils were Conservative, Liberal Democrat and no overall control, but the one thing they have in common is the Conservative Government in Downing Street. The Local Government Association reports that councils face an immediate £2.6 billion funding gap. Now that the deadline has passed, can the Minister confirm how many councils have applied for exceptional financial support, and whether pressures in adult social care, children’s services and homelessness will be fully met in the financial settlement?

It is not policy for us to comment individually on councils that are seeking advice from or engagement with officials, but I am grateful to the hon. Gentleman for his question, because it gives me the opportunity to put on record that my Department and I stand ready to engage with all those councils who wish to discuss their financial circumstances. We want to make sure that we have a well-funded, professional local government sector, delivering for those people in our communities who look to them for the services that they require for their daily lives.