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Local Authorities: Funding

Volume 757: debated on Tuesday 18 November 2014


Asked by

To ask Her Majesty’s Government what assessment they have made of cuts in funding to local authorities in the most deprived and least deprived areas of England.

My Lords, local government accounts for a quarter of all public spending. It is vital that local authorities help tackle the deficit by finding sensible savings and making better use of resources. Local government has risen to the challenge well and public satisfaction with council services remains high.

My Lords, I accept the Minister’s statement but would add that the University of Sheffield’s research shows that areas such as my own—Preston, Blackburn with Darwen, Liverpool and Manchester—have suffered disproportionately in terms of the reductions they are being asked to make. For example, Public Health England found that Manchester, Liverpool, Blackburn with Darwen and Preston face some of the toughest challenges. How can the Government justify giving reduced spending powers to local authorities in the most deprived areas and allowing greater spending in more affluent areas?

My Lords, this is just not the case. The most deprived councils receive, on average, 50% more than the least deprived. I will give examples from either end of the spectrum. Middlesbrough gets £2,500 per dwelling and Poole gets £1,678 per dwelling.

My Lords, in the light of recent media reports, what steps are the Government taking to ensure that child protection services are improved, especially in those areas where the need is greatest?

Child protection is an incredibly important area—certainly in light of some of the stories we have heard in recent weeks. All local authority officials working with children have a duty of care to those children. This is something we talked about a few weeks ago in terms of firming up some of those multidisciplinary arrangements. These are essential in joining together protections for children.

My Lords, I declare that I am a vice-president of the Local Government Association. In its recent publication Rewiring Public Services, which has all-party support, the association estimated that local government could save the public sector £11 billion annually through joining up service delivery across the public sector as a whole. Does the Minister agree that this is a compelling reason to devolve more power to local areas?

I certainly do, my Lords. I want at this point to congratulate councils in Greater Manchester, where I was formerly one of the leaders, not only on the steps that they have taken during the past 30 years in doing just that but on the confidence that the Government have placed in them in devolving power and funding to them.

My Lords, does the Minister accept the implications of local authority cuts for health services? We know from evidence that has come out today, and will continue to come out, of the number of local authorities that have cut beds in the community, ensuring that older people stay in hospital longer. This is affecting my not only own area of Milton Keynes, where I am chair of the Milton Keynes foundation trust, but all over the place. Local authorities are saying outright that this is why they cannot cope with having more beds, so they are closing beds in nursing homes.

The noble Baroness brings up a very valid point. There needs to be a joined-up approach in both health and social care. It is to be hoped that in due course a better care funding package will deliver this so that there is a seamless transition from hospital to intermediate care to care at home.

My Lords, the dedicated funding for local welfare provision has been vital in providing a net for some of the most vulnerable in society. It is proposed that this will no longer be ring-fenced but will be part of a general grant to local councils, at a time when their budgets are increasingly pressed—indeed, there may be a move for that money to be used for core statutory services in future. If that money is not to be ring-fenced, will the Minister tell us how Her Majesty’s Government will monitor the effects of these changes and whether they will be willing to report back to your Lordships’ House on them, to ensure that the most vulnerable are not even further disadvantaged?

The right reverend Prelate makes a good point. The ring-fenced funding pots were not always used for their intended purposes. It is the Government’s belief that in devolving funds straight to local authorities they will make the best use of them. I shall follow up the right reverend Prelate’s question on reporting back—I am sure that we can report back in due course.

Will the Minister ask the Government to consider reviewing council tax and getting a few more bands at the top, so that those people who live in large houses—which might perhaps be described as mansions—could pay a bit more towards keeping local council services going?

Does the Minister think that it is justified for local authorities that provide care services to employ firms that are using zero-hours contracts and paying a minimal amount? I have asked this question of local authorities at a meeting here and they have said that they should not do it. Is this the reason why they do it, with people operating care facilities for patients simply not being paid an adequate amount?

My Lords, zero-hours contracts are not always a bad thing and they suit certain people, but, certainly, anybody who is working for a local authority needs to be on the minimum wage.

My Lords, there is a clear pattern here: just yesterday, we had a report from the LSE and the ISER looking at the effects of direct tax benefits and pension changes introduced under this Government. Surprise, surprise: it concluded that the poorest half of the income distribution lost out and the top half gained, and that these changes were regressive. To add to that, the Government have not only imposed the biggest funding reductions in the public sector on local councils—with funding cut by 40% over this Parliament —but they have ensured that those areas with the greatest need are shouldering the largest burdens. The noble Baroness cited some figures, but if one looks at what has happened throughout this Parliament, one sees that spending power—the Government’s favourite measure—has been cut for Liverpool by 27%, for Hackney by 27%, for Manchester by 26% and for Birmingham by 23%. However, lo and behold, for Waverley Borough Council and Wokingham Borough Council it has increased by 1%. If that is fair, what definition of fairness is the Minister using?

My Lords, I take the noble Lord’s point about ring-fenced grants to councils such as Liverpool and Manchester, which lost a lot of theirs. Councils such as Trafford never actually had many ring-fenced grants so they had little to lose in that way. However, that effect has been dampened over the years so that it is not a cliff-like reduction. This Government have a different approach, which tries to rebalance the economy and puts growth at the heart of everything they do, including funding for local areas.