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Local Government Funding

Volume 764: debated on Wednesday 8 July 2015


Asked by

To ask Her Majesty’s Government what plans they have to restore the link between funding and need to local government funding; and what assessment they have made of the impact of local government funding cuts on both the most and least deprived local authorities in the United Kingdom.

My Lords, this Government have shifted their approach away from keeping authorities in England dependent on grants to providing councils with the tools and incentives they need to grow their local economies and promote housebuilding through business rates retention and the new homes bonus. We continue to deliver a fair settlement for all, where the councils with highest needs for services receive more funding and have higher spending power than less-deprived authorities. This is a devolved matter outside England.

I thank the Minister for that Answer. The Local Government Association has shown beyond doubt that there have been greater cuts for people living with greater deprivation, and last November the National Audit Office criticised the Government for not properly understanding the extent of cuts to front-line services. What evidence of financial stress are the Government looking for in local authorities to be sure that they can indeed meet their statutory responsibilities and maintain those front-line services?

My Lords, the Government do not agree with either the NAO analysis or the LGA analysis because neither takes into account the better care fund or the public health fund. On stress testing, local government has certainly proved itself well capable of delivering good services, with satisfaction remaining the same or increasing. In terms of delivering their statutory functions, there is no evidence at this stage that they are failing to do so.

I am sure that the noble Baroness is aware of the discussions we have had in this House on the NHS; she has just mentioned the better care fund. Is she aware of the effects of the Government’s local government cuts on social care, which mean that people are occupying beds in hospitals longer than they need to or want to, which is causing great delays in A&E?

My Lords, social care is certainly a demand-led service. A more joined-up approach would be beneficial to councils, the NHS, patients and care users—hence the devolution of health and social care to Greater Manchester.

My Lords, has the noble Baroness seen the recent report from the Local Government Association which says that by 2020 there will be a £9 billion funding gap and local government will have to make choices between children’s services, services for the elderly, mending roads and all the other services, including deciding whether to put out the lights in the streets? Does she accept that there has to be a stop in the cuts to ensure that these choices will not have to be made?

My Lords, the Government are encouraging councils to be innovative. They are rewarding those councils for their innovation and putting more power in the hands of local people—hence some of the devolution deals—to deliver their services more efficiently.

My Lords, does the Minister recognise that many local government services are crucial to the most vulnerable and poorest people in our society? Does she recognise that the huge annual shortfall in the social care budget is giving great anxiety, in particular to elderly and vulnerable people who wonder when their daily care will be the next victim of the Government’s cuts to local government funding?

My Lords, I am certainly aware of how crucial some local government services are to local people, particularly in those demand-led services. As I said, public satisfaction with council services has remained or increased in the last few years.

Could my noble friend tell me how many local government senior officials and chief executives are paid more than the Prime Minister?

My Lords, will the Minister rethink what she has being saying? It is not that local government has been dependent on grant, but that the Government have stopped it from raising any further money locally and cut the grant. Also, areas that she and I know very well have lost in the reassessment of the deprivation index. Those are still the areas that have the most people who are the most vulnerable. Will the Government be honest and fair and recognise that there is need out there? Yes, there needs to be more local decision-making, but there also needs to be fairness across the country and a recognition that we need to work more effectively with local government to ensure that those services enable their people to deal with a global problem.

My Lords, there were a few questions in there, but I just cannot share the view that the Government are stopping local government from raising its own income. On business rates retention and the new homes bonus, local authorities have seen incomes above what was expected from these areas. On need, I will list the 10 authorities with the highest spending power per dwelling: Hackney, Newham, Tower Hamlets, Camden, Knowsley, Islington, Southwark, Brent, Lambeth and Haringey. They are all Labour authorities.

My Lords, can I take the Minister back to spending power—the Government’s favourite measure, as I understand it—and pick up some of the areas that she just identified? If noble Lords look at the two-year period to 2015-16, the local authority ranked first in the multiple deprivation index had a 10% cut in its support; Newham, ranked second, had an 11% cut; Knowsley, ranked 12th, had an 11% cut; Middlesbrough, ranked 27th, had a 10% cut. Yet, at the other end of the spectrum, Woking, ranked 294th, had a 2.3% increase and Wokingham, ranked 325th, had a 2.9% increase. How is this a manifestation of the fact that we are all in it together?

My Lords, the two authorities that the noble Lord mentioned, Hackney and Newham, have spending of almost £3,000 per dwelling and £2,800 per dwelling respectively. In terms of quantum, they are doing considerably better than a lot of other local authorities.