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Provisional Local Government Finance Settlement

Volume 686: debated on Thursday 17 December 2020

Today I have written to all local authorities in England thanking their councillors, officers and employees for their exceptional service this year. From carers to teachers to social workers to refuse collectors to council officers, as well as the elected members, they have worked tirelessly over the course of this pandemic to keep us safe, to provide support to the most vulnerable, to assist local businesses and to deliver public services under immense pressure. I think I speak for the whole House in saying a sincere thank you and in wishing them and their families a happy and peaceful Christmas.

From the start of the pandemic, we committed to ensuring that councils had the resources they needed to step up and support their communities. We have provided councils with more than £7.2 billion of additional funding for covid-19 expenditure. We have ensured that councils receive support to manage associated losses in income, including from sales, fees, charges, leisure centres and local taxes, and that is expected to amount to further billions of pounds of support. That commitment remains undimmed, and the settlement we are announcing today ensures that councils have the resources they need to continue that work next year, to play their part in the recovery of their communities and to deliver first-class public services.

As we look ahead to 2021 and 2022, the annual settlement makes an extra £2.2 billion available to fund the provision of critical public services including adult and children’s social care. Within that, we are giving authorities access to an additional £1 billion for adult and children’s social care, made up of £300 million of social care grant and the flexibility of a 3% adult social care precept. On average, English councils will see a 4.5% cash-terms increase in core spending power, which is also an increase in real terms. That is testament to the support that our local government deserves, and it comes off the back of three settlements in a row that have increased funding in real terms.

The £1 billion grant announced at last year’s spending review will continue, along with all other existing social care funding. Balancing the contributions of national and local taxpayers, we are giving councils increased flexibility through a 2% council tax referendum limit, with an extra 3% for social care authorities. Councils will, of course, want to take into account the financial circumstances of their residents and to protect households from excessive increases in bills. It is incumbent on councils to balance these competing pressures and reach the right decision for their local areas.

To help councils continue reducing council tax for those least able to pay, including households hit hard financially by the pandemic, I am making £670 million of new grant funding available outside the core settlement for local council tax support. Lower tier councils, including districts, will benefit from a new one-off £111 million lower tier services grant, and we are providing certainty and stability by confirming that the main funding allocations for the full range of council services will rise in line with inflation.

Our settlement also addresses the extra costs incurred by councils in rural areas, providing an extra £4 million to the rural services delivery grant—the highest contribution to date, at £85 million. We are also proposing a further £622 million of new homes bonus allocations, We will invite views on how we can reform the scheme next year to ensure that it is focused where homes are needed the most and where councils are ambitious to get on and deliver them.

Despite the arrival of vaccines, we will continue to live with covid-19 for some months. That is why, alongside the core settlement, I am announcing comprehensive measures, including £1.55 billion of additional, unring-fenced grant funding for covid expenditure. Our measures insure against funding shortfalls, and I am particularly pleased to confirm today the scope of and approach to our very well received scheme to reimburse councils for 75% of irrecoverable lost tax income from 2020-21.

As the cold weather sets in, the protection of those sleeping rough amid the pandemic continues to be one of my priorities. Our world-leading Everyone In initiative was and remains a powerful testament to what local and central Government can achieve together. We are building on that work to ensure that as few of the 29,000 people who were helped off the streets under that scheme, and subsequently, return to life on the streets, spending over £750 million next year to tackle homelessness and rough sleeping—a 60% increase on the previous you spending review. In addition, we are providing £165 million of new funding to councils for the troubled families programme, underlining our continued commitment to the most vulnerable in society. Following the passage of the Domestic Abuse Bill, we will provide £125 million funding next year to enable councils to meet their duties in full to provide the support that victims of domestic abuse and their children undoubtedly deserve.

Serious challenges remain, but the start of the vaccine roll-out last week offers us cause for optimism and allows us to at least begin to glimpse the world beyond the pandemic. We want to work with local councils to build a new country beyond covid—a country that is more prosperous, greener, safer and more neighbourly. Local government will be integral to the achievement of that shared vision. We will establish a new £4 billion levelling-up fund, building on the success of our £3.6 billion towns and high streets funds. Any local area will be eligible to apply directly to this fund, which will finance the everyday infrastructure, town centre regeneration and culture that communities need and local people want. The UK shared prosperity fund will help to level up and create opportunity across the UK. A UK-wide investment framework for that will be published by my Department early next year.

The Government are funding vital local infrastructure, with total capital spending at £100 billion. That will fund once-in-a-generation changes to local communities and deliver the highest sustained levels of public sector net investment since the 1970s, including the biggest hospital building programme in living memory, and £2.2 billion investment in our schools funding programme to rebuild 500 schools over the next decade. In addition, local councils will benefit from £1.7 billion for local roads maintenance and upgrades to tackle potholes, which will improve local connectivity and deliver better roads for our communities.

I want local government to emerge stronger, more sustainable and better able to meet the needs of those it serves. That means greater openness and accountability, and in a minority of cases it means better financial management and regard for taxpayers’ money. To that end, my Department is publishing today its response to Sir Tony Redmond’s excellent review of the effectiveness of external audit and transparency. We will provide councils with an additional £15 million next year to implement Sir Tony’s recommendations. We are preserving the ability of local authorities to invest in programmes to power growth by lowering Public Works Loan Board interest rates, but we must also protect taxpayers from unwise risky investments of the kind we have seen, sadly, in some councils in recent years. Those practices must now end.

When there is a clearer path ahead, we will work with the sector and Members across the House to seek a new consensus for broader reforms to local government, including the fair funding review and the business rates reset, and we will ensure that councils are set on a long-term trajectory of sustainable growth and fair resources.

This will, I hope, be viewed as a significant settlement that paves the way for a bright future for our local communities as they seek to bounce back from an exceptionally difficult year. The settlement will deliver £2.2 billion of extra funding, a 4.5% cash and real terms increase in core spending power, and it will further fund councils to ensure that they steer the course of the remaining months of the covid-19 pandemic with certainty and confidence. Building on last year’s settlement, which exceptionally received cross-party support, it puts councils, which were at the forefront of our response to the pandemic, at the forefront of our recovery, and I commend this statement to the House.

I thank the Secretary of State for advance sight of his statement, and I echo his words of thanks to council staff for the sterling work they have carried out in the most daunting of circumstances. However, the Secretary of State’s announcement today leaves local authorities facing a vast funding gap that will inevitably lead to job losses, cuts in key frontline services, such as adult social care, and the closure of yet more treasured community assets such as libraries, youth centres and leisure centres.

Perhaps one of the most shocking aspects of the settlement is the Government’s plan to force councils to hike up council tax while the country still faces an unprecedented health crisis and the deepest recession for 300 years. The Government are proposing a council tax hike more than twice the rate of inflation. The Conservatives have decided to clobber hard-working families when their jobs and incomes are already under extreme pressure, and in return, those taxpayers will get fewer services.

Council tax is a regressive tax that hits families on average incomes harder than the wealthy. It also raises less money in poorer areas. A 5% increase in Surrey raises £38 million, while a 5% increase in Blackburn with Darwen raises just £2.8 million. An older person living in a less wealthy area, such as one of the red wall seats, will see their Conservative MP tax them more but cut the care services they rely on.

In his first speech as Prime Minister, Boris Johnson stood on the steps of Downing Street and said he would

“fix the crisis in social care once and for all with a clear plan we have prepared”.

No one has seen a dot or comma of that plan in the 18 months since. Costs for social care are soaring, yet today’s settlement will make the crisis worse and will hit older people living in less affluent areas hardest.

In 2011, the average band D council tax was £1,439. With the Conservative council tax bombshell announced today, the average bill for next year will be £1,909. That is a rise of 33% under this Conservative Government. The message to the public is clear: “Pay more but get less under the Conservatives, with Rishi Sunak’s council tax hike coming your way in the middle of the worst recession for three centuries.”

Can the Secretary of State please tell us how he expects families to afford a 5% council tax hike in the middle of an unprecedented economic crisis? When can we expect to see the Government’s plan to fix the social care crisis instead of leaving older people struggling without the support they need? Given the urgency of the pandemic, how much are the Government increasing the public health grant next year, and what does the Secretary of State expect councils to do about the 25% lost council tax and business rate income that he is not compensating them for?

I echo the hon. Gentleman’s thanks to local council workers across the country. He talks about our pledge to support local councils and to ensure that they are fully funded for the work that they have done during covid, and we have made good on that promise. We have provided £7.2 billion already. Local councils to date have reported that they have spent £4 billion and are projecting that they will spend almost £6.2 billion to the end of the year, so we will have provided local councils with as much, if not more, funding than they have reported.

The hon. Gentleman refers to funding for local council tax losses and for sales fees and charges. Our schemes are extremely generous in both regards, providing 75p in the pound of losses for local councils to ensure that they can weather the particular storm that they have been through this year. He refers to council tax costs. Local councils are not under any obligation to increase council taxes. We only have to look back at the record of the last Labour Government to see what happens under Labour. Under Labour, council tax doubled. Under this Conservative Government, council tax is lower in real terms today than it was in 2010-11.

It is difficult to see how the hon. Gentleman and his colleagues can pose as the guardians of taxpayer value. I appreciate that he is on what we might call a sticky wicket in this regard. We only have to look at his local Labour council in Croydon. It purchased a hotel above the asking price, which has now gone bankrupt. It created a housing company with a £200 million loan and it could not say whether it had built any houses. The cabinet has been described as acting like some kind of wrecking ball, except that the wrecking ball was directed at its own council. Or, indeed, we could look at Nottingham’s Labour council, which was described recently by its auditors as having “institutional blindness” to its financial mismanagement and ineptitude, which included creating an energy company called Robin Hood. That is a rather unusual definition of Robin Hood’s activities—instead of taking from the rich, it robbed off everyone.

The truth is that under Labour councils, it is the public who lose out. The public will pay the price in Croydon in lost jobs, poorer services and, ultimately, higher council taxes. We will continue to support local councils, the overwhelming majority of which, of all political persuasions, have done a sterling job this year, and we will ensure that they get the resources they need to continue that work into the new year.

In these exceptional times, we have another single-year statement—or single-year funding—and I am sure my right hon. Friend will wish to return to multi-year funding as soon as practically possible. I welcome the £8 billion that has been given in additional funding this year alone to councils to support them in the pandemic and the commitment to more than £3 billion for next year. Obviously a number of areas, particularly in London and the south-east, have gone into tier 3, which does mean additional costs and forgoing income that local authorities will need to try to balance their books not only in this current financial year but going into the next year. Will my right hon. Friend confirm what additional support will be available to local leaders in the areas that are facing the highest restrictions under covid-19?

My hon. Friend makes an important point, and I share his desire to have a multi-year settlement for local government. Obviously, this year has proved a unique one, in which the kaleidoscope has been shaken in many respects and will take time to settle. I hope that when we come to do the settlement next year it will indeed be a multi-year one. I believe that that is the expectation of my right hon. Friend the Chancellor, but he will no doubt give confirmation in due course, as we see how 2021 turns out.

On local councils in tier 3, we are providing further funding for both councils themselves and their local business community, on a month-by-month basis, if they are in tier 2 or tier 3. The purpose of today’s settlement, in looking ahead to the likely covid expenditure that councils will face next year, is to ensure that both in respect of the month-by-month costs that councils are incurring, which have been about £500 million a month, and the losses they are incurring in sales, fees and charges, they at least have forward guidance to the middle point of the next calendar year. Of course we all hope that by Easter, and certainly by the summer, the position in the country and within councils will be dramatically different.

On behalf of the Select Committee, may I join both Front Benchers in thanking councils up and down the country for the brilliant job they have done in keeping services going and communities safe in the past few terrible months? The Government are forecasting a 4.5% increase in spending power for local authorities, and the assumption there is that councils will put up council tax by 5%, including the 3% for social care, all in one year. Although councils have the discretion to decide on that, will he confirm that the spending power in his statement assumes that all councils will put their council tax up by 5%? There is a forecast in here about ongoing covid costs. Does he accept that those costs might be greater? If they are, on an unforeseen basis, will the Government stand ready to provide extra money for councils if they can show that their costs are in excess of what the Government are so far calculating?

I thank the Chair of the Select Committee for all his work and that of his Committee over the year. He is right to say that the figures we quote of an up to 4.5% real-terms cash increase in core spending power are dependent on the choices that local councils make in the weeks and months ahead, but one would expect that; local councils and the local democratic process will have to balance up the competing interests of providing public services and ensuring that hard-working people are not facing excessive increases in local council tax, and those will be different judgments in different parts of the country.

I will of course keep the covid costs being incurred by local councils under review. We have made good on our promises time and again since the start of the pandemic. Early in the pandemic, the Local Government Association came before the hon. Gentleman’s Committee and estimated that costs incurred by local councils would be around £10 billion. We are going to end this financial year having provided local councils with, I suspect, about £10 billion, and we are providing further billions of pounds into next year. So we can see the Government’s commitment and determination to support local councils.

First, I wish to thank the Minister for his decision on the housing algorithm, the statement today, and the very significant work that he, his Ministers, the Department and indeed the Isle of Wight Council has done during the pandemic, which has been vital. In the fair funding review, the Government for the first time recognised the additional cost of providing public services on the Isle of Wight— in effect, they recognised the Island as an island, and I am grateful for that. For understandable reasons, due to the covid pandemic, the review was put on hold. Does he accept that this delay has prevented Isle of Wight Council, despite its undoubted best efforts, from supporting Islanders to the same extent that mainland councils can support their residents? Finally, will he meet me and my local council to discuss funding these additional costs, as part of a consultation process and prior to the local government financial settlement for 2021-22?

I would be happy to meet my hon. Friend and the leader of his local council, as would, I am sure, the Minister for Regional Growth and Local Government, my hon. Friend the Member for Thornbury and Yate (Luke Hall). I do not agree that the Isle of Wight has lacked the resources to respond to the pandemic; from what I have seen it has done a sterling job. The Isle of Wight has had significant amounts of additional support, and total covid-19 funding for the council so far has been £20.3 million. We have also provided support for the local business community amounting to £48 million, which has been brilliantly dispensed by my hon. Friend’s local council, supporting 4,500 small and medium-sized businesses on the Isle of Wight. I am pleased that my hon. Friend supports yesterday’s announcement on the local housing need question and that he will get on and build more homes on the Isle of Wight in the years ahead.

Will the additional funding that the Secretary of State has announced for homelessness ensure that councils can continue to put a roof over the heads of people with no recourse to public funds? The local authorities that gave evidence to the Work and Pensions Committee last week welcomed the Government’s winter support package for hard-pressed families, but it runs only until March. Does the Secretary of State have longer-term plans for how councils can support vulnerable households, so that councils can make their plans for the future?

The right hon. Gentleman has a long-standing interest in this issue. It important that we set out long-term plans both to help the cohort of people who came in off the streets through Everybody In and to make further strides in our overall effort to reduce rough sleeping to the absolute minimum. In the summer we asked local councils, including the right hon. Gentleman’s, to draw up a plan for how they would assist those people who were in temporary accommodation into move-on accommodation, and then ultimately into either social housing or the private rental sector. We supported that with almost £100 million of funding.

The settlement announced today provides further funding for the next financial year that is the same as or greater than the amount of money that was available in this financial year, and it will be £750 million in total. We have also secured £430 million for new move-on accommodation and asked every local council in the country to bid for that so that they can invest in accommodation to help to support the people they have taken in off the streets.

On no recourse to public funds, we have taken a number of steps this year. We extended the derogation, not just to London but to the whole country, so that local councils can support European economic area nationals. There is of course, a cohort of people who are not EEA nationals, and we have allowed councils the discretion to support them when there is a risk to life. Many councils have chosen to do that throughout the pandemic and I am sure will do so this winter.

I thank my right hon. Friend for his statement and for the generous support that my local council has received during the pandemic. In particular, I wish to mention the £1 million rough sleepers fund and the £600,000 winter grant fund that we have received to support struggling families at this very difficult time. My local council staff have been doing a fantastic job, and my right hon. Friend is right to thank them for going above and beyond to serve our community.

My constituents are being told that in future they should expect council tax increases of 5% and that they should also expect to see cuts to vital services. Will my right hon. Friend please reassure my constituents that the generous funding settlement announced today, together with all the other measures, will mean that there will be no need for the council to choose to take such draconian measures as increasing council tax by 5% or making cuts to vital services?

I am happy to reassure my hon. Friend’s constituents in Telford that there should be no reason why her local council, Telford and Wrekin, should endanger local people’s services. We have provided Telford and Wrekin Council with £22.5 million of covid-19 funding this year, and we have provided £30 million for local businesses, supporting 2,500 businesses in my hon. Friend’s constituency. Of course, Telford is in the running for the towns fund and I have been to visit some of the fantastic proposals that my hon. Friend is championing in that respect. Earlier in the year we provided £1 million of accelerated funding, which I think has gone towards the brilliant bridge linking Telford railway station with the town centre and the new tech zone being created there, which will create good-quality, high-skilled jobs for the future. The Getting Building fund has provided £15 million to the marches so that Shropshire and Herefordshire can get building and create and sustain jobs.

The reality of this statement is that the Minister has thanked local authorities for all the good work they have done during the covid crisis, and they can look forward to cuts in services and the loss of jobs next year. I have a specific question on housing. He did not really reply to the question from my right hon. Friend the Member for East Ham (Stephen Timms) on those with no recourse to public funds. Can he guarantee that the funding available to local authorities now to house all rough sleepers will become a permanent feature of Government policy and that instead of just saying that they should provide move-on accommodation, the Government will ensure that local authorities can build the social housing—the council housing—that is so necessary to deal with the housing crisis that affects every part of this country? Lastly, in his role as Secretary of State for Housing, will he introduce legislation to give greater security to those living in private rented accommodation, who are at the moment going through such stress through the fear of losing their home when the protections are lifted at the end of this coronavirus crisis? We need to give people security in affordable housing in the future in this country.

I forgot to say in response to the shadow Minister that of course the first and most celebrated customer of Robin Hood Energy in Nottingham was the right hon. Gentleman, the former Leader of the Opposition. On his questions, I can absolutely answer that this Government are committed to ending rough sleeping and we can see from the 60% increase in funding in this settlement versus the last spending review the degree of resources that we are willing to put into this issue. It is not solely about money; it is also a crisis of health. There are issues to do with ex-offenders, law enforcement and immigration. We are doing everything we can, and I am working with my Cabinet colleagues to progress this issue. We are investing that £433 million into new, good-quality move-on accommodation , including in London, working with the GLA and local councils, including his own, as well as pan-London organisations such as Peabody to get that accommodation up and running by the end of this year. He asks about housing more generally, and I want to see more houses built in London as much as he does. He could go to his own council in Islington and ask it to do more. Its current local housing need is for 2,300 homes, and it is building on average 1,000, so less than half the amount of homes needed. Charity starts at home, and I suggest he goes to Islington and gets the council building to support the local community.

I thank my right hon. Friend for his statement. As chairman of the county all-party parliamentary group, I welcome his confirming a settlement that provides additional funding to provide stability for council finances next year. The county APPG has long campaigned for a more equitable methodology for distributing council funding that will promote levelling up and benefit not only historically underfunded counties such as Suffolk but metropolitan areas. I thus welcome the Secretary of State’s commitment to fair funding, but can he provide further details of when the Government will bring forward such proposals for consultation?

We all—certainly those of us on the Government Benches—would agree that we need an updated and fairer method for distributing public funds within local government. This year would have been the wrong time to bring that forward, I think. This is a one-year settlement in a period of almost unique instability in the sector. There might be an opportunity to do it next year, and my Department will work with the Treasury to review that. In the meantime, we have substantially increased the rural services delivery grant, taking that to £85 million, the highest amount to date, to support the delivery of public service in places such as Suffolk, where it is undoubtedly challenging and expensive.

I thank my right hon. Friend for the generous settlement he has secured for 2021-22. My Orpington constituency is part of the London Borough of Bromley, which, like other local authorities, faces significant uncertainty about funding from 2022-23 onwards, dealing with rising demands and the new normal following the covid situation. This year, the NHS will receive a multi-year settlement. When can a commitment be made by the Government to provide three or four-year financial settlements, which will be crucial in providing value for money for residents and service users, for local government into the future?

As I have said in response to other questions, it would clearly be beneficial for the sector for there to be a multi-year settlement. This was not the opportunity to do so. I do not think that this would have been the right time when there is so much instability and uncertainty surrounding the delivery of public services by local councils. Perhaps next year—I will certainly be making representations to the Chancellor to encourage him to do so.

The Secretary of State has said that it is not the right time to pursue wholesale reform of local government finance, which will be a relief to many local authorities across England. However, the threat of the reform will hang over the heads of those authorities as they work to recover from the financial difficulties of the pandemic and longer-term budget cuts. Will the Secretary of State confirm when he plans the reform to take place?

I am not able to confirm when we will bring that forward. As I have said, it will not be on this occasion, but we will have to make a judgment, as to the position of local government, whether next year would be right for, as she says, an undoubtedly significant change.

The rural services delivery grant helps local authorities in rural areas such as Rutland and Melton to provide vital local services and, under this Government, it is the highest that it has ever been. Can my right hon. Friend confirm his intention to maintain this rural services delivery grant next year, and will he incorporate those principles into the fairer funding review, which is vital for rural authorities and communities such as mine to get their fair share?

I shall certainly take my hon. Friend’s representations forward. I know that Leicestershire colleagues, both in local government and in the House, have long advocated a fairer distribution of public funds in local government. As I have said in answer to other questions, we will take careful consideration of that next year.

Covid-19 costs are expected to leave Bedford Borough Council with a funding gap of nearly £22 million by 2021-22. One councillor described the lack of a fair funding settlement as, “the Government expecting councils to set balanced budgets with both hands tied behind their backs while wearing a blindfold.” When will the Secretary of State realise that, to finally beat the pandemic and keep local economies going, the Government need to fund local authorities properly as promised?

It would not be right for me to say in public the self-reported estimate of costs provided to us by Bedford Borough Council because that has been done in confidence. None the less, across the whole country, as I have said, the sum of money that we have provided to local councils well exceeds their self-reported covid-19 expenditure. With respect to Bedford, I can say that the total funding provided this year has been £20.9 million so far. For Bedford’s businesses, we have provided £27.8 million, supporting 2,300 businesses. Looking to the future and the recovery of Bedford’s economy, it is likely to be a recipient of the towns fund, and it certainly has received £1 million in accelerated funding to support new infrastructure, skills, culture and business development.

May I welcome my right hon. Friend’s commitment to maintain the rural services delivery grant, which is so important in recognising the additional costs that rural councils face? Many of these councils have also seen a significant drop in income due to loss of revenue through things such as car parks and other services. Will he lay out what steps he will take to support these councils that have lost significant income during this year?

I appreciate that this will have been a particular challenge to Cornwall Council with its array of car parks and other attractions for the tourist sector. That is why we created the sales fees and charges scheme earlier in the year, which provides 75p in the pound to councils for losses in that regard. Already, we have paid out, I think, more than £500 million to local councils. I am sure that Cornwall Council has already benefited and will do so in the future and it is expected that that scheme will provide over £1 billion, if not significantly more. It is without cap, and we have announced in the settlement today that we will be rolling that forward to the middle point of next year. Cornwall Council will be able to rely on that to plan its future to the summer of next year, and, of course, we all hope that people will be in Cornwall enjoying its beaches and attractions in the summer of 2021.

I am concerned that the revised housing targets will cause a north-south divide on green-belt building. These new targets could lead to a 35% increase for Sheffield. Will the Secretary of State confirm that, following the very successful consultation with the community in Sheffield to limit green-belt building, the new target will not be imposed on Sheffield? Instead of levelling up, is it his plan to level our glorious northern green belt?

The hon. Lady makes an interesting argument, because we on the Government Benches want to see more private sector investment going into the great cities of the midlands and the north. We want to see more homes, more urban regeneration, and more brilliant and inspired schemes coming to constituencies such as hers. That is exactly the approach we have taken with respect to the local housing need, and I respectfully ask her to show a little bit more ambition for her community. The three-year annual delivery of homes in Sheffield is 2,500 homes; the new local housing need that we have proposed is 2,800 homes, so if the hon. Lady truly believes that 300 extra homes could not be built in a great city such as Sheffield, then I think she is talking it down, which I am sure is not her intention. However, through your auspices, Madam Deputy Speaker, can I offer her and, particularly, her mother—who has done a fantastic job leading her city over a very challenging year—a very happy Christmas?

I thank my right hon. Friend for this much-needed further financial support for our local authorities, which lead the local response to covid. Local government staff in Runnymede and Elmbridge borough councils and Surrey County Council have worked tirelessly this year to provide essential services to my constituents, and will continue to do so over Christmas and the new year break and beyond. With Runnymede and Weybridge now entering tier 3 restrictions, will my right hon. Friend join me in thanking those staff for their efforts, and agree that we must continue to support our local authorities and the fantastic work they do for our communities?

I would be delighted to join my hon. Friend in thanking the brilliant staff at his local councils. I have been consistently delighted and impressed by the fantastic work that staff at local councils have done across the country, including my own in Newark and Sherwood, Rushcliffe and Bassetlaw, and Nottinghamshire County Council. I am sure that all of us in the House want to join together to thank them and wish them a healthy and peaceful Christmas.

While I welcome any funding for local government, it is not enough. Enfield Council has had £193 million of cuts to funding since 2010. It has had to spend £64 million in dealing with the covid-19 emergency, yet has only received less than half of that from the Government, and it has not been receiving its fair share of public health funding since 2013, receiving half of what neighbouring boroughs get. When will the Government level up for Enfield and give it the proper funding it deserves?

As Secretary of State for local government, I am familiar with people saying that there is not enough money; that, I think, is a refrain that all of my predecessors of all parties have known. However, I do not think it is fair with respect to Enfield this year. We have provided it with £43.6 million of covid-19 funding so far. We have provided it with £44 million for its local business community, and the settlement that we are setting out today provides a further £12.5 million, taking Enfield’s core spending power to a quarter of a billion pounds. That will be a 5.3% increase—a very substantial increase—for the benefit of the hon. Gentleman’s council and his constituents.

At the start of this pandemic, the Government stated that they would provide local authorities with all the support they needed to get through these challenging times. The total amount of additional Government support that Blackpool Council has received since March to support local services and businesses now stands at over £129 million, and my council’s finance officers can scarcely believe that the position is so healthy at this stage. In spite of this, the temptation of many Labour-run councils, including my own, will be to go for a hefty council tax increase next year. Will my right hon. Friend join me in urging those councils to demonstrate restraint, and to make sure we consider how to get value for money from local services?

My hon. Friend makes a very important point, and I am very happy to give him my full support. When providing public services, local councils will need to balance their individual financial positions with the needs of their own constituents and residents—hard-working people whose incomes will be under pressure.

With respect to Blackpool Council, as my hon. Friend says, we provided it with an exceptional degree of support over the course of this year. Its core spending power is £148 million, so the sum that he quotes is very significant in that context. Some £26 billion has gone to pay for that council’s covid-19 expenditure, and it is also, of course, the recipient of our first towns fund town deal, amounting to £39.5 million of investment into Blackpool. That will, I think, go in part to ensure that the Blackpool illuminations are back and brighter than ever next year.

Council tax increases have become a stealth tax for this Government. Council tax now makes up 60% of core spending in local authorities—up from 49% just five years ago. Does the Secretary of State acknowledge that raising council tax year on year, as this Government have done, without recognising deprivation levels is, far from levelling up, leaving local authorities with high deprivation, such as mine in Greenwich, further and further behind?

As I said in answer to the shadow Minister’s remarks, the Government have seen a real-terms decrease in council tax compared with the position when we came to power in 2010. It was the last Labour Government that doubled council tax bills for residents throughout the country. Of course we are aware of the different tax bases of different local authorities and that is why we have consistently provided grants to ensure that there is equalisation across the country. In this settlement, we are providing £270 million of equalisation grants to ensure that each part of the country, regardless of how wealthy or otherwise it may be, has the resources it needs to properly fund adult and children’s social care and all the other important public services.

The additional funding for local authorities like Bromley is very welcome and I also welcome my right hon. Friend’s desire to move back to multi-year settlements as soon as possible. However, for those of us whose councils have social services responsibilities, the ongoing upward pressure of adult social care costs is perhaps the single biggest cause of financial uncertainty. There was talk and a promise of a social care Green Paper as far back as 2018, but we have not seen it yet. When will we tackle the difficult but essential task of reforming social care funding? Without that, it will be difficult to find a sustainable financial base for our authorities with those responsibilities.

My right hon. Friend the Secretary of State for Health and Social Care will bring forward proposals in due course. We will meet our manifesto commitment to introduce the long-term reforms that this country urgently needs on social care. I think today’s settlement provides local government with the sustainable finances it needs for social care. It has been widely praised by the sector as meeting the demographic changes that my right hon. Friend mentioned. We are also ensuring that councils such as his have the funding that they need. Bromley will have a 5.5% increase in core spending power from the previous year, in which there was a 4.7% increase. That is two successive years of increases in council funding for his local authority area.

Briefly, in other news for my right hon. Friend, today we have announced funding for waking watches, partly inspired by brilliant campaigners in his constituency.

I add my thanks to council staff and councillors for their work during this last year, particularly those at Durham County Council. I particularly thank the chief executive, Terry Collins, who is retiring at the end of the year after 43 years in local government.

The Secretary of State’s announcement is mainly made up of local council tax increases in core spending. Durham County Council has 50% of its council tax properties in band A, which limits its ability to raise large amounts of council tax compared with councils in the south, which have larger numbers of higher band council tax properties. That will mean that Durham County Council has no option but to increase its council tax to the maximum. The Secretary of State and the Government talk about levelling up, but today he is clearly punishing northern council tax payers while rewarding southern council tax payers.

I join the right hon. Gentleman in thanking and praising the staff of his local council and wishing Mr Collins a happy retirement. With respect to the balance of funding across the country, I am afraid that the right hon. Gentleman is mistaken. This settlement will ensure that funding is there for all councils in all parts of the country. We have taken particular care to address the issue that he raises. In fact, County Durham will receive £5.2 million in equalisation payments. That will ensure that it has a 4.5% cash and real-terms increase in core spending power, which comes on top of a 7% increase last year—very substantial increases to ensure that his constituents get good-quality public services.

I welcome my right hon. Friend’s statement, and particularly the review of the effectiveness of local authority external audits. Warrington Borough Council’s accounts dating back to 2017-18 still have not been signed off. Given the recent news from Croydon Council, which was effectively declared bankrupt when it issued a section 114 notice last month, does he share my concerns about Labour-controlled Warrington Council, which has debt of around £1.6 billion? Similarly to Croydon, it has used the funds to purchase a shopping centre, offices, a bank and—guess what?—an energy company. Does he agree that it is time for a Government inquiry into the level of council borrowing, which puts local services at risk and loads huge debt on to council tax payers such as my constituents in Warrington South?

My hon. Friend makes a very important point. We all want to see councils have access to funding at low interest rates to fund housing and regeneration within their own boundaries. We do not expect local councils to indulge in risky financial ventures, either within their own area or beyond. That is a mistake. Many local councils quite clearly do not have the financial management skills to do that. My hon. Friend highlights at least two egregious examples of that, in Nottingham and Croydon. Warrington may well be another; I will look it up myself after this statement. We need to bear down on those councils that appear to be using taxpayers’ money as if it were Monopoly money and respect the individuals who actually pay the bills at the end of the day.

We get the usual fundamental dishonesty in the Government’s position: they herald an increase in spending power, but that is entirely predicated on increases in council tax, and when those increases are made, they attack councils politically for having made those increases. Can we just have a bit of honesty from the Government about the position they are driving councils to? Cheshire West and Chester has coped very well with the coronavirus pandemic, but we are still £1 million in the red. Will the Government support us with that debt?

I will happily look into the issue that the hon. Gentleman raises, but £1 million is not a great deal of money in the context of the £39.8 million that the Government have provided to Cheshire West and Chester Council to meet its covid-19 expenditure. If that is correct, it rather suggests that we have made good on our promise to ensure that that council, like every other, gets the resources it needs. In case the hon. Gentleman would like to know, the settlement for next year for Cheshire West and Chester ensures a 4.1% cash and real-terms increase in core spending power, which builds on a 6% increase last year.

Conservative-led Blaby District Council is one of the best-run councils in our country. Conservative council leader Terry Richardson asked me today how the Government will compensate councils such as Blaby for the loss of the new homes bonus. For context, that is a loss to Blaby District Council of more than £1 million. If the Secretary of State does not have the answer to that specific point, will he undertake to write to me with a specific response on the data that Blaby has to work on?

I will happily write to my hon. Friend with the full details with respect to Blaby District Council. Across the country, we have announced today that we will be doing a further year of the new homes bonus, backed by over £600 million of Government money, but we will also be consulting on the future of the new homes bonus. The new homes bonus is an important part of the finances of many local councils, but it is widely perceived to be a poor incentive for councils to get on and build homes, so the consultation will ask how we can develop a new incentive that supports those councils that need to build homes and those that have high ambitions to get on and build. Fortunately for my hon. Friend, his council and those that surround it in Leicestershire are among the most ambitious councils in the country when it comes to house building.

Like others, I am very concerned that the increase in local authority budgets is largely predicated on an assumption of a rise in council tax and the social care precept. This tax is highly inappropriate in the current circumstances and fails to recognise the different needs of local economies such as mine in Oldham and Saddleworth. To be frank, it is just not good enough for the Secretary of State to say that it is up to local authorities what they do. When is he going to reimburse Oldham Council for its covid-associated deficit, forecast at more than £10 million in 2021-22? What will he do to fulfil the Conservative manifesto pledge to level up regarding council funding, given the disproportionate cuts that northern local authorities have faced over the last 10 years?

As I said in answer to the hon. Member for Bedford (Mohammad Yasin), it would not be right for me to say publicly how much a local council has self-reported as having spent on covid-19 expenditure, but across the whole country, we have more than compensated local councils for the costs they have incurred. We have provided Oldham with £33.5 million so far. In addition, it will be making use of the sales, fees and charges scheme, which provides 75p in the pound, and the council tax and business rates scheme that we have announced today, which does the same thing, so I rather suspect that Oldham will receive as much money as it requires over the course of the year. The hon. Lady did not welcome the fact that Oldham is part of the towns fund—I look forward to seeing the proposals that it brings forward—or that we provided £1 million to Oldham earlier in the year, so that it can get on and take forward some of those exciting ideas as soon as possible.

I thank my right hon. Friend for all the support that my council has received during coronavirus. One issue that my council faces is that we raise an awful lot in business rates, given the high property values in Kensington. We get very little of that back, yet our high streets are really suffering because of the crippling level of business rates. Does he agree that we need a fundamental review of business rates?

I join my hon. Friend in praising her local council, and in particular the excellent local council leader she is lucky to have, Elizabeth Campbell, whom it has been my pleasure to work with this year on many different issues.

My hon. Friend is right to say that business rates are a challenge. Of course, this year the Chancellor has provided a business rates holiday, which so many businesses on our local high streets have benefited from. It will be for him to decide whether or in what form that should continue into the next financial year, and no doubt he will bring forward further details on that next year. There will be a fundamental review of the future of business rates, and I am sure she will contribute to that in due course.

Merry Christmas, Madam Deputy Speaker. As the Secretary of State knows full well, Newham has the highest level of homelessness in the country and the second worst level of child poverty in the country, and more than half of Newham residents are either on furlough or out of work. The crisis is getting worse. Our food banks have never known times this bad, and despite fantastic work by local charities, many of our children will be going without this Christmas. Our council has suffered drastic cuts over the past 10 years and has even been underfunded for covid impacts by about £20 million. Can he assure me that the settlement will right that wrong, and if not, will he meet me and my right hon. Friend the Member for East Ham (Stephen Timms) to discuss?

I certainly can give the hon. Member that assurance, but equally, I would be more than happy to meet her and her right hon. Friend. She raises a number of different points. Her local council has received a great deal of money from the Government over the course of this year. It has received almost £50 million in covid-19 expenditure alone so far, in addition to the schemes I have already referred to, which will no doubt amount to many further millions of pounds. The Government have provided the council with £56 million to support 4,000 of her local businesses. She also mentions homelessness and rough sleeping, on which we have worked very closely with Newham Council—I visited a brilliant move-on accommodation site in her constituency earlier this year with the mayor—and we will be providing it with further funding next year, thanks to the £750 million that we are investing in our campaign to end rough sleeping.

Madam Deputy Speaker, may I wish you, as my brilliant constituency neighbour across the border in Epping Forest, a happy Christmas?

My right hon. Friend knows that we are in the process of bidding for the £25 million towns fund to regenerate Harlow. Coupled with the recently announced £50 million Harlow investment fund, does he agree that this regeneration money will completely transform our town to build an even better Harlow? Does he also agree that these regeneration funds are all the more important given the struggle that local businesses and shopkeepers have had to face because of the coronavirus pandemic, and will he confirm that every possible financial support will be given to the residents of Harlow to help us through this pandemic?

Can I thank my right hon. Friend for his hard work over the course of this year and for the campaigns we have worked on together? Not least of those is the decision he campaigned on for many years to institute national space standards for new homes built under permitted development rights, which I think will make a great deal of difference in Harlow, as across the country. He is right to highlight the many ways in which the Government are supporting Harlow—through the towns fund, which is bringing forward very exciting and welcome proposals, and also through the work of Homes England in my Department, which is putting £240 million against the new garden village to provide much-needed housing and further town centre regeneration for his local community. I look forward to visiting Harlow, I am sure, next year and seeing the results.

Would the Secretary of State look again at suspending, even if temporarily, the no recourse to public funds rule? He mentioned a number of groups who have been removed from that rule. I still deal with constituents day in and day out who have that rule inflicted upon them, and of course many are on zero-hours contracts, which means their work disappears literally overnight.

I am very alive to this issue. The Government’s position has not changed and the law remains as it has been, but as I said in answer to a previous question, we have done two things this year that are significant: first, extending the derogation, which enables councils to support EEA nationals in this country who find themselves on the streets, and also allowing councils to use the discretion they have under the law to support those where there is a risk to life. Many councils, I suspect the hon. Member’s among them, have used that discretion to support vulnerable rough sleepers who do not have recourse to public funds during the virus. Many of the 29,000 individuals we brought in off the streets under Everyone In were people who lacked recourse to public funds, and those people are by and large being supported by councils to this day.

I thank the Secretary of State for his statement, and for his announcement a couple of days ago about support for councils with outsourced leisure centres. Even with that income Amber Valley Borough Council’s finances are in a pretty terrible state. Does he believe that the two-tier council system will survive this crisis, and will he be encouraging areas to work out how upper and lower-tier councils can work together more closely to save money?

Earlier in the year, I laid a written ministerial statement that set out the Government’s position with respect to local government reorganisation. It remains my view that, where there is local support, councils should consider further reorganisation to drive the sorts of efficiencies my hon. Friend speaks of, but there must be support for that within the local community. It is not the Government’s intention to impose that on parts of the country where it does not work for the character and nature of local government. We have taken forward three propositions—one in Cumbria, one in Somerset and one in North Yorkshire. Bids for those have been submitted to me, and my hon. Friend the Minister for Regional Growth and Local Government and I will be making decisions on that early in the new year.

Public health teams have been a key part of the response to the covid crisis, but the King’s Fund reports that the public health grant settlement last year was 22% lower per head than it was for 2015-16. How does the Secretary of State plan to address that?

We have provided exceptional resources both to the NHS and to local authorities over the course of the year, so the suggestion that public health has not been resourced this year is not correct. We have been providing huge sums of money to support the increasingly important role of directors of public health in local councils and the teams that are around them. With respect to Birmingham, we have provided £177 million of covid-19 expenditure funding already, much of which will have gone to support the sort of work that the hon. Gentleman is talking about, including through the infection control programmes.

I thank the Minister for providing his statement today. May I ask him to inform the House how local authorities such as Doncaster Metropolitan Borough Council can continue to benefit from local settlement schemes? Furthermore, what steps is his Department taking to encourage local councils such as DMBC to ensure that they bid for funding in a timely manner and spend money in an equitable way?

The resettlement programme is resuming early in the new year after an understandable pause as a result of covid-19, and we will ensure that it is properly resourced so that it can continue to fulfil its important function. With respect to local councils, it is important that they apply for the funds that are made available to them. We have produced a number of schemes over the last couple of years, including the towns fund and the high streets fund. Next year, we will be bringing forward the £4 billion levelling-up fund, and it is my intention that we make the application and competition procedures as simple as possible so that local councils can succeed. My hon. Friend has a good council in his constituency, and I have worked closely with Damian Allen, its excellent chief executive. It has benefited from the towns fund on two occasions, and I hope to support it in future.

I want to start by thanking all the staff at Gateshead Council, who have done an absolutely magnificent job in responding to the pandemic and being hugely flexible, so thanks to them. I also want to return to the theme of public health that my hon. Friend the Member for Birmingham, Selly Oak (Steve McCabe) raised, because this year more than any other has shown the importance of public health services. They have been vital in helping to limit the spread of covid-19 and responding to the pandemic. We know that the pandemic has exposed the impact of health inequalities on those who contract covid-19 and on their response to it, yet there is nothing in the statement about public health. Can the Secretary of State tell the House what conversations he has had with Cabinet colleagues about public health funding for next year?

The question that the hon. Lady asks is primarily for my right hon. Friend the Secretary of State for Health and Social Care, but what I would say, building on my remarks of a few moments ago, is that public health has been significantly invested in over the course of this year as a result of the covid-19 pandemic. The public health grant provided to local councils has to be viewed in the round, including the sums of money that we have been providing to directors of public health for infection control, for personal protective equipment and for support for care homes across the country, including in her own local council, which has received £28 million of covid-19 expenditure already.

I am grateful to my right hon. Friend for the continued generous financial support offered to our local authorities. Burton has recently submitted its town investment plan, which is a joined-up plan to renew our high street, expand sustainable travel and enhance the skills of our young people. Will my right hon. Friend grant us our £25 million Christmas wish, which would truly level up Burton for the future?

I look forward to receiving the proposals for my hon. Friend’s towns fund bid. We will be making further announcements on that early next year, and nothing would give me greater pleasure than to support the towns in her constituency.

I want to ask the Secretary of State about funding for our hard-working firefighters, including the London Fire Brigade. They have seen a 38% cut in central Government funding since 2010 and 11,200 fewer firefighters during the same period. The workload for our firefighters continues to increase as they are now expected to monitor and keep safe a built environment with previously unidentified risk, inspecting over 8,000 high rises, including many in my Vauxhall constituency. So is it fair that the Government are forcing the LFB and other fire authorities to shoulder these costs?

I think the hon. Lady’s question is better directed to the Minister with responsibility for the fire service, who laid a written ministerial statement earlier today specifically with respect to the police and fire settlements. More broadly, I join her in thanking fire and rescue services across the country for the fantastic work they do day in, day out and have done throughout the pandemic, and the work they are doing with my Department with respect to building safety issues.

I heard the hon. Lady’s question earlier to my right hon. Friend the Leader of the House with respect to waking watch. She might like to know that earlier today we announced a £30 million fund, which will be available to any building faced with egregious waking watch costs, so they can pay for fire alarm systems to be installed. That should bring those costs to an end, or at the very least significantly reduce them, and be the beginning of the end of terrible rip-off practices that have put huge stress and anxiety on to leaseholders.

Virtual participation in proceedings concluded (Order, 4 June).