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Local Authority Budgets

Volume 710: debated on Monday 7 March 2022

6. What assessment he has made of the impact of reductions to local authority budgets on the Government’s levelling-up agenda. (905900)

12. What assessment he has made of the impact of reductions to local authority budgets on the Government’s levelling-up agenda. (905906)

Next year’s local government finance settlement makes available an additional £3.7 billion to councils, including funding for adult social care reform. This is an increase in funding of more than 4.5% in real terms and it will ensure that councils across the country have the resources they need to deliver key services.

Salford City Council has had its core funding from central Government cut by 53% since 2010-11. The local government finance settlement that the Minister has just mentioned does not reverse that decade of cuts, and nor does it help enough to provide the £7.6 million needed to pay for increases in costs from national insurance, the national minimum wage, employer pensions and inflation. However, the most critical pressure is on adult social care, where the city council faces increased demand and increased costs. How on earth can councils be expected to deliver vital social care services adequately when this Government’s solution is to make councils fund them from regressive taxes such as council tax and a social care levy of up to 14%?

We recognise that councils have financial pressures and we are doing everything we can to support them. Salford receives up to an additional £19.2 million in core spending power, which is a cash-terms increase of 7.8%. That excludes other funding that we have given to the hon. Lady’s council to assist with the pressures she has raised.

The levelling-up White Paper made no mention of funding for local councils, despite the fact that it is local authorities that deliver the kind of change to local communities that the White Paper claims to be aiming for. Does the Minister think that after 12 years of extraordinary cuts to local authority funding, councils across the country are in a good position to deliver levelling up without any new funding?

I disagree with the hon. Lady. The levelling-up White Paper did make reference to council funding, and the financial settlement that I referred to earlier mentioned the cash increase. She will know that Gateshead receives 8.1% and that the Northumberland part of her constituency receives 8%. The fact is that we have given additional funding for levelling up. This includes £2.1 million from the community renewal fund and a £358,000 allocation from the welcome back fund. There is money going into her constituency and we are here to support as much as we can.

Local government finance has been ravaged over the last decade under the mantra of austerity. Councils in the north have lost up to 50% of their core funding, and some have lost even more. The Secretary of State has said, “If you leave the free-play market forces entirely to themselves, then what you see is inequality growing, in particular geographical inequality”. Those were fine words, spoken at the convention of the north in my home city. When will the Department drop the spin on local government finance and genuinely improve councils’ core spending powers by factoring in inflation and national insurance increases, for which our cash-strapped local authorities are picking up the tab?

Labour Members continue to talk about losses in funding, but they forget to remind everyone of how we arrived in this position. It is because of their disgraceful management of the public finances. We have spent the last 10 years repairing the public finances, which is why we have been able to give the real-terms increase that will support all Labour councils.

Stroud District Council is on the record as saying how generous and supportive the Government were during the pandemic. We established holiday camps and a range of activities that were not there before, we are bidding for £20 million from the levelling-up fund and we are working closely with our GFirst local enterprise partnership, which is keen to know the timeline for the shared prosperity fund. Is the Minister able to give us any more information? This is another round of funding that is available to our local authorities.

I recognise my hon. Friend’s concerns. All I can tell her is that we will be providing further details very shortly.

I thank the Secretary of State and all the Ministers and officials in the Department for moving at pace to tackle the growing humanitarian crisis in Ukraine. We have heard from the Government that those with family links and those with sponsorship will get support. Many local authorities are under huge financial pressure, so will the Minister say what further help could be given to local authorities that want to house refugees not only from Ukraine but from Afghanistan? Finally, can she give more detail on the announcement, or non-announcement, of a third track for refugees?

I cannot answer all my right hon. Friend’s questions, but my right hon. Friend the Secretary of State is having discussions with councils on this very issue. As soon as we are able to provide further details, we will do so.

Does my hon. Friend agree that the reorganisation of local authority areas can reduce the financial pressure on councils? Will she meet me to discuss how Southport would benefit from being in a new council area?

Yes, it is true that reorganisation can sometimes assist. I would be happy to meet my hon. Friend to discuss this issue.

Members on both sides of the Chamber have said that any levelling up will ultimately be delivered by local authorities improving lives in their communities, but councils have faced and continue to face, despite the spin, serious shortfalls thanks to draconian Government cuts, including a 2% real-terms cut this year. Can the Minister explain how taking away £88 million from Burnley Borough Council in Lancashire over the last 10 years, even after taking into account the levelling-up funding, is fair? How is that levelling up? How will a £102 million shortfall over the next three years for Essex County Council—the Minister’s own county council—level up adult social care? Is it not time for Ministers to cut the spin, cut the claptrap and provide some substance and genuine levelling up for our hard-pressed councils?

I completely reject the hon. Gentleman’s numbers. As I said, we have given a 4.5% increase in the local government finance settlement. We are here to provide support to all local authorities. We are not going to engage in agreeing with the false numbers provided by the Opposition.