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Local Government Finance
07 February 2024
Lead MP
Lee Rowley
Debate Type
General Debate
Tags
Local Government
Other Contributors: 21
At a Glance
Lee Rowley raised concerns about local government finance in the House of Commons. Other MPs contributed to the debate.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Lead Contributor
Opened the debate
Begs to move the Local Government Finance Report (England) 2024–25.
Moves additional motions for Referendums Relating to Council Tax Increases.
Acknowledges the Minister's statement and seeks a permanent uplift for the Isle of Wight.
Questions whether local councils should be protected from referendums and when they will be allowed to govern without constraints.
Jim McMahon
Lab Co-op
Oldham West, Chadderton and Royton
Critiques the Government's approach towards local government finance, highlighting the unsustainable crisis in adult social care, children’s services, homelessness, and the overall impact on council finances. Emphasises the need for a multi-year funding settlement to ensure stability and support for councils.
Questions Jim McMahon about the audit of Plymouth City Council’s accounts and the £70 million transfer from capital spend to pension pot.
Clive Betts
Lab
Sheffield South East
Discusses the Select Committee's report on local authority audit, noting the complexity due to low audit fees and pension fund valuations.
Chris Loder
Con
West Dorset
The debate highlights the importance of ensuring fair funding for rural areas, specifically mentioning the case of Dorset which has been in need of a greater share of government finances. This year, however, there is welcome news with £4 million boost to Dorset Council's finances and up to £3.2 million through the rural services delivery grant. However, Loder emphasises that more needs to be done to address fundamental structural issues in local government funding. He also raises concerns about whether Dorset is getting its fair share of additional social care funding, noting that a third of his constituency is over 65 years old. Further, he discusses the disparity in settlement funding and council tax between rural and urban areas, stating that rural residents receive less per head and pay more in council tax than their urban counterparts.
Sarah Dyke
Lib Dem
Glastonbury and Somerton
Dyke intervenes to provide context for Somerset's financial issues, noting that they have been long drawn out rather than starting under the new Liberal Democrat Council. She mentions a council tax freeze from 2010-2016 under Conservative administration and near bankruptcy due to pressures on adult social care in 2019. Dyke also points out that Somerset has fewer properties in higher banded rates, leading to less council tax revenue. She emphasises the delivery of savings within nine months of a plan for unitary council implementation against local will.
Clive Betts
Lab
Sheffield South East
The MP thanked the shadow minister, his special advisers, and the Local Government Association for their work on the report 'Financial distress in local authorities'. He highlighted a funding gap of £4 billion, noting that the recent £600 million allocation is insufficient. Betts criticised the government's approach to council reserves as inadequate, stating that many councils are facing significant financial difficulties due to austerity measures since 2010. He noted an increasing number of section 114 notices issued by local authorities, a problem exacerbated by rising demands in social care and adult services. The MP emphasised that the current system is unsustainable for council tax payers who feel they are paying more and receiving less. Betts called for multi-year settlements, fair funding based on recent demographic data, and continued support for public health grants. He also urged the Minister to address the household support fund and advocated for long-term solutions in local government funding.
Sally-Ann Hart
Con
Hastings and Rye
Welcomed the £600 million extra funding for local authorities, including £500 million for social care responsibilities. Highlighted East Sussex County Council's challenging financial situation despite the additional funding, emphasising the need for sustainable long-term funding to meet the specific needs of coastal communities. Criticised Labour-run Hastings Borough Council’s mismanagement and its potential bankruptcy. Supported plans for a fairer funding formula that considers unique challenges faced by coastal areas.
Helen Morgan
Lib Dem
North Shropshire
Ms Morgan highlighted the chronic underfunding of local councils, using her own constituency as an example. She stated that despite political differences, all parties are affected by the funding crisis and need urgent attention from central government to address issues like social care costs, which have risen to 85% of Shropshire Council's budget. She noted a £37.3 million real-terms decrease in funding since 2016-17, leading to service cuts such as the closure of swimming pools and civic centres due to financial constraints. Morgan also pointed out that rural areas face higher costs for delivering social care due to geographical challenges, and called for fundamental reform in social care funding, special educational needs support, and temporary housing provision. She emphasised that short-term fixes are insufficient, urging ministers to consider long-term solutions addressing the structural issues faced by councils.
David Simmonds
Con
Ruislip, Northwood and Pinner
The speaker recognises the significant role of local government in providing care services for vulnerable individuals. He acknowledges the Government's recognition of unsustainable cost pressures but questions whether the additional funding is sufficient. The speaker emphasises the need for earlier announcements and a multi-annual financial settlement to allow efficient use of resources. He discusses issues such as deficits on the dedicated schools grant, highlighting the challenges faced by local authorities due to these deficits and calls for certainty from the Government regarding this long-term position. Simmonds also supports continued investment in public health functions. He highlights the historical inequity in the funding formula and its impact on different parts of the country. The speaker expresses support for Ministers addressing how funds are allocated based on statutory obligations, rather than additional grants not reflecting these obligations. He suggests looking at planning gain's role in local authority funding and proposes additional flexibility around housing revenue accounts to alleviate temporary accommodation costs pressures.
Rachael Maskell
Lab Co-op
York Central
City of York Council is facing significant financial pressures due to insufficient funding and a flawed funding formula. The council has been forced to implement innovative solutions such as lifting the blue badge ban and delivering free school meals in areas of deprivation. However, the city's services are under stress with real terms funding £33 million worse off than in 2010. The education sector faces severe challenges with low funding and a high number of pupils with special educational needs and disabilities (SEND). Social care budgets are also strained due to an ageing population and increased demand for emergency social care services. The council is urging the Minister to address these issues through cross-departmental working and reform of the funding formula, including business rates and local housing allowance. Flood relief and support for flooded businesses are also highlighted as areas needing urgent attention.
Steve Double
Con
St Austell and Newquay
Welcomed the additional almost £6 million funding for Cornwall, which has helped address some of the council's funding concerns. However, he emphasised that this is not a long-term solution due to factors like an ageing population putting pressure on social care services, unique challenges faced by rural areas, and unsustainable council tax levels compared to urban areas. He called for a fairer distribution of government funding based on need and demand in rural areas.
Sarah Dyke
Lib Dem
Glastonbury and Somerton
Critiqued the local government funding system, stating it is broken due to real-terms cuts inflicted by the Government. Highlighted that Somerset Council declared a financial emergency last year due to a £100 million funding gap for 2024-25, and while some additional support through the financial settlement is welcome, it falls short of what is needed. She appreciated engagement from the Under-Secretary but called for substantially greater funds.
Roger Gale
Con
Herne Bay and Sandwich
Responded to an intervention by ensuring that parliamentary procedures are followed and clarified whether a Member had sat down before being interrupted.
Jane Hunt
Con
Sleaford and North Hykeham
Thanks the Department for Levelling Up, Housing and Communities for the £600 million increase. Supports calls for fairer funding formulae and recognition of additional costs in rural areas. Advocates for a solution where Departments that request services pay for them directly.
Liz Twist
Lab
Blaydon and Consett
Critiques the Government's sticking plaster policies and calls for long-term stability and certainty, including multi-year funding settlements, restored audit oversight, and greater partnership with local government to deliver necessary services.
Simon Hoare
Con
North Dorset
The Minister emphasises the stability, certainty and security provided by the local government finance settlement. He acknowledges the complexity of the task and pays tribute to his private office and officials for their hard work. He also highlights the Chancellor's and Prime Minister's support in revising the formula and the Secretary of State's focus on delivering the biggest bang for each buck. The Minister underlines the need for cross-party working, blue skies thinking and significant change while commending councils for their important contributions.
Clive Betts
Lab
Sheffield South East
The shadow minister challenges the Government's inaction over the past 14 years despite having a long-term review of local government finance planned for the next Parliament. He questions why this was not done earlier during their time in power.
Richard Foord
Lib Dem
Honiton and Sidmouth
The Liberal Democrat Member seeks an intervention but does not receive a response from the Minister.
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