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Local Government Finance (England)
10 February 2021
Lead MP
Robert Jenrick
Debate Type
General Debate
Tags
Local Government
Other Contributors: 29
At a Glance
Robert Jenrick raised concerns about local government finance (england) in the House of Commons. A government minister responded. Other MPs also contributed.
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
Begged to move the Local Government Finance Report (England) 2021-22 and associated reports for consideration.
Informed the House that the Order Paper notes had not been considered by the Select Committee on Statutory Instruments but were indeed reviewed. Mentioned that the report would be published soon.
Steve Reed
Lab Co-op
Streatham and Croydon North
Critiqued the Government for imposing a council tax increase after economic hardship due to their handling of the pandemic. Emphasised that the 4.5% funding increase was predicated on a 5% rise in council tax, which is not optional. Highlighted that families are under financial pressure and social care would be cut if councils did not raise taxes. Accused the Government of cronyism with contracts given to companies linked to Conservative party politicians. Stated Labour's opposition due to economic illiteracy and unfairness towards families.
John Redwood
Con
Wokingham
Thanked the Government for their assistance to councils during the pandemic crisis, highlighting specific grants and schemes such as the pressures grant and reimbursement of lost tax revenues. He expressed satisfaction with the extension of these programmes but noted difficulties in reimbursing private sector management for leisure services. Redwood emphasised the need for continued increases in social care grants due to growing demand and cost parity across different regions. He also highlighted the role councils play in revitalising town centres, stressing the importance of facilitating a transition back to vibrant community life post-crisis by reviewing car access, parking arrangements, planning flexibility, and beautification efforts.
Clive Betts
Lab
Sheffield South East
I declare an interest as I am a vice-president of the Local Government Association. I also echo the thanks that the Secretary of State and shadow Secretary of State have rightly given to local authorities, councillors, and their staff for the incredible work they have done for our communities in the past 12 months. Whether that work was particular to covid-related issues, or whether it involved social care, public health, environmental services, paying business grants, or keeping day-to-day essential services such as refuse collection going, they have been a credit to our communities and we should thank them for their work.
It is a pleasure to speak in a local government finance debate, because it is an area close to my heart. I want to begin by echoing words that have been spoken on both sides of the Chamber: councils have absolutely played a blinder during the pandemic. We have asked a lot of our local authorities at every level, and they have consistently delivered in the most challenging circumstances. Those circumstances are challenging not just because of the pandemic, but because of the financial situation councils have faced over the past few years.
Diana R. Johnson
Lab
Kingston upon Hull North and Cottingham
Paid tribute to local government's role in the national response to covid, thanked local officers for their work over the past year. Argued that local government must be central to any plan for levelling up but has felt more like levelling down in Hull. Criticised the Chancellor for underfunding local government by around £2 billion and inviting councillors to levy a large council tax increase of up to 5%. Described this as political games at a time of national crisis, providing only a sticking plaster solution for social care despite previous promises from the Prime Minister.
Noted that Diana R. Johnson was not earlier informed of the time limits and then acknowledged Nickie Aiken's contribution.
Declared an interest as a current local councillor, paid tribute to councillors and officers for their outstanding work during the pandemic, thanked central Government for providing support to local authorities. Welcomed the increase in funding for local services, particularly for rough sleeping and homelessness. Advocated for cross-party collaboration to repeal and replace outdated legislation such as the Vagrancy Act 1824. Highlighted weaknesses in delivering local services and suggested a reassessment of London devolution with executive roles potentially moving from City Hall to local councils. Proposed reforms including giving local authorities power to introduce additional council tax bands above band H, expanding community contribution schemes, and business rate reform to support local retail and businesses.
Salford
The number of people in severe problem debt due to the covid crisis has risen to 1.2 million, nearly doubling since March. With three million at risk and proposed cuts to universal credit, the UK is facing one of its worst recessions. Salford alone has faced a £9.1 million council tax collection deficit this year and lost 53% of core funding from central Government since 2010. Forcing people to pay more in council tax without increasing overall funding makes no economic sense and exacerbates regional inequality.
Cornwall has benefited from Government assistance during the pandemic, but there are concerns about overspending on IT systems, unnecessary licences, and a high cost for consultants. The case of Cornwall's embassy in Brussels is viewed as bizarre given that Cornwall voted to leave the EU. Despite these issues, the MP thanks the Government for their support and looks forward to economic benefits from the G7 summit.
Wirral Council faces immense financial challenges due to a decade of austerity measures which have reduced its spending power by £124 million since 2010. The authority is forced to save around £40 million next year and consult on proposals impacting public services. Families are already worried about finances, made worse by the Government's plans to cut universal credit by £1,000 a year. Increasing council tax would place significant financial burdens on households.
Bridgwater and West Somerset
Expressed concern over the misuse of covid funds by Somerset County Council, criticised the Secretary of State's department for misleading the Prime Minister about the council’s financial practices. Stressed the need for a proper referendum to decide on local government restructuring plans, criticised plans for an online survey instead of a referendum due to potential abuse and lack of verification. Urged the Secretary of State to listen to local people's desires regarding their finances and services.
Helen Hayes
Lab
Dulwich and West Norwood
Acknowledged her role as vice-president of the Local Government Association, praised Lambeth and Southwark councils for their efforts during the pandemic. Highlighted additional costs incurred by councils due to the pandemic and funding shortfalls despite Government promises. Emphasised the need for sustainable funding models for adult social care. Criticised the Government's approach to local government as 'Cut the funding and devolve the blame'. Urged the Government to reconsider their plans, proposing alternatives such as a White Paper on social care reform.
David Simmonds
Con
Ruislip, Northwood and Pinner
Local government finance has been undergoing reforms over many decades with varying results. He criticises the Labour administration for proposing a high council tax rise in the past and highlights that the current funding formula aims to achieve an equitable distribution of funds among local authorities. He points out the differential impact of social care precept on London boroughs, highlighting the need for solutions tailored at the local level. Simmonds emphasises the importance of strong local services during crises and advocates for local autonomy in decision-making. He welcomes the Government’s additional resources but calls for a long-term solution that ensures proper resourcing and planning for future needs.
As someone with experience as a councillor, he understands the importance of these settlements for local authorities. He acknowledges the extra support delivered to his constituencies by Durham unitary authority and Darlington Borough Council, receiving £147 million extra since March. Paul Howell requests that longer-term settlements be provided soon to allow for better planning horizons. He expresses concerns about the classification of rural areas like Durham County and questions the expenditure on a new county hall. Additionally, he is worried that increasing reliance on local council tax funding could disproportionately affect poorer communities with higher demand for adult social care. Paul Howell also stresses the need for Whitehall officials to understand local realities better by relocating Departments outside metropolitan centres.
Peter Aldous
Con
Suffolk
Welcomes the Government's response to county councils and their funding pressures due to covid-19, but points out a significant pre-existing funding gap. The local tax income guarantee scheme is beneficial but disadvantages county councils more than others. Urges Minister to publish final consultation and indicative allocations of the fair funding review this year.
Burnley
Thanking Lancashire County Council and Burnley Borough Council for their support during the pandemic, criticises Labour's approach to funding as unsatisfactory. Highlights substantial funding provided by the Government to local authorities in Burnley and Lancashire. Emphasises transparency regarding council tax increases.
Peter Gibson
Con
Darlington
Praises Darlington Borough Council for its efforts during the pandemic, supported by funds from the Government. Notes the £2.3 billion increase in local government funding and welcomes the business rates freeze. Emphasises the need for reform in social care funding and business rates system.
Imran Ahmad Khan
Con
Wakefield
Her Majesty’s Government have provided unprecedented support to businesses and individuals struggling during the pandemic, including £8 billion in direct support for local government. The council tax relief fund was announced with £500 million, followed by £600 million through the infection control fund. I support the motion on the local government finance report 2020-21 and welcome an increase of £2.3 billion in spending power. However, it is crucial to criticise Labour-controlled councils for their imprudent and chaotic spending patterns that often result in deficits. In Wakefield, a market hall project has been a financial burden and the council attempted to close Northgate during the pandemic. The funding should be used efficiently without increasing taxes immediately.
Steve Double
Con
St Austell and Newquay
Cornwall Council received more than £555 million from the Government to support its work, businesses, communities and households over the past year. I welcome this local government financial settlement and the increase in funding for our councils. However, Cornwall Council often wastes money on unnecessary priorities such as maintaining an office in Brussels and paying consultants £20 million last year. The council also faces criticism for reducing face-to-face services despite working from home being claimed to be more efficient. I ask the Minister to confirm that councils should reopen face-to-face services and address delays in local searches causing stress for homebuyers. There is an urgent need for a fair funding review to recognise additional costs faced by rural councils.
Andy Carter
Lab
Warrington South
The Labour MP thanked frontline workers for their efforts during the pandemic and acknowledged the financial support provided by the government. He noted that Warrington Borough Council received £102 million in assistance, including business rates relief and additional un-ringfenced funding. For the year ahead, there is a 4.5% real-terms increase in spending power for Warrington, amounting to an additional £6.7 million. However, Carter criticised Labour councillors for increasing council tax by nearly 30% since 2015-16. He raised concerns about the delayed signing off of Warrington's statement of accounts and questioned the transparency of public money being used for commercial purposes.
Steven Baker
Con
Wycombe
The Conservative MP paid tribute to Buckinghamshire Council and praised their hard work during the coronavirus crisis. He raised concerns about the funding for Buckinghamshire Fire and Rescue Service, which was graded as 'requires improvement' due to lack of funds and staff. He called on Ministers to collaborate with other Departments to increase funding through a council tax precept rise. Baker emphasised the importance of properly funding fire services and warned against potential consequences if they remain underfunded.
Bob Seely
Con
Isle of Wight
Expressed gratitude for the support received during the pandemic and discussed the fair funding formula which recognises the Isle of Wight as an island. Mentioned that research will be conducted to identify additional costs due to being an isolated island, and called for a commitment from the Government to meet these additional costs if identified.
Duncan Baker
Con
Orchard Park
Welcomed the core spending power increase of 4.6% proposed by the Government as significant progress in council funding over the past five years. Stressed the importance of councils running efficiently, building reserves for challenges and not wasting taxpayers' money. Highlighted an example from his local authority on the misuse of funds and called for updates on measures to assist councils with seasonal economies.
Bob Neill
Con
Bromley and Chislehurst
Welcomes the funding settlement but highlights ongoing challenges such as economic pressures, business rate reductions, and adult social care funding gaps. Emphasises the need for multi-year financial stability, adjustments to business rates based on current economic conditions, additional support if local authorities face stress, extension of business grants, and a better mechanism for funding new burdens. Also mentions the lack of financial incentives for efficient service delivery.
Adam Afriyie
Con
Windsor
Compliments the Government's flexible approach to local government funding during the pandemic. Acknowledges the low council tax rates and high-rated services in his constituency, including well-managed state schools and care homes. Points out challenges such as business rate retention and flooding prevention. Suggests rewarding efficient local authorities with lower council taxes and considering adjustments to business rates based on online retail presence.
Kate Hollern
Lab
Blackburn
Pays tribute to the work of Blackburn with Darwen Borough Council staff and communities during the pandemic. Criticises the Government's proposal for being unfair, economically illiterate, and failing to recognise pre-covid financial pressures on councils. Describes the proposed council tax increase as a £2 billion 'bombshell' that will burden families already struggling due to reduced incomes, job losses, and lack of support. Argues that the government is breaking its promise to do whatever it takes to support councils during the pandemic.
Luke Hall
Con
South Dorset
Commends the local government finance settlement that includes a 4.6% increase in core spending power, £3 billion of additional funding for councils to fight and recover from COVID-19, and an extra £1 billion for adult social care. The minister also highlights the flexibility given to councils regarding council tax precepts and provides reassurance about future financial reform.
Adam Afriyie
Con
Windsor
Questions the Minister about considering a higher council tax band—band I—to provide more local autonomy in funding, which could reduce reliance on central government for certain areas.
Government Response
The Government have provided a comprehensive support package that includes increases in core spending power, additional COVID-19 funding, and extra resources for social care. The Minister emphasises the importance of equalisation to ensure fair distribution of funds among councils with varying abilities to raise revenue locally.
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