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Local Government Finance
05 February 2020
Lead MP
Andrew Gwynne
Debate Type
General Debate
Tags
Social CareTaxationCulture, Media & SportChildren & FamiliesLocal Government
Other Contributors: 50
At a Glance
Andrew Gwynne raised concerns about local government finance 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
The state of local government finance is desperate, with many councils broken or at breaking point. The Government's proposed fair funding review could worsen the situation for some local authorities by downgrading the importance of deprivation in deciding funding distribution. Since 2015, local government funding across England has fallen by 32%, and since 2010 it has been slashed by more than half. This neglect is evident in unrepaired roads, uncollected bins, cuts to adult learning, closed children's centres, library closures, and halved funding for Sure Start programmes.
Catherine West
Lab
Hornsey and Friern Barnet
Asked how many councils might fall like Northamptonshire County Council in the next five years, emphasising the need for action to avoid a clear tipping point.
Clive Betts
Lab
Sheffield South East
Referenced the Local Governance Research Unit’s annual survey of local government finances showing that 10% of councils are worried about insufficient resources to meet their statutory duties.
Kevan Jones
Durham, UK Parliament constituency
Expressed concern over rumours that the Chancellor will ask Departments to cut another 5% from their budgets and highlighted the severe impact on Durham County Council which has lost £224 million in core spending since 2010.
Kevin Hollinrake
Con
Thirsk and Malton
Argued that shire districts get much less local government funding, so their council tax has to be higher, and suggested considering a fairer funding formula.
Janet Daby
Lab
Lewisham East
Agreed with the link between cuts to local government finances, youth services, and rising knife crime, advocating for investment in children’s provision and education.
Noted a £1 billion cut to local government finance in Wales over the past 10 years according to fiscal analysis by the Wales Governance Centre at Cardiff University.
Steve Double
Con
St Austell and Newquay
Suggested that Cornwall has received lower levels of funding despite being some of the poorest parts of England, implying the fair funding review will correct this.
Jack Dromey
Lab
Birmingham Erdington
He agrees with Andrew Gwynne that Birmingham City Council has faced severe budget cuts of £700 million, resulting in the closure of children’s centres and youth clubs, and cutting social care and special needs provision. He argues that it is fundamentally wrong for vulnerable groups to be hit hardest by these cuts while more affluent areas receive additional funding.
Andrew Gwynne
Ind
Gorton and Denton
He reiterates his argument, emphasising that the fair funding review proposed by the government is unfair and will further devastate cities like Birmingham. According to the King's Fund, by 2030, the number of older people requiring adult social care support is projected to increase to 4.1 million, adding financial pressure on local councils.
Kevin Hollinrake
Con
Thirsk and Malton
He suggests that cross-party talks should be held to discuss a German-style social insurance system for adult social care funding, which would remove these pressures from local authority budgets. He asks Andrew Gwynne if he agrees with this proposal.
Andrew Gwynne
Ind
Gorton and Denton
He states that the government should come forward with proposals for resolving the crisis in adult social care, as cross-party talks have not yielded results in the past. He emphasises the need to tackle this issue seriously.
James Cartlidge
Con
South Suffolk
He reiterates Kevin Hollinrake's suggestion that cross-party talks should include all credible options, including social insurance for adult social care funding. He asks if the Labour Party would support such an option.
Andrew Gwynne
Ind
Gorton and Denton
He reiterates his stance that it is for the government to come forward with proposals, and he will view them in the round but is not personally in favour of a social insurance system. He emphasises the impact of the so-called fair funding review on deprived communities.
Kevan Jones
Ind
County Durham is likely to lose £39 million in public health funding under the proposed formula, while Surrey County Council would gain an additional £14 million. This disparity highlights the unfairness of the current system.
Jake Berry
Con
Rossendale and Darwen
Welcomes the Government's provisional local government finance settlement, which delivers a decade-high increase in councils' spending power. The Government has also committed to an evidence-based funding formula review and aims to empower communities through devolution initiatives like the Towns Fund.
Lyn Brown
Lab
Questions the absence of the Secretary of State for Housing, Communities and Local Government during this important debate on local government finance. Seeks clarity on what is going to happen with local government funding.
Tim Farron
Lib Dem
Westmorland and Lonsdale
The hon. Member questioned whether forcing local communities to accept a Mayor or a particular urban structure should be a condition for devolving power, suggesting that true empowerment comes from allowing local people to make decisions without imposed structures.
Clive Betts
Lab
Sheffield South East
The hon. Member thanked the Minister for supporting devolution in south Yorkshire and questioned whether the Government would consider extending 100% business rate retention to all councils, not just mayoral combined authorities.
Andrew Gwynne
Ind
Gorton
The Member questions the Minister on specific funding gaps in Tameside Metropolitan Borough Council and challenges the figures used by the Minister, asking for clarification on how much the social care levy raises.
Jake Berry
13:13:00
Welcomed the debate topic, thanked everyone working in local government for their work and emphasised the importance of devolution and supporting towns.
Clive Betts
Lab
Sheffield South East
Discussed the significant funding cuts to local government since 2010, highlighted the growing pressures on social care services, especially for children and elderly. Mentioned the need for a fair funding review that considers deprivation factors. Recommended establishing a specific agreement and settlement for social care. Called for improvements in local taxation systems and reforms in council tax bands and business rates retention. Emphasised the importance of devolving powers alongside the ability to raise money at a local level.
Bob Neill
Con
Brighton & Hove
Neill agrees with the need for a fair funding review and supports the Government's ambition to link it with their devolution agenda. He praises his colleague from Orpington for his expertise in local government, highlighting the necessity of thinking outside traditional frameworks when considering fiscal devolution. Neill advocates for the inclusion of more practical recommendations such as the devolution of stamp duty land tax and other property-based taxes to address disparities in funding and costs across regions. He also suggests simplifying the current funding formula and introducing incentives that reward efficiency, noting the importance of moving away from an artificial distinction between inner and outer London boroughs for area cost adjustments. Neill emphasises the need for a more nuanced approach to assessing need based on disposable income after housing costs are accounted for, and suggests looking at benefits data in a way that accounts for varying levels of take-up across different areas. He concludes by calling for multi-year funding settlements, encouraging local authorities to use their powers for commercial activities, and supporting the Government's broader devolution agenda.
Kevan Jones
Lab
Bishop Auckland
Emphasised the severe impact of local government funding cuts over the past decade, highlighting that County Durham has lost £224 million in grant and now receives less core spending per dwelling compared to Surrey. Criticised the 'fairer funding formula' as fundamentally flawed and a deliberate policy shift from deprived to affluent areas. Cited examples of unequal council tax bases and business rates distribution capabilities between regions, arguing that northern councils are worse off due to central Government policies.
Kevin Hollinrake
Con
Thirsk and Malton
Responded by suggesting shire counties receive less funding from central Government compared to metropolitan areas. Noted higher council tax rates in some shire counties due to lower core spending allocations.
Jake Berry
Con
Rossendale and Darwen
Recommended reading the Government’s December 2018 fairer funding review consultation, which addresses differing council tax bases. Disputed Jones's claim that current funding formula is not addressing regional disparities.
Duncan Baker
Con
North Norfolk
Emphasised the beauty of North Norfolk, highlighting its six blue flag beaches, stunning countryside, and £500 million annual tourism revenue. Discussed his background in local government, supporting the Government’s funding increase for local authorities. Highlighted his passion for helping others through political service and mentioned his stepfather's influence on his entrepreneurial spirit.
Kate Osborne
Lab
Jarrow and Gateshead East
It is a great honour to serve in this House. The constituency of Jarrow has faced significant industrial decline over the years, with successive Tory Governments decimating local industry. There are food banks, high unemployment, poverty and struggle today but the people of Jarrow remain resilient and proud of their history. I will continue fighting for our NHS, against precarious work, zero-hours contracts and unemployment, and for skilled, unionised, well-paid jobs. We need increased funding for schools and investment in further education. Universal credit is a catastrophe that has had a cruel effect on vulnerable families.
Robbie Moore
Con
Keighley and Ilkley
I represent Keighley and Ilkley, an area rich in history and culture with a vibrant economy and diverse communities. Local government must work and deliver for those on the ground by being truly representative of what people want. We need to revive and revitalise our town centre and get businesses booming again under this Conservative Government. Drug crime and issues surrounding grooming are major challenges that need addressing, but we also have potential to become a centre of engineering excellence internationally.
Preet Kaur Gill
Lab Co-op
Birmingham Edgbaston
The MP agreed with the statement that the cuts of £142 million resulting from central government funding assessments for Birmingham between 2015 and 2020 are unsustainable, attributing any consequent reductions in services to Conservative Government policies.
Virendra Sharma
Lab
Ealing, Southall
The speaker reiterated that austerity measures mean less money goes to those who need it most and highlighted the dire state of GP surgeries and a lack of a maternity unit in Ealing due to funding cuts. He emphasised how these cuts put young people at risk, increased policing costs, and worsened social care services for vulnerable groups. The speaker called for more investment from the Government into public services, youth support, and social care.
Gareth Bacon
Con
Orpington
Welcomed the contributions of his colleagues and highlighted his constituency's history, including its connection to notable figures like William Sumner and Charles Darwin. Emphasised the importance of broadband investment in rural areas and the need to protect green spaces under the planning system. Acknowledged Orpington’s vibrant high street and local businesses while expressing pride in its schools and their famous alumni. Recounted the significant role played by Biggin Hill during WWII, honouring the bravery of RAF pilots. Called for a review of local government funding baselines to address past financial issues and proposed measures like increased flexibility for local authorities to manage resources efficiently.
Multiple Members rose to speak but their contributions are not detailed in the provided transcript.
Tim Farron
Lib Dem
Westmorland and Lonsdale
Local authority funding cuts are the easiest for any Government to make, as they make savings then pass blame onto someone else. In Tim's constituency, local councils, national parks, police service, schools, public transport, health care, and social services have all suffered significant budget cuts. These cuts harm families and communities, especially those in rural areas with dispersed populations. The lack of council tax-raising powers for national parks means that these organisations are more vulnerable to funding cuts. In South Lakeland, head teachers face the difficult task of reducing costs without visibly harming children's education, often impacting special needs students most severely. Additionally, Cumbria has lost all subsidised bus services and its public health spending is set to drop below £40 per person, which hurts preventive healthcare initiatives. Social care services are also under strain, with a 96-year-old constituent stuck in a care home for over ten months due to lack of support from the council.
Mid Dorset and North Poole
Local government restructuring in Dorset has been driven by financial necessity, with nine councils merging into two. Despite these changes, both Dorset Council and BCP Council remain financially challenged. Social care represents the largest part of the budget and is placing significant strain on local councils due to an ageing population. The Government's promise to produce a social care Green Paper is welcome as it seeks a long-term solution to adult and children’s social care pressures. Despite what Opposition Members argue, the majority of funding increases have been seen in urban areas while shire counties receive £240 per person compared with £601 for inner-London authorities.
Preet Kaur Gill
Lab Co-op
Birmingham Edgbaston
Councils of all political persuasions are already in severe financial trouble following 10 years of Conservative Government cuts. The new adult social care funding formula will exacerbate inequalities within and between councils, with Birmingham set to lose almost £50 million.
Mid Dorset and North Poole
He argues that funding for rural areas is insufficient, especially in his constituency. He supports a longer-term financial settlement to give councils greater certainty and welcomes the Prime Minister's amendment, intending to support it.
Rachel Hopkins
Lab
Luton South and South Bedfordshire
She criticises the Conservative Government for cutting funding to local councils over the past decade, leading to significant service cuts in Luton. She highlights specific cuts such as libraries, transport services, and community safety. She also points out disparities in funding allocation based on deprivation levels and political affiliations.
Florence Eshalomi
Lab Co-op
Vauxhall and Camberwell Green
She discusses the impact of budget cuts on local councils, citing Lambeth Council's £200 million in savings. She highlights the challenges faced due to social care pressures and temporary accommodation issues. She also addresses the response to Grenfell fire disaster and calls for more Government support in funding critical safety measures.
Kevin Hollinrake
Con
Thirsk and Malton
The hon. Member agrees with the need for a fairer system of spending distribution but criticises the current disparity, noting that cities receive more than twice as much money per capita compared to counties. He highlights the higher council tax in shires due to less central government funding and argues against robbing Peter to pay Paul. The speaker supports a progressive approach where all areas benefit over time through consultation. He emphasises the importance of cross-party talks on adult social care, advocating for a sustainable solution that moves away from political footballs. Hollinrake mentions the Housing, Communities and Local Government Committee’s work on future funding options, including a social insurance-style system similar to Germany's 1995 model, which he sees as scalable and sustainable. He argues against general taxation as a means of financing social care due to its potential impact on debt-to-GDP ratios.
Lyn Brown
Lab
Newham Westside
The speaker sets the scene by introducing Government Members to Newham's struggles under austerity. She discusses the cut in grant funding and the rise in homelessness, particularly affecting children who lose their sense of security, jobs, and support networks due to temporary accommodation. She emphasises that if council homes were available, these issues would be less severe. The speaker also highlights the financial strain on local authorities spending over £1 billion annually on temporary accommodation and calls for a fair funding formula considering different levels of need.
David Simmonds
Con
Ruislip, Northwood and Pinner
The speaker notes his experience in local government and focuses on the Local Government Finance Acts of 1988 and 1992 as key underpinnings. He welcomes the Government's consultation for a fair funding formula addressing legal obligations and the lack of funding keeping pace with these duties. He mentions his constituency’s significant number of elderly residents who are asset rich but cash poor, requiring social care support not covered in previous funding formulas. The speaker urges flexibility and innovation in deploying resources while prioritising core legal obligations to citizens.
Jim McMahon
Lab Co-op
Oldham West, Chadderton and Royton
The speaker congratulates new Members for their maiden speeches and thanks fellow Labour Members for their contributions. He emphasises the importance of adequate funding for local public services and highlights the work done by his colleague on local government finance and devolution. The speaker addresses significant pressure on adult social care, children’s services, neighbourhood services, and the real need to address a £10 billion funding gap.
Kevan Jones
Lab
North Durham
The speaker interjects to point out that red wall Tories are absent from this debate despite representing areas with significant local government finance issues, highlighting the importance of their presence and input in such discussions.
Jim McMahon
Lab Co-op
Oldham West, Chadderton and Royton
McMahon argues that the fair funding review takes money from deprived areas to more affluent ones. He praises the community power in Jarrow and Ealing Southall, highlighting the role of councillors. He criticises the government's late response to cladding issues on tower blocks and the town centre fund for not addressing the business rates system harming high streets.
Kevin Hollinrake
Con
Thirsk and Malton
Hollinrake disagrees with McMahon's assertion, stating that changes in consumer behaviour rather than the business rates system are driving change on the high street.
Mid Dorset and North Poole
Discussed the pressure on social care in his constituency and highlighted unique challenges faced by areas with high levels of internal migration.
Shirley Williams
Labour Co-operative
Sheffield South East
Emphasised the importance of cross-party discussions to address funding issues for local government, drawing on the work his committee has done to progress solutions.
Jones
Lab
North Durham
Addressed the pressures on social care and the need for a comprehensive approach to solving the crisis in this sector.
Kevin Hollinrake
Con
Thirsk and Malton
Highlighted the importance of cross-party work and support to address challenges faced by local government, particularly regarding social care funding.
The hon. Member responded by confirming that the content of Ministers’ replies is up to them, not the Chair. She assured that if there was any inaccuracy in what the Prime Minister said, he would want to make a correction at an early opportunity. She also mentioned that those on the Treasury Bench heard her concerns and will ensure they are fed back so that any necessary corrections can be made quickly.
Government Response
Social CareTaxationCulture, Media & SportChildren & FamiliesLocal Government
Government Response
Welcomes the provisional local government finance settlement, noting it includes significant social care funding increases and a commitment to an evidence-based funding formula review. Emphasises the Government's vision for levelling up communities across England. The Minister responded that they are making progress in south Yorkshire and that any further business rate retention will be part of the spending review process. He also mentioned plans to publish a devolution White Paper later this year, setting out ambitions for full devolution across England.
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