Local Government Finance (England) — House of Commons, 2020-02-24
Topic: Mixed Topics
Andrew John Gwynne (Labour, Centre-left): My right hon. Friend is absolutely right, because the people-based services—children’s services and adult social care—are services that most of our constituents never have to use and where they do not see the money being spent, but the things that they care about and think these inflation-busting council tax increases are going towards, the neighbourhood services, are the things that over the past 10 years have been squeezed and squeezed, and in some cases have disappeared altogether Let us be clear: I do not expect churlishness or hypocrisy from Ministers or Members of the governing party in the upcoming local elections if councils increase their council tax and the social care levy by the maximum amount, because this finance settlement that we are agreeing tonight requires these increases to happen in full in every town and county hall in the country, to meet the 4.4% claim that is being made. What we know is that one third of this year’s growth would come directly from the general council tax increases of the maximum of 2.99%, with an additional one-fifth of the whole figure of growth coming from the social care levy being charged at the maximum of 2%. That is over 50% of the funding growth that has been lauded tonight coming from local taxation, not Government. As we know, its spread is very unequal, so we do not expect to see Ministers boasting about this settlement and then criticising councils for putting up council tax in the same breath. This settlement also fails to move beyond the sticking-plaster solutions that have been offered in recent years Solace’s local government finance spokesman, Martin Reeves, has criticised the Government’s approach, saying: "the constraints placed on these pots usually means the money is spent on dealing with existing demand, demand that is itself often a symptom of structural (and often longstanding) funding shortfalls elsewhere in the system." Rather than this reactionary approach to funding, we need to be dealing with a system that is at breaking point, proactively investing in reforms to improve outcomes, particularly for the more vulnerable people in our communities. The National Audit Office has warned that a continuation could "undermine strategic planning and create risks to value for money." I trust that the Secretary of State is working closely with the NAO on its review What I am speaking of today should not be any surprise to the Communities Secretary, because I am not the first person to raise concerns over the Government’s funding plans. Indeed, over one in 10 who responded to the Government’s consultation on the financial settlement objected to the way that the Government are increasingly using council tax to address the funding pressures the Government themselves have created, arguing that that would transfer the burden to local taxpayers. They argue, and they are right, that additional council tax flexibilities can have an uneven distributional effect, benefiting areas with larger tax bases while those with smaller tax bases continue to see gaps in their budgets grow Unfortunately, those same areas are often the ones that face the largest pressures on adult and children’s social care. For example, while Wigan has the potential to raise around £4.5 million from the council tax changes, Buckinghamshire can raise £12 million. For Wigan, that would barely let it break even on last year’s overspend as it managed increasing demand on care services, particularly caused by pressures in children’s services. Growth in demand is not slowing down, but the money to ensure that these essential services are in place is not coming from the Government and cannot be sufficiently raised in many parts of the country with the greatest call on these services A quarter of people who responded to the Government’s consultation were concerned, stating that the additional flexibility on council tax was not enough to meet the growing pressures on children’s services. One in five raised that concern in relation to adult social care. In 2018, the Local Government Association warned that the funding gap for adult social care alone will grow by £3.5 billion by 2025. Today it reported that over the past five years pressures on children’s services have pushed overspending to £3.2 billion. The number of children in care has grown by 28% in the past decade, and the number of children at risk of physical, emotional or sexual abuse or neglect has increased by 53%. I do not say that to make a political point. It should shame each and every one of us, on whichever side of the House we sit, that those most vulnerable children are being let down by a system that is broken The LGA has also warned that the funding promised in the finance settlement will not even be enough to cover the increase in costs from the rise in the national living wage from April. Even though demand continues to grow, councils will be forced to cut back on these services. This is not sustainable. I appreciate that there are no quick fixes. The Secretary of State knows my concern about the so-called fair funding review, but the figures that were used by the Local Government Association Labour Group were produced by the Tory-led LGA, whether he likes it or not. His Ministry was asked for clarification of whether or not those were in line with Government trends and thinking, and it gave its acknowledgement that they were I repeat my offer to the Secretary of State: we in the Opposition are willing to work with anyone who genuinely wants to fix our outdated and broken local government finance system, but it has to be genuinely fair and based on real needs. It needs to reflect the circumstances facing each local authority, including their ability to raise income, and it must properly take account of all kinds of need, including deprivation and health inequalities After a decade of decline and neglect, there is little surprise that the promise today of an uptick in spending power has largely been welcomed by the sector, and indeed, by us. We will not oppose the local government settlement. We will not oppose councils receiving any additional funding in today’s settlement, but let us be honest: this settlement, while welcome for a limited uplift, does not solve the financial crises faced by our town and county halls. It does not fix the two cost and demand-led services of adult and children’s social care, and it does not ease the squeeze on our hard-pressed neighbourhood services—all the things that our constituents think that their ever-increasing council tax bills go towards: the parks, the road repairs, the ground maintenance, community centres, street cleaning, libraries, street lighting and bins. There are also the contributions that are less tangible, such as the sense of place, community and local identity—the things that make us proud, or sometimes not proud, of where we live. All these things will continue to be cut or squeezed until or unless the funding crisis in children’s and adult social care is properly addressed and councils can start to rebuild our neighbourhood services again. Once we get to that place, that will be the time to welcome what is happening in local government. That will be the time to cheer. We will support the Secretary of State tonight, but let us get local government back to where it always should have been—at the heart of rebuilding our communities.