Local Government Finance Settlement 2018-19

Housing, Communities and Local Government – in the House of Commons at 12:00 am on 12th March 2018.

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Photo of Diana R. Johnson Diana R. Johnson Labour, Kingston upon Hull North 12:00 am, 12th March 2018

What assessment he has made of the effect of the local government finance settlement 2018-19 on the financial sustainability of local authorities.

Photo of Matt Western Matt Western Labour, Warwick and Leamington

What assessment he has made of the effect of the local government finance settlement 2018-19 on the ability of local authorities to meet their statutory responsibilities.

Photo of Rishi Sunak Rishi Sunak Parliamentary Under-Secretary (Housing, Communities and Local Government)

The 2018-19 settlement is the third year of a four-year deal providing funding certainty and is accepted by 97% of councils. The settlement sees a real-terms increase in resources to local government over the next two years, totalling £45.1 billion in the forthcoming financial year.

Photo of Diana R. Johnson Diana R. Johnson Labour, Kingston upon Hull North

Hull is the third most deprived local authority in the country. Two thirds more Hull residents require social care compared with the national average. We have lost half our Government funding since 2010 and we will be getting the lowest amount per head from the social care precept of any Yorkshire and Humber council. With the Government having got it so wrong so far, will the Minister guarantee that Hull will now get a fair funding settlement?

Photo of Rishi Sunak Rishi Sunak Parliamentary Under-Secretary (Housing, Communities and Local Government)

The hon. Lady makes some comments about funding for deprived areas. She will be pleased to know that funding per household in her particular area is higher than the average for unitary authorities across the country and that in general the most deprived local authorities have funding per household that is 23% higher than the most well-off. On her point, I can reassure her that we are committed to introducing a new fair funding formula and I look forward to hearing the responses from her council as we develop it.

Photo of Matt Western Matt Western Labour, Warwick and Leamington

In a letter to the Secretary of State last month, the Conservative leader of Warwickshire County Council stated that in the council’s view the current funding model for local government is unsustainable. Is she correct?

Photo of Rishi Sunak Rishi Sunak Parliamentary Under-Secretary (Housing, Communities and Local Government)

I appreciate that the hon. Gentleman makes a point about the funding settlement and the formula. He will know from his membership of the Select Committee, which I have just had the pleasure to appear before, that we are looking very hard at the structure of local government financing, both increasing the amount of business rates retentions to 75% and introducing a new needs-based formula that takes into account updated needs and resources. I know his Committee will play a huge part in making sure that we get that right for Warwickshire and for the country.

Photo of Gary Streeter Gary Streeter Conservative, South West Devon

Over the years, I have strongly supported the pressure we have rightly put local authorities under to improve efficiency and bear down on waste, and I am sure that elsewhere in the country there are examples of where more needs to be done. In the south-west, however, my impression is that the finances of Devon, Plymouth and many other local authorities have been cut to the bone. I think there is an opportunity for the Government to be more generous with efficient local authorities in the south-west to enable them to make sure their priorities are delivered.

Photo of Rishi Sunak Rishi Sunak Parliamentary Under-Secretary (Housing, Communities and Local Government)

I pay tribute to the work of local government across the country. Local authorities have done a commendable job over the past few years of delivering high quality services in a difficult financial climate. I thank them, as I know their constituents do. On my hon. Friend’s point, I look forward to the representations from Devon and the south-west as we reform local government financing through the fair funding formula which is coming soon.

Photo of David Lammy David Lammy Labour, Tottenham

On 4 July, the Secretary of State said to the House that he would help, with every precaution, local authorities dealing with the cladding problem across our country following the Grenfell Tower fire. Why is it, despite over 41 local authorities asking for that help and the Department giving £817 million back to the Treasury, has he not been able to find the money to help those poor worried people who are in those buildings as we speak?

Photo of Rishi Sunak Rishi Sunak Parliamentary Under-Secretary (Housing, Communities and Local Government)

The Department is in discussions with multiple local authorities on the requirements to improve the safety of buildings. My understanding is that the Department has not said no to any local authority thus far that is seeking flexibility with those plans.

Photo of Ruth George Ruth George Labour, High Peak

My own council in Derbyshire has seen £180 million—over half of its budget—cut in the past seven years. It cannot now offer enough money for social care packages for terminally ill people to receive care in their own home. They are being forced to die in hospital away from their loved ones. What will the Minister do to make sure that councils receive the proper funding that they need to be able to free up hospital beds and support families in the most urgent need?

Photo of Rishi Sunak Rishi Sunak Parliamentary Under-Secretary (Housing, Communities and Local Government)

As we have been discussing, the Government have put extra financial resources into social care. It is pleasing to see that over the past year, delayed transfers of care across England attributable to social care have fallen by 34%, showing that the resources we are putting in are making a difference on the ground.

Photo of Emma Hardy Emma Hardy Labour, Kingston upon Hull West and Hessle

Since 2010, Hull City Council has been forced to cut its children’s services budget by £37.2 million, which means that it has not had the money that it has needed for early intervention support for families. It is no surprise that the number of looked-after children in Hull has increased by 140—that is 140 children’s lives changed forever. Will the Minister please give authorities such as Hull City Council more money, so that they can give those families support when they need it, before they enter crisis?

Photo of Rishi Sunak Rishi Sunak Parliamentary Under-Secretary (Housing, Communities and Local Government)

The hon. Lady is absolutely right to highlight the important work that prevention plays. Nobody wants to see a child in need in those circumstances, which is why this Government have committed almost £1 billion to the troubled families programme over this period in the spending review. As recent results have shown, that is reducing the number of children in need after heavy intervention from their key workers in the programme.

Photo of Jim McMahon Jim McMahon Shadow Minister (Housing, Communities and Local Government) (Devolution)

Last week, the respected National Audit Office published its report on the financial sustainability of local authorities. It laid clear the significant challenges faced by councils and the vital services that they deliver. Can the Secretary of State prove that he is on the side of local councils and place in the House of Commons Library any submissions that he has made to the Chancellor ahead of the spring statement?

Photo of Rishi Sunak Rishi Sunak Parliamentary Under-Secretary (Housing, Communities and Local Government)

I also read the National Audit Office report with interest. I was pleased to see that it made very positive comments about the Department’s work in getting to grips with the challenges across local government and making sure that the sector is properly resourced and looks forward to the reviews that are being put in place to improve funding and business rates retention.