Local Authority Finances

Housing, Communities and Local Government – in the House of Commons on 4th March 2019.

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Photo of Bridget Phillipson Bridget Phillipson Labour, Houghton and Sunderland South

What assessment he has made of the financial sustainability of local authorities.

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

The hon. Lady will be aware that the recent settlement confirmed a real-terms increase in the resources available to local authorities. The Government responded to pressures faced by councils in the autumn Budget and supported financial sustainability with more than £1 billion of additional funding across this year and next.

Photo of John Bercow John Bercow Speaker of the House of Commons, Chair, Speaker's Committee on the Electoral Commission, Chair, Speaker's Committee for the Independent Parliamentary Standards Authority, Chair, Commons Reference Group on Representation and Inclusion Committee

Order. Before I call Bridget Phillipson, we are very short of time so I hint that the hon. Members for Morley and Outwood (Andrea Jenkyns) and for Nuneaton (Mr Jones) could usefully seek to take part in the exchanges on this question, if they were so inclined. It would work perfectly well.

Photo of Bridget Phillipson Bridget Phillipson Labour, Houghton and Sunderland South

Since 2010, Sunderland City Council has been forced to make cuts of more than £290 million, yet the announcement today of the so-called stronger towns fund will see only £105 million for the whole of the north-east region put together. Given that our communities will be hit hardest by this Government’s Brexit plan, does the Minister seriously expect us to be grateful for this announcement, and does he expect us to support another decade of Brexit-driven austerity and decline?

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

I gently point out to the hon. Lady that the towns fund that she talks about has the highest per capita allocation exactly to her area, and it is something that she should be welcoming for her constituents. Beyond that, the only way sustainably to provide and fund the services that we care about is to drive economic growth, efficiency and innovation. I am glad that her council participated in our digital innovation programme, and that 100 other local authorities are benefiting from our business rates pilots to keep more of their economic growth in their local community.

Photo of Andrea Jenkyns Andrea Jenkyns Conservative, Morley and Outwood

From the £1.6 billion post-Brexit stronger towns fund, how much can Yorkshire and Humber expect to receive after we leave the EU, and will this money be used to get fair funding in place?

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

I know that the Secretary of State will be making a more detailed statement on the towns fund later when I am sure that he can address my hon. Friend’s specific question. This is a separate process from the fair funding review, which is, I know, something that all colleagues are interested to hear. That process is regarding ongoing spending and that will be done through the spending review later this year.

Photo of Vincent Cable Vincent Cable Leader of the Liberal Democrats

Will the Minister say how the financial sustainability of local government is helped by what amounts to negative rates support grants, where councils are paying in more to central Government than they get back?

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

Perhaps the right hon. Gentleman was not here for the recent local government settlement. It is exactly because of the threat to sustainability that this Government eliminated negative RSG, which is something that the sector had asked for and we were pleased to meet that concern at the recent settlement.

Photo of Marcus Jones Marcus Jones Vice-Chair, Conservative Party

The historic funding settlement does not reflect the shift in population by many families and older people from city to county areas, increasing the demand in those areas for high-value services. Will my hon. Friend say what more we can do to make the finances of local government in county areas more sustainable?

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

We take funding for county areas extremely seriously, and it is of course important that the new funding formula accurately reflects needs brought about by changing demographics on the ground. I can assure my hon. Friend that I will continue to work with him, the County Councils Network and others to ensure that our new formula is fit for the future.