Ministry of Housing, Communities and Local Government

Part of Department for Work and Pensions – in the House of Commons at 5:19 pm on 2nd July 2019.

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Photo of Kevan Jones Kevan Jones Labour, North Durham 5:19 pm, 2nd July 2019

I would like to begin by addressing the remarks of Layla Moran. I am sorry, but her party, the Liberal Democrats, were not innocent bystanders in austerity. They were active participants. She says she wants to look to the future—fine—but the effects of the decisions taken under the coalition Government are still biting today, not just in local government but across a whole host of Government policies. I am sorry, but people need to keep being reminded of that.

The National Audit Office and the Centre for Cities produced very robust reports on the effects of the cuts by the coalition Government and this Government to local government funding. Those cuts have been, as my hon. Friend Mr Betts said, most severe in their effect. They have also not been very fair. For example, the most deprived areas in the north have borne the biggest share of the cuts, while areas such as Surrey and Wokingham have had few cuts that have had very little effect.

Durham County Council has faced massive cuts. Since 2010-11, its budget has been cut by £242 million. It has also been put at a disadvantage. As my hon. Friend the Member for Sheffield South East alluded to earlier, the Government have been moving funding from central Government to locally raised taxation. That puts authorities such as Durham at a huge disadvantage, because we have a low council tax base and a low business tax rate base. Some 50% of properties in County Durham are in council tax band A, so its ability to raise local taxation, even if it wanted to, is limited compared to others that have a larger and more diverse council tax base. If that was not bad enough, in addition to what is coming down the road with the fairer funding formula, County Durham will have to find another £39 million of cuts over the next four years. Under that strangely named fairer funding formula, County Durham loses an additional £10 million. Even though it is a deprived area, since 2011 it has already faced a higher than average core spending cut. Yet if we look at the average across the country, Durham is below average, so I do not know how that can be fair.

There is an idea, not just in local government funding but in education funding and everything else, that somehow every single part of the country is the same. We heard it from Sir Geoffrey Clifton-Brown, who argued that the Cotswolds could somehow be compared to an inner-city borough such as Hackney. It is quite clear that deprived areas such as County Durham have a huge call on their resources from the two great drivers, adult social care and children’s care.

In 2018, there were 1,157 looked-after children in County Durham. Wokingham, which has not had the savage cuts that County Durham has had to face, looks after 141 children. We not comparing like with like. These are not services that councils can pick and choose from either; they fall under statutory provision. I have to say that Durham does them very well, but they create huge demands on the council budget that are not reflected in the support received from central Government. The cut in core spending has been dramatic in County Durham. Government figures show that the average core spending per dwelling is £1,908. In Durham, it is £1,727. In Surrey, which I would argue is a little bit more affluent than County Durham, it is £2,004. If we were brought up to even the England average, County Durham would get an additional £44 million.

This is about not only the savage effects of austerity on local government, but the pork barrel way in which the Government have distributed the money, clearly favouring areas that have supported the Conservative party and its coalition partners in the past, and punishing northern councils. In addition to the cuts that have taken place already, we have the public health funding formula, on which I led a Westminster Hall debate a few weeks ago. How can it be right that County Durham will lose £19 million a year—35% of its budget—while Surrey County Council increases its public health budget by £14 million a year?

Those funding decisions are clearly designed to support certain areas. [Interruption.] Sir Edward Leigh chunters from a sedentary position, but the facts are there in black and white. It has been a deliberate policy of this Government since—[Interruption.] Oh, he has got tired and gone off for a sleep. Clearly, as my hon. Friend the Member for Sheffield South East said, we need not only to look at fairer funding for local government but to ask what we need it to do. Like him, I feel that we will end up in a situation where some councils go bankrupt—some already have—and others struggle on delivering services, while being blamed by the Government for not doing so, when they have limited ability even to raise council tax locally.

In the 1980s, when I was first elected to local government, the Conservative party was a proud party of local government. It actively supported local government, cared about it and, as my hon. Friend said, thought it was an important part of the glue of democracy and of how we provided for communities. Alas, that seems a distant past: as I said, local government clearly will not be a priority for whoever wins the Conservative party leadership contest. This cannot go on, or we will end up in a situation where the people we were elected to serve suffer and councils throughout the country become unsustainable.