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Local Government Finance

Part of the debate – in the House of Commons at 2:02 pm on 5th February 2020.

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Photo of Kevan Jones Kevan Jones Labour, North Durham 2:02 pm, 5th February 2020

My hon. Friend Mr Betts highlighted what has been happening over the past 10 years, which is that local government as a sector has taken the biggest cuts. Added to that, Departments might have to find another 5%, and no matter what the Minister says in his reply about levelling up and making promises to northern councils, it will be very difficult, because this Government and the coalition Government had a clear policy to move funding from more deprived to more affluent areas.

Interestingly, the Minister said in reply to an intervention by my hon. Friend Ms Brown that he was here because he wanted to make the point that he was the Northern Powerhouse Minister. With one sole exception, Robbie Moore has been the only new Conservative northern MP who has sat through this debate. We had a brief interlude from Dehenna Davison, who stayed for about 10 minutes, and I did spot briefly Peter Gibson. If this new army—supposedly—of new Conservative MPs want to argue for their region, they should be doing it in here and they are not setting a very good example. I will work with them to argue why the Government got it wrong on local government finances over the past 10 years.

It is not just me saying that: the National Audit Office and the Centre for Cities have clearly demonstrated that money has moved from northern councils—the more deprived areas—to the more leafy suburbs in the south-east. That has not been done by accident; it has been deliberate design and policy. If the Minister levels up the system and makes it fair, I will fully support that, but that would be very unpopular among some of his colleagues in the south-east.

We have a situation now, after the last 10 years, where County Durham has lost £224 million in grant. Core spending per dwelling in County Durham stands at £1,727, whereas the figure for Surrey is £2,004, so it is clear that deprived areas such as County Durham are getting less core spending, and that has been deliberately designed by this Government.

The cover for that is the so-called “fairer funding formula”. That is complete nonsense, because it is fundamentally flawed in two respects and it is a disguise to use the word “fairer”. It starts from the premise that the needs of every single area and council are the same, when that is clearly not the case; I will give examples later. As my hon. Friend the Member for Sheffield South East highlighted, it also works on the basis that each council has the ability to raise local finance on an equal basis; I am sorry, but they don’t.