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Local Government Finance

Part of the debate – in the House of Commons at 3:48 pm on 5th February 2020.

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Photo of Luke Hall Luke Hall Parliamentary Under-Secretary (Housing, Communities and Local Government) 3:48 pm, 5th February 2020

I want to start by thanking all Members who have contributed to the debate. It has been a lively and, at times, fiery debate, but certainly a constructive one, and we had some genuinely important issues to discuss.

I would like to congratulate all Members who made their maiden speeches today. Kate Osborne gave a passionate speech about the industrial heritage and history of her community and the inspiration that Ellen Wilkinson provided. I congratulate her on what she said about fighting for the principles she believes in and for health services, children’s services and workers’ rights. From her maiden speech, her constituents will be assured that she will be a passionate and doughty champion for them in this House.

My hon. Friend Duncan Baker talked about his 14,000 majority, which I am sure all of us are jealous of. He started his speech by explaining that it would be a love letter to North Norfolk, and it certainly was. He talked passionately about his work on both the town council and the district council. He mentioned that he was nicknamed “a young Norman” during the campaign; I am sure that that will follow him in the House. He talked passionately about his late stepfather, who built up a business and was an inspiration to him. I am sure that everyone who heard his speech agrees that his stepfather would be proud of him.

My hon. Friend Robbie Moore talked about the beautiful rural and urban landscapes in his constituency and the unanimous support in the House for the Timothy Taylor’s beer produced there. He talked about how local government must be representative. From his speech, we will all be reassured of the excellent representation he will provide in this House as a Member of Parliament, and I know that he will succeed in putting Keighley and Ilkley on the map.

My hon. Friend Mr Bacon talked passionately about his predecessors and the big shoes that he had to fill. He was right to pay tribute to Jo Johnson, a hard-working local MP, and to mention his belief that his constituency is the best place to live in the country, although I am sure that there will be 649 other opinions on that. He also talked about the importance of the fair funding review. I am sure that we will come on to talk about that, but I know that we will all benefit from his 22 years of local government experience, and we are grateful for his contribution this afternoon.

Local government has a unique and far-reaching role to play in our communities. It delivers services that we rely on day in, day out, and debates on the funding of the sector and the challenges and opportunities ahead for it are some of the most important that we have in the House. We will provide the funding for social care, education, transport, housing, health and local growth to flourish, and that is why core spending power for local government will increase from £46.2 billion to £49.1 billion in 2020-21—a 4.4% real-terms increase across the sector.

A number of Members talked about the pressures facing adult and children’s social care. My hon. Friend Michael Tomlinson gave an important speech about the pressure on social care in his constituency and the unique challenges faced by parts of the country with high levels of internal migration. The Chairman of the Housing, Communities and Local Government Committee, Mr Betts, was right to talk about the importance of cross-party discussions on this matter getting under way and how the work that he and the Committee have done on ways to make progress could be an example for talks. Mr Jones talked about the pressure on social care, and my hon. Friend Kevin Hollinrake highlighted the importance of cross-party work and support.

It is absolutely true that councils face pressures on adult and children’s care services—that is something we are hearing from the sector and from councils across the country. This settlement, when it is put before the House, will address that. We have given almost £6 billion of dedicated funding across social care. That includes the extra £1 billion grant for adult and children’s social care, on top of the continuation of existing social care grants worth £2.5 billion.

It is not just about the grant funding that we have provided. Councils are paying for their services through locally raised revenue. That is why we have proposed a 2% adult social care precept, which will enable councils to raise a further £500 million for social care. That will help local authorities to meet rising demand and recognises the vital role that social care plays in supporting the most vulnerable adults and children in our society.

I will touch on the fair funding review in a minute, but it is worth saying that, as part of the initial consultation, we have developed a new formula for children and young people’s services that uses world-leading research and up-to-date data from a strong evidence base for assessing relative needs and then distributing the funding accordingly.

As part of the injection of £14 billion into primary and secondary schools over the next three years, a package of £700 million was provided for supporting children with special educational needs and disabilities. One of the best ways to improve outcomes for children is to remove the need for them to enter the care sector in the first place. That is why we have committed to a further year of the troubled families programme in 2020-21. In addition to the resource injection in social care through the settlement, the NHS’s contribution to the better care fund—the purpose of which is to increase health and social care integration—will increase by 3.4% in real terms, in line with the additional investment in the national health service in 2020-21. However, we of course want to think about the long term, and that is why we are committed to fixing the crisis in social care once and for all to give people the dignity and security they deserve. We will seek to reach across the Floor and build cross-party consensus to ensure that we do have a long-term solution.

One of the other main themes of this debate has been the fair funding review. We heard from Rachel Hopkins, from my hon. Friend Sir Robert Neill about his long experience in local government and the importance of simplifying the formula, and from my hon. Friend David Simmonds about delivering the formula. I think we should be clear that the sector has asked us for a simpler, up-to-date, evidence-based funding formula, and that is what we are going to deliver.

The figures we have heard this afternoon are pure speculation. They use out-of-date cost adjusters and out-of-date population data, and they are pure speculation. It is worth saying that this should be a completely evidence-based review. It is being developed hand in hand with leading academics; it is not a simplistic exercise. I understand why hon. Members have raised it today, but this is not about north versus south, rural versus urban or Labour versus Conservative. It is about developing a needs-based formula that takes into account deprivation, rurality and other cost drivers; that is weighted appropriately and adjusted for the costs of delivering services in different areas; that is balanced with the resources available to different authorities to fund those services; and, of course, that is considered against any transitional arrangements the Government may wish to make. It is simply not possible to predict the overall outcome for individual authorities or groups of authorities based on one or couple of these formulas.

Ultimately, this review should be a collective endeavour with our colleagues in local government, and it is underpinned by real analytical rigour. Very soon, in the next few weeks—we hope to do so by the end of this month—we will share the emerging results with the sector, and we will go to full consultation in the spring. I will keep Opposition Front Benchers fully informed about the progress of that. It is hugely important that we deliver this cross-party to make sure that it works for all of the communities that we represent in this House.

A number of colleagues spoke about the importance of delivering for rural communities. Again, we heard from my hon. Friend the Member for Mid Dorset and North Poole about the pressures on his areas. It is important to note that we will maintain the rural services delivery grant at its highest ever level of £81 million in the coming year. It will be distributed using the same methodology as last year, which distributes funding to the top quartile of local authorities on the super-sparsity indicator.

This will form part of the fair funding review, which will include factors such as rurality and sparsity, but also the other geographical factors that affect the cost of delivering services across the country, and it will take account of them in a robust manner. In the December 2018 consultation, we set out the initial proposed approach to the area cost adjustment, which will include the adjustment for additional service costs associated with sparsity, isolation or market size. For example, if an authority has longer journey times from service points to households, they will have to pay their staff for more hours in order to deliver the equivalent level of service. That will be reflected in the review.

Ms Brown raised the importance of tackling homelessness last week, and she did so again today with passion and vigour. I have met the Mayor of Newham to discuss funding, and I would be very happy to visit Newham with her and the Mayor to look at this issue and talk about it in greater depth.

A number of colleagues raised the importance of policing and the work we are doing to tackle this issue. This is a clear priority for this Government: 20,000 more police officers on the streets, with 6,000 in the coming year. It is also why we have launched the £25 million safer streets fund, which will support areas disproportionately affected by crimes such as burglary and theft to implement well-evidenced measures tackling security, street lighting and other issues that affect their communities.

This is a settlement that injects significant new resources into protecting the most vulnerable adults and children in our care. It maintains grant funding and increases core funding in line with inflation, and it does all of this while protecting council tax payers from excessive increases that they neither want nor often can afford.

It is clear that everybody across this House wants to see local government not just properly funded, but able to adapt, innovate and improve the services it provides for residents for generations to come. Through the reforms that we have outlined this afternoon, that is exactly what we will deliver: a 4.4% real-terms increase across the sector; an extra £1 billion for social care; over £900 million for new homes bonus allocations; and the highest ever rural services delivery grant, at £81 million.

I look forward to further discussing these issues when we meet in this place next week to debate the most comprehensive and generous settlement for a decade.

Question put (Standing Order No. 31(2)), That the original words stand part of the Question.