Local Government Finance (England)

Part of the debate – in the House of Commons at 5:35 pm on 10th February 2021.

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Photo of Helen Hayes Helen Hayes Labour, Dulwich and West Norwood 5:35 pm, 10th February 2021

I declare an interest as a vice-president of the Local Government Association.

Let me start by paying tribute to my local councils, Lambeth and Southwark, for the work that they have been doing to support local residents and deliver essential services over the past year. It has been an incredibly challenging time, but our local councils have been on the frontline of the coronavirus response, delivering emergency help and support at the same time as the need for many core services has also increased.

I pay particular tribute to Lambeth and Southwark council staff for their tireless work. Many frontline staff are from black, Asian and minority ethnic backgrounds and have continued to work on the frontline, despite knowing that they are at increased risk. Many are also parents who have been juggling their work, delivering services while home-schooling young children. I pay tribute to them for their commitment and public service at this very difficult time.

Our councils have also stepped up to meet needs where the Government have failed, particularly in relation to effective contact tracing and the provision of laptops for children struggling to access online learning. The Government promised councils that the additional costs incurred in responding to the coronavirus pandemic would be covered. Our councils took that commitment in good faith and incurred the costs that were necessary to support local residents, but they have been badly let down by this Government.

Councils across the country, including Lambeth and Southwark, are heading into the new financial year millions of pounds short of the funding they need. Councils have faced a triple whammy of additional costs arising from the pandemic and increased pressure on some existing services. They have faced a loss of income arising from the business rates holiday and the wider pressures on household incomes affecting council tax receipts and a loss of funding from fees and charges as local facilities such as swimming pools have had to close. Southwark Council has recently calculated that the additional costs of the coronavirus pandemic, combined with the loss of income over the past year, amount to £100 million.

After the additional Government measures, Southwark still has a shortfall of £23 million. That is the amount of the Government’s broken promise. The approach to this funding settlement exemplifies the Government’s lack of regard for local government and the vital role that it plays. Our local councils have seen more than a decade of cuts, which, in Lambeth and Southwark, has reduced their grant from central Government by more than 60%. The same public servants who have stepped up to respond to the coronavirus pandemic had already been stretched to breaking point by relentless austerity.

The public will not be fooled by the Government’s announcement of one-off single-year pots of money, which are sticking plasters on the gaping hole in local government finance. Forcing councils to increase council tax, a regressive tax that hits low-income residents hardest, does not raise anything approaching the level of funding that our councils need and is a very cynical approach.

Central to the challenges facing local government is the Government’s shameful neglect of adult social care. The need for social care reform and a new sustainable funding model has been clear for the whole of the decade that the Tories have been in power, but they have done nothing about it. The funding deficit in social care has been quantified many times. A total of £3 billion is needed just to meet current needs. The failure to come forward with practical proposals for social care reform and to publish the long promised White Paper means that 1.5 million people who are in need of care receive nothing and many more do not receive the level of support they need or, indeed, the level of support that any one of us would wish for our loved ones. Thousands of care staff are paid less than the living wage. Social care is the forgotten frontline of the coronavirus pandemic, left unprotected without personal protective equipment, while the Government allowed covid-positive patients to be discharged into care homes.

As a co-chair of the all-party group on adult social care and a former member of the Housing, Communities and Local Government Committee, I can confirm that there has been no lack of cross-party work on social care reform. That social care has been neglected and council finances stretched to breaking point as a result, is the Tories’ responsibility alone. The Government’s approach to local government can be summarised as “Cut the funding and devolve the blame”. Our councils and our communities deserve far better than Tory cuts, cynical blame and regressive tax rises. I urge the Government to think again, and to scrap the regressive council tax hike, bring forward proposals for the reform of social care and provide the sustainable funding of our councils to deliver the services our communities rely on.