Local Government Finance (England)

Part of the debate – in the House of Commons at 6:15 pm on 10th February 2021.

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Photo of Andy Carter Andy Carter Conservative, Warrington South 6:15 pm, 10th February 2021

Let me start by saying what an incredible job the people who work on the frontline of our local council services are doing. That includes Warrington’s binmen, social workers and environmental health teams—local people who have been supporting communities across Warrington South throughout the pandemic. I want to put on record my thanks for their efforts, because the last few times that I have spoken about the decisions taken by elected Labour councillors in Warrington, they have suggested that I am criticising the frontline efforts of the hard-working people who deliver our services. To be clear, those brilliant public sector workers have stepped up to support the most vulnerable people when they have needed it, and I thank them for their efforts.

In recent weeks, as well as dealing with the impact of covid-19, our council workers have also dealt with the fallout of Storm Christoph, with more than 700 homes flooded across the town, affecting homes in Dallam, Sankey Bridges and Lymm. There is no doubt that the challenge of dealing with the floods will be costly, and I am keen for the Secretary of State to look at how central Government can assist locally.

Let me turn to local government finances. I thank the Government for the assistance that they have given to local authorities. During the current year, Warrington Borough Council has received £102 million from central Government, including support for businesses in our town. It is worth breaking that down: £32 million in business rates relief; £15.5 million pounds in additional un-ringfenced support for the council; £1.6 million in council tax hardship funding; £1.14 million for test and trace; £4.76 million for infection control; £400,000 for emergency accommodation funding; and £580,000 for the covid winter grant scheme to help fund families and those on free school meals during the holidays. The list goes on. The Government are backing councils with the resources that they need during this challenging period.

For the year ahead, Warrington will see a real-terms increase in its spending power of 4.5%. There is an additional £6.7 million for Warrington Council, but, quite rightly, it is down to local councillors to decide how much they want to raise in council tax each year. They are elected and they hold the tax-raising powers.

Let us just go back to 2015-16, long before covid hit. The average council tax band D property in Warrington was paying £1,206 a year. The average band D figure for 2021-22, which has just been agreed by the council, will be £1,565. That is just short of a 30% increase over the period. That is an extra £360 per household for a band D home in Warrington, before police and fire precepts are added. Under Labour in Warrington, we have seen an almost 30% increase in council tax. At the same time, some Conservative Councils are freezing council tax again. At every opportunity, Labour says that it is down to the Government that council tax has increased so significantly, but we know that that is simply not the case. Local councillors decide the services to be delivered and local levels of taxation, and Labour authorities are past masters at putting up council taxes.

In the time remaining, I will turn to a number of other concerns regarding local government finance in Warrington. As the Secretary of State will know, Warrington Borough Council’s statement of accounts is yet to be signed off by the independent auditor. I refer not to the current year, which is due to end shortly, nor to the previous year, nor, for that matter, to the year before that; the statement of accounts in Warrington has not yet been signed off for 2017-18, due to an objection over a £30 million investment in Redwood Bank. Despite promises after promises, there are still technical issues as to why Grant Thornton has not signed those statements off. We do not know those technical reasons, and I have lost count of the number of times that we have had promises that the statement of accounts will be signed off.

There is increasing concern locally that public money is being used for commercial purposes and it is not being used in a transparent way. That is not a good thing. It is not a plc with shareholders; it is a local council, and the risks are borne by local people. We also have not seen the full report from the auditor who investigated the objection that was raised by a member of the public about that £30 million investment. The council could choose to make it public, but so far it has not done so.

Before Christmas I raised my concerns about the level of borrowing by the council to invest in commercial ventures. Those concerns have not gone away, with £1.3 billion borrowed, at preferential rates, to purchase commercial property, invest in an energy company and buy a solar farm. The uncertainty caused by covid confirms the need for new measures to restrict and monitor these investment activities. Analysis by the TaxPayers Alliance shows yields well below forecast for a sample of local authorities that have been down this route. There are no guarantees with any of these investments. Today we may well find that there are no shortfalls in income in Warrington, but there are no guarantees as we navigate our way through the rocky times ahead. They will continue to deliver and ultimately it is down to ratepayers, who will end up footing the bill for underperforming portfolios.

Perhaps one of the most frustrating elements of the level of borrowing is that services such as Broomfields leisure centre in Appleton, which is in such an awful state, are not able to reopen, yet at the same time money is being spent on a superstore in Salford and a new set of council offices in Time Square—a project that was originally priced at £107 million, but finally came in at £142 million.