Funding for Local Councils

– in the House of Commons at 8:12 pm on 22 May 2024.

Alert me about debates like this

Motion made, and Question proposed, That this House do now adjourn.—(Aaron Bell.)

Photo of Helen Morgan Helen Morgan Liberal Democrat Spokesperson (Levelling up, Housing and Communities), Liberal Democrat Spokesperson (Local Government) 8:15, 22 May 2024

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

I thank the Minister for attending this evening and for his response. I appreciate that it has been a bit of an unusual day, so I will not be imploring him to make all sorts of commitments from the Dispatch Box, given the unusual circumstances in which we find ourselves. I would like to raise some important matters. If I am lucky or privileged enough to be returned to this place by the constituents of North Shropshire, I will continue to campaign on these issues on their behalf.

Many hon. Members across the House have raised the issue of the crisis in local government funding in recent months. I wish to highlight some of the specific challenges faced by rural councils, and in particular by my own council of Shropshire, which deals with the area of North Shropshire.

Most people’s experience of government is local, as we know. They drive on the roads every day, so they experience the potholes and the conditions of the roads. They use the waste disposal services, whether that is having their bins collected or taking them to a recycling centre. They might use a swimming pool. They might have a friend, relative or loved one in need of social care, or they might need it themselves. They might have a child in a local authority-maintained school. Therefore, local government is most people’s experience of government, and it is the backbone of our communities.

Since 2016, councils have seen a £5.25 billion real-terms cut in the funding they receive from central Government, and that is driving deep inequality in our communities and impacting on people’s perception of the value they receive from the tax they pay. Shropshire Council had to find £50 million of cuts in the financial year that just ended, and it is saying that it will need to make a further £60 million of cuts in the coming year. That is an enormous cut and it will affect everyone in North Shropshire, but it will affect vulnerable people the most, and that is my area of concern.

Now why is this? It is very tempting to stand here and say that Shropshire is Conservative-run, which is why it is in so much trouble, but although I believe that Liberal Democrats would do a better job, the reality is that the council spends around 85% of its budget on social care. That is more than the average of councils across the country, which spend about two thirds of their budget trying to meet adult and child social care costs. It means that, in Shropshire, for every pound that we give to the council for services, only 15p is spent on other things, whether statutory provisions such as libraries, or other big-ticket items, such as highways, and it really is not enough money.

The problem is that the quality of social care is being affected as well. Earlier last year, I met an elderly couple in Ellesmere, who have loved and cared for their disabled daughter all of her lives. When she became ill and went into hospital, they were unable to continue that level of care when she was discharged because of their own health problems, so they needed a more supportive arrangement. The council found a sheltered flat for their daughter. They paid for new carpets and were excited about her having that new arrangement. But just two weeks before she was due to move in, the flat was withdrawn because it was considered to be too expensive, causing a huge amount of trauma and concern about the money that they had invested in the flat. We were able to reverse that decision in that case, but they are far from the only family in that situation. In fact, half a million people in England are desperate for social care.

The reality is that Shropshire Council cannot outrun the growing demand for social care. It might make the £60 million of cuts this year and avoid a section 114 notice this time around, but will it—or indeed any other administration—be able to do that in future? Given the increasing level of demand, I think that any administration will struggle to achieve that.

Every single person in Shropshire has seen, and will see, an increase in their council tax, and what they are getting in return is reduced services. All the while, adult social care need is not being met, as the Public Accounts Committee recently confirmed. I strongly suspect that is because we are trying to fund social care through council tax, which is a regressive, broken tax that goes nowhere near matching the cost of the service that we are trying to deliver with a sensible revenue stream to fund it. I do not think that we will fix the problem unless we totally revisit how we fund social care, and indeed how we collect council tax.

It is not just people receiving social care who are feeling the brunt of the cuts; it is all the services that we expect to receive. Last month, our council announced the closure of two of the five recycling centres in Shropshire, two of which are in my constituency. If either of those close, some of my constituents will have a 45-minute drive to a recycling centre. I am sure that they will make that drive. We are all dependent on our cars—we do not have great bus services—and I am sure that law-abiding citizens will do their best to get their refuse to a tip that is further away, but North Shropshire is a beautiful rural constituency with miles and miles of remote isolated roads, and it is at high risk from fly-tippers. People are genuinely concerned that the beautiful countryside will be ruined by that criminal activity, and it will cost the council even more to clean it up. We seem to be taking with one hand and spending huge amounts of money with the other, which might not have the desired outcome.

There is a similar story on special educational needs and disability. Local authorities obviously have to pay for transport for SEND pupils, and the rationing of that transport is becoming a huge problem for some of my constituents. I was contacted by Shane and Brad, the foster parents of Toby, an 18-year-old with special educational needs. He moved from Norfolk to Shropshire five months ago on a special guardianship arrangement, with the understanding that his education, health and care plan would be transferred and the provision would continue. Not only can they not afford to transport him around to wherever specialist place might be available; but because he is over 16, they have not been able to find a specialist place, so poor old Toby has not been to school since he moved to Shropshire five months ago.

The council do not have the resources to solve this problem. There are not enough specialist teachers or educational psychologists, or enough specialist places in state schools. As a result, young people face a postcode lottery when it comes to funding to support their EHCP. In rural areas, transport for children with special needs is particularly problematic because they have to be transported over larger distances at greater cost. Again, the council is not depriving those people through malice or a lack of care; it simply does not have the funding to meet the demand.

Perhaps less seriously—although this still has a huge impact—there is a problem with leisure facilities. Whitchurch in my constituency has recently lost not only the town’s only performance space but its registry office, driving test centre and library, as well as rooms that community groups can hire out for regular use, because the civic centre has reinforced autoclaved aerated concrete in its roof. We would think that the council would be able to fix the problem, and find some money to repair the roof, but that is not the case. The council cannot afford the interest payments and has said that the cost is prohibitive. It is now trying to find alternatives, which will ultimately lead to a lesser space. That is a problem for residents who enjoy the use of those facilities, but it also has a huge economic impact on the town centre, with businesses already reporting to me that they have reduced footfall. That is of great concern.

There is a real problem with libraries. A third of libraries have closed in the past 10 years, despite libraries being a statutory service. Because the comprehensive and efficient library service that is required is not defined, lots of councils are cutting libraries and their availability. Again, that is driving deep inequality. The National Literacy Trust has found that children who read at their expected age level are twice as likely to be library users as not to be. If we want to level up, it is really important that we give children from all backgrounds the opportunity to read, access a library, and make the most of their education.

I will move on to public transport, which I have talked about a lot in this place. Shropshire has a particularly poor public transport network and has lost the most miles of bus services anywhere in England since 2015, with 63% fewer miles being completed by bus than in 2015. That is a drastic decrease, especially compared with places such as Milton Keynes, where bus miles have increased. There is definitely a way of doing it if we have the funding right.

Poor public transport is a problem for the economy because we cannot transport workers around, which gives us a labour supply issue. It is a problem for young people trying to access college courses because they do not know whether their bus service will be there next year, and it is a problem for older people who may be trying to access the hospital because to get there by taxi is unaffordable.

Again, given that we are about to embark on a general election, this is possibly not the right moment to implore the Minister to allow the franchising of bus services, but I put on record that if councils could fund those services, it would have a huge economic regenerative impact. It would be great to see buses be a priority for all the parties in the general election, because they have such a good impact on increasing labour supply and on enabling people of all ages and all income levels to live, work and get about the community.

In conclusion, I want to make the point that rural areas are struggling perhaps more than urban areas, despite the fact that we sometimes assess urban deprivation as worse than rural deprivation. It is certainly more visible, but the central Government funding for local councils has lost touch with reality on the cost of delivering those services, and indeed to some extent on the level of need. When we look at the impact on people, whether it is social care or special educational needs provision, swimming pools or libraries or recycling centres, all those things are suffering and they all cost more to deliver in a rural area.

I want to state this case again to all political parties, because we do not know who will be sitting in the Minister’s seat after the general election: sorting out the fair funding formula is very important. Delivering in rural areas is essential to regenerating the economy in those areas. One fifth of the population live in rural areas. They are underperforming economically and we need to ensure that local councils have the funding they need to provide regeneration and quality of life for those well-deserving people who live in those beautiful parts of Britain.

Photo of Simon Hoare Simon Hoare Chair, Northern Ireland Affairs Committee, Parliamentary Under Secretary of State (Department for Levelling Up, Housing and Communities) 8:27, 22 May 2024

I thank Helen Morgan for instigating this debate. I am only sad not to see Jim Shannon in his place—this may be the final Adjournment debate of the Session, and I feel personally hurt that he has not been here to intervene and to give Strangford’s take on Shropshire. However, I am sure he is somewhere thinking of us and kicking himself that he is not here.

The hon. Member for North Shropshire was right to say that all politics is local. She is also right to echo something that I have said on many occasions: most people’s exposure in our communities is to the facilities and services provided by local councils for their communities. We agree absolutely on that. I want to place on the record my thanks to all the councillors and officers of Shropshire Council, and indeed to local government across the country, for all that they do and strive to do. They get out of bed in the morning to achieve for their communities, to deliver change, to make place and to improve opportunities and living.

The hon. Lady referred specifically to libraries. Libraries is a topic very close to my heart, both as a keen reader and, as a child, an avid attender of our local library. Dorset Council has done the most phenomenal work with its libraries in similarly challenging circumstances, being a rural council and the like. I am pretty certain that should her officers in Shropshire reach out to those in Dorset, they would be happy to provide some advice or guidance—call it what you will—on safeguarding the future delivery of those important services.

The hon. Lady is right that I have acknowledged—the Government have acknowledged—the challenging financial circumstances of local government, brought about in whole, or certainly in very great part, by pressures on adult social care, special educational needs and disabilities, and home-to-school transport. Around about 80% of an upper-tier council’s budget is spent on 10% to 15% of its population. We just have to watch that balance to ensure that council tax payers feel that they are getting something for their money. As she will know, I have not committed on behalf of the Government to a root-and-branch review of the local government funding formula, because my assessment is that it is all but broken—an analogue proposal for a digital age that needs reworking from the bottom up. I have always asked for certainty and clarity from the local government sector, and as a Government, we have always been keen to deliver them. In the next Parliament, they could best be delivered by having, in the short term, a multi-year settlement to give that security, and then by Parliament using that time—and I cannot overstate the value that I see in this—to provide a cross-party sustainable solution for delivering on these issues.

I do not say this flippantly, because I have thought about it, but the hon. Lady has spoken in this Chamber and in Westminster Hall about local government finance and local government issues more generally, and I have answered on many occasions her questions and those of Labour Members, and it suddenly struck me early this morning—I do not know why it struck me then—that although they may identify a problem, I have yet to hear their solution. I have yet to hear the genesis of an idea from the Opposition parties. The Labour party has had 14 years to think about it, and the hon. Lady’s party has had the past nine years, but there is absolutely no idea. She told us—I jotted down her words contemporaneously —that we need to give consideration to

“how we fund social care, and indeed how we collect council tax.”

I agree with her, but she gave no suggested solution to those pressing problems. I find that very strange given that Opposition parties really have nothing else to do than beaver away on policy to put before the electorate in just a few weeks’ time.

Although the hon. Lady was right to point out that she has no idea, and no more do I, of what the result of the election will be, it is very much my hope that I may be standing at the Government Dispatch Box setting out the plans to which we have committed on the fundamental review and rewriting of local government finance. I shall leave that to the electorate of North Dorset to decide, and I hope that they put their faith and trust in me, as they have done on the past several occasions.

Let me turn briefly to some of the figures. I have said them so many times now that I get slightly bored of them, but I think it worthwhile to read them into the record. The local government finance settlement for 2024-25 makes available up to £64.7 billion—an increase in core spending power of up to £4.5 billion, or 7.5% in cash terms, compared with 2023-24. We listened to the views of local government, and many colleagues from across the House, including the hon. Lady, who knows how grateful I was that she took part in the parliamentary level of the consultation that I undertook, which was the highest level of take-up that a Minister has delivered. As a result of listening to what we heard, the Government announced additional measures for local authorities in England worth a further £600 million, including £500 million of new funding for councils with responsibility for adult and children’s social care.

What does that represent as far as the hon. Lady’s council is concerned? The settlement represents an increase in core spending power of up to £25.1 million, or 8%, making available a whopping total of £340.2 million in 2024-25. That is not small beer for Shropshire Council. I also recognise, as the hon. Lady does, the additional cost pressures and challenges of delivering quality services in a rural environment with a sparse population and longer travel times, which is why we have set such enormous store by the rural services delivery grant. As she knows, because Shropshire ranks within the top 25 sparsely populated areas in England, her council received an additional £9 million through the RSDG for 2024-25 on top of the other moneys I have spoken of, in order to assist with the importance and the difficulties of serving dispersed populations.

Is it enough—is it ever enough? Who knows? We always need more. It is important that every year, councils take the opportunity to learn from others, peer review, and engage the Local Government Association to help them modernise and seek savings through shared services and other initiatives. I know that many councils do that, but not all do. As we know, Shropshire went unitary and gleaned a huge amount of financial benefit from so doing, as did my council area of Dorset. There are things that local authorities can be doing to reduce expenditure and to use the money from the savings they make to continue to deliver those services that, increasingly, people look to their local council to deliver.

In conclusion, I am grateful to the hon. Member for North Shropshire for raising this issue. She and I share many things, including a concern for making sure that our rural areas are well represented in this place. I will continue to do that on behalf of my constituents; I hope the hon. Lady will not take it ill if I say that I hope my party will represent North Shropshire after the general election, but it has been a personal pleasure to work alongside her over these past several months since I have been dealing with local government. She has brought a lot of engagement to the process. I am just sorry that her party has not brought forward any ideas, but let us share those ideas cross-party in the next Parliament to ensure we have a robust settlement rubric that will meet demands: one that will be cost-effective and affordable, but will continue to deliver the quality of public services that so many in our communities rely upon and rightly deserve.

Question put and agreed to.

House adjourned.