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Local Government Finance Settlement - Statement

Part of the debate – in the House of Lords at 6:15 pm on 19th December 2017.

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Photo of Lord Kennedy of Southwark Lord Kennedy of Southwark Shadow Spokesperson (Housing), Opposition Whip (Lords), Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Home Affairs) 6:15 pm, 19th December 2017

My Lords, I first draw the attention of the House to my interests as a councillor in the London Borough of Lewisham and as a vice-president of the Local Government Association. Secondly, I thank the noble Lord, Lord Bourne of Aberystwyth, for repeating the Statement made by his right honourable friend the Secretary of State for Communities and Local Government in the other place earlier today.

On reading the Statement or listening to the noble Lord delivering it, you could be forgiven for thinking there was not a problem, but of course, the opposite is true: the Institute for Fiscal Studies estimates that between 2010 and 2020 local authorities will have had their direct funding cut by 79%. Anyone involved in local government will be fully aware of the serious pressure on budgets, resources, staff morale and the communities local authorities seek to serve. While local government will welcome some of the piecemeal measures being offered here, what has been announced today is not enough and is extremely disappointing. Missing also is any evidence of a coherent plan, and the lack of vision is troubling. Announcing a few million pounds here and there for specific initiatives while overall depleting local government funds is a recipe for disaster.

Local government delivers a vast range of the core services that people rely on day in, day out, and the Government need a new approach. I pay tribute to the staff employed by local authorities up and down the country for the job they do in difficult circumstances. They deserve a decent pay rise; perhaps the noble Lord can refer to that when he responds.

The noble Lord said that the Government are publishing a formal consultation on a review of relative needs and resources. Can he explain what he means by relative needs, and what is the direction of travel he is embarking upon? I disagree with him that the budget allocations have served councils and communities well in recent years.

The Government have announced that they are moving ahead with another phase of their business rates retention programme. Can the noble Lord tell the House where they are with the fair funding review and whether that is in effect being incorporated into the consultation he referred to in his Statement? I see that there are to be five new business rate retention pilots, and it was no surprise to see that Surrey made it on to the list. I am sure that Councillor Hodge and his colleagues on Surrey County Council will be pleased.

Rural areas have specific problems, so it is pleasing that the rural areas delivery grant will not be reduced next year. I am also pleased that none of the changes that were rumoured to be happening to the new homes bonus have come about; that will be a relief to many.

The noble Lord referred to the 20% increase in planning fees. Certainly, everything helps, but it is disappointing that the department to date has not allowed even one council to trial full cost recovery of planning fees. I do not see the objection to having one council trial this. The fact that council tax payers are subsidising the planning process is a matter of regret; we should seek to eliminate that unfairness and thereby release funds to be spent on local priorities.

One of the most serious issues facing local government is the crisis in adult social care, and the measures in the Statement make no progress towards finding the solution to the problem of providing quality care services for our ageing population. This will be a disappointment to local authorities, as will the failure to deal with the crisis in children’s services: we have seen a reduction in early years interventions and a record number of 72,000 children taken into care. Last year 170,000 children were subject to child protection plans, which is double the number seven years ago. Reductions in the amount of money available for important early years intervention just leads to unbearable pressure and risk, which is both shocking and completely avoidable.

Analysis by the Local Government Association revealed that in 2015-16, 75% of councils exceeded their children’s social care budgets by, in total, £605 million. Can the noble Lord tell the House how he justifies measures which further expand the crises in children’s services and adult social care and do not give local government the stability it needs? Why does he think it acceptable to place a further burden on council tax payers in the next financial year, instead of providing the additional funds that would equate to the rise that can be applied to the council tax for adult social care without having to hold a local referendum?

As Christmas approaches, the homelessness situation is shocking. The Government are not providing the necessary funds to help local authorities deal with it. Imposing legislative requirements without adequate funding will not address the problem. The Government will not face up to the crisis, and the measures here provide little comfort to those in desperate need and those who seek to provide these valuable services.