Local Government Funding: Merseyside

– in Westminster Hall at 4:30 pm on 30th October 2018.

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Photo of Maria Eagle Maria Eagle Labour, Garston and Halewood 4:30 pm, 30th October 2018

I beg to move,

That this House
has considered local government funding in Merseyside.

It is a pleasure to serve under your chairmanship, Mr Hollobone. I am happy to welcome several of my Merseyside colleagues to the debate.

The Prime Minister says austerity is over. The Chancellor says austerity is coming to an end. Aside from the clear difference between those two statements, neither are the experience of local government leaders and councillors on Merseyside, nor is it set to be their experience over the next few years. My constituency covers two local authority areas, Liverpool City Council and Knowsley Metropolitan Borough Council. I see that my right hon. Friend Mr Howarth intends to speak in the debate, so I will focus my remarks on the situation facing Liverpool City Council and he will deal with that facing Knowsley Metropolitan Borough Council. I confine my remarks in that regard to simply saying that the challenge facing Knowsley is equally difficult to Liverpool’s, although it is a smaller authority.

Liverpool City Council has already had to cut £340 million from its budget—some 58% of its total resource—since 2010. This year, it must find a further £41 million of cuts to make up the balance of the £90 million reduction it has been seeking over the city’s three-year budgeting period, which comes to an end next March. By 2020, it will have cut £420 million in total, which was 64% of its budget before austerity was unnecessarily and zealously imposed to such a high degree by the Lib Dem-Tory coalition Government in 2010. Those figures show that there is a lot more cutting to come over the next two years, regardless of what the Chancellor said to us yesterday. Austerity is set to continue for Liverpool City Council, no matter the measures in yesterday’s Budget.

According to the National Audit Office, local authorities in England have seen a 49% reduction in Government funding since 2010, so the cuts imposed on Liverpool have been far higher than average, despite its people having higher levels of deprivation and poverty than the average. Indeed, Liverpool City Council is ranked as the fourth most deprived local authority in the latest indices of multiple deprivation statistics. In fact, 10 of the city’s 30 wards contain a local area within the 1% most deprived nationally, with one—Speke-Garston—in my constituency. Liverpool is ranked as the third most deprived for health and disability and the fifth most for income and employment.

In any fair system, central Government would mandate below-average cuts on Liverpool; that would happen in any system that took any note of the needs of the people of different areas. However, the way in which the coalition and Tory Governments since 2010 have imposed austerity most emphatically does not take account of the relative needs of the people of different areas who have to deliver the cuts demanded of them. Liverpool has been doubly disadvantaged by facing a larger cut in addition to having more and greater needs to meet.

Take social care as an example. In 2010, Liverpool City Council spent £222 million supporting adults who need help in the community, either because of age, infirmity or disability. That has been reduced to £152 million, despite our ageing population and our population having higher levels of ill health than in many other areas—as set out in the indices of multiple deprivation—meaning more people need the help provided by adult social care services.

Photo of Conor McGinn Conor McGinn Labour, St Helens North

I thank my hon. Friend for securing the debate and for the leadership she gives to Merseyside MPs on these issues. To put it in context, central Government cuts to St Helens Council’s budget are the equivalent of two whole years of its social care budgets. Similar to Liverpool, we have an ageing population and an expected increase in people suffering from conditions such as dementia. Does she agree that that is completely unsustainable, and that austerity certainly has not ended, for my constituents or hers?

Photo of Maria Eagle Maria Eagle Labour, Garston and Halewood

I agree with my hon. Friend. It is impossible to see how anybody looking at these facts could assert that austerity is either over or is even coming to an end. We obviously do not know what the Government think between those two poles, but it is one or the other, depending on where they are. From where we are, it does not seem that either assertion comes near to explaining the truth.

In Liverpool, £70 million less is being spent on adult social care alone due to the cuts caused by austerity—this political choice that Governments since 2010 have made. Thresholds for eligibility for that help have therefore clearly had to increase, so fewer people get it despite more people needing it. That lack of support, which should be there and would have been in the past, creates extra burdens on individuals and their families. That is the direct consequence of these cuts in Government funding.

Photo of Jim Cunningham Jim Cunningham Labour, Coventry South

This is a timely debate. Coventry has experienced exactly the same sort of local government cuts as Liverpool, and through the loss of grants—that is what caused all this—well over 50% of its budget is really not there anymore. One big problem in Coventry—I am sure my hon. Friend will touch on it—is the funding of children taken into care. She just touched on social care. Lots of families now have to find money for social care that they can ill afford, driving them into the hands of money lenders.

Photo of Maria Eagle Maria Eagle Labour, Garston and Halewood

My hon. Friend will know the figures for Coventry very well. He set some out, and they sound similar to some of the figures we have seen on Merseyside. Any application for Coventry to join Merseyside will of course be considered by the appropriate authorities, if my hon. Friend wants to take that back to Coventry.

Nationally, £7 billion has been cut from social care budgets, so the £650 million announced by the Chancellor yesterday—to much fanfare—will make little impact on the size of the problem created by the Governments he has been a member of since 2010. I saw today that that figure will cover not only adult social care but children’s, and it also apparently includes money for NHS winter pressures next year, so perhaps that figure is not quite all it was cracked up to be in the Budget statement. However, even if it were, it would not be enough to deal with many of the problems created by the cuts to Liverpool’s social care that have had to be made in the last eight years and are still ongoing.

What about reserves? Tory Ministers frequently answer questions about the scale of the cuts faced by suggesting that authorities should spend their reserves; we often hear that cry. Liverpool has spent £146 million of its reserves to support social care spending, even at the reduced levels it now provides. Its reserves are down to £17 million, so I hope that the Minister was not planning to tell me that Liverpool City Council should spend its reserves. It is clear that that is not a long-term solution. In fact, it is not a solution that will work for much longer at all. Indeed, the NAO says that one in 10 authorities nationally will have nothing left in three years’ time if they continue to use their reserves to pay for social care, as Liverpool has done. Even if those remaining reserves were spent only on social care and nothing else, local authority reserves would be completely used up by 2022.

What about new money? The Mayor of the city of Liverpool, Joe Anderson, has adopted—quite entrepreneurially, I think—an invest to earn strategy, for which he has been criticised but which has yielded so far an extra £13 million a year in new revenue. His original idea was to use that money to support growth in the local economy. However, because of the extent of the cuts in Government funding and the damage they have done— the dire impact that they have had on some of the poorest and most vulnerable members of society in Liverpool—he has had to use the money to support services that would otherwise have been cut even further. For example, all our Sure Start centres have been kept open, even though some of the services they provide have gone. However, the tide of extra need being caused by ongoing cuts in Government support and social security benefits is likely to overwhelm the extra funding that the Mayor has brought in via invest to earn, and to do so soon. In that regard, the roll-out of universal credit will mean 55,000 people in the city being transferred on to it.

Photo of Angela Eagle Angela Eagle Labour, Wallasey

Does my hon. Friend recognise the experience in Wirral with the roll-out of universal credit? That has led to a need for 30 extra tonnes of food and created a 32% increase in the use of food banks because of the hardship that it has caused.

Photo of Maria Eagle Maria Eagle Labour, Garston and Halewood

My hon. Friend, perhaps unsurprisingly, has anticipated my next point—we tend to be on the same wavelength. The Trussell Trust says that in areas where universal credit has been rolled out, it sees a disproportionate increase—my hon. Friend reports a big increase in Wirral—in food bank referrals, as opposed to a lower increase in other areas. The Chancellor is putting some money back in for universal credit, to ameliorate the cuts made by George Osborne in Department for Work and Pensions budgets, but that will not prevent millions of poor and vulnerable people from losing money. They will just lose a little less—and that is without the administrative chaos and design features of this benefit that cause poverty and destitution in Liverpool. Only the Liverpool citizens support scheme, the mayoral hardship fund and the discretionary housing payments, on which the Mayor spends more than central Government provide in moneys, stand between many families and destitution.

The Mayor of Liverpool, Joe Anderson, has repeatedly invited Ministers to Liverpool to inspect the books and tell him just what else he is supposed to try in order to deal with the funding crisis that austerity has created, but not one has taken up the challenge. Indeed, he even sent train tickets to Eric Pickles, when he was Secretary of State, to facilitate a visit, but he did not use them. Perhaps this Minister can take up the offer to inspect the books and see what else he can suggest that Liverpool City Council do; we would be most happy to welcome him. If not, perhaps he could indicate that the Mayor of Liverpool’s suggestion of a royal commission on the funding formula will be seriously considered. After all, with things going as they are, soon there will be no consideration of levels of deprivation or need in any of the ways in which funding is allocated to local authorities, nor will any account be taken of the ability of the people of a local area to pay for all that is needed themselves; there will be no elements of redistribution. That is a recipe for entrenching disadvantage and ending social solidarity.

According to the Local Government Association, 168 councils will soon receive no revenue support grant at all and will rely only on business rates and council tax for their income. That disadvantages Liverpool again, because the council tax mix and base is so low. For example, Liverpool has more people than Bristol, but raises £38 million less in council tax, because almost 60% of Liverpool properties are in band A, compared with an average of 24% across the country, and 90% are in bands A to C, compared with 66% nationally. In addition, almost 36% of council tax payers are eligible for a discount because of their circumstances, whereas the national average is 16%. However, Government funding takes no account of these issues. It makes a big difference. If Liverpool was at the national average for these things, that would have meant an additional £97.7 million in council tax available to be collected every year. As it is, Liverpool can raise only £167 million in council tax. Similarly, less is raised in business rates in Liverpool than in many other places, because of the density and mix of local businesses.

Forcing the people of the city to rely, for meeting higher levels of local need, on weaker business rate and council tax yields is not a fair way to fund local services. I therefore finish by asking the Minister to have the courage that his predecessors lacked and visit Liverpool to inspect our books and make some suggestions as to what else, if anything, can be done. I also ask him to address the question of establishing a royal commission on local Government funding to ensure that the Government of which he is a member do not entrench existing deprivation and remove elements of redistribution that have in the past ensured social solidarity and improved life chances and equality between different areas of the country. We need that now more than ever.

Several hon. Members:

rose—

Photo of Philip Hollobone Philip Hollobone Conservative, Kettering

Order. The debate can last until 5.30 pm. I am obliged to call the Opposition Front-Bench spokesman no later than 5.13, and the guideline limit is five minutes for the Opposition, 10 minutes for the Minister and then time for the mover of the motion to sum up the debate at the end. That means that the Back-Bench contributions can run till 5.13. Five Members are seeking to catch my eye. Three of them have written to Mr Speaker, but I am a generous soul, so I want to get everybody in. If contributions are longer than five minutes, it means that those at the end will get less. The first Member who has applied to Mr Speaker is Dame Louise Ellman.

Photo of Louise Ellman Louise Ellman Labour/Co-operative, Liverpool, Riverside 4:46 pm, 30th October 2018

It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate my hon. Friend Maria Eagle on securing this important debate and on the excellent way in which she opened it.

Local government is vital. It is responsible for essential services such as education, social care and road safety. It is a lifeline for people in need. It drives regeneration and civic pride. In Liverpool, the City Council, with Mayor Joe Anderson, has protected people from the brunt of ongoing and severe Government cuts. It has displayed innovation and civic leadership. By 2020, more than 64% of central Government funding will have been removed from Liverpool. That is a real-terms loss of £444 million. For the fourth poorest local authority in the country, that is a great injustice.

The Chancellor’s statement that austerity is ending rings hollow in Liverpool. Government cuts continue as the council struggles to care for people who need social care and children who just want a chance in life. Nurseries remain underfunded and schools still struggle. The impact of the Government’s cumulative cuts in benefits, often affecting working people, takes its toll. Universal credit threatens to make people poorer. We do not know what the Chancellor’s reassurances in the Budget will mean to people on the ground—not very much, I suspect. Rhetoric needs to be matched with positive action.

Despite increasingly vociferous warnings, fire and police services are denied the essential cash that they need to protect the community. Cuts in fire services are causing increasing public concern; and in Liverpool and Merseyside as a whole gun crime is now increasing. Over the city hangs the threat of Brexit—threats to the economy, to EU-funded initiatives and to the European collaborative research that is so important to our universities and to the city of Liverpool.

I call on the Government to change course and match their words with positive change. They must revisit their plans to put an even tighter squeeze on local services by changing local government funding after 2020 to eliminate central Government support for Liverpool. That is grossly unjust in a city where there is a low council tax base and a 1% rise in council tax raises only £1.4 million; a 1% increase in a place such as Surrey raises £6 million.

Liverpool has a responsible and innovative council protecting Liverpool people from a Government intent on cutting back. I call on Ministers to match their rhetoric with deeds, stop the cuts and give Liverpool a fair deal.

Photo of Angela Eagle Angela Eagle Labour, Wallasey 4:49 pm, 30th October 2018

Thank you for calling me to speak, Mr Hollobone. I would like to add to the congratulations to my sister, my hon. Friend Maria Eagle, on securing this debate at such an important time. As she has pointed out, local authorities in general have seen a cut of nearly 50% to their budgets, but local authorities in Merseyside have suffered even greater cuts.

My local authority, Wirral, has suffered a 53% cut in real terms since 2010, which is above average. That means that it has lost well over half its 2010 budget, which is £635 less in resource every household in the Wirral. Wirral’s local authority is expected to continue to cut £130 million more between now and 2021, despite the Chancellor and his jocular toilet jokes in the Budget yesterday.

How do these cuts affect my constituents? Behind all the cuts and the many service reductions we have been forced to experience in the past few years are people who are often very vulnerable, not being looked after or being left to fend for themselves when circumstances make it impossible for them to survive independently. The social safety net has been deliberately destroyed by this Government in pursuit of their ideological obsessions with a smaller state. Not only do they pursue those obsessions and hit the poorest hardest, but when we have debates such as this they smirk and laugh, and do not believe the tales that we bring to the House about the real results their cuts have had. The Minister looks to me to be doing the same again today.

We have seen an increase in food bank use, homelessness and destitution, as well as anxiety and insecurity, which has led to increases in mental health breakdowns. A lot of these cuts are actually false economies. In Wirral, the adult social care budget has been cut by over a quarter since 2010, but because of our low council tax base the capacity to raise tax locally is severely constrained. A council tax increase of nearly 6% this year raised only £8 million, half of which is ring-fenced for social care, but because Wirral has an above average number of older people, that increase does not even cover the extra demand being generated by our ageing local population. It is not acceptable for the national Government to wash their hands of the different levels of demand for social care in different areas and leave council tax payers to pick up the bill when council tax bases vary so dramatically—my hon. Friend the Member for Garston and Halewood said of Liverpool’s case—between different areas, because of different property prices.

In my constituency, over 11,000 people are providing unpaid care to their loved ones, many for 50 hours a week with little and diminishing help. We have seen real-terms cuts in spending on youth services. When Labour was in government, spending on youth services doubled, but since 2010 it has gone down by 7% nationally. Spending on young people’s services, such as counselling and youth centres, has fallen by over half. Some 1,000 Sure Start centres have closed and many preventive, proactive services have been wiped out. In Wirral, that has led to a huge increase in the number of children taken into care, which is up from 650 two years ago to 810 this year.

These cuts are a false economy, because as less is spent on preventive work, more has to be spent on much more profound and costly interventions later. How is it moral to wait until a young life is ruined, rather than spend less to prevent it from happening in the first place?

In Wallasey, 20 out of 26 schools face budget cuts. With nearly £3 million cut between 2015 and 2020, per-pupil funding has fallen by 8%. Since 2010, 50% of the Merseyside fire authority’s grant been taken away. Instead of having 42 fire engines, we now have 22, with only 14 available for immediate response. The number of firefighters has reduced by nearly 40% from 927 to a mere 580. After years of decline, fire deaths have increased by 10%. The Merseyside police budget cuts have led to the loss of over 1,000 officers and crime is rising. As the recent Home Affairs Committee report demonstrated, the police are becoming less and less able to cope. As crime rises, we see the number of arrests and charges falling.

Once more, the emergency services are so stretched that they can barely cope with emergencies, and they certainly cannot do preventive work, so lives are put at risk as public sector workers face relentless pressure, being expected to do more for less. This is not my definition of fairness and it is not my definition of the end of austerity. It is an ongoing, rolling scandal, which is placed at the door of this Government.

Photo of Stephen Twigg Stephen Twigg Chair, International Development Committee 4:55 pm, 30th October 2018

It is a pleasure to serve under your chairmanship, Mr Hollobone, and I congratulate my hon. Friend Maria Eagle on securing this debate and leading it so powerfully. Along with my hon. Friend Dame Louise Ellman, she set out fully the impact of austerity on Liverpool City Council.

Last week in this Chamber, we had a debate led by my hon. Friend Luciana Berger in which we shared the horrific stories from our constituents about the increased use of food banks, and the impacts of austerity and the changes to social security benefits. I strongly echo what my hon. Friend the Member for Garston and Halewood said about the efforts of Liverpool City Council, under the leadership of Mayor Joe Anderson, despite the scale of cuts in the support from central Government, still to deliver for the people, and in particular to deliver for some of the most vulnerable communities in our city. I second the idea of a royal commission to really address the issue of the fairness of local government funding. I also pay tribute to those who work in our public services who, despite austerity, do their utmost to deliver the very best services at local level.

I want to focus first on education, and secondly on crime and policing. As my hon. Friend the Member for Garston and Halewood rightly said, Liverpool City Council has done its utmost to protect its children’s centres, because we know how powerful the evidence is that investing in the early years of children’s lives makes the biggest difference. If we are serious about seeking a more equal and just society, investment in those early years is crucial. I ask the Minister to speak to his colleagues in the Department for Education about the importance of those early years.

Last week, I raised the issue of the important role that nursery schools play in our communities—I make no apology for raising it again. I have two brilliant nursery schools in my consistency, Ellergreen and East Prescot Road, both of which are rated outstanding by Ofsted. They are very concerned about their long-term funding, because of some of the considerations that the Department for Education is undertaking. We are all concerned that the adoption of a national funding formula poses a threat to our schools’ funding. Schools in my constituency and around the country will not be comforted by getting some money for the “little extras” as the Chancellor set out in his speech yesterday—that is frankly insulting. We need a serious, long-term settlement for schools funding.

I will finish by saying something about crime and policing, because that is an issue of massive concern to my constituents. I ask the Minister to share the issues that have been raised during the debate with his colleagues in the Home Office. Again, this speaks to the question of injustice in funding, which all three of my colleagues have spoken about. Funding cuts have hit all parts of the country, but they have hit some parts much harder than others, and it tends to be the areas with the greatest social and economic need, such as Merseyside, that have been hit the hardest. Merseyside police relies on central Government to provide 75% of its funding. In contrast, Surrey can raise most of its funding for its police locally. Therefore, an equivalent cut to both forces does not hit the two areas the same—it hits Merseyside much harder than it hits Surrey.

As my hon. Friend Ms Eagle has just pointed out, since 2010 in Merseyside we have lost 1,700 staff and police officers—1,700 gone—and had a cut in the number of police community support officers of around 35%. Last year, the chief constable of Merseyside, Andy Cooke, warned that Merseyside police was reaching breaking point, as budgets are stretched to the limit.

Crime is going up, but officer numbers are at their lowest in years. Office for National Statistics figures show a 14% rise in crime in Merseyside in the year to September 2018. Of particular concern in my constituency are the 18% rise in robbery and the 16% rise in violent crime. I say to the Minister, who speaks for communities and who can lobby his Home Office colleagues, that that has to change. Surely dealing with crime and protecting the public are the most basic responsibilities of any Government.

I ask the Minister please to listen to our chief constable and our police and crime commissioner, Jane Kennedy. We need a fair deal for policing in Merseyside, alongside a fair deal for local authorities, about which my hon. Friends have spoken so eloquently.

Photo of George Howarth George Howarth Labour, Knowsley 5:00 pm, 30th October 2018

It is a pleasure to serve under your chairmanship, Mr Hollobone. I, too, congratulate my hon. Friend Maria Eagle on the typically thorough way in which she introduced this important subject. I will confine my remarks to the effects of the cuts in grant to Knowsley specifically, but before I do, I echo what my hon. Friend Stephen Twigg and other hon. Friends have said about the impact of cuts on policing and on fire and rescue services.

As my hon. Friend the Member for Garston and Halewood indicated, Knowsley Council is the council in the country hardest hit by funding cuts, which amount to £100 million less to spend on vital local services. To bring that down to a human scale, that equates to a cut of £485 in grant support for every person in the borough, compared with a national figure of £188. To bring that down to an even more human scale, Windsor and Maidenhead Council has had a £49 cut in grant per head and Wokingham Borough Council has had a £43 cut in grant per head. I began to wonder whether something in the grant formula was weighted towards local authorities that begin with the letter w, but if that had been the case, it would have applied to the Wirral too. As my hon. Friend Ms Eagle eloquently described, however, it does not.

Knowsley Council has told me that its biggest challenges are funding children’s social care, which my hon. Friends have mentioned; the need for a permanent funding solution for adult care; and the impact of moving the cost of funding services provision on to council tax payers. Funding social care is not just a problem for Knowsley. In the north-west as a whole, the number of looked-after children has increased by 12% since 2003. In Knowsley, the additional pressures on the budget for children’s social care are expected to exceed £3 million as a result of a combination of increased costs for all placements, even higher increased costs for specialised placements and the scarcity of suitable residential placements.

The Government’s response, however, has been wholly inadequate and falls well short of providing the funding and certainty needed to keep up with growing demands. The Minister will say that there was an announcement in the Budget yesterday. We have not seen how that will be distributed, and we do not know what it will mean for any given local authority, but if the total sum mentioned is distributed evenly, it will hardly make a dent in the difficulties that areas such as Knowsley are experiencing.

Some additional funding for adult social care has been announced in the past few years, but it does not reflect the resources needed to offer adequate and sustainable services and, moreover, it was a one-off. In March 2017, £9 million of additional resources were announced from the better care fund to help to fund increasing demand and rising costs. So far, however, the Government have not confirmed whether that support will continue beyond 2019-20. Can the Minister commit to continuing that funding? If he cannot, the council’s budget will inevitably mean that services will suffer still further. Moving the cost of service provision on to local council tax payers is, frankly, nothing short of disgraceful. The move away from a grant distribution formula that provided a weighted recognition of the needs of an area is entirely regressive in how poorer, more deprived areas such as Knowsley end up as the biggest losers. How can that be fair?

The Government argue that need should be replaced by a funding system that rewards councils based on the level of economic growth and prosperity. Knowsley has some important and successful local companies such as QVC in my constituency and Jaguar Land Rover in the constituency of my hon. Friend the Member for Garston and Halewood, but their success and that of other companies locally, though important and welcome, can have only a limited impact on the revenue generated for Knowsley Council and falls short of the area’s needs.

We have already seen the effect on services. Anything that is not a statutory requirement has inevitably had to bear the brunt of the cuts. As we have seen elsewhere, we are at the point at which local councils cannot meet even those statutory requirements. As need is increasingly sidelined, that trend will sadly continue. The grim conclusion has to be that unless the Government acknowledge the need for a fair funding system that properly reflects local need and deprivation, areas such as Knowsley face a bleak future in which the consequences of the Government’s austerity programme are visited on the communities least able to bear them.

Photo of Luciana Berger Luciana Berger Labour/Co-operative, Liverpool, Wavertree 5:06 pm, 30th October 2018

I thank my hon. Friend Maria Eagle for securing the debate and for the manner in which she opened it. I am honoured to be among my hon. Friends representing constituencies on Merseyside, especially in the face of a Tory Government who have chosen to impose unfair and disproportionate cuts on our constituents. I use the word “chosen” carefully because, as we know, austerity is a choice, which makes the damage done to our constituents’ lives so much worse. It is not just what is in the pot but how the Government have chosen to cut it up that has hit the most deprived the hardest, because the Government have removed the weighting for deprivation from many of their funding formulas. As we saw in the Budget yesterday, those cuts are not going away anytime soon, despite the Prime Minister’s promise that “austerity is over” earlier this month.

Tory cuts have hit Merseyside so hard that there has been a £440 million reduction in Liverpool City Council’s Government support since 2010-11, which is a cut of 64% to the council’s overall budget. We are at the point at which our most basic services are in crisis, and many hon. Friends have articulated examples of where that is the case.

The total revenue budget of Merseyside fire and rescue service has been reduced from £73 million to £59.9 million. These cuts might be just figures on a spreadsheet to some, but they have real-life consequences. Our fire and rescue authority has been forced to reduce the number of firefighters it employs from 923 to 620, and to reduce the number of fire engines from 42 to just 24. In turn, the response time for life-risk incidents is on average 35 seconds slower than in 2010-11. What if there were a major incident in Merseyside?

Similarly, Merseyside police has faced startling cuts from central Government, as my hon. Friends have said. Many hon. Friends have articulated the connection between local authority funding and our police, and how we have been disproportionately hit. Our police workforce has been cut by nearly a quarter, so we have 1,600 fewer police staff than in 2010-11. I ask the Minister to reflect on that and I hope he is listening carefully.

Ultimately, the combination of all the cuts to our local authority, our fire service and our police force have led to a reduction in the level of service for many different community services throughout the course of life—from our children’s centres to our youth services, to our leisure and recreation service, to what happens on our roads, to our community services and to services for the elderly and social care.

We have an incredibly stretched council, fire service and police workforce who do so much in such challenging circumstances, and what we are seeing is an impact on real life for too many of our constituents. We are seeing an increase in people in crisis. We are here today because we think it is socially and morally illiterate to see so many people in crisis. It is also financially illiterate. We are sitting here in front of a Minister from the Ministry of Housing, Communities and Local Government, but this situation has wider, far-reaching consequences for all Government Departments. We have heard about the impact on our national health service and that we are going to see £20 billion extra spent on our NHS, but again this disproportionate focus on crisis is so much more expensive. It does not make any economic sense.

Other colleagues have clearly articulated the impact of cuts, including the increase in crime. I will just reflect on the fact that we are now seeing the most brutal run of gun violence in Liverpool in recent years. In just a 10-day period at the beginning of this month, there were two fatal shootings, one of which was in my constituency, and four non-fatal shootings. This increase in serious crime has far-reaching and serious consequences for our constituents.

However, it is not until we compare the cuts that we have sustained on Merseyside with those elsewhere that we truly see the disproportionate level of austerity with which our constituents have been burdened. Whereas each household in Merseyside has experienced a cut of £712.57, the average reduction per household across England is just £320.99. That is still an unwarranted reduction, but of course it is nowhere near the level of cuts that the people of Merseyside have to cope with in one of the most deprived areas of the country. It is nothing short of a tragedy that the Government’s own figures have shown that if Liverpool City Council had been subject to that same average reduction, it would have been £71.6 million better off in 2019-20 than it is expected to be. What is worse and most galling is that some authorities have seen an increase in their spending power—colleagues have mentioned Surrey.

Neglect by a Tory Government is nothing new to the people of Merseyside, whose independence and resilience makes our region proudly what it is, and our city, under the leadership of Joe Anderson, is doing so much in spite of this Government. In conclusion, can the Minister tell us when our constituents will be given an equal chance and some relief from this disproportionate burden?

Photo of Jim McMahon Jim McMahon Shadow Minister (Housing, Communities and Local Government) (Devolution) 5:12 pm, 30th October 2018

It is a pleasure to serve under your chairmanship, Mr Hollobone.

I would say that it is also a pleasure to respond to the debate, but it is not a pleasure at all; it is heartbreaking, when we consider the human stories that sit behind the numbers that we have heard today. However, I pay tribute to my hon. Friends the Members for Garston and Halewood (Maria Eagle), for Liverpool, Riverside (Dame Louise Ellman), for Wallasey (Ms Eagle), and for Liverpool, West Derby (Stephen Twigg), my right hon. Friend Mr Howarth, and my hon. Friend Luciana Berger, for how they have stood up to represent their communities in the face of absolutely devastating cuts to vital public services.

I should declare an interest as a vice-president of the Local Government Association and I will use some of the LGA’s information in my speech. The truth is that austerity is not over, but it was never going to be over, because as things stand the Government do not believe in strong local public services. We have heard talk today about how the Government do not like a big state. The truth is that the Government actually do not mind a big state, provided that it is a big national state, because the workforce data today says that the national Government workforce is the biggest since comparable records began, compared with local government, which is now at its smallest since comparable records began. The disproportionate cut has not only been to local government; within England the most deprived communities have been the hardest hit. The most deprived communities have seen cuts of about £220 per person, compared with about £40 per person in the least deprived, so austerity has been targeted at local government and then within local government it has been targeted at the areas that could least afford to take the hit, in the way that we have seen.

The Government have completely ignored pleas from the cross-party LGA to do two things: first, to stop the in-year cut of £1.3 billion; and, secondly, to fund forward the £5.8 billion that would have addressed homelessness, adult social care and children’s services. Let us be honest—when it comes to the £410 million that is being put forward, the majority of people who work in social care are paid the minimum wage. When the national minimum wage goes up in April, those people will rightly be uplifted, but there is a cost to that for the providers. Much of the money announced in the Budget will not go to additional care for over-65s who need it, but to pay people who are being paid the lowest possible rate for providing an essential community service. I do not believe that is fair, the LGA does not believe that is fair and councils across the country do not believe that is fair, but again we see the Government turning a blind eye to it.

We all know where the real impact has been felt; we know the numbers on adult social care and the fact that 1.2 million people who would have had care in 2010 do not get that care today. We know that there are more young people who have been taken into care because they are at risk if they are kept at home, and the cost of that to local authorities. We also know, because the Government have walked away from their responsibilities, that the only way that councils can fund that care is to reduce eligibility and take the money from vital neighbourhood services.

The services that council tax payers see and value that come from the council tax that they pay have been the very services that have been taken away to fund the pressures on people’s services in every community in the country. The public say, “I’m paying more council tax, but the bins are being emptied less often, the local library has closed and the park doesn’t get maintained in the way that it used to.” All those really important services have been affected.

I hoped that when we had a change in Secretary of State that the new Secretary of State would finally have the ear of the Treasury, so that they could finally get a fair hearing and make the case for these vital community services, but it strikes me that one or two things have happened. Either the Ministry did not bother making the case in the first place, or—it could be both these things—the Treasury just does not care about the human impact of austerity and how we have seen it distributed across the country.

What I want to know, what people in the Chamber want to know and what people in England want to know is, what will the Minister do to address such chronic underfunding? It will be on his watch that an older person will die because they do not get the social care they need, or a child will be made to feel vulnerable because they are not getting the protection they need. Where will the money come from?

Photo of Rishi Sunak Rishi Sunak Parliamentary Under-Secretary (Housing, Communities and Local Government) 5:16 pm, 30th October 2018

It is a pleasure to serve under your chairmanship, Mr Hollobone.

I start by congratulating Maria Eagle on securing this debate and it is good to see a strong turnout from Merseyside colleagues as well.

It did not sound like the hon. Member was aware that in fact my very first visit as Minister for Local Government was indeed to Liverpool, both to see the City Council and to work with the troubled families programme, and I was delighted to accept an invitation from Luciana Berger shortly after being appointed to this particular role.

Being relatively new to this role, I am the first to say that local authorities have done a commendable job over the past few years, maintaining a strong level of services in the face of rising demand. And in responding to the specific points that the hon. Member for Garston and Halewood made, I will first outline my broad vision for the role of local government, which consists of three particular areas: first, to drive economic growth; secondly, to help the most vulnerable in our society; and, lastly, to build strong communities. I will take each of these areas in turn, specifically in relation to the points that have been made by hon. Members about Merseyside.

I will start with the economics. In this financial year, councils on Merseyside— including Sefton, Knowsley, Liverpool, Wirral, Halton and St Helens—had an aggregated core spending power of around £1.3 billion. Core spending power is the standard measure of a local authority’s key financial resources. It includes money from the central Government grant, which is typically known as the revenue support grant, but also the money raised locally from council tax, the money raised through the business rates system, and further specific grants from central Government for things such as adult social care, the better care programme and indeed the new homes bonus.

Across Merseyside, core spending power is up every single year in this four-year spending period and up 2% this year as well.

Photo of Maria Eagle Maria Eagle Labour, Garston and Halewood

I received a parliamentary answer from a colleague of the Minister about police spending, which said that over the last year £5.1 million of extra money had been given to enable the police to tackle the very serious crime that my hon. Friends the Members for Liverpool, Wavertree (Luciana Berger) and for Wallasey (Ms Eagle) referred to. In fact, that money came from the Government simply allowing a precept increase; it all came from hard-pressed council tax payers in Liverpool and not one penny piece came from the Government. How can the Minister justify the ridiculous figures that he is using, which hide the Government’s contribution by referring to everything else that can be raised in any other way? It is a way of abdicating responsibility.

Photo of Rishi Sunak Rishi Sunak Parliamentary Under-Secretary (Housing, Communities and Local Government)

I totally reject the suggestion of hiding. It would be ridiculous to look at any local authority’s financial resources without considering the various ways in which such an authority funds itself. I am delighted that the hon. Lady is focused on keeping council tax low. Indeed, the Government have ensured that council tax today is lower in real terms, across the country, than it was in 2010. We have heard various suggestions from Labour Members about doubling council tax, which is something I assume the hon. Lady, being on the side of hard-working taxpayers like us, would reject.

The idea that the funding formulas do not take account of deprivation or the differing ability of areas to raise council tax is totally erroneous. For example, when the adult social care precept was introduced, it was understood that different areas would raise different amounts from it, which is why in the incremental billions of pounds that the Government have injected into the social care system directly through the better care fund there is an equalising measure to take that into account. That is exactly why, today, the most deprived authorities have a core spending power per household—taking into account all those things, council tax included—that is 23% higher than that of richer authorities. Indeed, that is why areas with larger council tax bases provide more of their area’s resources from council tax; Merseyside provides less than half of the amount those areas do, because the council tax base in Liverpool is that much lower. It is totally wrong to suggest that that is not taken into account.

I think it was alleged that I, or the Government, had removed deprivation from funding formulas. I can categorically say that I have not removed it from any funding formula. We are currently in a root and branch review of how local government is funded. We are in the midst of various consultations and I would be delighted to have hon. Members’ suggestions.

Photo of George Howarth George Howarth Labour, Knowsley

If that is the case, will the Minister explain why Knowsley, which is one of the most socially deprived parts of the UK, has had a £100 million cut in its grant? His figures just do not add up.

Photo of Rishi Sunak Rishi Sunak Parliamentary Under-Secretary (Housing, Communities and Local Government)

I can tell the right hon. Gentleman that Knowsley’s core spending power per household is about 20-something per cent. higher than the average for a similar metropolitan authority, which takes into account exactly his point. He talked about the fair funding review and, as I said, that is exactly where all the issues will be considered, ensuring that deprivation or, indeed, multiple other factors, are taken into account in the new funding formula.

Photo of Rishi Sunak Rishi Sunak Parliamentary Under-Secretary (Housing, Communities and Local Government)

No. I will try to make some progress.

When it comes to that point, I am convinced and confident that those factors are taken into account. Indeed, as we restructure the fair funding formula, they will continue to be taken into account fairly and accurately.

Beyond Government grants, driving economic growth locally is the only sustainable way to ensure that we can raise the money we need to fund our services, and business rates retention is one such opportunity. I am delighted, and I am sure hon. Members here will join me in recognising, that Merseyside is in the fortunate position of being a 100% business rates retention area, which means that the local councils keep all the growth they generate from those rates. That is not something that is enjoyed by every local authority—[Interruption.]

Photo of Philip Hollobone Philip Hollobone Conservative, Kettering

Order. We do not really want sledging in the Chamber. Ms Eagle is sitting opposite the Minister and he must be heard with courtesy. Her side of the House was heard with courtesy during all its contributions. I know that the hon. Lady’s attempt to intervene was not accepted by the Minister, but she could have another go. However, she is more likely to be successful if she does not keep shouting across the Chamber.

Photo of Rishi Sunak Rishi Sunak Parliamentary Under-Secretary (Housing, Communities and Local Government)

Thank you, Mr Hollobone. I think the hon. Lady was being snide about the fact that Merseyside is a business rates retention pilot. I am sure that the £54 million that Merseyside will keep this year in additional funding as a result of the pilot is nothing to be snide about, and will make an enormous difference on the ground, helping the people I know she cares about. Many other local authorities across the country would be happy to be one of the pilot areas, so if she thinks that Merseyside would rather not be one and would give up the opportunity to others, I would be happy to talk to her afterwards.

Photo of Rishi Sunak Rishi Sunak Parliamentary Under-Secretary (Housing, Communities and Local Government)

I will try to make some progress.

Business rates retention is not the only incentive for local growth, as it sits alongside the other support the Government give to local authorities’ wider ambitions through local growth deals. For example, £2 million has been invested to create the first dedicated digital skills academy in the UK, at the City of Liverpool College and more than £13 million has been invested in a highway infrastructure scheme comprising a series of essential and integrated improvements along the A565 corridor. In sum, the Government strongly support Merseyside’s economic growth, whether through direct investment or business rates retention, and thus enable it to fund services over the years to come.

Photo of Rishi Sunak Rishi Sunak Parliamentary Under-Secretary (Housing, Communities and Local Government)

I will make some progress.

The second vision I outlined, which is undeniably one of the most crucial roles that local government plays, is to continue to help the most vulnerable in our society. It is local authorities, as we have heard, that support the elderly, the disabled and our children in need, and we owe an enormous debt of gratitude to councils for their incredible work. I am delighted that the Government back local authorities to carry out those vital duties. Last year, the Budget provided an additional £2 billion for social care. Earlier this year, another £240 million was announced for social care winter funding, and in the Budget yesterday the Chancellor announced that a further £650 million will be provided for care services next year.

In contrast to what we have heard, the flexibility to use the funding for things such as children’s services is something that local authorities have specifically asked for. They will have the flexibility in each local area to use the funding for different care services, rather than its use being dictated by central Government. I would have thought that all Members would appreciate their local areas having such flexibility to make the best use of the money, in the way they see fit.

I am pleased to say that that increased investment and better working between the NHS and local government is paying dividends on the ground. We have seen social care free up 949 beds a day since the peak two years ago—a 39% reduction in social care delayed transfers of care. In Merseyside, progress has been seen particularly in St Helens, and I commend the local authority on reducing such transfers by 72% since the February 2017 peak.

I have mentioned the troubled families programme, which is making amazing strides to support our society’s most vulnerable families. When I visited the Clubmoor children’s centre in Liverpool, it was a privilege to talk to several of the families participating and to see the life-changing work at first hand. I am proud to say that the Government have invested £1 billion in the programme over this spending cycle, with 130,000 families nationally achieving significant and sustained progress against the goals they have been set. In almost 17,000 of the families, one or more of the adults have moved into work, and the families I spoke to told me that that was central to their ambitions.

Across Merseyside, 10,000 families are being helped with more than £20 million of funding, and I pay tribute to Liverpool City Council in particular for doing a very good job, working with early help assessments. We heard from Derek Twigg about the importance of early intervention. Referrals to children’s services in Liverpool were down 3% in the most recent year—

Photo of George Howarth George Howarth Labour, Knowsley

On a point of order, I want to place on record that, had he been here, my hon. Friend Derek Twigg would have made a significant contribution, but he is, in fact, not here.

Photo of Philip Hollobone Philip Hollobone Conservative, Kettering

Thank you for that point of clarification. It will be on the record.

Photo of Rishi Sunak Rishi Sunak Parliamentary Under-Secretary (Housing, Communities and Local Government)

I apologise to Stephen Twigg, who mentioned the importance of early intervention. I thank the right hon. Gentleman for the point of order. That great work in the last year builds on three successive years of reductions in referrals to children’s services.

We talked about the importance of local authorities in building strong communities and the Government back that, whether through the funds for Liverpool City Council from the controlling migration fund, ensuring that communities are connected through the roads fund that was announced yesterday, or bringing high streets together and creating pocket parks—something that Liverpool has benefited from. Whether through building economic growth, supporting communities or helping the vulnerable, the Government are determined to recognise the role that local government plays and to back it with what it needs.

Photo of Maria Eagle Maria Eagle Labour, Garston and Halewood 5:28 pm, 30th October 2018

I am disappointed that the Minister chose to take away half of my time to respond. I am afraid he did not deal with the points that were made in the debate, and that is a shame. It is ridiculous for him to suggest in the way he did that the Government take account of deprivation. I would like to see how he came up with the figures in his speech. Liverpool’s local authority has lost 64% of its money, and Knowsley 58%. Our police have had the worst cut in the country, losing 31% of their money, with the fire authority losing 50% of theirs. Liverpool Community College has lost £5 million over the past four years. If that is strongly supporting Merseyside, I hope that the Minister and his Government will stop supporting us, because it is terrible.

Question put and agreed to.

Resolved,

That this House
has considered local government funding in Merseyside.

Sitting adjourned.