Local Government Funding — [Mrs Anne Main in the Chair]

Part of the debate – in Westminster Hall at 3:58 pm on 27th March 2019.

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Photo of Rishi Sunak Rishi Sunak Parliamentary Under-Secretary (Housing, Communities and Local Government) 3:58 pm, 27th March 2019

It is nice that we are now talking about whether the increase in funding is enough. I am glad we have moved the debate on. It is also good to hear Labour Members talking about the importance of council tax. We believe in keeping people’s council tax bills down. They will be 6% lower in real terms this year than they were when this Government came into office, and they have risen slower than under the last Labour Government, when they increased at an annual rate of almost 6%. This Government are committed to keeping council tax bills low, and it is important that we are mindful of that.

Many points were made, and I want to try to address as many as I can in the time available. I would like to do so through the framework with which I look at local government, given the sheer range of things it does. Local councils do three important things: support the most vulnerable in our society, drive economic growth in their areas and build strong communities. I believe very much that this Government are backing them in doing all three of those vital tasks.

First, as we heard, local government helps the most vulnerable in our society. Local authorities are the first to reach out those who fall on hard times, and I am delighted that our recent settlement provides them with increased funding to do exactly that. Councils have told this Government that the most acute pressure they face is in adult and children’s social care, so in the recent settlement and Budget, the Government responded with an additional £650 million for adult and children’s social care this year. That includes £240 million to ease winter pressures and the flexibility to split the remainder between adult and children’s services as local preferences dictate.

We also champion authorities that put innovation at the heart of service delivery. We heard a lot about money, but the outcomes that that money delivers are just as important. We should be focused not just on what goes in but on what comes out. The Government will focus relentlessly on ensuring that taxpayers’ hard-earned money is well spent.

On children’s care, about which we heard a lot, a recent National Audit Office report noted the enormous variation in performance and cost among local authorities. That is nothing to do with the political colour of those authorities; it is just down to differences in leadership and management practice. That is why it is important that the Government are backing practices in Leeds, Hertfordshire and North Yorkshire with an £84 million fund, and taking their models, which deliver higher-quality outcomes at lower cost, across the country.

The hon. Members for Colne Valley and for Stockton North (Alex Cunningham)—and indeed Mr Reed, who is no longer in his place—rightly mentioned the importance of early intervention, in which I strongly believe. I have been a relentless champion of the troubled families programme since I have had this job. He is not here anymore, but the hon. Member for Croydon North will have seen the Secretary of State make a very significant speech last week about the progress of that programme and how it is transforming children’s lives on the ground, getting people into work and keeping people out of the criminal justice system.

Knife crime is also important. That is why a £10 million extension was recently made to the troubled families programme, specifically to support families against youth crime. That funding is now benefiting 21 areas that bid into the programme to tackle that vital issue. The hon. Gentleman talked about funding running out. That is because we are at the end of a spending review period. Of course, in the spending review, I and the Government will be batting very hard for a successor programme to the troubled families programme. The Secretary of State committed to that last week, and I wholeheartedly support it.

I am also passionate about technology, which has the potential to be transformative. I recently launched an innovation fund to help councils embrace the digital revolution. Technology helps deliver services better on the ground and find ways to save money. Together with the LGA, we are developing a tool to help councils to benchmark, analyse and drive their performance. I believe there are considerable opportunities across local government to improve lives, save money and transform services, and we will pursue them all relentlessly.

The second thing local authorities do is drive economic growth, ensuring that every part of our country can prosper. Ultimately, that is the only sustainable way to fund the public services that we have heard so much about and we all care passionately about, and it is the only way to improve living standards in our communities. There may well be fundamentally different points of view on that. The Government believe that, rather than being funded by central Government handouts, local authorities should be empowered and rewarded for their entrepreneurship. Indeed, even Labour Members expressed different points of view about the degree of autonomy local government should have to raise its own money and about over-reliance on things such as business rates—the single largest way for local areas around the world to raise income. It is all very well saying we want more local autonomy, but we must understand what that means in practice.

Our business rates retention scheme does exactly that, putting power in the hands of local authorities to reap the benefits of their hard work. This year, on top of the £46 billion I mentioned, local authorities will retain an additional £2.4 billion of business rates growth. The 15 new business rates retention pilots across the nation, from Northumberland to Southampton, demonstrate this Government’s commitment to backing councils’ ambitions for their local economies.