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Liverpool City Council Funding

Part of the debate – in Westminster Hall at 11:00 am on 29th October 2019.

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Photo of Stephen Twigg Stephen Twigg Chair, International Development Committee 11:00 am, 29th October 2019

The hon. Lady’s intervention precisely anticipates my next paragraph.

At that unprecedented meeting, members of the Labour, Liberal Democrat, Green and Liberal parties agreed unanimously on a call for urgent action from the Treasury. Liverpool MPs, led by my hon. Friend Maria Eagle, have echoed the call for an urgent meeting with the Secretary of State. To echo Luciana Berger, I ask the Minister whether the Government will meet Liverpool’s Mayor, MPs and councillors as a matter of urgency to look at ways in which the Government can help to address Liverpool’s perilous financial situation.

There is an inherent unfairness in the way that local government funding is allocated. The Government use core spending power as a measure. Their figures show that had Liverpool been subjected to only the average reduction in support for all authorities, it would be £77 million a year better off. Instead, since 2010 there has been a dramatic reduction in Liverpool City Council’s spending power while the spending power of other authorities has increased. For example, Surrey County Council’s spending power has increased by £65 per household in the same period.

In authorities such as Liverpool—and next-door Knowsley, Sir George—with a high level of deprivation, a large proportion of properties are typically in the lower council tax bands, for which higher Government grants have compensated. Since 2010, however, support from the Government has been reduced as they have sought to offset austerity by allowing local authorities to raise more taxation locally. The difficulty is that 60% of dwellings in Liverpool are in the lowest council tax band, whereas the national figure is about a quarter. Liverpool’s council tax base is further reduced by the number of dwellings that qualify for discounts and exemptions.

If Liverpool’s tax base were comprised of the same proportion of households in each council tax band and the same proportion of households that qualify for discounts and exemptions as the national average, the city council estimates that it would generate more than £100 million extra in council tax every year. Surely we need to address that issue of fairness. Will the Government seriously consider the Mayor of Liverpool’s proposal for a royal commission on local government funding to ensure that a fair funding formula can be adopted across the country?

Despite all that, the council has managed to continue to prioritise services for the most vulnerable in our community. In the last year it has spent £12 million on support to help prevent people becoming homeless and on assisting rough sleepers. It has spent almost £3 million on the citizens support scheme that it set up to help residents in short-term crisis to meet their needs for food and other essential items. That has provided a lifeline for some of the city’s most vulnerable residents after the abolition of the discretionary social fund. The mayoral hardship fund continues to provide vital support for some of the city’s most vulnerable people. Spending on discretionary housing payments, which support people struggling to pay their rent, has gone up by 12%.

I pay tribute to Mayor Joe Anderson and councillors from all parties for taking action to protect the most vulnerable families who have been left struggling and worrying about how they will pay for essentials. The support that the council has been able to provide stands between many families and destitution.

I also thank the vibrant voluntary and community sectors, including the Merseyside Law Centre, formerly Merseyside Welfare Rights; St Andrew’s Community Network, which is based in the constituency of my hon. Friend Dan Carden; and the Alt Valley Community Trust. I volunteer monthly at the north Liverpool food bank at St John’s church in Tuebrook, so I see the great need in our communities and the fantastic role that the voluntary and community sectors play, alongside the city council, in seeking to protect some of the most vulnerable.