Oral answer (Lords) on Council Funding - Jun 4

To ask Her Majesty’s Government, further to the Institute for Fiscal Studies report English council funding: what’s happened and what’s next?, published on 29 May, what steps they are taking to provide additional resources to councils to enable them to (1) continue to provide, and (2) extend and improve, their existing services.

My Lords, the Government are committed to supporting councils and recognise their efforts to deliver critical services for communities. The 2019-20 settlement confirmed that core spending power is forecast to increase in cash terms by 2.8%—a real-terms increase in resources. This allows councils to deliver the services that residents need. The upcoming spending review is the vehicle for agreeing funding from 2020-21 onwards for the sector, and the department’s preparations are well under way.

I think that any of us going around most of our communities would agree that they are being hollowed out. If you look at what is happening with homelessness, libraries and youth services, you will see that there is a lot of feeling in the community that the Government are not standing behind local authorities, so I am sorry but I have to contradict what the Minister says. Any of us walking around will see what is happening. Is it possible that we could raise taxes so that we could give more money to the local authorities, or is it possible that we could give them the right to raise the money locally so that they could improve their communities? The way things are going, the hollowing out and the problems will carry on, and we will be the recipients of very bad anti-social behaviour.

My Lords, the noble Lord’s Question refers to the Institute for Fiscal Studies report, which I have read. The authors of the report, Neil Amin-Smith and David Phillips, are fair in acknowledging some of the things that we have done with regard to local government spending—for example, they cite a 10% increase in children’s social services. But the noble Lord is right in that there has been a reduction in other areas. The report canvasses the possibility of a local income tax, but I do not think that that is the way forward, and nor does my party. However, I am sure that the noble Lord would want to acknowledge that there is much innovation. He referred to libraries—a subject which I know is close to his heart. In Warrington, for example, hubs provide library services with other services, which is an innovative way of improving the service. That has also happened in Leeds and in other areas. I think that that is the way forward.

My Lords, I again refer the House to my relevant registered interest. Can the noble Lord tell the House why he thinks that so many councils are struggling to deliver services, one of the most serious examples being the difficulties faced by Northamptonshire County Council?

My Lords, I readily acknowledge that there are challenges, but it is important to say that many facets indicate that things are improving. We know—the Chancellor has said—that we have ended austerity, and the comprehensive spending review is around the corner. It is also the case, as I am sure the noble Lord will acknowledge, that the last settlement was a good settlement. The noble Lord, Lord Porter, acknowledged as much, and other people in other parties have done the same. Innovation is a way of improving services and so too are some central government grants for such things as the Future High Streets Fund, Stronger Towns funding and so on, which do not go through local government but directly to the towns concerned.

My Lords, the most has been taken from the poorest communities. When you look around, you will see that the poorest communities have had the biggest cuts in their local services, whether local government or health. Why are the Government pursuing this?

My Lords, I am sure the noble Lord would be the first to acknowledge that the fair funding formula is one way of addressing this to ensure that we get it right, so that local authorities with the greatest needs and challenges are properly funded. That is why we are progressing it.

My Lords, I refer Members to my registered interests as a councillor and a vice-president of the Local Government Association. Having watched the BBC programme on social care delivery in Somerset, in which both the providers and the carers were close to tears because of the inadequacy of the service they were able to provide through lack of resources, I wonder whether the Minister agrees that this is a shocking indictment of the state of funding of local government and that the Government have a desperate responsibility to put this right—and to put it right now.

My Lords, I did not have the privilege of watching the programme to which the noble Baroness refers, but I have indicated the challenge we face on social care. She will acknowledge, I am sure, that £10 billion for the three-year period ending in 2020 has made a significant difference, but challenges still exist. I am sure she will also acknowledge that we have increased children’s social care spending beyond what it was in 2009. I am the first to agree that there are challenges, but I cannot comment specifically on Somerset as I did not see the programme.

Despite what the Minister has said, the IFS report says that cuts have been larger in more deprived areas than in more affluent areas. These are areas where local welfare assistance schemes to replace the national Social Fund are most needed, yet this ultimate safety net is being shredded and the Government say they have no responsibility. Will they now take responsibility, ensure that local authorities have a duty to provide such schemes, provide the funds for them to do so and ring-fence those funds?

My Lords, that was a pantechnicon of questions; any that I miss I will endeavour to cover in a separate letter to the noble Baroness. I am sure she would be the first to acknowledge that the IFS report is very balanced. There are certainly areas where it raises the issue of additional funding, including the possibility of local income tax. I am not sure of the noble Baroness’s position on that; my own, and that of my party, is that we do not think it would be a good idea. There are challenges on funding. Some will be met, I am sure, by increased spending via the comprehensive spending review; some can be met by innovation in delivery on which the IFS has commented favourably in the past; and some will no doubt by met by the direct funding which I have referred to such as the Stronger Towns Fund, the Future High Streets Fund and so on.