Asked by
Baroness Taylor of Stevenage
To ask His Majesty’s Government, given the impact of current
levels of inflation on budget planning for local councils for
2023–24, what support they are providing to councils in setting
balanced budgets and ensuring that local services are
delivered.
The Parliamentary Under-Secretary of State, Department for
Levelling Up, Housing & Communities () (Con)
We recognise that councils are facing pressures, which is why,
taking 2023 and 2024 together, we have increased the funding
available to local government in England in real terms. The
provisional local government finance settlement for 2023-24 makes
available up to £59.5 billion for local government in England—an
increase of up to £5 billion, or 9%, in cash terms on 2022-23—and
includes a £2 billion additional grant fund for social care. We
consulted on these proposals until 16 January, and will consider
the responses prior to publishing the final settlement in early
February.
Baroness Taylor of Stevenage (Lab)
My Lords, I thank the Minister for her Answer. Those standing as
councillors do not do so to cut services for their residents. The
Local Government Association estimates a gap in funding of £3.2
billion this year, rising to £5.2 billion next year. Across the
country, local councillors are taking awful decisions on closing
libraries, swimming pools, children’s centres, domestic abuse
services, nurseries, transport services for disabled children and
more. Even Tory Hertfordshire says that it has exhausted all
options for service cuts. Do His Majesty’s Government recognise
that cutting local services puts pressure on other public
services? Why has the fair funding review for local government
ground to a halt?
(Con)
My Lords, as I said, we recognise that councils are facing
pressures but the 9% announced in the Autumn Statement is, in
real terms, an increase in funding. Local government is having to
meet pressures in the same way as every resident in this country
is under pressure. As I said in answer to a question yesterday,
we will look further at funding issues for local government in
future—probably not in this Parliament but in the next.
(CB)
My Lords, the Minister will know that, in the decade from 2011,
there was an estimated 22% real-terms reduction in local
authorities’ purchasing power, despite that being a decade of
considerable increase in demand for services. Does the Minister
accept that it will be some years before local government will
get back to the spending power that it had in 2011?
(Con)
My Lords, local authorities across this country are doing some
very creative things to make their money go further. They are
working closely with others in their local areas to deliver the
services that their residents deserve. I think that this will go
on. Through the levelling-up Bill that has come here, we will see
different ways in which local government can join together to
make itself far more financially viable.
(Con)
My Lords, allowing local authority expenditure to increase by
9.2% in cash terms seems reasonable to me against the background
of the current economic challenges. However, if, pursuant to my
noble friend the Minister’s reply, a local authority thinks that
that is wrong for its area, it is free to spend more if it can
persuade the local electorate to vote for that in a referendum.
Is that not a more democratic way of approaching local government
finance than the crude rate-capping that we had before?
(Con)
I absolutely agree with my noble friend, not only on that point
but that councils can look to a referendum. It is important that,
if they look for a referendum, they say what they are going to
spend the money on so that local people have a choice.
(Lab)
My Lords, is the Minister aware that, in the first few months of
last year, 2.2 million hours of adult social care were lost? This
year, we have half a million people waiting for a care
assessment, a care package or to have some care sorted out. Does
she agree that adult social care and the community basis for
adult social care should be a priority in the Budget? The Health
Secretary believed this when he was chair of the Health and
Social Care Committee in the Commons. Will she remind him of his
promise to increase funding and will she engage with her Treasury
officials and her Ministers to make that happen?
(Con)
My Lords, adult social care has been an issue to be solved for
not just this Government but many Governments before them. The
Government are putting more money into adult social care. They
put £2 billion more into local authority funding this year for
it, and we will continue to look for better ways of delivering
adult social care, working with the NHS as well.
(LD)
My Lords, according to LGA evidence, without further government
intervention 74% of council areas are at risk of losing their
local swimming pool or reducing leisure services due to rising
fuel costs, and that is this year. Can the Minister explain why
the Government’s energy bills discount scheme includes museums
and libraries, which is very welcome, but surprisingly excludes
public leisure facilities? Can she please check whether the
Government were aware of this evidence when they drew up the
recent scheme? Will they seriously reconsider classifying pools
and leisure centres as energy intensive, as they surely are?
(Con)
My Lords, the energy bill relief scheme this winter provides a
discount on energy for councils whose bills have been
significantly inflated. This scheme was to run until 2023, and in
January the Government announced that the energy bills discount
scheme would run for a further year, until March 2024. But the
noble Baroness opposite is right; I have already asked that
question, and when I get an answer, I will come back to her.
(Con)
My Lords, on average, how much of all local authority expenditure
is spent on public sector pensions?
(Con)
I am very sorry that I cannot give my noble friend that answer
from the Dispatch Box. I will look into it and come back to
her.
(Lab)
My Lords, councils up and down the country had to reduce just
about every service to make ends meet. Because of the
Government’s cuts for the last 13 years, many councils are on the
edge of a financial cliff and have even considered a Section 114
notice. Can the Minister tell me when this nightmare will end for
our local communities?
(Con)
My Lords, there are also some councils doing extremely well in
keeping services running. We continue to monitor the sector’s
finances and stand ready to speak to any council and support it
if it has concerns about its ability to manage its finances or
faces pressures that it has not planned for. We are working with
local authorities to do that so that they do not get to the point
of an S114.
(LD)
My Lords, when will the review of business rates take place?
(Con)
I do not have a date for that.
(Lab)
My Lords, can the Minister tell the House what inflation figure
was used when the local government settlement was made?
(Con)
I cannot tell the noble Lord what inflation figure was used, but
I think that 9% is a very reasonable figure in the economic
situation that we are in at the moment, due to many things, such
as Covid and the Ukrainian war.
(Lab)
Does the Minister agree that one of our problems is that the
current council tax structure is well past its sell-by date and
needs changing? In those circumstances, and building on the noble
Lord’s suggestion about a referendum, would they permit a council
to run a referendum for a restructuring of its council tax?
(Con)
I do not think that there is anything in the rules that allows
them to do that. As I said yesterday, we are looking at updating
the local government finance system. It has been an issue to get
right for a long time, under many different Governments. We have
said that we will continue to look at it, carry out a
review—particularly on relative needs and resources—and reset the
cumulative business rates growth as well.
The Lord
My Lords, can I take the Minister back to social care? Yesterday,
the archbishops’ report on re-imagining care was published. It
suggested that we need a major rethink on how the whole care
system works, not just with local authorities—though it notes
that not enough is being put in. The noble Baroness, Lady
Andrews, has welcomed the report and produced a fantastic report
on this with her committee. Might this be an opportunity to
completely rethink how we do social care in the future?
(Con)
My Lords, as I have said, successive Governments have looked at
the issue of social care. With an ageing population, it is
something that we have to do; we have to change the way we
deliver social care and the way it is funded. This Government are
looking at this, and will continue to do so until we have a
solution.
