Housing, Communities and Local Government: Departmental Spending

(3) a further sum, not exceeding £22,567,364,000 be granted to Her Majesty to be issued by the Treasury out of the Consolidated Fund and applied for expenditure on the use of resources authorised by Parliament—(James Morris.)

Before I call Clive Betts, I give notice that, again, there is time pressure on the debate, so I am likely to introduce an immediate three-minute time limit because we must finish by 5 pm.

First, I will look at the covid crisis and how local government has responded to it. I think I speak for every Member of this House when I say that local councils, collectively across the piece, whatever their party, have responded magnificently. We do things virtually these days, so perhaps a virtual round of applause for local councils from Parliament would not go amiss.

What local councils have done is deliver social care; rehouse rough sleepers; work with the voluntary sector to help vulnerable people; administer the business grants scheme that the Government introduced; get the director of public health working at a local level on testing, tracking and tracing; and, of course, keep essential services, such as refuse collection, up and running for our constituents. They have done all that against the background of austerity. Local councils have had bigger cuts to their funding than any other part of the public sector in the past 10 years. The National Audit Office figures show an 80% cut in grants and an almost 30% cut in spending power over that 10-year period. Of course, the councils in the poorest areas have, by and large, had the largest cuts in grant, because they had the largest grants in the first place.

Despite that situation and despite the fact that they have had to try to prioritise social care spending for both adults and children, councils have kept services going. When we look at some of the cuts that they have had to make in other services, we see that it was nearly 50% on housing services, 50% on health and safety, and 20% in five years in real terms in public health grants. Those services—housing, health and safety and public health—are exactly the sorts of services that have been required to deliver in response to covid. None the less, they have stepped up to the mark and done extremely well.

What have the Government done in response? I think that we have had a change of language from Ministers, which is a bit concerning. On 16 March, the Secretary of State said that the Government would do whatever was necessary to support these efforts—very similar words to the ones that were used in relation to the health service.

Will my hon. Friend give way?

I will give way, but just once I think.

I will be very brief. Did my hon. Friend share my sense of déjà vu when councils were promised “whatever funding is needed”? Nottingham City Council spent £8 million on fire safety improvement post-Grenfell and it did not receive a single penny from central Government, despite exactly the same sort of comments being made at the time.

That leads into another area. The Select Committee has just produced a report about cladding and other such issues. We have challenged the Government to produce funding in that report, so I am sure that we will take up that issue as well.

The change came when the Secretary of State appeared before the Select Committee. Suddenly, he was saying that the Government had asked councils to do things, but that they would be fully compensated for the things that they had been asked to do. Then there was a very general list. The Public Accounts Committee and the Select Committee, as well as the Local Government Association, have been trying to get more information on that. There is still a lack of clarity about precisely what will be funded. That is important, and quite different from the national health service, which seems to be given, rightly, “everything that it takes”—the commitment given to local councils.

We have had tranches of money—£2.16 billion, then £500 million—given to councils to cover both extra costs and lost revenue, which is just as important for many councils as the extra costs they have incurred. However, the LGA is saying that by the end of June, according to the returns that went to the Ministry, the costs were £4.8 billion against the £3.7 billion received—a gap of £1 billion. The Government said they would give some help with lost income by compensating councils for 75% of the amount after the first 5% of losses, which is welcome, and somehow apportioning the lost revenue from council tax and business rates. There are two questions to ask about this. The Government have already included loss of income in the £3.7 billion compensation, so will the commitment to cover 75% be reduced? I see the Minister shaking his head; it would help if that was explained very clearly indeed.

Will my hon. Friend give way on that point?

Normally I would give way, but Madam Deputy Speaker is looking askance at me, so I think I had better move on.

The second question is, can the Government not bring forward a bit sooner the apportionment of losses from council tax and business rates? Waiting until the spending review introduces an extra element of uncertainty.

I have another question about compensation for losses in the leisure sector. Many authorities—about 60, I think—of all political persuasions do not provide leisure services directly; instead, they provide them through arm’s length arrangements. Sheffield does it through Sheffield International Venues and has some magnificent facilities, including Sheffield Arena and Ponds Forge, which is an international-class swimming pool, and lots of community facilities. What we need is an assurance that income losses for councils in that situation will be treated the same as income losses for councils that provide the services directly. That is an important point for many councils up and down the country.

It still feels as if local government is on a life support machine, waiting for the next bit of revenue to trickle down from the next ministerial statement, rather than having the certainty that it needs to plan. Many councils are now looking at making cuts and emergency budgets and talking openly about section 114 notices. Yes, okay, the Ministry has said, “Come and see us before you issue a 114 notice,” but that is too late. We do not want councils to reach the point where they are thinking about a 114 and planning for it. We want them to have the certainty of getting funding so they are not driven into that position.

This is not just about funding for this year; it is about funding for next year as well. Many councils, including Sheffield Council, have reserves to see them through this year, but using them will just postpone the problem until next year. Also, many councils had plans for efficiency savings, which have been put on hold as managerial expertise is put into dealing with the current crisis. Efficiency measures that have had to be put to one side for the time being are another loss for councils that needs to be recognised properly.

We will start with a time limit of four minutes.

I echo many of the comments made by the hon. Member for Sheffield South East (Mr Betts): local government has done remarkable work to help our communities get through coronavirus, and I am thankful for the emergency financial support provided to councils by the Department. Stoke-on-Trent has received more than £16 million as part of this, and it is very welcome. Under the Conservative leadership of Councillor Abi Brown, the council has managed its finances very well—I know that other areas of the country have not had such responsible leadership—but we will still have costs locally that are not fully met by this emergency funding, and I am concerned about the implications of what might be required to meet these in-year pressures.

This is especially significant in areas such as Stoke-on-Trent that have higher levels of multiple deprivation and need. I know the Minister fully recognises these challenges and is well attuned to the further support necessary. Stoke-on-Trent is the 12th highest local authority in terms of the proportion of neighbourhoods in the most deprived 10%. The council tax base is indeed very low—the second lowest in the country, next to Hull—and while, in one sense, lower house prices can be an opportunity, they are a massive barrier when it comes to the viability of development and the ability to generate revenues locally.

It is crucial that the Government’s agenda for business rates retention also be maintained. There are challenges in the city with the rising need for social care and children’s services. While improving, children’s services in Stoke-on-Trent are still inadequate. Initiatives to allow for nationally led financing reform are ever more needed. I know the Government are aware of that, and I hope we can find sensible and long-lasting solutions.

Stoke-on-Trent City Council and VAST, working with local voluntary organisations, quickly set up the Stoke-on-Trent covid support network. I have seen amazing work being done by organisations such as Bethel church in Longton and Temple Street Methodist church in Fenton. I again thank all our local volunteers and council officers for their work. Be they voluntary organisations or local businesses, many have been impacted. Bethel church, for example, receives much of its income from its charity shop on the Strand in Longton, which of course has had to close. The £10,000 grant it received has been a huge relief, as it has been for many. As I said yesterday in the debate on the economy, businesses in Stoke-on-Trent South are extremely grateful for the support put in place by the Government.

It comes to something when the Chair of the Public Accounts Committee joins forces with my hon. Friend the Member for Sheffield South East (Mr Betts), the Chair of the Housing, Communities and Local Government Committee, to ask for more money. It is perhaps not a surprise that his Committee would do that, but it is not something that the Public Accounts Committee does.

However, I echo everything my hon. Friend said. Given the time, I will not repeat it, but we know that local government is actually very efficient at spending money, so I reiterate what he said to the Minister about being on his side on this. We have seen the Treasury first offer all the money, and then massively backtrack, so we have been playing this game of chase with the permanent secretary to get information about exactly and precisely which elements of spending will be refunded as a result of covid-19. I urge the Minister to look at the information that has been sent both jointly and separately to the two Committees and at what his permanent secretary has said to see whether he can push things a bit faster. We will be behind him in getting that detail from the Treasury, because we are very much on the same side on this.

In my role as Chair of the Public Accounts Committee, let me say that we often look at where money is supposedly saved and efficiencies made, but the cost is often actually shunted to another part of the public sector. There is no more accurate description of that than when money is taken out of local government, because that shoves the cost somewhere else. If local government is doing its job properly and doing it well, that will often prevent further expenditure down the line by preventing problems that cost society, communities and the taxpayer a lot in the long term.

We know, given the current climate, that there is no long-term certainty over funding, as my hon. Friend the Member for Sheffield South East said, and there is a gap of £1 billion on covid spending alone. There is real pressure right now. Budgets are being looked at and decisions are being made. A long time ago—25 years ago—I was a councillor making these very decisions about spending, and we would be looking now at cuts for the following year. That was under a Government of the same party as the Minister’s, albeit a long time ago, so I will forgive him that if he can get the money from the Treasury now. The concern is that such decisions will be irreversible.

I welcome the support from the Ministry of Housing, Communities and Local Government, a Department that has really come into its own for diligent evangelism during the pandemic. I pay tribute in particular to the Minister for his angelic support over this time, which for many of us has been very difficult. He will know that full well, and I am very grateful for his support helping with crematorium chapels.

The work of local government in Dorset has shown its true value during the pandemic, and I want to take this opportunity to ensure that Dorset is properly recognised and that the Government ensure that it has its fair share of funding and investment, which has not always been the case.

I start by paying tribute to Dorset Council. Under the leadership of Councillor Spencer Flower and chief executive Matthew Prosser, it has distributed thousands of grants totalling well over £100 million, which has been hugely supportive to our community. Prior to coronavirus, Dorset Council’s budget performance was sound. MHCLG must ensure that the council is properly reimbursed for the costs of responding to the pandemic, but we also need to grasp the issues surrounding the escalating costs from things such as social care, which are not going away. The response to coronavirus is forecast to cause a budget gap of some £60 million this financial year for Dorset Council. As I have said, rural Dorset does not receive its fair share, nor has it done for some time. We need to make sure that sensible and diligent financial management is not used as an excuse to say that Dorset does not need support.

Equally, we have very proactive town councils in West Dorset, and I pay particular tribute to our mayors, town councillors and town clerks. Town councils come in all shapes and sizes, and I urge the Minister to ensure that our town councils hit hardest by coronavirus receive the financial support that they need, such as Lyme Regis. It has a permanent population of just under 3,800, but that jumps to 20,000 in a typical summer season. Lyme Regis Town Council provides extensive amenities for holidaymakers, and income from commercial and tourism activity is absolutely vital. The council needs additional support to weather the coronavirus storm, and I very much invite the Minister to consider that.