Local Authority Finance

13. What steps his Department is taking to help ensure the financial sustainability of local authorities.

We have made available up to £64.7 billion for local authorities through the local government finance settlement for 2024-25—an above-inflation increase of up to £4.5 billion, or 7.5% in cash terms, on 2023-24. Of course, that includes an additional £600 million of funding, which was announced by my hon. Friend the Minister for Local Government on 24 January.

Aside from potholes, the issue that has caused the most angst for Derbyshire County Council is the significant rise in the cost of residential placements for looked-after children. The council believes that the market for this is now completely out of control and that prices are excessive. Is there more that the Government can do to help councils financially to pay these bills or to find a better way to structure that market so that the bills are not so high?

My hon. Friend makes an important point. We are spending £500 million additionally on adult and children’s social care, but he is right to say that the cost of residential homes for looked-after children is excessive, and a number of private equity firms are operating like bandits in this area. I have talked to the Minister responsible, the Under-Secretary of State for Education, my hon. Friend the Member for Wantage (David Johnston), and action will be forthcoming.

I call the Chair of the Select Committee, Clive Betts.

The Select Committee recently produced a report on local government finance in which we said that the Government must act now if local authorities are to survive this severe crisis. What has the Secretary of State done? He has asked every local authority to produce a productivity plan. That sounds a bit like advising councils how to spend better the money they have not got. He has asked local authorities to identify

“ways to reduce wasteful spend”.

What does he think they have been doing for the last 13 years? In particular, he has asked them to identify waste on

“discredited staff equality, diversity and inclusion programmes”.

How much does he think that will save when it comes to avoiding section 114 notices?

The Chairman of the Select Committee is right to say that local government is facing challenges, but there are outstanding councils—North Lincolnshire and South Norfolk, for example—that are continuing to ensure that they can build up surpluses and deliver effective services. That is because they put productivity first. There are some local authorities, lamentably, that are not putting productivity first. They include South Cambridgeshire, with its plans for a four-day week, and St Albans, which is still spending money on discredited forms of training that only increase division rather than bringing communities together. It is no coincidence that both those local authorities are Liberal Democrat.