Local Government Finance

I beg to move,

That the Local Government Finance Report (England) 2026-27 (HC 1604), which was laid before this House on 9 February, be approved.

With this it will be convenient to discuss the following:

That the Referendums Relating to Council Tax Increases (Principles) (England) Report 2026-27 (HC 1605), which was laid before this House on 9 February, be approved.

Before I begin, I notify the House that the local government finance report has been updated with small corrections on pages 7 and 13. These corrections have been passed on to the House in the proper way ahead of today’s debate. Like you, Madam Deputy Speaker, I am grateful to the Joint Committee on Statutory Instruments for its careful consideration of these reports.

I believe in local government, because I have lived it. As a councillor and as a council leader, I saw the difference that councils make to people’s lives. Local government is the part of our democracy that is closest to people and the things that they care about the most—their family, their community and their home town.

Labour took office after 14 years of ideological cuts imposed on local government. The Tories devolved the blame for their failure in national government by imposing £16 billion of cuts on councils and local communities. Even worse, they targeted the worst of those cuts deliberately on our poorest communities. The former Prime Minister, the right hon. Member for Richmond and Northallerton (Rishi Sunak), was filmed standing in a leafy garden in Tunbridge Wells boasting about how the Conservatives had stripped away funding from struggling towns so that they could play politics with public money.

Has the Secretary of State made an analysis of the division of Pride in Place funding between Labour and Reform seats versus Liberal Democrat and Conservative seats?

I thought the hon. Gentleman was going to stand up and apologise to the House for what his Government did in diverting money away from the poorest communities. I am very disappointed that he did not take that opportunity, and I suspect that I am not the only one—perhaps he will take the opportunity later on. I remind him and his colleagues that under the Tories, only three in 10 councils received funding that aligned with deprivation; with this Government, the number is more than nine in every 10.

Local people were forced to pay a staggeringly high price for Tory venality. High streets were hollowed out and boarded up. The number of people sleeping rough on our streets doubled. The number of families stuck in temporary accommodation doubled. There were more potholes on our roads than craters on the moon.

I will give way to the hon. Gentleman so that he can apologise for that.

I was going to say thank you for the Pride in Place money, actually; I am very grateful that the Government have given £20 million to my constituency.

On the subject of funding for councils, the Government are requiring district councils to pay for food waste recycling. That is not an unreasonable proposition, but there was a principle under the previous Government of new burdens funding, whereby when a new burden was presented to a council, the Government would sort it out. Why have the Secretary of State’s Government decided not to support councils with new burdens funding?

I am grateful for the hon. Gentleman’s words about Pride in Place. I am glad that he has answered the question of the hon. Member for Spelthorne (Lincoln Jopp), because that money is being distributed to constituencies represented by Members right across the House. On the point that the hon. Member for Wyre Forest (Mark Garnier) makes about food waste recycling, funding for that has been built into the settlement, so it is present. The new burden is being funded in that way.

The Secretary of State is being incredibly kind. He talks about the settlement, but the settlement does not work. Wyre Forest district council has had a 0% increase in core funding. Dare I say that across the whole of Worcestershire, where there is a district council with a Conservative Member of Parliament, there has been a 0% increase, but where there is a district council with a Labour Member of Parliament, there has been an increase of up to 5%. Can he explain why that has happened?

The settlement follows a funding formula and takes account of the costs of delivering food waste recycling in the way that the hon. Gentleman described earlier.

Will the Secretary of State give way?

Let me return to my theme for a moment before I take any more interventions.

The right hon. Member for Beverley and Holderness (Graham Stuart) and colleagues across the House will remember that the Tories used to belittle local councillors as part-time volunteers and took away their pension rights to deter people from risking a career on the frontline of local government. Today, it falls to this Government to fix the foundations that the Tories smashed apart.

We are rebuilding local government so that councils can rebuild their communities. We are making good on our promise to introduce multi-year funding settlements so that councils can plan for the future with certainty. We are reconnecting funding with need so that we can take off the Tory shackles that have held back so many of our towns and communities for so long. We are ending wasteful bidding wars for funding, freeing councils to focus on filling in potholes, not forms. We are putting fairness back into a system that the Tories bragged about breaking. We reject the decline that ripped the heart out of towns and communities up and down this country. We choose change.

Shropshire council is about to see a 10% cut in its core funding from central Government, having been terribly badly run by the Conservatives for the previous 16 years before the Lib Dem administration took over in May. The Government have given the council permission to put up its council tax by 9% without a referendum, but that does not even touch the sides of the cut in funding from central Government. How is Shropshire, which needs to receive exceptional financial support in this year, ever going to fill the ever-growing black hole unless the funding from Government reflects the costs of delivering services in rural areas?

I believe the hon. Lady has had several meetings with my colleague the Minister for Local Government. It is right and very important that we should align funding with need; that is the only way to ensure that funding is fair across the whole country. That is what we promised to do in our manifesto, and that is what we are doing with this settlement.