Local Government Finance

The three motions on local government finance will be debated together.

I beg to move,

That the Local Government Finance Report (England) 2023-24 (HC 1015), which was laid before this House on 6 February, be approved.

With this we shall discuss the following motions on local government finance:

That the Referendums Relating to Council Tax Increases (Principles) (England) Report 2023-24 (HC 1016), which was laid before this House on 6 February, be approved.

That the Referendums Relating to Council Tax Increases (Alternative Notional Amounts) (England) Report 2023-24 (HC 1017), which was laid before this House on 6 February, be approved.

Today we are confirming the major parts of the settlement announced in December: greater funding for local government, greater stability for councils, greater certainty in their ability to plan, and greater space in their ability for future reform, responding to what local councils have asked us to do. We know that local government has faced significant challenges in recent years: the pandemic and its incredible local response to that, the Russian invasion of Ukraine and the challenges that that has brought for prices, the cost of living and inflation, and, more broadly, global inflation, which has fuelled the cost of living. We know that that has had an impact across society, and that includes the tremendous work that our colleagues in town halls and council chambers up and down the land have done throughout. I am hugely grateful for all their efforts to continue to deliver for their communities in difficult circumstances.

The Minister talks about the terrible circumstances in Ukraine and the events of the last year, but he must recognise that the scale of the cuts since 2010 have been devastating for our local authorities, which have had to consider closing libraries, swimming pools, leisure centres and so forth. Can he confirm that it is in fact more of a long-term problem and that we need greater investment in our public services?

I am grateful to the hon. Lady for outlining her concerns. She tempts me into a wider discussion about the financial policies of the previous Labour Government and the coalition over the last 13 or so years, which have been discussed at length here. I was a councillor in 2010, and I know that where I was a councillor the money was not in the right place then, so 2010 should not be seen as a panacea for the effectiveness and efficiency of local government.

None the less, we are dealing with a specific challenge this year, and there is a significant improvement in the local government funding provided as part of this settlement. In recognition of those exceptional pressures, we are confirming funding from the taxpayer totalling almost £60 billion for local authorities in England for the next financial year.

It is important to acknowledge, as this House confuses it on occasion, that political debates are always about much more than money. However, using that calculus, we are confirming an additional £5 billion in core spending power for 2023-24, a new one-off funding guarantee that ensures that every council will see a minimum 3% increase in its core spending power before decisions are made on raising council tax locally, plus £2 billion in additional grants for adult and children’s social care for the coming financial year.

Taken together, they represent a significant increase that will allow councils to deliver the vital local services upon which we all depend and that responds to councils’ request for greater certainty and greater space to reform in the years to come. That is in addition to the billions already available to local government through the levelling-up fund and other regeneration and infrastructure funding, which is helping to boost growth, jobs and opportunity, as demonstrated only a fortnight ago in the additional funding announced for more than 111 local infrastructure projects across the UK.

I thank the Minister for giving way; he is very kind. Is he aware of concerns that the revenue support grant does not reflect updated population statistics, which will have a severely negative impact on constituencies such mine in Salford? Our population has increased by 15.4% from 2011 to 2021. How do the Government propose to address that glaring deficiency in the plan?

The hon. Lady raises an important point: a number of the formulas in place in local government have been in place for a number of years. There is always the question, which Governments of all parties have debated and discussed over many years, of when it is the right time to reform and when it is the right time to offer stability. I would be happy to talk to her in more detail about particular challenges that occur in the north-west with the changes in the census, but, as a principle this year, given the requests of local government, we have chosen to prioritise stability and certainty, which councils have asked for.

The Minister talks about levelling up, and I do not want to go into the pain he had last week on that, but there was a report yesterday in the Financial Times that the Treasury has stopped his Department doing any further capital spending because it is concerned about value for money. Could he comment on that?

The Treasury certainly has not stopped anybody doing capital spending; we need only look at the amount of money going out of the Department for Levelling Up, Housing and Communities and supporting communities such as my own in Chesterfield and North East Derbyshire, through two town deals and the levelling-up funds. That demonstrates this Government’s commitment to levelling up across the whole country, all through the year.

I thank my hon. Friend the Minister for the recent funding from the levelling-up fund that will benefit projects across my constituency. In addition to core funding, we have had transforming cities funding and coastal communities funding—a huge amount of money has gone into local government, above and beyond the core spending grants. Furthermore, as our right hon. Friend the Secretary of State knows, local authorities now predominantly do not fund schools, which are directly funded by the Department for Education. Can my hon. Friend confirm that the uplift in funding will allow local authorities such as mine to concentrate on core functions that the public expect, such as filling in potholes and cleaning the streets?

That is exactly the intention behind what we are confirming today. Local government does a brilliant job every single day all across the land, and we are seeking to give it the tools to continue doing that and space to reform in the coming years.

I will make a little progress and then I will happily give way to more hon. Members.

Throughout, we have been mindful of the squeeze on household budgets and how it is being felt more acutely in some places than in others. That is why money is going to the communities that need it most and why, alongside that, we are providing councils with £100 million-worth of further support to help the most vulnerable households with council tax increases and cost of living pressures. It is also why we are striking a fair balance between giving councils the flexibility to make local decisions to meet local pressures and support the most vulnerable, and continuing our general policy of protecting local taxpayers from excessive tax increases, in line with our manifesto commitments.