Jim McMahon MP: speeches

Speeches

• 6 Feb 2025 · Coalfield Communities · Hansard source

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  We are absolutely committed to ensuring that every part of the country realises its full potential. Let us be clear: everybody in every part of the country has potential, but far too often, that potential is not met by opportunity. We will look at any projects and measures that aim to do what my hon. Friend has described in the coalfields to ensure that potential is met, and I can certainly take up that point and maybe follow up in writing. The proud history of our coalfield communities must be matched with a proud future. Late last year, we published the English devolution White Paper, and a Bill will follow. That White Paper includes a reformed vision for the long-term plan for towns, which the autumn Budget confirmed will be retained and reformed as part of our regeneration programme. We are proud that through that plan, coalfield communities from Newark-on-Trent to Wrexham will receive a package of up to £20 million in funding and support. Furthermore, this Government are working with mayors where they are to produce local growth plans across their city regions, which sit alongside local coalfield communities, because we recognise that those are vital to our collective economic future. That regeneration, and the long-term investment and co-ordination that are needed, were referenced by my hon. Friends the Members for Whitehaven and Workington (Josh MacAlister), for Cannock Chase (Josh Newbury), for North Durham (Luke Akehurst), for Leigh and Atherton, for Ayr, Carrick and Cumnock (Elaine Stewart), for Chesterfield (Mr Perkins), for North Warwickshire and Bedworth (Rachel Taylor), for North West Leicestershire (Amanda Hack) and for Airdrie and Shotts (Kenneth Stevenson). They recognise that of course, we can be proud of the history of our place—we all are—but the future is important too, and if we do not put the building blocks in place to rebuild industry and pride, we will miss a trick. As was referenced earlier, no working-class person is waiting for a handout, but we absolutely deserve a hand up. We are sick and tired of being told to wait our turn, to behave and stand in line and to know our place, hoping that somehow, tomorrow, our turn may just come. Lesson after lesson and generation after generation shows that, for all those promises, it never comes. We cannot have power, wealth and opportunity constantly being hoarded by the centre, to the exclusion of our communities that are impacted by it. That is why devolution is so important. If we do not break away from the centralising model of command and control, and the hoarding of power and opportunity, we will never make progress with our economy, society or political power in this country. This week, we are proud to be expanding the devolution priority programme, through which more mayors will be created, with the powers and the tools that they will need, as local leaders, to do what is right for their area. They will not have to come cap in hand to central Government, in constant, wasteful bidding wars. Like my hon. Friend the Member for North East Derbyshire (Louise Jones), I pay tribute to the late John Prescott, a working-class voice in politics. He took up that charge—that fight—and we all recognise the work that he did. Members of the House have our assurance that we stand with our coalfield communities and the excellent Members of Parliament who have spoken today. Question put and agreed to. Resolved, That this House has considered Government support for coalfield communities.

• 6 Feb 2025 · Coalfield Communities · Hansard source

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  I thank all Members for a really thoughtful debate. When Members speak about their constituencies in the way they have today, we get a sense of the pride of place. I congratulate my hon. Friend the Member for Newcastle-under-Lyme (Adam Jogee) on securing the debate, and I thank the Backbench Business Committee for agreeing to it. The level of interest in the debate, and the fact that two time limits on speeches have been introduced, speaks volumes. I know from my own experience of growing up in and representing a constituency with a fierce and proud industrial past, built on the back of the coal that fired it, just how much pride and sense of belonging comes with that. They were jobs—of course they were—but they were more than that; they were about people and place. That identity has stayed with the generations that have come since. Between 1985 and 1997, the closure of 150 collieries resulted in approximately 250,000 job losses. That was not just about employment; those closures meant the loss of the vital social facilities that the National Coal Board and the trade unions had provided for those communities. That is why the Government are taking concrete action to support coalfield communities and secure the future prosperity of former mining communities while honouring their remarkable heritage. We really got a sense of that in the debate. My hon. Friends the Members for Blyth and Ashington (Ian Lavery), for Ossett and Denby Dale (Jade Botterill) and for Alloa and Grangemouth (Brian Leishman) spoke about community and solidarity, as well as about heritage. It is that sense of belonging that we need to respect. Quite often—I hear this strongly when I go around the country—people feel not just that Parliament is a million miles away, but that the next town is a million miles away. The isolation that people often feel economically, socially and politically is profound, and we must do far more to meet that challenge. This Government’s defining mission is growth, and we are determined that our coalfield communities are central to it. That is why we are working in partnership to invest in and empower the nation’s coalfields, so that they can kick-start growth in their area and increase living standards for working people. We have already announced planning reforms, devolution, our plans to make work pay, and settlements to fix the foundations of local government. That will also help coalfields to build their future and realise their full potential.

• 6 Feb 2025 · Coalfield Communities · Hansard source

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  Very briefly, please.

• 5 Feb 2025 · Local Government Finance · Hansard source

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  I will give way for a final time before making some progress.

• 5 Feb 2025 · Local Government Finance · Hansard source

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  The Deputy Prime Minister and I, like many others in this House, have local government in our blood—we are proud public servants. We know what a difference the sector makes every day to millions of people across this country, and how much stronger local government, working in genuine partnership with central Government, can achieve to change lives. I thank the millions of dedicated public servants who work in and for the sector for all their efforts to deliver more than 800 services that local people rely on. We know it has been a difficult few years, but this statement is an important step towards rebuilding the foundations of local government, ready to meet the scale of the challenge ahead so that we can rebuild our country together as part of our plan for change. That is why I take the responsibility of leading the Government’s work to rebuild the sector with the seriousness and urgency that is, quite frankly, long overdue. Today, I will set out funding for local authorities in England for the coming year through the final local government finance settlement. Before I do, I want to say that the Government are grateful to all those who contributed to the consultation on the provisional settlement, which attracted 227 responses, including more than 45 from Members of this House.

• 5 Feb 2025 · Local Government Finance · Hansard source

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  I am going to make a bit of progress. I am mindful of time, and I believe we are guillotined at 7 pm. The Budget will deliver more than £5 billion of new funding for local services over and above council tax income. There are no slogans and no gimmicks. This is real action—£5 billion-worth of real action—and I can confirm that £20 million more will be made available for the children’s social care prevention grant, putting prevention and reform at the heart of the recovery. After hearing representations from the councils affected, we can also announce an additional £2 million of support for councils with internal drainage board levy pressures. That is on top of what was announced in December’s provisional settlement, so the grant is now worth £5 million in total. We will set aside almost £60 million for the coming financial year to ensure that local leaders have the vital capacity to get their financial house in order, so that councils can be effectively supported to better understand their spending and, equally, so that they can be held to account for it by their electorate, which is a vital part of the democratic process. The funding that we are providing includes £515 million to help local government with the increase in employer national insurance contributions.

• 5 Feb 2025 · Local Government Finance · Hansard source

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  I will make some progress, but I will take more interventions later. Councils know that the current system is riddled with inefficiency and is poorly targeted at meeting need. It is vital that we get this right, and we want to hear from all parts of the sector to better understand the drivers of need, including deprivation, the ability to raise tax locally and the impact on service delivery in rural areas. The consultation on these reforms runs until 12 February, and we welcome representations from all who have a stake in this agenda. We are listening to the sector and, through this settlement, responding to the real drivers of cost, especially the spiralling demand in areas such as social care. Importantly, we are taking into account the ability of councils to raise funding locally.

• 5 Feb 2025 · Local Government Finance · Hansard source

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  Very real pressures have built up, and I will not criticise any council from the Dispatch Box—the days of doing that have long gone. That is not to say that I agree with every decision made by individual councils, or that I would not have chosen a different course. In some cases, the decisions were plainly not in the interests of local taxpayers. However, we are where we are, and we need to stabilise the sector this year and reform the funding system over the multi-year settlement, so that we begin to build back the foundation of sustainability and long-term security. We need to invest in prevention and reform, so that we get ahead of the problem instead of paying at the back end for worse outcomes. In the end, we need a funding system that really holds. By doing that, we will ensure that most councils in most parts of the country find themselves in a much better position than they were before the work was undertaken. Because of the types of decisions that have been taken, there will always be outliers. Whatever system we design, we can accommodate most councils in most circumstances, but because of the decisions that have sometimes been taken, we cannot accommodate all councils in all circumstances. The Government have committed to working alongside councils to work through this. Of course, local government reorganisation will accelerate the need to do that in some areas, because we will have to reconcile the creation of unitaries with the inherited debt liabilities. We are fully sighted on that.

• 5 Feb 2025 · Local Government Finance · Hansard source

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  I thank the right hon. Gentleman for his question, and assure him that it is an issue we are acutely aware of. The disproportionate burden that drainage places on small district councils is quite a challenge. We met representatives from a number of district councils to talk about the internal drainage board levy system, and, as an interim measure—in the end, I think we do need a more fundamental review of how it is paid for—we have increased the levy grant by £2 million to £5 million, so we are beginning to get there. However, I agree with the right hon. Gentleman entirely: we do need a long-term solution to that. He has my commitment that we will find a way through that as we begin the wider reforms later on. As the Chancellor said last week, this plan will be achieved first and foremost through growth, which will be driven by empowered local leaders working in partnership with local communities and local businesses; those who have skin in the game are now on the playing field, not confined to the terraces as spectators. This new approach has to start with strong and empowered local government, because whether we are talking about raising living standards, delivering 1.5 million new homes and vital infrastructure, getting our NHS and social care system back on its feet or creating good jobs and strong communities, it all comes back to local councils delivering for local communities. Indeed, we cannot deliver on the national renewal that working people deserve without grassroots government leading the charge, which means resetting our relationship with local leaders and rebuilding the foundations from scratch. It means ditching the slogans and gimmicks in favour of a determination to get the basics right, delivering decent local services that people can begin to rely on once more. After 14 years of neglect and decline, that will be easier said than done, and, because of the scale of the challenge, it will take more than six months to fix. But be clear: we have changed course. The work has begun with determination and with pace. Councils of all political stripes are feeling the strain, and it will be a long, hard road to get them back to full fitness. This final settlement marks an important milestone on that journey, as we finally turn the page on chaos, austerity and 14 long years of managed decline. In that spirit, the settlement addresses the financial crisis facing councils head on, moving away from bidding wars for wasteful competitive funding pots and towards core, stable multi-year financial settlements.

• 5 Feb 2025 · Local Government Finance · Hansard source

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  There are, understandably, many criticisms of council tax. It is accepted that it is a fairly regressive tax in terms of the relationship between the ability of a household to pay versus a property’s value, but in the end it is a reliable tax that is understood by the taxpaying public. The framework of council tax will be maintained, in the same way as business rates, but that does not mean that we cannot do more to make it fairer. The best way to make it fairer in this settlement is for the Government to play their part. What we have seen over the past 14 years is that, despite an acceleration in council tax increases, councils have still found themselves impoverished: they cannot raise enough money locally, whatever they do, to fund the demand for local public services. We clearly see the role of the Government as an equaliser to the system. Taking into account the ability to raise tax at a local level, by providing a top-up the Government can ensure that every area gets decent local public services, and we can begin to get some fairness into the system. I take my hon. Friend’s point entirely, however, and I look forward to the work of the all-party parliamentary group.

• 5 Feb 2025 · Local Government Finance · Hansard source

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  In a way, there is commonality across the House in recognising that particular problems really ought to be taken into account when it comes to local government funding, and if it is got right—our intention is to get it right—it will take into account up-to-date population and deprivation statistics. It should take into account the ability of a local authority to raise tax locally through council tax, or through business rates or fees and charges. It should take into account the cost of delivering services, whether that is about the rental costs of acquiring a space to operate from or even the cost of delivering services in areas such as rural or coastal communities, where there are particular issues. The formula should take that into account, so let’s work through that. We are responding to the pressures, which is why we are making £3.7 billion of extra funding available for social care authorities. That includes an uplift of £880 million in the social care grant, which includes an additional £20 million that I have confirmed today for the new children’s social care prevention grant, taking the total for that grant to £270 million. That paves the way for the national roll-out of transformed family help and child protection services. We have doubled settlement investment in preventive children’s social care to £500 million next year. If we do not reform the system and focus on prevention, we will continue to pay more and more, too often for worsening outcomes. This is happening alongside the Education Secretary’s work to take forward the Children’s Wellbeing and Schools Bill, which will crack down on profiteering and improve child protection—something that the Tories failed to do, at a very dear cost to taxpayers, who were left to pick up the bill. Again, the severe pressures on SEND services came across loud and clear during the consultation. As we have announced, we are boosting SEND provision and alternative provision by an extra £1 billion to start to return the system to financial sustainability and to improve outcomes for young people. We are aware of the impact that dedicated schools grant deficits are having on council finances, which is why we are committed to working with councils, parents, teachers and schools to transform SEND provision and the life chances of the children who need it.

• 5 Feb 2025 · Local Government Finance · Hansard source

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  That is the point. When it comes to fairness in the council tax system, we have to be honest and say that there has increasingly been an imbalance, whereby people are paying more and more but often receiving fewer and fewer universal neighbourhood services. There is a real danger to the democratic process if there is not a link between the tax that people are paying and the quality of public services that they are getting in return. In the end, councils are wrestling with adult social care, children’s services and temporary accommodation, and what else can they do but meet the demand? It is not a good position for the taxpayer or for local authorities, and we acknowledge that. Our new £600 million recovery grant targets areas with both the greatest need and the greatest demand for services. The recovery grant is the first meaningful step towards long-overdue funding reform, but it is only the first step. A longer-term and more fundamental overhaul of the way that councils are funded is needed to ensure that all councils can deliver for local residents. The Tories committed to improving and updating the way that councils are funded through the fair funding review, but in the end they failed to take the tough decisions needed to deliver it, just like they failed to give councils certainty and security so that they could plan ahead, with a decade marked by year-by-year, hand-to-mouth settlements. That is why the 2026-27 settlement, which will be the first multi-year settlement in a decade, will introduce an up-to-date assessment of councils’ needs and resources. We are acting where the previous Government failed. We will get on with the job of allocating funding fairly, based on the evidence of need, because councils know that every pound counts, and they also know that the current system—

• 5 Feb 2025 · Local Government Finance · Hansard source

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  I cannot commit to that today. What I can do is to commit, from a political point of view, that the Government are willing to work cross-party and through APPGs to understand the weight of the issue and the potential solutions. I will be honest, though: we need to manage expectations on whether we can get consensus in this place on a new form of council tax or local property tax, but that does not mean we are not willing to listen to arguments.

• 5 Feb 2025 · Local Government Finance · Hansard source

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  The hon. Member must accept that part of the difficulty we have in a two-tier system is the inability to move money around that system. It is correct to say that rural councils, mainly in two-tier areas, have had an increase of nearly 6%, but we have a huge inability to move that money around. There is around £2 billion in the two-tier system that could be freed up through reorganisation of local government, so will he stop looking both ways on reorganisation, and give a commitment on behalf of his party that the Liberal Democrats will support it?

• 5 Feb 2025 · Local Government Finance · Hansard source

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  The £515 million of investment from the Treasury to help councils with the increase in employer national insurance contributions has been distributed on the basis of their net service expenditure costs. We thought that that was the fairest way of establishing an evidence base that could be scrutinised. There have been legitimate representations about third-party provider costs in some critical areas, such as social care. We accept the figures from the Local Government Association because we have no reason to dispute them, but our difficulty is that that in itself does not mean that the cost will be passed on directly to the local authority in question. Some parties are bound by contracts that mean that they cannot pass it on even if they wanted to. There will be negotiations about the ability of a provider to absorb that cost, but we do not underestimate the problem. No one is going to pretend that this settlement fixes the system. What we want to try to do is stabilise the system through a multi-year settlement with bigger reforms.

• 5 Feb 2025 · Local Government Finance · Hansard source

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  I am only intervening given the hon. Gentleman’s position as Chair of the Public Accounts Committee. I think that this is a common interest for the PAC, Parliament and the Government. I do not want to labour the points about the past; the question now is how we move forward. From our perspective, it is not acceptable at all that the whole of Government accounts cannot be reconciled because of local government audit backlogs, so we want to address that. More importantly—this is definitely where there is a common interest—we must rebuild the early warning system, because what we cannot pick up effectively enough is whether there are systemic problems, which are more than just one council beginning to wobble, that we should be aware of and take action on.

• 5 Feb 2025 · Local Government Finance · Hansard source

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  Will the hon. Gentleman give way?

• 5 Feb 2025 · Local Government Finance · Hansard source

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  This is not a perfect settlement, but it is my honest belief that it is a good settlement. We are keen to make sure that the money goes to local authorities in a way that is transparent, with an evidence base that can be scrutinised. Councils are sick and tired of the system being manipulated by Governments of different types over different periods in a way that is not fair.

• 5 Feb 2025 · Local Government Finance · Hansard source

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  I thank my hon. Friend for that question and pay tribute to Salford for its leadership in the work it is doing in many areas of public sector reform in Salford and across Greater Manchester. In the end, if all we do is pay at the back end for a system that, frankly, is broken, we will be paying more and more every single year for a system that is delivering worse outcomes for service users. That is bad for service users and bad for taxpayers, so we must have a more fundamental response and we fully intend to do that. The multi-year settlements are essential to ensure local leaders have the time and space to plan their budgets. But we will not stop there. We are introducing a fairer system to give councils the certainty and stability they need to go from costly crisis management to long-term prevention and the root-and-branch reform of local public services. Crucially, I can now confirm that core spending power for the sector will be more than £69 billion for 2025-26, a 6.8% cash terms increase on this year. I can confirm that, despite some very difficult choices—there have been choices and trade-offs to make, as there always are—this settlement will mean that no local authority will see a reduction in its core spending power.

• 5 Feb 2025 · Local Government Finance · Hansard source

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  Absolutely. Deprivation is a key part of the funding settlement. This is the first settlement in a long time, and probably the first since the area-based grant in 2010-11, in which deprivation is a measure by which the Government allocate money to the sector. If we see this as only a local government problem, we will miss the prevention and reform agenda that we need. My hon. Friend and I often talk about this, but the Home Office is working on diversionary activities for young people. In many communities, gang activity, child criminal exploitation and knife crime are very real issues that draw too many young people into crime. We need those diversionary activities in the places where people live. We need to address that, and it should be a whole of Government agenda. That is why we are marshalling our work around the Government’s missions, and our approach is anchored to the plan for change.

• 5 Feb 2025 · Local Government Finance · Hansard source

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  I think that that is true up to a point, but we need to take a couple of factors into account. First, the payment relating to employer national insurance contributions goes straight to the council. Secondly, this needs to be taken in the round. For the right hon. Gentleman’s own council, the social care grant is £48 million, the social care change grant is £6.7 million, and when it comes to third-party providers, the market sustainability and improvement fund is £10 million. We are trying to meet the demand in a very complex environment, but, as I have said, there is no pretending that this will fix a broken system in one fell swoop. The reform will take time.

• 5 Feb 2025 · Local Government Finance · Hansard source

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  On the timetable point, all councils in the 21 two-tier areas for reorganisation will receive their statutory elections. Individual councils will need to decide whether to apply for the process or not. If they choose to apply, we would expect their proposals to be submitted to the Government by November. That is quite a short period for them to work up the proposals, but there will be support in terms of capacity along the route. As for how that unlocks devolution a bit further down the line, we are obviously concentrating on the devolution priority programme at the moment and getting the mayors in place, but the door is always open to areas that want to talk about mayoral devolution.

• 5 Feb 2025 · Local Government Finance · Hansard source

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  Where we can agree is that we accept that the old perspective that there are inner-London pressures that do not feature in the outer-London boroughs might have held in the past but it does not address the complexity that there is today, because a number of pressures have moved outwards into those outer boroughs. I think that that is accepted and appreciated. I said that this might not be a perfect settlement, but it is a good settlement. The hon. Gentleman’s council has a 6.5% increase in its core spending power. So there is room there—this is not a flat cash settlement—and we hope that the local authority will make the necessary decisions. We are not interested in scoring party political points or pitting one council against another. We know that councils of all political stripes are struggling, and we want to work together, through the later reforms that we are looking at as part of the more structural review we are undertaking, to make sure that we genuinely address that. We hope that when Members across the House look at the rationale and the evidence base—whether they agree with the quantum is a separate issue—they can at least say that it holds. That is the work that we are undertaking today, and we encourage Members to contribute to the process.

• 5 Feb 2025 · Local Government Finance · Hansard source

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  The hon. Gentleman has my commitment that we will review the submission that we have had in good faith and in the spirit of partnership. We recognise that the councils that have made exceptional financial support applications have done so at the end of a process, not at the start, and that they need the Government to work with them. We will confirm exact allocations later, local authority by local authority, but I take on board what the hon. Gentleman says. The financial legacy left by the last Government has led to a record number of councils asking for additional council tax increases. The ability to request additional increases already existed, but there is a need to balance them with the impact on local taxpayers. On that basis, we have taken a stricter approach than the previous Government. That means avoiding excessively high increases and agreeing to rises only where councils have comparatively low levels of existing council tax. Having carefully considered requests, we have agreed to modest increases in six local authorities: Windsor and Maidenhead, Birmingham, Bradford, Newham, Somerset and Trafford councils. However, our strict approach means that we have not been able to agree to all the requests that we have had and that not all requests have been met in full. Taxpayers in those areas are still expected to pay less than the average amount of council tax, compared with similar councils, because of the approach that we have taken. We have been clear that all councils should take whatever steps are necessary to protect their most vulnerable residents from the impact of additional increases. At national level, even with those increases, the overall increase in council tax is not expected to exceed that of last year. Without the additional £5 billion provided in the Budget and the settlement, there is no doubt that that would not have been possible. In a way, that displays the new relationship, because, unlike the previous Government, we will not impoverish councils or parade them around to be shamed. Instead, we will work with them to put them back on their feet financially. We will fix the broken local audit system and the unacceptable backlog that we inherited; move from a failing, dispersed approach towards a focused, proportionate local audit office that offers value for money; and improve transparency, accountability and confidence in how hard-earned taxpayer money is being spent. However, we all know that there is no quick fix. The legacy that we have been left is nothing short of scandalous, but this settlement marks a turning point. It will back local government with the long-term funding and certainty that it needs to fix the foundations, based on a new partnership with central Government. Through reform, fairer funding and better stewardship, we will ensure that the sector is fit, legal and decent, so it can stand on its feet as a strong, functioning arm of the state. The settlement will provide more money for local government, especially in areas of greatest need, such as social care, and more investment in the things that matter to local communities, from support for our high streets and town centres to mending potholes and boosting local planning departments, adding up to public services that we can all begin to rely on once again. Stronger communities will support a stronger economy, with higher growth, delivering higher living standards for working people that will be felt in every part of the country. Driven by a devolution revolution, we will deliver the greatest transfer of power from Whitehall to our communities in a generation. Finally, we will put politics back into the service of working people. Our plan for change has local government at its heart and I commend it to the House.

• 5 Feb 2025 · Local Government Finance · Hansard source

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  I take my hon. Friend’s points entirely. I credit him for much of the work that was done when he chaired the Select Committee, which he did for a long time, and I attribute to his intervention the credibility that it is due. We are focusing today on our immediate fiscal response to support councils over the current financial year, but we accept that to bring about long-term structural reform, such matters as addressing a council’s ability to raise local tax through business rates and council tax must be taken into account, alongside, of course, the cost of delivering public services, including the cost of rural service delivery. We are absolutely committed to taking all those factors into account.