Jim McMahon MP: speeches

Speeches

• 18 Dec 2024 · Provisional Local Government Finance Settlement · Hansard source

  More

  Given the hon. Gentleman’s background, I am surprised that he is displaying such ignorance of council finance. The Government’s role in local government finance is to be an equaliser. As he knows, everywhere has the ability to raise tax locally through council tax and business rates, but he also knows that some areas have the ability to raise far more than others because of their tax base. It is the job of the Government to equalise—to make sure that when it comes to demand for services, everywhere gets the service provision it needs. That requires the Government to provide more funding in some places to reconcile that lower tax base, so that everyone gets the services they are entitled to. The presentation that the hon. Gentleman has offered shows either ignorance or politics, but I think the country deserves better.

• 18 Dec 2024 · Provisional Local Government Finance Settlement · Hansard source

  More

  I thank the former Chair of the Housing, Communities and Local Government Committee for that question. I can confirm that the core spending power of that element in this settlement for Sheffield will be 8.5%, which is before the additional funds that will follow. Sheffield gets a good settlement from this, but we recognise that it is in a context of growing demand, so we hope councils see that we are meeting them on the challenge they face. On whether we will review council tax, I think every Government recognise that there are huge limitations with council tax, and also huge geographical variations. It is regressive, which is the nature of a tax based on property values rather than the income of the people in them. However, council tax is understood, its collection rates are high and it is really the foundation—although not the total, as my hon. Friend knows—of the funding of council services. The urgent issue we need to face is that previous Governments moved away from their role as the equaliser in the system. Whereas the revenue support grant used to be in place to support councils by reconciling lower tax bases, recent Governments have been missing in action. We are saying to councils of all political stripes, across every type of authority and every part of the country, that we will reconcile that and work with them to equalise the situation. On the local audit office, we are absolutely determined that this will not be a return to the Audit Commission. We are trying to do a number of things. First, we want to rebuild the early warning system to make sure that we see any systemic problems developing in the system. However, we also recognise that the cost of audit has increased by 150%, which is a direct cost to taxpayers, and that there is fragmentation in the market, and we need to look at the fall-back position as opposed to auditor supply. There is quite a lot that we need to deal with, but this is very much about the provision of audit and making sure the early warning system is rebuilt; it is certainly not a blow to the inspection regime.

• 18 Dec 2024 · Provisional Local Government Finance Settlement · Hansard source

  More

  That is exactly the point of moving to a fairer funding formula—and we will of course consult on the component parts making that up. We have to take this in the round—I genuinely want any part of the country and any type of local authority to be able to interrogate the system, and even if they disagree with the quantum—there will always be arguments that—to be able to say that the rationale and the evidence base hold. It is a matter of accepted fact that there is a premium on the cost of rural service delivery, just because of the travelling involved. For example, for a home care worker, there is the travel time between appointments and all the rest of it. However, it is probably also accepted that the evidence base is not as robust and strong as it needs to be, so we want to make sure through this process that we take into account the need for that strong and robust evidence base.

• 18 Dec 2024 · Provisional Local Government Finance Settlement · Hansard source

  More

  Again, the hon. Lady’s council will see a core spending power increase of 5%, and that is only this part of the settlement—it does not include extended producer responsibility or billions of pounds in other grants that will come. This is a genuine attempt to make sure we give councils the funding that is needed, and I think we have succeeded in a very difficult context, but it is a matter of fact that some councils’ local tax bases are stronger, for reasons that go back many years and, in some cases, many centuries. That is not because of the efforts of the local council—it is what it is—and for too long, councils in deprived communities with lower tax bases have done everything that has been asked of them. They have raised council tax to the maximum, so local communities are paying more and more, but increasingly they are getting less and less. They are seeing their neighbourhood services diminish. There are tough choices, and we do not shy away from that. We have been very honest in the oral statement about the trade-offs that have had to be made, but the increase of 5% in the core spending power of the hon. Lady’s council will help deal with the issues she has raised.

• 18 Dec 2024 · Provisional Local Government Finance Settlement · Hansard source

  More

  I thank the hon. Member for coming to one of our surgeries to make representations on behalf of his council. I know that he cares about these issues. We need to be careful not to think that those who have received the recovery grant are the only places that have deprivation, because that is not the case. The recovery grant is very targeted and has two components: one is whether the area has a weaker tax base; the other is whether the area has significantly higher deprivation than other comparable areas. We are clear that we need to root out deprivation and need wherever they exist. The fair funding review is intended to take into account many different component parts, including the cost of rural service delivery, general overheads, premises costs, deprivation and the rest, so that, whatever the issue and whatever the context, councils have confidence that the funding is correct.

• 18 Dec 2024 · Provisional Local Government Finance Settlement · Hansard source

  More

  I agree about the importance and significance of the statutory override—that is felt very acutely in the Department and in the sector. We are consulting now on a number of matters, including the statutory override, and we are in constant dialogue with the Treasury about how we deal with that in the long term. In the end, this is another example of the legacy we have inherited. We are taking very difficult decisions to reconcile, reform and repair the system—decisions that should have been taken earlier but were not. That issue is very much on our agenda.

• 18 Dec 2024 · Provisional Local Government Finance Settlement · Hansard source

  More

  There is a legitimate question to ask the previous Government about why on earth some councils were allowed to borrow disproportionately to their revenue. In the end, some councils have found themselves on the wrong side of that. When we were designing the recovery grant, that was about deprivation and low tax bases, and dealing with the quantum was about directing money to particular services, but I will be honest: there will always be councils—Croydon will be one of them—which, because of their unique situations, are just outside that general allocation. We are ready to have one-to-one support conversations where needed.

• 18 Dec 2024 · Provisional Local Government Finance Settlement · Hansard source

  More

  My hon. Friend makes a good point. Where councils such as Calderdale are doing well and excelling, they are working hand in glove with the local community and voluntary organisations to ensure they get the coverage to reach into communities. I applaud that work, and I hope that the 7.4% uplift in core spending power in this part of the settlement goes some way to supporting it.

• 18 Dec 2024 · Provisional Local Government Finance Settlement · Hansard source

  More

  That is exactly right. We have approached this year as very much a recovery operation. We could see that councils were in the ditch and needed to be pulled out and taken home, and that is exactly what this one-year settlement will do. However, what they need and deserve is a multi-year settlement that gives long-term security and stability, and for that long-term settlement not to be the continuation of a broken system, but a system that has been rewired and put right. With the fair funding review, the multi-year settlement and the reform agenda, putting prevention at the heart of public services, we will begin to achieve the end to which my hon. Friend rightly points.

• 18 Dec 2024 · Provisional Local Government Finance Settlement · Hansard source

  More

  I thank my hon. Friend for that question, and I join him in paying tribute to the council officers and council leadership in Stoke-on-Trent. As a direct cash payment—the down payment I mentioned earlier—Stoke-on-Trent council will get £8.7 million, and its core spending power will increase by 8.6% just in this round, but that may well over 10% by the time the full allocations come through. That is part of the rebuilding process, and as I have said, it reflects the fact that we cannot punish councils because of their inherited historical tax base. We must make sure that the Government step up to their role to equalise the system so that everyone has fair access to public services.

• 18 Dec 2024 · Provisional Local Government Finance Settlement · Hansard source

  More

  To be honest, although I absolutely agree that we need reform, I believe the urgency is today. Think about the number of older people who would have been entitled to adult social care in 2010 who now do not even get support from the local authority, because eligibility has changed in so many areas. There is a crisis, and that crisis is not just being felt in the homes of all the people who have given to this country and deserve better; it is being felt in the acute sector and in the health service, where we are paying far more at the back end because community preventative services are not in place. We are working with the Cabinet Office and the Treasury to say, “Let’s learn as we go” on some of this, in terms of innovation and pilots where we can invest to save—invest in those community preventative services up front, to try to better reduce demand. Of course, it is about money, but in the end it is about the service we provide. I appreciate the hon. Gentleman’s comments about the settlement in the round.

• 18 Dec 2024 · Provisional Local Government Finance Settlement · Hansard source

  More

  The Government were elected on a mandate of change, to deliver a new era of economic growth and national renewal, and reverse the years of failure and decline that we inherited. Through the tough decisions that we took in the Budget, we prevented a return to austerity while protecting working people’s payslips. The plan for change that the Prime Minister unveiled earlier this month is the next stage on the journey of reform—a plan to kick-start growth and get Britain building again, putting more money in people’s pockets and delivering 1.5 million new homes, good jobs and opportunities for all. Just this week, we announced our plans to rebuild and reform local government, and to empower local leaders to deliver that change so that the benefits are felt in every community. We cannot do this alone. We need strong, empowered local government to work with us, as equal partners in a new relationship. Public service is our collective duty, but after a decade of cuts, fiscal mismanagement and the failure of the previous Government to fix the foundations, it is a fact that councils of all political stripes are in crisis. The broken local audit system in England and the scandal of the unacceptable backlog that led to the recent whole of Government accounts disclaimer further illustrate the dire straits of the system and the legacy that we must reconcile. The Prime Minister gets this. As a former director of a critical public service, he knows that reform is vital, and so does the Deputy Prime Minister, having worked on the frontline as a home care worker, seeing the human impact every single day. I am proud to have public service and local government in my blood too. That is why I take the responsibility to lead the Government’s work to rebuild the sector with the seriousness that is due and the urgency that is required. The work has already begun, and today marks a major milestone in our mission to rebuild local government and put councils on a firmer financial footing, as we publish the provisional local government finance settlement for ’25-26 and launch our consultation on these proposals, alongside our consultation on wider funding reform. In the autumn Budget, the Government announced £4 billion of additional funding for local government services, of which £1.3 billion would come in the settlement presented today, but we know that we need to rally. That is why I am announcing over £700 million of additional grants. That includes over £200 million of extra funding for social care since the policy statement. I also confirm that the new funding includes £515 million that will be made available in the final settlement to support councils with the increase in employer national insurance contributions. The package in the provisional settlement will enable local government to invest in the vital services that people rely on, making £69 billion available—equivalent to a 3.5% real-terms increase in councils’ core spending power when compared with ’24-25. I confirm that this will increase even further in the final settlement. Today is the start, not the end. Taken together, the additional funding made available in this settlement and the Budget will deliver over £5 billion of new funding for local services over and above local council tax. Alongside that, every authority in England will receive a one-off share of £100 million currently held in the business rates levy account. Together, we must ensure that public investment is used for long-term prevention and reform of local public services, rather than expensive short-term crisis responses, which often have much worse outcomes. We are determined to end the cycle of failure that we have seen for too long, and we will provide certainty by ensuring that no authority will see a reduction in its core spending power after accounting for council tax flexibilities next year. We are also ensuring that taxpayers’ money goes to where it is needed the most. That includes an immediate down payment: a highly targeted £600 million recovery grant, funded through repurposing the rural services delivery grant and the services grant, ahead of broader reforms to a fairer funding system later. Today, we are launching a consultation on local authority funding reform starting in ’26-27. There will always be tough decisions to make, but we are determined to ensure that we fairly reflect the real drivers of cost, including demand, the need for public services, and importantly, the ability of councils to raise revenue locally. That is why we are making up to £3.7 billion of extra funding available through this settlement to help local authorities to meet the spiralling costs of social care. That includes an additional £200 million uplift to the social care grant, which I confirm today, taking the total increase to the grant for ’25-26 to £880 million. That includes the new children’s social care prevention grant, first announced in the policy statement, which I today confirm will be uplifted in a further final settlement by £13 million, taking the total to £263 million. That is the first step in our national roll-out of transformed family health services, as we double settlement investment in preventive children’s social care services to over £500 million next year. I place on record my appreciation, and that of the Deputy Prime Minister, for the partnership and determination shown by the Treasury, the Education and Health Secretaries, and their Ministers and officials. We will not do as the previous Government did and impoverish councils, and those who need support the most, then parade them around for public shaming. That helps no one. We must work together to get councils back on their feet financially. The principle stands that it is for local authorities to decide at what level they set their council tax, and they are accountable to local taxpayers; however, we are committed to keeping taxes on working people as low as possible, and we have to strike a balance, so we will maintain the previous Government’s policy, as set out in the Office for Budget Responsibility forecast, of setting a 5% council tax referendum principle, made up of a 3% core principle and a 2% principle for the adult social care precept. That means that residents will have the final say over increases that go beyond that. We have put in place a framework for 2025-26 to support those councils in the most financial difficulty. Similar to the approach taken by the previous Government, we will consider requests for bespoke referendum principles on a case-by-case basis. We expect the changes outlined today will give the respite needed and clarity on the direction of travel, but we also know that 14 years have hit hard and, for some, the recovery grant and the other measures will still mean that additional support is required. We will put taxpayers and the impact on working people at the forefront of our decisions, and we will look carefully at councils’ individual circumstances—for instance, how much they charge in council tax and the strength of their plans to protect vulnerable people on low incomes. To recognise the impact of council tax on households across all councils, we are consulting with the sector on changes to payment instalments, which will allow annual council tax bills that are spread over 10 months to move to a 12-month schedule by right, helping household budgeting, spreading the cost for working people and mirroring how most household bills are paid. Ensuring local government can deliver for working people in the long term requires a root-and-branch reform of the way that councils are funded. That is why through the 2026-27 settlement—the first multiyear settlement in 10 years—we will introduce an up-to-date assessment of councils’ needs and resources. Today we are launching a consultation on the objectives and principles of those changes. We will consider representations from all corners of the sector to develop our understanding of the drivers of need, including deprivation, and of the impact in rural areas on service delivery—fairness for all delivered once and for all. We will redouble our work to shift power away from Westminster into the hands of those communities who know their area best. We will reduce the myriad of funding pots that councils have to contend with, giving them the flexibility they need to deliver local and national priorities. That effort is underpinned by our strategy to streamline and simplify the local audit system in England. Local communities deserve transparency, accountability and the effective early warning system that local audits provide. We are taking immediate action by replacing the broken and dispersed system with a focused, proportionate and value-for-money local audit office, ensuring that the system is fit for purpose. This is a long-term challenge, and it will take hard work and dedication to achieve, which is why we are wasting no time in fixing the foundations, getting the audit backlog under control, overhauling the system for the long term, returning to secure multiyear settlements, and bringing forward ambitious plans for devolution, growth and reform of public services, while improving standards, accountability and efficiency. We are building for the long term to get local government fighting fit, legal and decent, and as equal partners to rebuild our country from the ground up, and ready to play its part in delivering the Government’s missions through our plan for change. I commend the statement to the House.

• 18 Dec 2024 · Provisional Local Government Finance Settlement · Hansard source

  More

  We come back again to the broken housing market. The need to build 1.5 million new homes is there, but—let us be clear—they have to be the right homes in the right places for the need in the local area. That means not only more social homes but council provision. We continue to see a cycle—we have all seen today’s inflation figures, which are driven by private rent—in which the taxpayer pays more and more for accommodation that is often substandard and does not even meet the decent homes standard, with no benefit to the taxpayer. We have got to rebuild council housing and social housing and make it fit for purpose and affordable.

• 18 Dec 2024 · Provisional Local Government Finance Settlement · Hansard source

  More

  I thank the Chair of the Select Committee for her question. We are all getting ready for Christmas and looking forward to time with our families and our own respite, but in the end it is hard to enjoy that moment given the prospect of just how many children in this country are in temporary accommodation. Some 159,000 children do not have a secure, affordable place to live and so are in temporary accommodation. In my own town, there are 500 such children. We do our best—we martial for the Christmas parties that charities put on—but it is no replacement for a secure family home. There will be lots of differences in the exchanges that take place here, but we need to focus on why we are doing what we are doing. The reason we are building 1.5 million new homes is of course economic, and about decent, well-paid, working-class jobs—we talk a lot about that—but in the end it is about sorting out the housing crisis. If we sort out that crisis, we sort out the temporary accommodation crisis and the financial crisis in local government. If we sort out the crisis in adult social care, of course we sort out the financial crisis, but we will finally deliver on the promise of the state looking after the generation who gave so much. If we sort out the crisis in children’s social care, we finally deliver on the state promise to invest in the next generation. Repairing the foundations is, of course, about financial foundations—that is important—but it is also about people and communities, and in the end that is what we are all here for.

• 18 Dec 2024 · Provisional Local Government Finance Settlement · Hansard source

  More

  I have covered the rural services element before, so I will home in on the home to school transport issue, which I know is a huge issue in many county council areas, where children are carried further away to get to schools. I will be honest and say that some of that is absolutely required, and has always been required, but quite a lot of it is the result of a broken system in which education is not being provided in local communities and parents have been forced to move further out. The plan we have to rebuild education and to invest in schools, some of it funded through impositions on private schools to get that money into the state sector, is about rebuilding local education provision so that parents have the choice and the confidence to go to the state school nearest to their home. That will have an impact on council budgets for home to school transport.

• 18 Dec 2024 · Provisional Local Government Finance Settlement · Hansard source

  More

  Most in the sector would agree that Oflog—the Office for Local Government—had a vague remit that was an expensive way of gathering data. In the end, if it were to be developed, we could risk mission creep whereby its remit would verge into the areas that local authorities so disliked about the former Audit Commission. We are trying to get the right balance between the early warning system that enables us to see which individual councils are under stress, and, importantly, noting any developing systemic threats or themes for which central Government might have to take much earlier action. We want to rebuild that early warning system. However, we are absolutely clear that we are not replacing the Audit Commission. For one, it was hugely expensive, and we need to ensure that any money goes to the frontline of local public services. Honestly, councils do not need inspectors going in to mark their homework when they should be trusted to get on and do the job well. People understand what the National Audit Office is, so we hope that they will understand and see the benefit of a local audit office, and that it will be embraced by the sector.

• 18 Dec 2024 · Provisional Local Government Finance Settlement · Hansard source

  More

  Let us talk about Birmingham, because the Opposition referenced the £3 million new homes bonus. The new recovery grant—£600 million of brand new money targeted at those councils with high deprivation and low tax bases—just for Birmingham is £39 million. That will start the repair work of rebuilding the foundations. When we talk about fair funding and why it is needed, we will not do what the previous Government did, where they put party politics ahead of the national interest. Let me remind the Conservatives of what the previous Prime Minister, the right hon. Member for Richmond and Northallerton (Rishi Sunak), said in Tunbridge Wells in 2022: “We inherited a bunch of formulas from Labour that shoved all the funding into deprived urban areas and that needed to be undone. I started the work of undoing that.” That is a record of shame. It is nothing to preach about. To right the wrongs of the past 14 years and finally get money where it is needed, this Government will work for public service, not party interest.

• 18 Dec 2024 · Provisional Local Government Finance Settlement · Hansard source

  More

  Here we go again. I would think that after 14 years of councils being on year-to-year watch to find out what position they would be in, the Conservatives would at least welcome the preparation now for multiyear settlements. They had 14 years to get their house in order, and they could not even line up to give councils more than 12 months’ certainty about what was coming. The one thing councils were absolutely certain about was that it was only going to be bad news after bad news. When there were crises in adult social care and children’s services and when homelessness was rising at a rate of knots, the last Government were completely missing in action—that was what councils were facing. How many councils went bust on their watch? Councils were lining up saying to the Government that they could not afford—

• 18 Dec 2024 · Provisional Local Government Finance Settlement · Hansard source

  More

  Yes, I can confirm that we are providing, with the support of the Department for Education, new funding of £1 billion to support the high needs block in SEND for the reasons that the hon. Member says. We also know that money today is not the answer in the long term. We have to reform SEND provision in the mainstream, so that parents and pupils get the support that they need.

• 18 Dec 2024 · Provisional Local Government Finance Settlement · Hansard source

  More

  I am pleased to say that this year, core spending power in my hon. Friend’s area will increase by 8.1%, and again, that does not take into account the billions of pounds that will follow. That reflects the service demand pressures, but also the reality of the local tax bases in that area. Telford, like many areas, does a very good job of providing local public services, but the council itself recognises that the neighbourhood services that most people see and feel—those that make a difference to quality of life—have been retreated on because of the need to fund targeted services, and social care in particular. We are absolutely determined to rebuild adult and children’s social care and sort out the housing crisis, but we also want people to live in good places that people are proud of, which requires those neighbourhood services to be rebuilt. It will take time to do that, but our commitment to Telford and the rest of the country is that we are absolutely determined to do so.

• 16 Dec 2024 · English Devolution · Hansard source

  More

  I know many Labour and Co-operative Members of Parliament have been campaigning hard on the extended community right to buy. That is about giving communities the power to take over those important community assets on their high streets and in their town centres in a meaningful way. The Minister for local growth, my hon. Friend the Member for Nottingham North and Kimberley (Alex Norris), is working hard on a communities White Paper, which will provide far more detail. In the end, it is not just about that community right to buy; it is about a genuine shift where people feel far more control, power and agency in the places where they live.

• 16 Dec 2024 · English Devolution · Hansard source

  More

  I do not want to get myself into neighbourhood disputes—there are not enough hours in the day. I hope that it will be clear from reading the White Paper that this is not a forcing together, but a genuine distribution of power from a centralising state to communities where it really matters. My hope is that local disputes, some of which I am sure are well rehearsed and go back a long time, are put to one side. In the end, the prize is the greater good, which is for the benefit of all.

• 16 Dec 2024 · English Devolution · Hansard source

  More

  It would be rude to deny the good people of Devon a spat between the Conservatives and the Liberal Democrats. But in all seriousness, it is for local areas to decide whether they want to apply to the Government to be part of the reorganisation programme. If we receive a request from that area, we will administer it in a fair way, as we would any other.

• 16 Dec 2024 · English Devolution · Hansard source

  More

  That question was raised earlier, and I apologise for not addressing it. The Government will provide capacity to enable both devolution and local government reorganisation through discussions with local authorities. Some of that might be funding, and quite a lot might be support through workforce development. Last week, we launched the workforce development group —a joint project between MHCLG, other Government Departments and bodies such as the Local Government Association—to make sure that we are addressing the workforce issues. Even before the reorganisation, we know that many counties are struggling to recruit to jobs like adult social care and many districts are struggling to recruit to jobs like planning, so there is a bigger issue here that we are looking to address.

• 16 Dec 2024 · English Devolution · Hansard source

  More

  I thank Members in Cornwall and the leaders in Cornwall for the discussions that we have had. I know that devolution is an issue that is strongly felt, and that identity in particular is an issue that is strongly felt. We recognise that we need to strike the right balance, so the White Paper will point to a population size that is optimal in our view—in terms of economic footprint, public service alignment and reconciling public service delivery boundaries—but we recognise that in Cornwall, as in Cumbria, we might have to take a more nuanced approach. I will be clear that our view is to have established powers related to integrated settlements and devolved powers of significance. That will come with a mayor, but of course Cornwall has agreed to a level 2 deal and in the current White Paper, that would be a foundation deal as a starter for that journey.