Local Government Finance: Provisional Settlement

Alison McGovern Excerpts

Wednesday 17th December 2025 Written Statements

[The Minister for Local Government and Homelessness (Alison McGovern)]

Today, the Government have published the first multi-year local government finance settlement in a decade, through which we will deliver the long overdue fair funding review 2.0 reforms. In partnership with local government, we are keeping our promises and building a fairer, more sustainable system for everyone.

A decade and a half of austerity has impacted every community across the country, but people living in the most deprived areas were worst affected. The link between funding and deprivation has been broken, and services were slashed in the poorest places in England, creating a downward spiral of poverty and poor life chances. We will fix it—giving councils the funding to reinvest in those neighbourhood services that saw the biggest cuts in the last 14 years, such as libraries, street cleaning and youth clubs. We will introduce an evidence-led system of determining need that properly recognises local circumstances and the costs of delivering services in deprived communities. We will compensate councils that are unable to generate as much funding through council tax, so no one is punished for living in an area with a weaker tax base.

A year ago, we outlined our intent to fix the foundations of local government. Since then, we agreed our approach to transformational funding reform, consulted three times and published a policy statement in November. We are acting on reforming the services putting the most pressure on local government, including through launching a landmark cross-Government strategy to prevent homelessness before it occurs and investing over £2.4 billion to the families first partnership programme to reform children’s social care. We have committed to reforming special educational needs provision to deliver a sustainable system that supports children and families. We are pressing forward on our commitment to 1.5 million homes, including through supporting local authorities to build. We are devolving power to the right level—empowering mayors to drive economic growth through the visitor levy on short-term stays and to use funding flexibly to deliver local priorities through the integrated settlement, and providing £6 billion over the next 30 years for the devolution priority programme. We have also committed to the once-in-a-generation reform to simplify local government by ending the wasteful two-tier system.

We said that we would deliver on our promises, and we are. We invite all stakeholders to respond to the consultation on the provisional settlement.

Provisional local government finance settlement 2026-27

We recognise the challenges local authorities are facing from higher demand and costs for critical services, and are investing in local government to build a better future. The spending review in June 2025 announced over £5 billion of new grant funding for local services over the multi-year settlement period, including £3.4 billion of new grant funding delivered through this settlement.

The provisional 2026-27 settlement makes available over £77.7 billion in core spending power for local authorities in England, a 5.7% increase compared to 2025-26. This increases to over £84.6 billion by 2028-29, by the end of the multi-year period—a 15.1% increase compared to 2025-26. This means that in total, under this Labour Government, we will make available a 23.6% cash-terms increase in core spending power in 2028-29 compared to 2024-25.

The multi-year settlement will provide more certainty for councils, enabling them to better plan local provision with stability into future years. We know councils are concerned about what happens at the next spending review and we will continue to work closely with them to avoid cliff edges in funding.

The fair funding review 2.0

This Government believe in treating every area fairly. The previous Government’s irrational funding system benefited some authorities disproportionately. We will act where they did not, taking the tough decisions to create a fairer, evidence-led system.

As set out at the policy statement present at www.gov.uk/government/publications/local-government-finance-policy-statement-2026-27-to-2028-29/local-government-finance-policy-statement-2026-27-to-2028-29 we are giving councils more certainty with the first multi-year settlement in a decade, and putting local authorities on an equal footing to better enable them to reinvest in neighbourhood services. We set out that we would undo the damage of austerity by maintaining the £600 million recovery grant allocations from 2025-26, targeted towards those most impacted by the cuts, and confirmed we are introducing a recovery grant guarantee, providing an above real-terms increase to social care authorities who received the grant last year—subject to a £35 million cap.

We are providing more financial protection for councils and consistent services for local people by supporting local authorities through the change with funding floors, and phasing in new allocations across the multi-year settlement. We also committed to improving efficiency and value for taxpayers by simplifying 36 funding streams worth over £56 billion over the multi-year settlement, and by resetting the business rates retention system to restore the balance between aligning funding with need and rewarding local growth.

Our reforms mean that the top 10% most deprived authorities will see an average increase in core spending power per head of 24% from 2024-25 to 2028-29, compared with an increase of 6% for the 10% least deprived authorities. No more will deprived places be punished for their poverty. This Government will act as an equaliser to protect local services.

Social care

We recognise the strain on vital services that people rely on. That is why we are driving long-term reform to make our public services efficient, more sustainable and focused on prevention.

This Government are building a national care service based on a higher quality of care, greater choice and control, and better join-up between services, backed by around £4.6 billion of additional funding made available for adult social care in 2028-29 compared to 2025-26. This includes £500 million for the first ever fair pay agreement—the most significant investment in improving pay and conditions for adult social care staff to date.

We have already begun the full-scale transformation of children’s social care through the families first partnership programme, funded with £2.4 billion over the next three years. This investment will help councils move from firefighting crises to preventing them, delivering the right help at the right time.

We know local authorities are being pushed to the brink while some private children’s social care providers continue to make excessive profits. This cannot continue. The Government’s ambition is to reduce reliance on residential care, reshape the market for care placements, and move towards a system rooted in family environments through fostering. This is better for children and better for councils.

We are taking action through the Children’s Wellbeing and Schools Bill. Using these powers, the Housing Secretary and the Education Secretary will explore how we might implement a profit cap in the children’s social care placement market. This would be a crucial step in ensuring that public money delivers value and care, not profiteering. We will set out further information on our approach in 2026.

Special educational needs and disabilities

We recognise that local authorities are continuing to face significant pressure from dedicated schools grant deficits on their accounts. In June this year, we announced a two-year extension to the DSG statutory override to support local authorities to manage these impacts. The Government have also confirmed that they will bring forward a full schools White Paper early in the new year. This will set out substantial plans for reform of special educational needs provision to deliver a sustainable system, which first and foremost supports children and families effectively, and which is also financially sustainable.

We recognise that the size of deficits that some councils may accrue while the statutory override is in place may not be manageable with local resources alone, and will bring forward arrangements to assist with them as part of broader SEND reform plans. Although we do not expect local authorities to plan on the basis of having to meet deficits in full, any future support will not be unlimited. Councils must continue to work to keep deficits as low as possible. We will provide further detail on our plans to support local authorities with historical and accruing deficits, and on conditions for accessing such support, later in the settlement process.

Homelessness & temporary accommodation

We inherited a homelessness crisis. We recognise the pressure that temporary accommodation costs are putting on councils’ budgets. Last week we published a national plan to end homelessness: our cross-Government homelessness and rough sleeping strategy, which sets out the action we are taking to get back on track to ending homelessness. This includes tackling the root cause of homelessness, as well as supporting a shift to prevention and taking immediate action to support households in temporary accommodation and experiencing long-term rough sleeping. The strategy includes action to help councils invest in good-quality and lower-cost temporary accommodation, reducing the use of expensive B&Bs and nightly paid accommodation.

As announced on Monday, funding for the domestic abuse support in safe accommodation duty will see a £19 million uplift to £499 million over the multi-year settlement. This funding is part of the Government’s mission to halve violence against women and girls in a decade, with improved support for victims.

Council tax & exceptional financial support

Fairness for taxpayers is at the heart of this Government’s decision making. Over the multi-year settlement, the Government intend to maintain a core 3% council tax referendum principle, and a 2% adult social care precept, as they were in 2025-26 for the vast majority of local authorities.

Decisions on council tax levels are a matter for local authorities.

The Government are committed to ensuring the local government funding system is fair for taxpayers across the country. In some areas, council tax levels are radically lower than in others. A small number of places with many expensive properties can set far lower council tax and raise as much or more. The reality of this is that the council tax bill for a house worth £10 million in Westminster can be less than an ordinary family home in places like Blackpool and Darlington.



To increase fairness for taxpayers, provide better value for money, and enable areas to rebalance disparities in their council tax levels should they wish to, the Government propose not setting referendum principles for six authorities in 2027-28 and 2028-29: City of London, Hammersmith and Fulham, Kensington and Chelsea, Wandsworth, Westminster, and Windsor and Maidenhead. These councils are all upper tier, will receive 95% income protection and have the lowest council tax levels of any upper tier authorities in the country—this year band D taxpayers paid between £450 to £1,280 less than the average in England. By choosing not to subsidise very low bills for the 500,000 households in these places, we will provide £250 million more funding for public services in places with higher need.

Decisions on council tax levels are a matter for local authorities. The flexibility will give greater choice to these authorities in deciding how to manage their financial position in the most appropriate way for them, including deciding whether to draw on the relatively high reserve levels, income from the second homes premium and reduced pension contributions from which a number of them benefit.

Alongside the new high value council tax surcharge, expected to be implemented from 2028, these changes will make the tax paid on homes fairer and more progressive.

The Government are under no illusions about the pressures councils are facing. Following precedent set by the previous Government, we will continue to have a support framework in place next year to help authorities in the most difficult positions, including considering requests for additional council tax flexibility. In recognition of cost-of-living pressures, the Government will not agree to requests for additional flexibility to increase bills from authorities where council taxpayers are already paying more than average. Any support or flexibility provided should be a time-limited and temporary measure and we will continue to expect local authorities to be doing all they can to manage their finances and protect vulnerable taxpayers. The Ministry of Housing, Communities and Local Government continues to offer any council a discussion, in confidence, about its ability to manage its budget.

We expect any authority that decides to make additional increases to their council tax to ensure that appropriate support is put in place for vulnerable households.

Mayors

This Government are committed to giving locally-elected strategic leaders the powers and funding they need to deliver jobs, new homes and new transport. For the first time, every mayoral strategic authority will receive funding through the local government finance settlement to create greater alignment of the funding at a local level, avoiding needless duplication and waste. We will continue to work on integrating funding for mayoral strategic authorities further into the settlement where relevant, including through the consideration of options to allocate mayoral strategic authorities a direct share of business rates from across their region as set out at the autumn Budget.

We have also taken steps into a new era of fiscal devolution in England, giving mayors the power to raise and invest money into projects that improve their local areas, raising living standards and driving growth through a new visitor levy power for mayors of strategic authorities.

Outcomes framework

We will introduce the new outcomes framework for local government in the new year, operational from spring 2026, It will enable outcomes-based performance measurement against key national priorities, delivered at the local level and driven by councils as local leaders of place.

Conclusion

The consultation on the provisional local government finance settlement 2025-26 will be open for four weeks, closing on 14 January. We welcome views from the local government sector and beyond through this consultation.

This written ministerial statement covers England only.

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Local Government Finance

Alison McGovern Excerpts

Wednesday 17th December 2025 Commons Chamber

[The Minister for Local Government and Homelessness (Alison McGovern)]

On 20 November, my Department published a policy statement setting out our approach to the first multi-year local government finance settlement in a decade. Today, we publish the provisional settlement itself and launch our formal consultation on the proposals. It represents the choices we are making as a Government. Unlike the Tories, we will not look the other way as poverty gets worse. We will not ignore the economic and social costs of deprivation. The spending review announced over £5 billion of new grant funding for local services over the multi-year settlement period. That includes £3.4 billion of new grant funding being delivered through this settlement.

Before I give more details, I want to make this point. For 14 years, the Tories decimated local government, asking local leaders to do more with less, and that had consequences. Local high streets are always changing, but deprived towns saw more empty shops, more vape shops and more pawnbrokers than other places. Their councils did not have the resources to do anything about it. In 2019, the Chartered Institute of Public Finance and Accountancy found that nearly 800 libraries had closed since 2010. In 2022, The Guardian newspaper uncovered a real-terms annual cut of nearly £330 million to the upkeep of our local parks, with the biggest cuts in the poorest parts of the country. The last decade and a half of austerity impacted every community, but the very worst effects were felt by people living in the most deprived areas—and that was a choice.

By breaking the link between funding and deprivation, the Tories punished poorer councils. Year after year, they exacerbated inequality. As a result, too many places in this country feel forgotten and left to fend for themselves. The answer is not Reform’s return to austerity or the Tories’ carping from the sidelines; it is to use the best data we have available to redesign the funding system so that deprivation is recognised and addressed within the settlement. That is why the figures we are publishing today are derived using the very latest data from the 2025 index of multiple deprivation released at the end of October this year. It is why, according to our analysis, whereas under the old system deprivation scores could account for only 25% of variation in per capita funding applications, under this settlement it is up to 75%, with other important factors such as coastline, miles of road or visitor numbers making up the rest.

In addition, we are giving councils more certainty with the first multi-year settlement in a decade, allowing local leaders to focus on long-term investment and change. We are addressing the damage of austerity by maintaining the £600 million recovery grant allocations from 2025-26, targeted towards those most impacted by the cuts, and introducing a recovery grant guarantee, providing an above-real-terms increase to social care authorities that received the grant last year.

We are supporting local authorities through change by providing funding floors and phasing in new allocations across the multi-year settlement. We are improving efficiency and value for money by simplifying an unprecedented 36 funding streams, worth more than £56 billion over the multi-year settlement. We are resetting the business rates retention system to restore the balance between aligning funding with need and rewarding local growth, and unlocking the dream of home ownership for more people by boosting real incentives for councils to build new homes. We know that councils are concerned about what will happen at the next spending review, so we will keep working closely with them to avoid cliff edges in funding.

This settlement is our most significant move yet to make English local government sustainable at last. It will take overall core spending power for local government to over £84.6 billion by ’28-29—equivalent to a 15% cash-terms increase compared with ’25-26. The Labour Government have made it clear that we back local government through action. Since coming into power, we have made available a 23.6% increase in core spending power in ’28-29 compared with ’24-25.

However, we have to do more, because the previous Government’s funding system left local government in chaos. Social care costs were soaring out of control, with very little focus on prevention. Children’s social care, the impact of a failing special educational needs and disabilities system, and the spiralling costs of homelessness and temporary accommodation have destabilised council funding, even where councils have acted judiciously to protect the public pound through this difficult era. That is why we need national change to empower local councils to maximise the benefit of this announcement.

The Government are building a national care service based on higher quality of care, greater choice and control and better integration. This is backed by around £4.5 billion of additional funding made available for adult social care in ’28-29, compared with ’25-26. We are changing children’s social care through the families first partnership, funded with £2.5 billion over the next three years, because all children deserve good parenting and a loving home environment—and we know that costs less in the long run, too.

The children’s social care residential market is broken, and we are taking action. Using powers in the Children’s Wellbeing and Schools Bill, the Housing and Education Secretaries will explore how we might implement a profit cap in the children’s social care placement market, which would be a crucial step in ensuring that public money delivers value and care, not profiteering. We will set out further information on our approach in 2026.

On special educational needs and disabilities, in the new year the Government will bring forward the schools White Paper, which will set out ambitious plans to reform special educational needs provision. But we recognise the impacts of the dedicated schools grant deficits on local authorities’ accounts. In future, special educational needs provision will be funded by central Government; local authorities will not be expected to fund costs from general funds once the statutory override ends in March 2028. We will provide further details on our plans to support local authorities with those deficits later in the settlement process.

On homelessness, Members have already heard me acknowledge that temporary accommodation is another growing financial pressure on councils, with spend reaching nearly £3 billion in ’24-25. Last week, we published the national plan to end homelessness—our strategy to prevent homelessness before it occurs. We have set clear objectives to get our children out of costly B&Bs and to help councils to balance the books.

The Government intend to maintain a core 3% council tax referendum principle and a 2% adult social care precept for the vast majority of councils. We are committed to ensuring that the funding system is fair for taxpayers throughout the country. In some areas, council tax levels are radically lower than others. Council tax bills for £10 million houses in some of the wealthiest parts of the country can be less than what an ordinary working family pays in places like Blackpool or Darlington.

The Government plan to lift referendum principles in ’27-28 and ’28-29 for Wandsworth, Westminster, Hammersmith and Fulham, City of London, Kensington and Chelsea and Windsor and Maidenhead. This change will improve fairness, as taxpayers in those councils have the lowest bills in the country, and this year paid up to £1,280 less than the average council taxpayer. It will enable the Government to allocate more than £250 million of funding in the system more fairly, instead of subsidising bills for the half a million households in those council areas. It will also provide greater flexibility for those authorities in deciding how to manage their finances following our reforms. The councils will decide on the level of council tax increase to set and whether to draw on the relatively high alternative sources of income from which a number of them benefit.

We know that adapting to our reforms will take time. We will therefore continue to have a support framework in place next year to help authorities in challenging positions. Following precedent set by previous Governments, councils in significant financial difficulty can request additional flexibility from the Government. In making that decision the Government have been clear, unlike the Tories, that they will not agree to increases where the council has above-average council tax. In recognition of cost of living pressures, each application will be considered on a case-by-case basis, and decisions will reflect the support offered to low-income and vulnerable residents.

In closing, I go back to the libraries that have been closed and the parks that have been neglected. Under this Labour Government not only is our Chancellor of the Exchequer making sure that our schools have libraries, but we are making sure through this funding that councils can ensure that parks are good for our children to play in. We can never turn the clock back—we cannot undo all the past damage to councils—but we can change town hall finances so that councillors battling the consequences of poverty have a Government who are on their side for once.

We said we would restore the link between funding and deprivation, and today we are doing exactly that. There will be no more forgotten people left to fend for themselves and no more forgotten places sneered at by Conservative Members, but a fighting chance for every place in this country. I commend this statement to the House.

[Madam Deputy Speaker (Judith Cummins)]

I call the shadow Minister.

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

It is no surprise that the Government sought to sneak this consultation out with the minimum level of attention, proposed, as it was, for simply a written ministerial statement at the last possible second. We can all see that poverty is rising, driven by a shrinking economy and rising unemployment, combined with inflation running at 3.6% and higher energy bills. Rising business rates are crippling our businesses, and local communities everywhere are feeling the pressure created by this Government’s choices.

How does the settlement help our councils to deal with all that? First, it assumes that working people—all people—will pay higher taxes everywhere. We should not misunderstand the Minister’s words on core spending power. The settlement enshrines an assumption that taxes will rise to the maximum possible extent everywhere, with fees and charges for parking, libraries and everything else following the same trajectory. Even if the inflation target of 2% is reached—which seems unlikely given that it is currently at 3.6%—the increase represents a 1% uplift for local government during the whole life of this Parliament, and that sector was left £1.5 billion worse off by the rise in national insurance contributions alone.

Resources at a local level are going backwards. This is a settlement that punishes efficiency, with those councils that deliver the best value for money being raided to bail out the more spendthrift—and I am sure we can guess which parties tend to run those councils. It is a settlement that introduces new, higher taxes on hospitality—voted for by every party in this Chamber besides the Conservatives—bearing down on investment and opportunity. It brings in a homes tax on more expensive homes—money that goes to the Treasury, not councils. In the Red Book, that is estimated to cost the Government a net £335 million due to the damage it does to the housing market. Only this hapless Labour Government could bring in new taxes that actually cost the Treasury money—and here they go again.

This settlement repeats the fallacy that poverty is the only driver of council costs. The average English local authority delivers more than 800 different services. Our rural coastal areas, and anywhere else with lots of retirees, face the high costs of adult social care but do not necessarily score highly on indices of deprivation, despite the costs being driven by statutory duties. The undertaker Prime Minister is ushering many councils towards their financial doom. As this Government hammer Wychavon and Stratford-on-Avon, they are also hammering Ashfield, Dartford, Burnley, Cambridge, Hyndburn, Lichfield and Bolsover, which are among the places worst hit by this financial settlement.

The Government’s detachment from the consequences of their actions is striking, and all while the Prime Minister and the Chancellor dodge the new high-value council tax in their grace and favour accommodation. All this is behind the smoke and mirrors that disguise from our local authorities the financial impact. They have been required to carry out their public budget consultations without having had sight of the impact of this settlement.

Let me conclude with some straightforward questions. Will the Minister tell the House when our locally elected brethren will learn the net impact of this settlement on their council tax budgets? When will we debate the impact of the Government’s cuts to SEND capital funding? When will the House have the opportunity to scrutinise their decision to impose exceptional financial support or higher council tax rises to bail out the consequences of their decisions? When will they provide clarity on the impact of their SEND proposals on council budgets? How will the Government use the budgets allocated to the new devolution areas and now snatched back to mitigate the impact of their decisions?

Will the Minister admit to the House that this is a tax-raising, job-destroying, housing-hobbling, rate-raising, service-slashing, community-crippling, election-cancelling settlement that fails even on its intended purpose of shunting resources to politically favoured areas?

[Alison McGovern]

I can hardly wonder at getting that purely political response when I made the perfectly legitimate political point that under the Tories a lot of councils were dealt very bad funding settlements indeed. We do not need to trade political insults to see the libraries closed, the parks left unmaintained and the damage done to councils, but I look forward to discussing this issue with the hon. Member across the Dispatch Box as we move forward, once he has talked to his own councils about the funding settlement they will be receiving.

The hon. Member asked some slightly more important questions, particularly on SEND. He will know that this is primarily a matter of getting the absolute best outcome for our children. The Department for Education will bring forward plans in the new year, and I am working closely with Ministers in that Department to ensure that we get it right. I mentioned some of the details in my statement.

I do not recognise the picture described by the hon. Member on devolution, and I feel confident in saying that nor would the Minister for devolution, my hon. Friend the Member for Peckham (Miatta Fahnbulleh), who is in her place. She announced significant investment for the places affected, and we all look forward to working with areas up and down the country to ensure that our country grows as we wish it to.

[Madam Deputy Speaker (Judith Cummins)]

I call the Chair of the Housing, Communities and Local Government Committee.

[Florence Eshalomi (Vauxhall and Camberwell Green) (Lab/Co-op)]

I thank the Minister for her statement. I know she has been working really hard on this issue since she took on the role a few months ago. She is aware of the many pressing issues facing councils up and down the country—from SEND to temporary accommodation, housing and adult social care—and 14 years of under-investment will not be reversed by one funding settlement. It is therefore important that we continue to work with councils.

This is the first multi-year settlement in a decade, which will help our local leaders in planning for the future and, most importantly, planning for their local residents. I welcome the inclusion of local housing costs in the new funding formula, but ultimately it does not take in local housing allowance, which the Minister knows has been frozen for many years and is still causing a lot of pressure for councils.

The Minister mentioned that the Government will be looking at the council tax freeze in some areas, and at lifting referendum principles. She knows there is growing consensus on wholescale council tax reform instead of us tweaking it. It is the most regressive form of taxation and there is inequality across the country. Will the Minister look at what the Committee’s report says about a wholescale review of council tax banding, so that local leaders can have funding to spend on their local areas, and make sure that other areas see that funding come through?

[Alison McGovern]

I thank the Chair of the Select Committee for that comprehensive run through all the issues. She is right that we need not just funding but policy change to get councils to financial sustainability. I look forward to discussing that with my hon. Friend and her Committee. She also asked about council tax reform, which was not the subject of my statement, but I have no doubt that she will be asking me about it again in the near future.

[Madam Deputy Speaker (Judith Cummins)]

I call the Liberal Democrat spokesperson.

[Zöe Franklin (Guildford) (LD)]

I thank the Minister for advance sight of her statement. The Liberal Democrats welcome the fact that this is a multi-year settlement, which gives councils a greater degree of certainty and the ability to plan ahead. We have long called for that. However, a longer settlement on its own does not resolve the deep financial instability facing local government. The Minister is right to say that social care, SEND and homelessness costs are destabilising council finances—a direct result of years of Conservative neglect—but recognising the problem is not the same as resolving it.

It will take us and council teams time to review the detail of the settlement and understand what it means in reality for local government. However, early conversations with local government colleagues have highlighted a concerning lack of clarity on the SEND debt. The settlement provides minimal information on how councils are to manage SEND costs until 2028, or how existing deficits will be resolved. Can the Minister provide a clear timeline for when councils will receive certainty on the SEND deficit? Without one, responsible financial planning is simply not possible.

I also seek clarity on the issue of social care. Although the statement includes various measures to try to address the social care crisis, the reality is that that will be swept away by the rising scale of need and the costs of social care. When will the Government finally bring forward a fully funded, long-term plan for adult social care reform that ensures that local authority funding settlements are not undermined by the escalating costs of a social care system that is bankrupting councils and placing unsustainable pressure on the NHS?

[Alison McGovern]

The hon. Lady mentions multi-year settlements alone not being the answer—no, but they do help. That relates to her two other points on SEND and social care, because multi-year settlements allow councils to plan properly and undertake commissioning activities over a longer period of time. That was our objective, which we have achieved with this. She asked for more details on SEND. I mentioned in my statement that local authorities will not be expected to fund costs from general funds once the statutory override ends in 2028. We will have more to say on that throughout this settlement process.

The hon. Lady asked about adult social care. Significant reform is needed there, but I do not think that anybody could say that we have not done anything. We are building a national care service, backed by about £4.5 billion of additional funding for adult social care in 2028-29, compared with 2025-26, including £500 million for the first ever fair pay agreement. I will never forget visiting care homes after they had got through the hell of covid. All that we do on social care has to back those people who did the most when our country needed them.

[Madam Deputy Speaker]

Members will have seen that many want to speak, so I make a plea to help one another out and keep questions and answers concise.

[Helen Hayes (Dulwich and West Norwood) (Lab)]

I thank the Minister for her statement. I particularly welcome the restoration of the link between funding for local government and deprivation, and the inclusion of housing costs within the measure of deprivation. It makes no sense to do anything other than that.

Even with the funding settlement, the financial situation will continue to be very challenging for my local authorities of Lambeth and Southwark without meaningful support from the Government with the costs of temporary accommodation. When does the Minister expect to be able to set out more detail on how councils will be supported to reduce the need for temporary accommodation and to bring the costs down?

[Alison McGovern]

My hon. Friend, who chairs the Education Committee, will know that it is not just the cost of temporary accommodation to councils; it is also the cost of children’s schooling. Last week I set out our strategy to counteract that terrible phenomenon and I will talk in detail to councils in the weeks and months to come to do exactly as she asks.

[Simon Hoare (North Dorset) (Con)]

I thank the Minister and her officials for their work—it is the most painful task to have to pull all this together and they are all to be commended. I agree with her that multi-year settlements should lead to smarter commissioning, which should then deliver greater return on the money. She will know that the cost of delivering services in rural areas is higher—everyone across the House recognises that—so can she say what this proposed settlement will do specifically to address that and allow equity of opportunity in access to services, whether one is an urban or rural resident?

[Alison McGovern]

The hon. Gentleman is absolutely right to highlight how we have to do things differently in rural areas, and we have tried to take account of that need. That is why we are including a journey times adjustment in our assessment of cost for all services. We are also increasing the cap in the home-to-school transport formula from 20 miles to 50 miles, in recognition of the fact that the original distance cap would penalise local authorities that have no choice but to place children further from home. We are also including a remoteness adjustment in the adult social care formula to address the point that he mentions. Overall, the point cannot be made enough that we have to do things differently in rural areas, and we all need to take account of that.

[Jim McMahon (Oldham West, Chadderton and Royton) (Lab/Co-op)]

The fair funding review is significant. It is the first multi-year settlement for a decade, and the first real attempt at fairly distributing resources based on need, cost and the ability to raise revenue locally. It represents a serious piece of work by decent public servants, and I pay tribute to the finance team in my hon. Friend’s Department. The consultation asked councils to make their case for adjustments. London councils asked for housing to be included in the measure of deprivation, and we can see that in some of the changes that have been made, but that sees a significant shift towards London. The recovery grant has made a significant difference and I am pleased to see it continue, but it shows that fundamentally the formula is not yet picking up the real cost pressures being felt by local government as a result of the previous Government.

Much has been said about council tax, but the inequality goes much further, as the Minister knows: our car parking income is £2 million, but Westminster city council alone generates £90 million. That is more than the entire recovery grant for Manchester, Liverpool, Newcastle, Sheffield and Leeds combined, so there are much wider structural issues that need to be addressed. My hon. Friend will also know that, despite best endeavours, councils will still find this settlement very challenging and that bigger reforms are needed, so can she make the case—I know she will—to her colleagues in the Treasury that, if the Government want the benefit to be felt on every street in every community, in the end local government will need more money put into the pot more generally?

[Alison McGovern]

First, I must pay tribute to my hon. Friend for his work on this. I might be putting the ball in the net today, but he was the midfielder who created the goal. It is his work to reconnect deprivation and council funding that we are delivering today, and I pay massive tribute to him. He asked whether we might go further to persuade our Treasury colleagues to invest in local government. I think that the best way to do that—I will welcome his support in this—is to show the results that councils get when they are properly invested in. We see that nowhere more than in his home city region of Greater Manchester and his council of Oldham, which show time and again that they provide value for money and they are growing our economy.

[Greg Smith (Mid Buckinghamshire) (Con)]

The Minister said in her statement that she did not want to look the other way, but in reality this Government are looking the other way when it comes to rural communities. I listened carefully to the answers she gave to my hon. Friend the Member for North Dorset (Simon Hoare), but the fact is that, with the exception of adult social care, rurality has been taken out of formula decisions. Can she come to the Dispatch Box and say how areas such as Buckinghamshire, which I am lucky enough to represent, are going to be properly funded, given our rural nature?

[Alison McGovern]

I am glad that the hon. Gentleman was listening when I gave my earlier answer on rurality. We have recognised where there are extra cost pressures, and I will happily discuss this in detail with him if he wishes. This is recognised in the statement and in the data that we have taken account of. The new deprivation statistics are much more fine-grained, and they can find poverty wherever it is, whether it is in a town, a city, a village, a rural area or wherever.

[Mr Clive Betts (Sheffield South East) (Lab)]

I do not know whether my hon. Friend is as surprised as I am that the official Opposition could not even bear to mention the word “austerity” when they responded. Before we move on, there was a case of amnesia from the Lib Dems, who forget their role, under the coalition Government, in some of the worse cuts of all that local government experienced. I therefore welcome the Minister’s comments about deprivation. The poorest councils got hit hardest during austerity by the Conservatives. I thank her for putting tackling deprivation at the heart of this settlement.

I have two challenges. The Chair of the Select Committee, my hon. Friend the Member for Vauxhall and Camberwell Green (Florence Eshalomi), reiterated what we said in the Select Committee in the last Parliament: council tax is regressive and has to be reformed. The Minister mentioned the need for long-term changes to the whole way in which social care is funded. Would she at least begin a conversation across parties to try to get long-term agreement about how this should be done? It has failed over and over again through parties squabbling over the details. We need a long-term settlement. Can we at least start those conversations now?

[Alison McGovern]

My hon. Friend is extremely experienced in these matters and remembers, as I do, the impossible situation that councils, particularly in the poorest areas, were put in under the Tory Government. He is right to point out that the Lib Dems did play a small role in that, too. On his questions, I always read in detail the Select Committee’s reports, and I will do that with the ones he mentions. The Government have set out the pathway, making the immediate change that I said on social care and asking Baroness Casey to drive us towards that long-term vision that he points out. That is exactly what we need to do; we need to fix this for the long term.

[Tim Farron (Westmorland and Lonsdale) (LD)]

Westmorland and Furness is an extremely well-run council and an extremely unusual one as well. It is England’s most rural council. It is the council that accepts the highest number of visitors—non-resident population—as we support everybody else’s constituents, who make up the 15 million who come to our district every year. The council has some of the poorest wards in the country. It is the host of Barrow, which is the centre of the UK’s defence industry, and it has the highest percentage of people in social care. This formula will leave us unusually crippled. We think it will mean a 13% cut to our budgets over the next three years. Given that we are so unusual, will the Minister unusually agree to meet me, her hon. Friend the Member for Barrow and Furness (Michelle Scrogham) and local council leaders, so we can work out an unusual solution to this wonderful but unusual council’s problems?

[Alison McGovern]

I thank the hon. Gentleman for his question and his description of his unusual and wonderful area. I do not recognise the figures he mentioned just then, but I will happily meet him and any colleagues he wants to bring, and we will go through the numbers together in detail.

[Andrew Cooper (Mid Cheshire) (Lab)]

I thank the Minister for her statement and welcome her commitment to restoring fairness to the heart of the local government financial settlement, giving our councils the long-term certainty they have been crying out for. The Conservatives were a disaster for local government. In both Cheshire authorities, 70p in every pound is now spent on looking after vulnerable adults and children, leaving the remainder to fund every other essential service. That is to say nothing of the ballooning dedicated schools grant deficit. The Conservatives left our communities struggling with deteriorating infrastructure and under-resourced essential services. Can she say more about what this settlement means for my constituents in Northwich, Winsford and Middlewich? Can she possibility provide us with an indication of when councils will get some certainty over what the future holds for the statutory override, so that we can see those dedicated schools grant deficits cleared?

[Alison McGovern]

It is extremely important that we properly fund authorities in Cheshire to help support those communities. I can confirm that that is what we are doing today, with significant increases in spending power for those authorities. I look forward to working with my hon. Friend and colleagues across the county to ensure that we do as he says and get social care back on a firmer footing as we move forward through the years.

[Rebecca Smith (South West Devon) (Con)]

I represent a constituency with two district councils with prudently created reserves and a unitary council with high levels of debt. Understandably, residents in the district council areas are concerned that local government reorganisation will see their reserves usurped by any new unitary council areas—if they have not already had to spend that reserve due to decreased funding under the settlement. Can the Minister reassure my constituents that their prudence is not being penalised and that, under the local government reorganisation, any reserves from a council will be ringfenced specifically for the communities that they come from, rather than being used to reduce the debt of the new council?

[Alison McGovern]

I thank the hon. Lady for her question; she values the prudence and good decision making of local authorities. At their best, that is what we see and it is what I hope to achieve through the local government reorganisation process.

[Andrew Lewin (Welwyn Hatfield) (Lab)]

There is fierce pride in Hatfield, Welwyn Garden City and our villages, but we are a community of contrasts: the gap in life expectancy a few miles down the road is 13 years. I have had an initial look, and it seems that Welwyn Hatfield will benefit to the tune of about £9 million. That is wonderful news for our community.

I thank the Minister for looking at need after housing costs, but will she give me a guarantee that that will continue to be a key part of how our Government look at need? In communities such as Hertfordshire, housing is often such a barrier to people getting on.

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[Alison McGovern]

I thank my hon. Friend, who is an impressive champion for his constituency; the people of Welwyn Hatfield should be proud of him. When we are thinking about deprivation, we are determined for it not to be a question of one part of the country against another. It is simply about being led by the evidence: identifying poverty and deprivation wherever it exists—including its cause, which, as my hon. Friend says, can be housing costs. We will keep doing that and take decisions on that basis.

[Ian Roome (North Devon) (LD)]

As an ex-council leader, I welcome the multi-year settlement and am glad that the Government have listened; I have campaigned for it for many years, so thank you.

I welcome the remoteness element. In my constituency of North Devon, we have North Devon council and also the wider Devon county council. Could the Minister describe what percentage the remoteness allocation will represent for places such as Devon and North Devon district council?

[Alison McGovern]

I thank the hon. Gentleman and former council leader for his question. It is nice to have a bit of agreement at Christmas, Madam Deputy Speaker—if it is over multi-year settlements, then then so be it. I will write to him with the specific details about his area and how the remoteness formula affects the council's funding.

[Preet Kaur Gill (Birmingham Edgbaston) (Lab/Co-op)]

I welcome the Government’s investment in Birmingham through today’s fair funding settlement and the £160 million of Pride in Place funding for nine areas, including Bartley Green in my constituency. That stands in stark contrast to the Conservatives’ austerity agenda, which cut £1 billion from Birmingham city council’s budget and placed severe pressure on the public services that my constituents rely on. I have been fighting for eight years in this place for fair funding for Birmingham. Does the Minister agree that only Labour can be trusted to invest in our city?

[Alison McGovern]

I thank my hon. Friend for that question on behalf of the people of Birmingham. We know that they deserve better. Birmingham is a great city; I was there only recently and always feel welcome and at home. It is right for us to invest in our cities. I am sick to the back teeth of people having a go at places like Birmingham and where I am from in Merseyside. It is time we backed our cities, including Birmingham.

[Dr Ellie Chowns (North Herefordshire) (Green)]

I always like to start on a positive note, so let me add to the cross-party Christmas cheer by welcoming the shift to multi-year funding settlements. I agree with the Minister: local authority funding was decimated under the Conservatives for 14 years and local leaders were asked to do more with less. But I am worried that that might continue for some authorities like mine.

North Herefordshire and Herefordshire council have been facing millions of pounds of funding reductions under the proposals put forward by the Government. We must recognise that a fair funding settlement has to mean fair recognition that providing services in rural areas incurs extra costs, and not just for social care—there needs to be a remoteness adjustment for all the services that we provide. Will the Minister go away, consider that and come back with proposals that fairly recognise the needs of rural authorities like Herefordshire?

[Alison McGovern]

I thank the hon. Lady for speaking up on behalf of rural areas. In addition to what I have said to a number of hon. Members, I would add that it is not just in adult social care that we recognise the difference that rurality makes. Overturning 14 years of Tory misrule of councils will take time. We will engage with all councils, including her council, and it is my objective to get local authorities back on a sustainable footing.

[Imran Hussain (Bradford East) (Lab)]

The reality is that for years the Tory Government relied on formulas that decimated local government and services for the poorest, while giving funding to affluent Tory suburbs, so clearly the Tories will not like the formula set out by the Minister. Today must be a turning point that corrects the grave wrong carried out by the previous Government for 14 years. Will the Minister confirm that the new formula, which I welcome, will mean that places like Bradford, which have some of the highest levels of poverty and deprivation, will finally begin to see their fair share in the settlement?

[Alison McGovern]

My hon. Friend is right to describe the serious and challenging situations that lots of parts of the country face. I am anxious to ensure that we make progress in Bradford, not only because Bradford and places like it suffer from the consequences of poverty, but because Bradford has one of the youngest populations in the country. It is part of our future: we must back our young people, and I want to see Bradford grow and its people do well.

[Bradley Thomas (Bromsgrove) (Con)]

Talking about local government finance, I was shocked to read in The Times yesterday that Reform-led Worcestershire county council has sought permission from the Government to increase council tax by a maximum 10%. Will the Minister take this opportunity to rule that out, and will she tell us if Labour is in cahoots with Reform to whack up council tax?

[Alison McGovern]

People have accused me of many things, but being in cahoots with Reform is not one of them. I am very, very definitely not in cahoots with Reform. I have heard what the hon. Gentleman has said. I made some remarks in my speech about the steps that we will take, particularly if people are already paying an average amount of council tax. I am more than aware about the situation that people are facing with the cost of living, so if he wants to write to me with some more details about what he has read in The Times, I will happily respond to him formally.

[Andy Slaughter (Hammersmith and Chiswick) (Lab)]

The Minister mentioned Hammersmith and Fulham council in her statement, so I hope she will not mind my reminding her that it is one of the most efficiently run councils in the country. Despite having had 50% of its funding cut under the Tories, it has made £138 million in savings since 2014. It has pulled most of the levers that it has had available, such as the second homes premium, to deal with that, and it has some of the most deprived areas in the country within it. I invite her to come and visit Hammersmith and Fulham to see how a well-run council works, particularly when it has high levels of need and high-cost areas.

[Alison McGovern]

I would be more than happy to do that.

[Steve Darling (Torbay) (LD)]

I am sure that the Minister will join me in congratulating Anna Coles, the director of adult and community services at Torbay council, and her team on achieving a “good” rating from the Care Quality Commission this week. The fly in the ointment is that despite Torbay being the most deprived local authority in south-west England, this settlement means that it is set to lose out on adult social care because of the higher than average number of people who are old. Will the Minister explain that?

[Alison McGovern]

It is excellent to hear that Anna Coles has done so well in providing local services. I do not recognise the figures mentioned by the hon. Gentleman and I would be happy to discuss them with him. Our objective is to get all councils back on their feet, particularly through the Pride in Place programme, in which Torbay is participating.

[Rachel Hopkins (Luton South and South Bedfordshire) (Lab)]

May I warmly welcome the announcement today of the linking between local government funding and deprivation and need? That marks an end to the cuts and austerity brought in under the Tory and Liberal Democrat coalition Government. Will the Minister outline how that will benefit the children and young people in my constituency and in Luton, who bore the brunt of Tory austerity?

[Alison McGovern]

Luton is an extremely important place, with great potential to grow our economy. Most importantly, we want to see those children in Luton thrive, because they are our future. Today’s announcement allocates significant investment in Luton, which I am really pleased to do, precisely because of that relinking to deprivation, and I have every faith in my hon. Friend and her colleagues in Luton to make that money work for our children’s future.

[Blake Stephenson (Mid Bedfordshire) (Con)]

May I welcome the focus on reducing deprivation in this statement? How confident is the Minister that deprivation in rural areas will not be missed in the funding formula? I should refer Members to my entry in the Register of Members’ Financial Interests, because I am still a councillor on Central Bedfordshire council. That council is looking at having to find more than £20 million to balance its budget. That will be a real struggle in central Bedfordshire, which is a high-growth area with high needs and a lot of spending. Will the Minister commit to meet with me and local council leaders to discuss the unique circumstances in central Bedfordshire and what can be done to alleviate the financial pressures and to support them in balancing their budget?

[Alison McGovern]

I have a much greater level of confidence that we can find pockets of deprivation in rural areas, because the latest indices of multiple deprivation are much better-quality data. I will happily discuss that with the hon. Gentleman as we meet to talk about the finances in central Bedfordshire.

[Mike Kane (Wythenshawe and Sale East) (Lab)]

Changes to funding formulas can throw up huge anomalies. The Minister is well aware that Trafford council, which covers part of my constituency, is one of those anomalies. Will she commit to work with my Trafford parliamentary colleagues, Trafford council and me to see if we can iron out some of those issues?

[Alison McGovern]

Wherever there are challenges as we transition to this new funding formula, I will work really closely with colleagues. I will do that especially with my friends in Trafford, and I look forward to meeting with my hon. Friend again soon to discuss that.

[Martin Wrigley (Newton Abbot) (LD)]

I draw the attention of the House to my entry in the Register of Members’ Financial Interests; I am a sitting councillor in Teignbridge. Looking at the figures—which I have been desperately trying to do, although they are tiny—it looks to me like Teignbridge is getting a negative change in this year’s settlement of -0.07%, while Devon gets a small increase. I suspect that might not adequately make up for what Devon lost last year in the rural services grant. Does the Minister have any hope for our finding a way to solve the problem of delivering services in a rural area, even though we have areas of high deprivation? That is a common thing across the House, and it is clearly hitting everywhere.

[Alison McGovern]

I refer the hon. Gentleman to the answers I have already given on rural areas. We have built that into this settlement, and I will work with colleagues in all rural areas to ensure that we can get services improved and make this work.

[Mr Jonathan Brash (Hartlepool) (Lab)]

Over 14 years of the Conservative Government, they cut Hartlepool’s budget in real terms by 40%. That is £50 million missing from that budget every single year. It meant libraries and parks being left behind and child poverty being up by 10% over those 14 years. While some of the Conservatives come here to criticise and others jump ship to Reform, including in Hartlepool, does the Minister agree that they should be ashamed of themselves for their record on local government? This is the start of putting right what they got so wrong.

[Alison McGovern]

I most certainly agree. Having visited Hartlepool before—I hope to do so again—I know not just what it has been through, but what it has to offer. It has a fine champion in my hon. Friend as its MP, and I look forward to working with him and all my friends in Hartlepool to make good on the promise of the next generation in Hartlepool.

[Sarah Olney (Richmond Park) (LD)]

I am really concerned that the Government’s fair funding formula sells many London councils short, such as Richmond and Kingston in the area that I represent. The majority of London boroughs already have lower core spending power per capita than the England average, and several are among the lowest funded councils per capita in the country; additional cuts will impact those councils significantly. London has the highest rate of poverty in the country once housing costs are factored in. According to the Department for Work and Pensions, one in four Londoners lives in poverty, and rising council tax bills will impact those who are struggling the most. With that in mind, what assessment has the Minister made of the impact that rising council tax bills and cuts to services will have on those already living in poverty in London?

[Alison McGovern]

I thank the hon. Lady for her question. I might be a proud northerner, but I was once a councillor in a London borough, so I do not need to be told what poverty in London looks like. In my statement, I mentioned the possibilities for raising income that some councils have access to, and we want to work with local authorities on that. I am determined that we will not make this about geographical division in our country; we will make it a journey for all councils back towards financial sustainability. That is the objective, and I will happily work with the hon. Lady on that if that is what she wants to do.

[Navendu Mishra (Stockport) (Lab)]

I thank the Minister for her statement. I refer the House to my entry in the Register of Members’ Financial Interests and my officership of an all-party parliamentary group.

In past years, protection uplift funding for Greater Manchester fire and rescue service has been calculated based on inaccurate data, meaning that Greater Manchester receives significantly less money than regions with far fewer buildings. Will the Minister correct this error, so that GMFRS has the necessary resources to carry out essential inspection and enforcement activity across Stockport and Greater Manchester?

[Alison McGovern]

I hear what my hon. Friend says, and I will happily discuss it with him and with my colleague the fire Minister, my hon. Friend the Member for Chester North and Neston (Samantha Dixon). If my hon. Friend thinks there are errors, he can by all means send us more details, and we will work on that.

[Clive Jones (Wokingham) (LD)]

Wokingham is the lowest funded unitary authority in the UK and is struggling to find enough money for adult social care and children’s services. I have three quick questions for the Minister. First, has she protected tier 1 local authorities from real-terms cuts? Secondly, have the Government honoured their commitment to a new fair funding formula by removing the recovery grant that undermines it. Lastly, how does the Minister expect local authorities to afford the dedicated schools grant deficits accrued up to 31 March 2028?

[Alison McGovern]

I think those three questions have been answered in what I have already said, so I refer the hon. Gentleman to my earlier answers.

[Emily Darlington (Milton Keynes Central) (Lab)]

As a former deputy leader of Milton Keynes city council, I welcome this announcement. As a reminder, Milton Keynes city council faced £200 million-worth of cuts—55% of our grant—while Buckinghamshire and Northamptonshire were protected and got bail-outs. This settlement is, for once, going to give us the funding we need to protect Britain’s fastest-growing city, so I thank the Minister. Will she meet us to talk about some of the things we can do to encourage councils to build homes at the same rate as Milton Keynes?

--- Later in debate ---

[Alison McGovern]

My hon. Friend is not just a former deputy leader of Milton Keynes city council; she has become a fantastic champion of that great city since coming to this House. If she wants to meet to talk about fast-growing cities and building homes, I will be there all day.

[Sarah Dyke (Glastonbury and Somerton) (LD)]

One fifth of the UK population live in rural areas. They face unavoidable additional costs, including longer travel times, reduced provider competition and workforce recruitment. Those costs have an impact on every single aspect of local service delivery, but funding formulas fail to adequately recognise rurality, putting additional pressure on the vital services that residents in Glastonbury and Somerton rely on. Does the Minister accept that additional cost pressures are linked to geography and sparsity, and will she outline what steps are being taken to support large rural councils such as Somerset to manage these funding gaps?

[Alison McGovern]

The hon. Lady asked if I recognise that issue, and I have already said several times that I do, as well as setting out some of the steps that we are taking to address it. As I said, I will happily work with hon. Members on both sides of the House to take local authorities, wherever they are, on a journey towards sustainability.

[Pam Cox (Colchester) (Lab)]

I am always proud to be in this Chamber, but I am particularly proud to be here today as the Government bang a final nail in the coffin of Conservative austerity. I really welcome what I hope will be significant additional investment in my constituency of Colchester, because that investment will do so much to improve local services for local residents. Can the Minister give us a timeline for that funding—that is, when will we get the cash?

[Alison McGovern]

I feel like a bit of an old lady in the House these days, having been here in 2010 at the beginning of austerity. I saw the effects of it—

[Hon. Members]

There was no money.

[Alison McGovern]

Well, you should see the level of debt that the Tories left us with. The global financial crisis was a tough time, but I never thought a Tory Government would leave us with a debt-to-GDP ratio of nearly 100%.

To return to the constituency of my hon. Friend the Member for Colchester (Pam Cox) and the important work that we are doing to rebuild local authorities after that awful period of austerity, we will be releasing information to councils today so that they can start the budgeting process. We will engage heavily with local authorities over the months to come so that they can set their budgets in the normal way in the spring. I encourage her local authority to be in direct contact with the Department, and I would be happy to meet her to talk about the impact on her constituency.

[Mr Tom Morrison (Cheadle) (LD)]

Stockport council, along with two other boroughs, missed out on the recovery grant. The grant was not mentioned in the fair funding review or consultation. Why was it not mentioned, and is the Minister concerned that that opens up the whole process to legal challenge?

--- Later in debate ---

[Alison McGovern]

I thank the hon. Gentleman for his question. I have every confidence in the details that we are publishing today. We will be working with local authorities, as I have said, to make sure that they can set their budgets in the normal way and move towards financial sustainability.

[Mohammad Yasin (Bedford) (Lab)]

I thank the Government for delivering an early Christmas present to my constituents in Bedford and Kempston. The granting of planning permission for the Universal Studios theme park is a landmark moment not just for the eastern region but for the whole UK, as it will bring in around £50 billion of investment and tens of thousands of jobs. Does the Minister agree that Bedford borough council, which is already under significant financial pressure, will need additional Government investment to meet the extra demand on local public services, to support growth and to put our region firmly on the global map?

[Alison McGovern]

I have to agree with my hon. Friend that it is not just the people of Bedford who are excited about Universal Studios; the excitement can be felt across the United Kingdom. Today’s settlement hopefully helps us on that journey, but I will happily meet him to discuss the impacts on Bedford and the wider area.

[Helen Morgan (North Shropshire) (LD)]

I know the Minister is aware that Shropshire council ran out of road this year, having been caught in a perfect storm of 16 years of Conservative mismanagement of the council, surging demand for social care and the failure of the previous Government to recognise the reality of delivering services in a rural area. Can she reassure my constituents that she will not only help us to get through this difficult period with exceptional financial support, but work with me and the other Shropshire MPs to ensure that Shropshire council is put on a secure financial footing for the future?

[Alison McGovern]

I thank the hon. Member for meeting me recently to discuss that issue, which was really helpful. As I said in my statement, decisions about financial support will be taken in the usual way, and I will of course work with her and other Shropshire MPs to make sure that her area is on a journey towards sustainability.

[Rosie Wrighting (Kettering) (Lab)]

When I knock on doors, one thing is said to me repeatedly: Kettering does not get its fair share. I do not have to tell my constituents that the Tories underfunded our local government. The parent taking their child to our rundown swimming pool sees it, the family waiting for a council house sees it, the child waiting for a space at a special school sees it, anyone who drives a car on our roads sees it, and the Tories saw it in 2018 when Northamptonshire county council went bankrupt under their leadership. Will the Minister confirm that this is a Labour Government sending the people of Kettering the message, “You matter, and you deserve your fair share”?

[Alison McGovern]

I would first say to the people of Kettering that their MP has done a cracking job in making sure that their needs are represented in this place and in the decisions that the Government take. Their MP has spoken up for their future, their children, their council and their needs, and we are doing our best to meet those needs.

[Vikki Slade (Mid Dorset and North Poole) (LD)]

I refer the House to my entry in the Register of Members’ Financial Interests.

I welcome the Government’s announcement of a cap on social care placements, but some special schools are making unreasonable charges. One school in my area that is offering places to neurodiverse children who are struggling in mainstream education but are otherwise without disabilities charges more than £100,000 a year in fees plus transport, while state-maintained alternatives are doing it for £25,000 for the same cohort. Will the Minister commit herself to working with the Department for Education to introduce a cap on charges and profits for specialist schools now? Councils will have collapsed by 2028 and taxpayers will lose out, so this really needs to be addressed before then.

[Alison McGovern]

The hon. Lady has made precisely the case that I was trying to make in my statement. We must fund councils properly, but if we do not get a grip on escalating costs it will do no good; we will still have unsustainable councils. I am already working with colleagues in the Department for Education, and if the hon. Lady would like to send me details of the case that she mentioned, I will be happy to investigate it.

[Several hon. Members rose—]

[Naushabah Khan (Gillingham and Rainham) (Lab)]

After 14 years, the Tories should be ashamed of their legacy in local government. I know that my council, Medway, will welcome the Minister’s announcement about linking deprivation to funding, but we still face other challenges. Will she set out what the changes mean for my local area, and will she agree to come to Medway to meet us and discuss how we can take on some of those other issues?

[Alison McGovern]

Places such as Medway deserve a lot better, and through her championing of her constituency in the House, my hon. Friend is ensuring that they will get it. We want to see councils invest in high streets, and we want to see those high streets thrive, along with other services. I would be happy to visit my hon. Friend’s constituency and see for myself what we can do to improve it.

[Andrew George (St Ives) (LD)]

The Minister constantly says that she does not recognise the figures when presented with what are expected to be the settlements for certain local authorities. That is possibly because we are fumbling in the dark today, as the figures simply are not available. I had to go to the Vote Office, and I have some of the papers here. The fact is that in my own area, the Government have proposed a bespoke arrangement for the Council of the Isles of Scilly, but there is no clarity about what it will mean in the forthcoming years, and in respect of the indices of deprivation, there is no clarity on what it means for Cornwall. Will the Minister meet me, and other local Members, to discuss these issues?

[Alison McGovern]

I will.

[Josh Fenton-Glynn (Calder Valley) (Lab)]

I declare my interest as an officer of the Special Interest Group of Municipal Authorities team, and as a recovering local government alumnus.

We inherited a system in which 40% of local authorities were at risk of going bust and issuing section 114 notices by March 2026, driven by a rising demand for adult and children’s services and SEND services. Communities such as mine in Calder Valley have faced those pressures every day. This settlement really matters; the new fair funding settlement gives more help to the places that need it most, and gives them long-term stability. However, more needs to be done, so can the Minister confirm that we will prioritise and value local government services and their importance to our economy?

[Alison McGovern]

Yes.

[Andrew Pakes (Peterborough) (Lab)]

The Conservatives have some brass neck when they blame councils like mine for being poor, given that they oversaw 14 years of austerity, underfunding and cuts. The initial figures suggest that by 2028-29 Peterborough city council will be receiving £65 million more from this Government, which will be a life-changer for many people. Can the Minister explain how we can use that money to transform the communities that people like me represent in this House?

[Alison McGovern]

I thank my hon. Friend for his consistent championing of Peterborough in this House—and, frankly, in my ear—at all times. He always stands up for his constituents, and I have been pleased to visit Peterborough on a number of occasions. I want to see the significant investment that we are making in Peterborough help it to thrive. It has great potential and fantastic young people, and I look forward to being invited back to see exactly what is happening there.

[Caroline Voaden (South Devon) (LD)]

I welcome the multi-year settlement, but I am deeply concerned that the statement made no reference to the particular pressures facing rural areas. Devon has the longest road network in England, so everything costs more—SEND, care, bus services and bin collections—and Dartmouth library is now facing a cut in hours because of funding cuts. Using deprivation as a way to calculate the funding formula does not take account of the older population, and my concern is that hidden pockets of deep deprivation, in an otherwise wealthy area, will not be recognised. Can the Minister reassure me that hidden pockets of deprivation will be recognised by the formula?

[Alison McGovern]

I have answered a number of questions on rural areas, so I refer the hon. Lady to the answers I have already given. I have real confidence in the latest indices of deprivation. The data quality is much better, so we are able to meet the challenge she sets.

[John Slinger (Rugby) (Lab)]

I warmly welcome the settlement, which puts fairness at the heart of local government funding. I thank the Minister for the increased funding for Warwickshire, which will benefit people across the county and in Rugby. Would she care to comment on the fact that there is not a single Reform UK MP in the Chamber? Does that not indicate that Reform does not take local government seriously?

[Alison McGovern]

It certainly does. Our first duties as Members of Parliament are to listen to our constituents and to be in this House. My hon. Friend always stands up for his constituents, unlike others who are not here.

[Lisa Smart (Hazel Grove) (LD)]

Like others, I warmly welcome the multi-year funding settlement. As a former local councillor, I know the impact it will have on local councils, which will be able to plan when they are tackling some of the thorniest issues that affect our most vulnerable constituents. We in this country are blessed to have remarkable people working in local government, and the best local councillors know their communities, stand up for them and mither their MPs to stand up for them.

At first glance, Stockport appears to be one of the areas that is worse off under this funding settlement, despite containing the most deprived part of Greater Manchester. We missed out on the recovery grant by 0.01%, and the initial indication is that we will be worse off. Will the Minister meet me, the hon. Member for Stockport (Navendu Mishra) and my hon. Friend the Member for Cheadle (Mr Morrison) so that we can go through this and work out how we will make sure that my most vulnerable constituents are not unduly impacted?

[Alison McGovern]

I will.

[Steve Race (Exeter) (Lab)]

I welcome the multi-year settlement, and I thank the Minister and the Secretary of State for their engagement with me and Members from across the House as we make the case for our local areas. It looks like Devon county council will get a significant uplift over a period of years. If that is true, I am particularly keen to see the Lib Dem and Green-led Devon county council U-turn on its decision to cut 66% of its homelessness budget, get on top of the weeds that it has allowed to grow throughout our entire city, which are engulfing some communities, and go back on its current consultation to cut library hours. Will the Minister set out how she thinks the increase in funding to local authorities will have a positive impact on services and local people?

[Alison McGovern]

I thank my hon. Friend for all the work he has done, as part of our homelessness strategy, to draw attention to homelessness and rough sleeping in his city of Exeter, which is a wonderful place and deserves to have the county council and others look after it properly. This investment in local authorities will make sure that everyone in our country feels proud of the place where they live. We want to see all our places grow, and I expect all councils to do that work. I look forward to meeting him to discuss this issue further.

[Mr Adnan Hussain (Blackburn) (Ind)]

I welcome the Government’s funding formula, but I would like to bring to the Minister’s attention my conversation with my local council leader and its chief executive just last week. They are worried that the council cannot afford the spiralling cost of children’s services. For one particular child, the cost is £25,000 a week. Councils often have no choice but to rely on private providers at market rates. Will the Minister commit to tackle the cost of private provision, or look into introducing a cap?

[Alison McGovern]

I think I answered that question in my statement. I am just as concerned about the cost as the hon. Member is.

[Dr Lauren Sullivan (Gravesham) (Lab)]

I thank the Minister for her statement. She is right to talk about play parks, homelessness and libraries. As a councillor, one of my proudest achievements was replacing five play parks, but I have seen how Tory-run Kent county council cut everything to the bone. I am grateful for the multi-year funding settlement; will the Minister share what this will mean and look like for Gravesham residents?

[Alison McGovern]

My hon. Friend is right to point out, as I did, the consequences of council cuts. They are not just theoretical on a spreadsheet—we all saw the effects in our parks and our town centres. We want to turn that around in Gravesham, and I look forward to working with my hon. Friend over the weeks and months to come to make that real for her residents.

[Peter Swallow (Bracknell) (Lab)]

Between 2015 and 2020, under the last multi-year settlement, the Conservative Government cut Bracknell Forest council’s funding by £500,000. I am delighted that this provisional settlement would see Bracknell Forest’s funding rise by almost £10 million—an increase of over 7%. Does my hon. Friend agree that this shows that Labour will always invest in our local services and the Conservatives will always choose austerity?

[Alison McGovern]

I thank my hon. Friend for the case he makes, which shows people in Bracknell that they have an effective MP who is prepared to stand up for them, champion them and make sure they get the services they need.

[Natasha Irons (Croydon East) (Lab)]

I welcome the Government’s taking into account deprivation in the multi-year funding settlement. If there was ever a demonstration of what a difference a Labour Government can make, it is this: investment in our poorest communities, not crippling Tory austerity. It looks like in Croydon we are set to get an extra £158 million over this Parliament, which is a game changer for us. Will the Minister outline the timetable for our getting this extra investment? I thank her again for her work.

[Alison McGovern]

I thank my hon. Friend for being a brilliant champion for Croydon. She has stood up for the people she represents. We know that poverty in London has changed, and areas such as Croydon have experienced an increase. This funding settlement is a recognition of that reality. We want Croydon to thrive, which is why, after publishing this information today, we will work with local authorities over the coming months so that they can set their budgets in the normal way in the spring. Croydon has a great future ahead and I want to work closely with my hon. Friend to make sure that happens.

[Mrs Elsie Blundell (Heywood and Middleton North) (Lab)]

I welcome the additional investment the Minister has announced, and what it will mean for my constituents in terms of local government funding. Firefighters, such as those based at Heywood fire station in my constituency, are attending a massively increased number of flooding and water-rescue incidents, which are up 40% over the last 10 years. Has any consideration been given to introducing a statutory duty on local fire and rescue services, along with commensurate funding to ensure that firefighters are properly resourced and equipped to respond to flooding and water rescues?

--- Later in debate ---

[Alison McGovern]

I thank my hon. Friend for raising that point, which is very apposite given the effects of climate change and other things. I am sure that the fire Minister, my hon. Friend the Member for Chester North and Neston (Samantha Dixon), will have heard what she said, and we will all work together to make sure it is addressed.

[Daniel Francis (Bexleyheath and Crayford) (Lab)]

Five years ago, the Conservative-controlled council in the London borough of Bexley found itself in such a dire situation that it sought a capitalisation order, made 15% of staff redundant and had to sell a building because it could not even fund the redundancy notices. [Interruption.] For the Conservative Members chuntering, that is a real example of there being “no money left”. Will the Minister contrast the announcement she has made today with the approach taken by the previous Government?

[Alison McGovern]

I thank my hon. Friend for being such a champion for his constituents, and for making sure that their voice is heard in the decisions we are taking. The situation he describes was chaotic and, as he said, people paid the price for that in their job security and in the services we all rely on. The difference is that we are taking a long-term approach, with a multi-year settlement, and funding according to deprivation means that where the need is greatest, the money will follow.

[James Naish (Rushcliffe) (Lab)]

On behalf of Nottinghamshire county council, I thank the Government for a £234 million—or 30%—increase over the course of this Parliament, which will make a huge difference, and for the 4.6% increase in core spending for my area, Rushcliffe. I previously raised with the Minister in writing the need to avoid cliff edges. The borough council was particularly concerned about the loss of the new homes bonus and similar mechanisms. Will the Minister expand on the decisions that have been taken? I also want to mention rurality, which really matters and drives up service costs; I hope she will meet me and other Nottinghamshire MPs to discuss that.

[Alison McGovern]

Members will be reassured to know that ample time is reserved in my diary to meet them in the new year, and I would love to meet my hon. Friend to discuss rurality and the other things he mentioned.

On new homes, we are making sure that councils get all the benefit for every new home they build. That is part of the settlement. We want to build 1.5 million new homes and we want councils to feel the benefit of that when they make the relevant decisions. I will happily talk my hon. Friend through the detail when we meet.

[Antonia Bance (Tipton and Wednesbury) (Lab)]

Black Country people are proud and resilient, but 50 years of deindustrialisation and 14 years of Tory austerity have left my borough of Sandwell the fifth most deprived in the country. Does the Minister agree with me that this Government can finally see deprived urban areas—post-industrial areas like mine—and is finally giving us back what we are due?

[Alison McGovern]

I very much agree. For those places that bore the costs of bad decisions many years ago and have never been able to get fully back on their feet, this is part of turning the corner. I look forward to working with my hon. Friend on that.

[Anna Dixon (Shipley) (Lab)]

I am sure you would like to join me, Madam Deputy Speaker, in thanking the Minister for backing Bradford in her response to our hon. Friend the Member for Bradford East (Imran Hussain). This Government’s fair funding is finally turning a corner for councils like Bradford that have been at the sharp end of Tory cuts to local government. Does the Minister agree that, with elections in May next year, if residents in my Shipley constituency want to see improvements in local services, they will need a Labour council working with a Labour Government?

[Alison McGovern]

My announcement today is a massive vote of confidence in the people of Shipley and of Bradford, and I look forward to working with my hon. Friend to make sure that every penny piece of that investment improves her constituents’ lives.

Housing, Communities and Local Government

Alison McGovern Excerpts

Monday 15th December 2025 Written Corrections

[Lee Pitcher (Doncaster East and the Isle of Axholme) (Lab)]

This is deeply personal to me because I was one of those children, 34 years ago, sat on a double mattress in a room doing my GCSE revision and my coursework, and then having to sleep next to my mum and sister in a room while all that was going on. That is why today is so remarkably important, and why I am so proud to stand here and hear that we are going to do something about this. I can tell this House that when that happens to you, you feel alone, you feel isolated, you feel that no one cares, and your dignity and self-respect sits in somebody else’s hands. There are thousands of children out there today living in cramped B&Bs. I am so glad that the Labour Government will end that unlawful practice and protect those families from being placed in those unsafe, unsuitable conditions. Something that is massively important for me is my patience, but on this issue it runs out all the time. What is the timeline to stop that happening to those children in B&Bs?

[Alison McGovern]

I thank my hon. Friend for that contribution. Children who are stuck in inappropriate B&Bs should know that they have a champion in this House, they should know that there is someone who has been there too, and they should know that they are not alone. On the timeline for getting kids out of B&Bs, we will end the use of B&B accommodation by the end of the Parliament in all but the most extreme cases—an absolute emergency. It is already the law—it has been for 20 years—that children are not supposed to be in B&Bs for more than six weeks. What on Earth is going on in this country when there are 2,000 children in such a situation? Let us work together, let us do something about it and let us bring those numbers down very quickly.

[Official Report, 11 December 2025; Vol. 777, c. 528.]

Written correction submitted by the Minister for Local Government and Homelessness, the hon. Member for Birkenhead (Alison McGovern):

[Alison McGovern]

I thank my hon. Friend for that contribution. Children who are stuck in inappropriate B&Bs should know that they have a champion in this House, they should know that there is someone who has been there too, and they should know that they are not alone. On the timeline for getting kids out of B&Bs, we will end the use of B&B accommodation by the end of the Parliament in all but the most extreme cases—an absolute emergency. It is already the law—it has been for 20 years—that children are not supposed to be in B&Bs for more than six weeks. What on Earth is going on in this country when there are 2,000 families with children in such a situation? Let us work together, let us do something about it and let us bring those numbers down very quickly.

National Plan to End Homelessness

Alison McGovern Excerpts

Thursday 11th December 2025 Written Statements

[The Minister for Local Government and Homelessness (Alison McGovern)]

Today, the Government have published their national plan to end homelessness. For the first time ever, this is a truly cross-Government strategy, with commitments from all relevant Departments to both reduce homelessness and rough sleeping and—where appropriate—to use their levers to improve the lives of children and families already in the homelessness system.

Both the number of individuals sleeping rough and the number of households in temporary accommodation have more than doubled since 2010. Behind these statistics are human lives—some who we can see sleeping on our streets and others who we cannot, often families and children living in unsuitable accommodation without adequate facilities.

This strategy sets out our clear vision for change. Homelessness should not be an accepted part of our society, but the scale of crisis we inherited means we cannot end it overnight. That is why this strategy sets out the actions we are taking to drive change across the short, medium and long term. It outlines the tangible actions and targets we have set ourselves for delivery this Parliament, which will act as milestones on the way to achieving our long-term vision.

In the long term, the strategy commits to delivering sustainable change to address the root causes of homelessness. This will include building more homes through our £39 billion investment in social and affordable housing; reforming renters’ rights, including banning section 21 evictions; and tackling poverty, as set out in our recent child poverty strategy, lifting 550,000 children out of poverty.

In the medium term, the strategy commits to supporting councils and public services to shift from crisis to prevention. We are investing £3.5 billion in homelessness and rough sleeping over the next three years via new, more flexible arrangements that prioritise prevention. Alongside this, we are outlining a long-term ambition that no one should leave a public institution into homelessness. This is backed up by both a new duty on public services to identify, act and collaborate to prevent homelessness, and a set of targets and commitments from other Government Departments that recognise that the causes of homelessness do not respect departmental boundaries.

In the short term, the strategy commits to taking immediate action to tackle the worst forms of homelessness.

First, it pledges to eliminate the unlawful use of B&Bs for families over the course of the Parliament, as well as to tackle unacceptable temporary accommodation. We will do this by increasing supply, improving quality and experience—including via cross-Government commitments to improve health outcomes and school attendance and reduce the risk of mortality when children are in temporary accommodation—and supporting local models through an expanded emergency accommodation reduction programme.

Secondly, it pledges to halve the number of people with complex needs who spend months or even years on the street by the end of the Parliament. We will do this through a new long-term rough sleeping innovation programme, as well as targeted funding for supported housing and the voluntary, community and faith sector.

We have looked at the issues carefully, across an interministerial group. We were supported by a lived experience forum so that people who have experienced homelessness could influence the strategy, and an expert group bringing together representatives from homelessness and rough sleeping organisations, local government and experts.

We have made our ambition clear and will hold ourselves to account to deliver on it. The strategy sets three new overarching national targets: to increase the proportion of households supported to stay in their own home or find other accommodation; to end the use of B&B accommodation for families except in short-term emergencies; and to halve the number of people sleeping rough long term. It also places targets and commitments on seven Departments across Government. We expect local partners to do the same, outlining clear local action plans and targets of their own to deliver on this vision.

The interministerial group will continue to meet to monitor progress and make sure that we deliver. We will report publicly on this progress at least every two years, and will feedback regularly to Parliament in the usual way.

To underwrite this ambition, today we have also announced a £50 million top-up to the homelessness prevention grant to further boost services available to people experiencing and at risk of homelessness this year. The allocations will be published on gov.uk here www.gov.uk/government/publications/homelessness-prevention-grant-allocations-2025-to-2026

Now more than ever, we need our partners to join us in this mission, including local councils, frontline public services, homelessness organisations, voluntary, community and faith groups. Together, this strategy will set us on the path to ending homelessness, and deliver immediate action to improve the lives of people experiencing homelessness and rough sleeping now.

Copies of the strategy have been laid in the House this morning and are now available at gov.uk.

[HCWS1154]

National Plan to End Homelessness

Alison McGovern Excerpts

Thursday 11th December 2025 Commons Chamber

[The Minister for Local Government and Homelessness (Alison McGovern)]

I would like to make a statement to the House about the publication of our national plan to end homelessness.

The strategy we have published today, I want to say from the outset, builds on the work of my hon. Friend the Member for Bethnal Green and Stepney (Rushanara Ali) and my right hon. Friend the Member for Ashton-under-Lyne (Angela Rayner). I pay tribute to both of them for their considerable work.

This Labour Government inherited a homelessness crisis. Both rough sleeping and households in temporary accommodation increased radically from 2010. It is not just the people we can see sleeping in Westminster tube station as we leave this building, but the families and children we cannot see—those living in unsuitable temporary accommodation such as bed and breakfasts, without a kitchen and far away from family, friends and schools. For some, this has been a matter of life and death: 1,142 people died while homeless last year, and 74 children’s deaths were connected to temporary accommodation in the five years to 2024—58 of them were babies under one. Everyone deserves a roof over their head. Children in the worst housing our country can offer deserve the attention of this House. The strategy outlines the tangible actions and targets we have set ourselves for delivery this Parliament, which will act as milestones on the way to achieving the long-term vision.

We have looked at the issues carefully. As well as the interministerial group, the Ministry of Housing, Communities and Local Government convened a lived experience forum, so that the people who have experienced homelessness and rough sleeping could influence the strategy. We established an expert group to bring together representatives from organisations that support people, local government and experts to provide knowledge, analysis and challenge. I thank them all, on behalf of the House, for their contribution.

To tackle the root causes of homelessness and break the cycle of failure, we must build more homes. We want to build 1.5 million new homes, including more social and affordable housing—more than has been built for years. The new programme could deliver around 300,000 social and affordable homes over its lifetime, with about 180,000 for social rent.

Not having enough money is another cause of homelessness. The child poverty strategy, presented to the House last week, will lift 550,000 children out of poverty by 2030, including through the removal of the two-child limit. The implementation of the Renters’ Rights Act 2025 will give more protection to renters by abolishing section 21 no-fault evictions, closing a key route into homelessness.

Building more homes and preventing homelessness overall will take time, but families living in squalid, overcrowded conditions simply cannot wait. The Government will eliminate the use of B&Bs for families in this Parliament and make sure that, on the rare occasion that homelessness cannot be prevented, temporary accommodation is liveable. We have already proven that that is possible through innovation funded by our emergency accommodation reduction pilots programme. The programme funds new work to find more sustainable accommodation, the inspection of properties, the acquisition of long-term accommodation for families, and support to make that transition. That is why, in this strategy, we are increasing funding to £30 million to stop a wider range of poor practice, including the overuse of B&Bs and unsuitable out-of-area placements.

There is £950 million for the fourth round of the local authority housing fund. That means councils can invest in owning their accommodation, rather than paying through the nose to rent bad accommodation, and we will explore partnering with social impact and institutional investors to use private finance and support from the National Housing Bank to yet further increase the supply of good-quality temporary accommodation.

To make sure that children in temporary accommodation get the support they need, we will introduce a new duty on councils to notify schools, health visitors and GPs when a child is in temporary accommodation—something that Members have called for. That will improve health outcomes and school attendance, and reduce the risk of mortality for those children. Most crucially, we will work with the NHS to end the practice of discharging newborns with their mums into B&Bs.

There is no worse feeling for any of us as public servants than seeing a man or woman on the street in need of help that we failed to give them. Over a third of people who have been sleeping outside have been doing so for months, and some for years. They have complex underlying needs and have been failed by services again and again. This cannot continue, so today we are setting a target to halve the number of people sleeping rough long term by the end of this Parliament. We will help more vulnerable people off the streets and into stable housing by investing £124 million over the next three years in supported housing services. We will provide £37 million to our partners working in the voluntary, community and faith sector to support recovery from homelessness. We will target £15 million for councils to test innovative approaches to helping people experiencing long-term rough sleeping, which is often complicated.

In a country such as ours, we really should be able to prevent homelessness; instead, hard-working professionals are stuck responding to crisis after crisis. Many councils have simply become overwhelmed by the costs, and people are having to face a night on the street just to access support in the first place. I am proud that the strategy prioritises the targeted prevention of homelessness among vulnerable groups, like young people and survivors of domestic abuse. We are providing more support to young people in supported housing, helping them to develop the skills and independence they need. By making work pay—crucially, by removing the work disincentive for those in temporary accommodation and supported housing —we are ensuring that a job is a reasonable and achievable outcome.

Public institutions should lead the way in preventing homelessness, and this strategy sets out our long-term ambition that no one leaves a public institution into homelessness, with cross-Government targets to start the change to reduce homelessness from prisons, care and hospitals. To force lasting system change, we will introduce a duty to collaborate—to compel public services to work together to prevent homelessness.

We are backing up all these actions with record levels of funding. We have invested more than £1 billion in homelessness services this year, including the largest ever investment in prevention services. Today I can announce the allocation of an extra £50 million top-up to the homelessness prevention grant this year, which further boosts the support available to people at risk of homelessness right now. The strategy sets out how we will provide a further £3.5 billion for homelessness and rough sleeping services over the next three years, with much more freedom and flexibility for councils to get on and do.

We have made our ambition clear, and we will hold ourselves accountable for achieving the outcomes we seek. The strategy sets out three new national targets, alongside commitments from six of our most crucial partner Departments across Whitehall. The interministerial group on homelessness and rough sleeping will continue to meet to deliver the strategy, and will publish a report on progress at least every two years—although I have absolutely no doubt that hon. Members will hold us accountable for the targets week in, week out. We will monitor local progress with new outcomes metrics, with councils setting targets and publishing action plans.

On those goals—ending the use of B&Bs, halving long-term rough sleeping and increasing the rate at which homelessness is prevented—I know that everyone in this House wants all our places, up and down the country, to succeed. Now more than ever, we need our partners to join us in this mission: councils, frontline public services, homelessness organisations, and voluntary, community and faith groups. If we join forces, the strategy will set us on the path to ending homelessness and will deliver immediate action to improve the lives of people experiencing homelessness and rough sleeping.

For every child without a bedroom to do their homework in, for every adult whose life could be turned around by an arm around their shoulder, and for every person who needs a home for Christmas and beyond: this plan is for you, and this Government are for you too. I commend this statement and our strategy to the House.

[Madam Deputy Speaker (Judith Cummins)]

I call the shadow Minister.

[Gareth Bacon (Orpington) (Con)]

I thank the Minister for her remarks and for advance sight of her statement. This is the third time that I have had the opportunity to discuss the issue of homelessness with the Minister in the last seven weeks. I do not doubt that all hon. and right hon. Members here today share a strong desire to end rough sleeping and homelessness for good.

Homelessness is a social tragedy wherever and for whatever reason it occurs. No one in our society should be forced to live on the streets, and it is incumbent on us all to do our best to ensure that our constituents can live in a safe, decent and secure home. The Minister’s reference to the horrendous figure of how many men, women and children have died while being homeless is a poignant reminder of why decisive action is critical. Although progress to that end was made under the previous Government, work remains to be done, and I offer my full support to the Government in their desire to end homelessness once and for all.

As policymakers have increasingly come to appreciate, homelessness does not simply begin when someone finds themselves on the street. Rather, it is rooted in long-term causes. For example, some people have persistent issues with mental health or substance abuse, offenders may be stuck between prison and the streets with no place to go, or young people may leave the care system without a fixed destination.

I am pleased that inspiration for cross-departmental working has been taken from the previous Government’s “Ending Rough Sleeping For Good” strategy, which brought seven Departments from across the Government together. The previous Government implemented StreetLink to provide more support for those who are sleeping rough or those concerned with someone who is sleeping rough. It connects local authorities and charities, and provides quicker support to those who need it most.

We welcome the Government’s taking action, but we need to see details of how the plan will be implemented in the long term to achieve their goals. Homelessness has reached a record high in the past year, with the number of households including children in temporary accommodation surging to historic highs. St Mungo’s estimates that long-term rough sleeping is up by 27% in London. It is vital that the Government look at the wider picture to see all the connected pressures. Only by making a concerted effort to reduce the cost of living and make private housing more affordable will the Government get people out of temporary accommodation and into secure, long-term homes of their own.

However, the Government are determined to spend ever increasing amounts on welfare, increase taxes and make it harder to employ people, and they must square that with the negative impact on people’s jobs. Labour promised to build 1.5 million new homes by the end of this Parliament, as the Minister mentioned again today. To make good their promise, they must build 300,000 new homes per year, but with only 208,600 delivered in 2024-25, they are already 91,400 behind their self-imposed target. That does not bode well for the future.

The homelessness strategy has only just been published, and we will of course study it carefully, but I have some initial questions for the Minister. With the Government demonstrably failing to meet their housing targets, what guarantee is there that they will meet their new target on homelessness and halving long-term rough sleeping? How will they make that promise cast-iron? The Government are pushing more responsibility on to local authorities by requiring them to publish action plans, in addition to the homelessness strategy. How will that help? Will it just result in more paperwork?

The former Secretary of State, the right hon. Member for Ashton-under-Lyne (Angela Rayner), promised to repeal the Vagrancy Act 1824. Is that still the plan? If it is, will the Minister set out a clear timeline? The strategy mentions various new targets. What metrics will the Government use to assess the success or otherwise of the strategy? Will the Government report back to Parliament on progress regularly, and if so, with what frequency?

We all want the strategy to work. In that spirit, His Majesty’s Opposition will engage constructively with the plan and scrutinise it as it is implemented.

[Alison McGovern]

I thank the hon. Gentleman for his comments, and I thank hon. Members across the House for the cross-party way in which they have engaged on the strategy. We will disagree—I am sure we will disagree about the manner in which Opposition Members sometimes discuss social security—but where we agree, let us make every effort to put the people who need this strategy first. Those are people who have been on the streets for too long and children who deserve a proper childhood. I hope that we can share that ambition.

The hon. Gentleman asked about metrics. The Department publishes a number of datasets that we are using to analyse the metrics. He mentioned a couple of them—children in temporary accommodation and long-term rough sleeping—but we also know how many people present themselves to councils at risk of homelessness, and we want to increase the rate at which that is prevented. I will ensure that we report regularly to Parliament on that.

The hon. Gentleman mentioned repealing the Vagrancy Act. Some other bits of legislation need to come into force so that we can do that. I will write to him with the exact timings, because they relate to the business of another Department.

On the matter of councils’ strategies and whether it is just paperwork, I can tell the hon. Gentleman that it very much is not. The statistics show that in some areas, we have been able to get on top of B&B use—there are more details in the strategy—while in some areas, we have not. It is less about paperwork and more about transparency over outcomes and then taking action to ensure that best practice informs what is going on everywhere.

The hon. Gentleman asks about targets and how cast-iron they will be. Thinking about the state of house building, we were always going to have to ramp up over time. I am clear that the goals in the strategy are achievable, and I would welcome the support of the hon. Gentleman and the rest of the House in ensuring that we see them done.

[Madam Deputy Speaker (Judith Cummins)]

I call the Chair of the Housing, Communities and Local Government Committee.

[Florence Eshalomi (Vauxhall and Camberwell Green) (Lab/Co-op)]

I thank the Minister for her statement this afternoon. I pay tribute to my hon. Friend the Member for Bethnal Green and Stepney (Rushanara Ali) and my right hon. Friend the Member for Ashton-under-Lyne (Angela Rayner) for their work; this is an area they were both committed to when they were in their previous ministerial roles. The Minister is correct that reversing the tide of homelessness should certainly be a national priority. It is not something that will happen overnight, and we know that further action will be needed to ensure that councils have the support they need for the pressures they are facing—particularly London councils, as the Minister will know, which are collectively facing costs of £5 million a day just on TA.

One of the ways the Government can help to alleviate those pressures and stop people becoming homeless in the first instance is with their rents. There have been asks of Government with cross-party support and from a number of organisations, including the Local Government Association, to look at local housing allowance rates to ensure that people can afford to rent locally so that they do not find themselves facing the threat of eviction and homelessness. Has the Minister discussed this matter with colleagues in the Department for Work and Pensions and the Treasury to ensure that our residents and tenants do not find themselves evicted? I think of the many children who, two weeks from today, will be opening their presents in another B&B or in more unsuitable temporary accommodation. For them and for many others, we have to make sure we get this right.

[Alison McGovern]

I thank the Chair of the Select Committee for her words and for her long-standing commitment to tackling homelessness in the capital and right across the country. She is right to ask about council pressures, and we are trying to address the inadequacies of council funding across the country. At the moment, the costs of TA and the spikes in demand are putting pressure on councils that will make it even harder for them to balance their budgets, and that serves nobody. We have to get this under control, because it is a waste of taxpayers’ money, no less than it is a waste of childhoods. We have got to get on top of it.

My hon. Friend asks about incomes and whether I have discussed that with other Departments. This is a cross-departmental strategy, and Ministers from DWP and other Departments have been very involved in it. At the heart of the problem is the lack of social housing, particularly in London, which is why we need to build more. I am glad that this strategy comes closely after the child poverty strategy last week, which saw action to improve family incomes, not least the removal of the two-child limit.

[Madam Deputy Speaker]

I call the Liberal Democrat spokesperson.

[Gideon Amos (Taunton and Wellington) (LD)]

We Liberal Democrats also welcome this statement and the additional funding, although I still have some questions. For Liberals from Beveridge to Stephen Ross, who introduced the first homelessness legislation into this Chamber, tackling homelessness and poor housing has been central to allowing people to lead the fulfilled and free lives that we want to see them lead. I pay tribute to the Shared Health Foundation for highlighting the tragic numbers, as the Minister mentioned, of children and babies who have died with temporary accommodation mentioned on their death certificate as a contributory factor. It is a truly tragic situation.

The 132,000 households in temporary accommodation, with 12,000 households on the waiting list in my Somerset council area, are far too many. Even one homeless house- hold is, of course, far too many. As the hon. Member for Harrow East (Bob Blackman) raised last week, there has been a 22% increase in the number of people homeless after being discharged from public institutions, which, as the Minister said, is a massively important aspect of this.

Our Liberal Democrat manifesto called for an end to section 21 evictions and for a cross-Whitehall strategy on homelessness, and we welcome both of those things—it is excellent that they have happened. However, we urge the Government to go further, in particular by increasing the social housing target from 18,000 to 150,000 social homes per year, or at least to the 90,000 social homes per year that are required according to Shelter and the National Housing Federation.

In welcoming the statement, I have a few questions for the Minister. What is the timeline is for completing the repeal of the Vagrancy Act provisions? Will the Government uprate the local housing allowance to represent the bottom third of rents and index-link that allowance to those rents, and when will housing benefit be effectively unfrozen by reviewing that local housing allowance? Finally, will the Government consider exempting homeless people from the shared accommodation rate, which both reduces the quantity and diminishes the quality of housing available to homeless people?

[Alison McGovern]

I thank the hon. Gentleman for welcoming the strategy and for joining the cross-party support for our objectives. It is important that we make it clear where we have agreement across the parties. I join him in welcoming the important work of the Shared Health Foundation.

On his final question, there are exemptions to the shared accommodation rate, and I would encourage him to have a look at that part of the strategy. On the local housing allowance, as I said in response to my hon. Friend the Chair of the Housing, Communities and Local Government Committee a moment ago, it is important that family incomes improve, which is why we took the steps we did in the child poverty strategy. I spoke about the Vagrancy Act in my response to the shadow Minister, but I will happily also send the hon. Gentleman the details about the steps that we are taking.

The hon. Gentleman also mentions the need to increase social housing, and I would recommend to him the detail on this published by the Minister for Housing, my hon. Friend the Member for Greenwich and Woolwich (Matthew Pennycook). I do not think any of us should have a cap on our ambition for building social and affordable homes, and I encourage all parts of the country to get on with spending the investment the Chancellor has allocated so that we can put a roof over people’s heads.

[Sean Woodcock (Banbury) (Lab)]

I welcome this strategy and pay tribute to the Minister and her predecessors for the work that has gone into it. I also pay tribute to the Banbury Youth Homeless Project in my constituency, which does great work with young people affected by homelessness, and extend an invitation to the Minister to come and visit the organisation at some point. One feature of the current housing crisis is that temporary accommodation is often anything but. The Minister has reiterated the Government’s ambition to build 1.5 million homes during the course of this Parliament, but I would be grateful if she could provide some detail on how the Government plan to accelerate the delivery of homes, particularly in areas like mine, where infrastructure issues are frequently a barrier to the delivery of much-needed affordable homes.

[Alison McGovern]

My hon. Friend knows that I am a fan of Banbury. I am hoping to get there before too long, and would be most grateful to meet that organisation; it sounds like it is doing sterling work, and I am grateful to them for it. It is true, as he says, that temporary accommodation is often anything but. The distinction we are trying to draw in the strategy is one of quality. While good-quality temporary accommodation often cannot help a family get back on the road to stability, we do see some really poor-quality temporary accommodation. To give people a long-term home where they can set down roots, as Members will know, our Planning and Infra- structure Bill has been proceeding through Parliament. That legislation will allow us to speed up the delivery of all housing, including the social housing we so desperately need.

[Sir Edward Leigh (Gainsborough) (Con)]

I welcome this statement. We do need a massive house building programme, but I suspect the Government are going to have to strip away many more delays and controls if they are going to have any chance of meeting their own target. Does the Minister understand that there is a real lack of confidence in all this? The public see our own people on the streets without proper housing while people who enter the country illegally and migrants are held for months in comfortable hotels in idleness. If the Government were to be really robust and arrest, detain and deport those people, we could not only concentrate more resources on those genuinely in need, but actually save lives at sea.

[Alison McGovern]

As part of the strategy, I have worked closely with my colleagues in the Home Office to support their priorities, which are to secure our borders, deal with the dreadful criminality of people trafficking across borders and get the backlog down. That is the best way to achieve what the right hon. Gentleman suggests, which is to have the resources to support people who have fled conflict and need to rebuild their lives. We want to ensure, through this strategy, that we get help quickly to the people whose cases have been decided, with the outcome that they are a refugee and will be settling in the UK. That means councils knowing where the people are and the support being available. I welcome the right hon. Gentleman’s support for that approach.

[Anneliese Dodds (Oxford East) (Lab/Co-op)]

As my hon. Friend knows, homelessness pressures in Oxford are some of the worst in the whole country. Will she join me in commending Oxford city council’s plan to purchase 260 additional homes for temporary accommodation to get kids out of hotel rooms and other unsuitable accommodation and into decent-quality, much cheaper accommodation? What will she do to back initiatives such as that and to preserve councils’ ability to impose requirements on developers so that they also provide social accommodation?

[Alison McGovern]

I will join my right hon. Friend in commending Oxford city council’s plans. That is exactly the sort of action that this strategy envisages. We must get kids out of totally unsuitable B&B accommodation and help councils to have the resources to acquire much better accommodation that can stabilise family life. In order to back councils to do that, we have the £950 million local authority housing fund, which I mentioned earlier. I want to see local authorities charging forward to tackle this problem. Oxford’s council is not the only one that is getting this right—there are others across the country—but I would encourage all local authorities to look at the approach that Oxford is taking.

[Rebecca Smith (South West Devon) (Con)]

The excellent team at Plymouth city council work tirelessly to tackle homelessness, but pressures on the private rented sector in the city, increased because of the Renters’ Rights Act 2025, has hindered the supply of permanent move-on accommodation. We know that it does not all need to be social housing and that we need private rented homes as well. The council puts the sustained number of Plymouth households in temporary accommodation at about 440 a month—half of them in B&Bs—of which 40 are families. Although I recognise support for councils to buy properties and aims for new home completions, the reality is that will not be enough. How long must households in Plymouth who are currently in temporary accommodation wait for a home? Is Plymouth one of the 20 local authorities being supported to eliminate B&B use as part of the child poverty strategy?

[Alison McGovern]

I will have more to say about funding for local authorities specifically in the coming days. As the hon. Member will know, we are expecting the provisional statement for local authorities. She mentions renters’ rights. Section 21 evictions are a significant cause of homelessness, so it is right that we have brought those to an end through the Renters’ Rights Act. We all want to see good-quality private rented accommodation too. Any area needs a mix of housing so that people can have choice and a good community around them.

[Sarah Russell (Congleton) (Lab)]

I thank my hon. Friend for bringing forward this welcome strategy, to which I know she is personally committed. There is a long-term ambition in the strategy to reduce the number of days of school missed by children in temporary accommodation, but is there a specific target for that? On data transparency for children from more deprived backgrounds, will she set out in more detail how that will be achieved and in particular whether there is an ambition to have wider tracking of outcomes for these children—not just the number of school days lost but how many times they return to temporary accommodation in the course of their childhood?

[Alison McGovern]

I thank my hon. Friend for her question, which is a really important one. She will know that the Department for Education is introducing the unique identifier, which is at the core of the data we need to track this properly. On an ambition for the number of days lost, in an ideal world it would be zero. We need to get the work with the DfE under way and plot a course through the action plan over the coming weeks and months to get the numbers reduced significantly.

[Sarah Dyke (Glastonbury and Somerton) (LD)]

Glastonbury has the highest density of van dwellers in the UK, with around 300 people living in caravans. While some do choose this as a way of life, many are vulnerable or simply cannot afford to pay rent. They deserve a proper roof over their heads, as many of these caravans are simply not fit for accommodation. What considerations has the Minister made in this strategy to support those being exploited by unscrupulous van lords in this unregulated market? Will she meet me to discuss this ongoing crisis?

[Alison McGovern]

I thank the hon. Lady for her input into the strategy on behalf of her constituents. I would be happy to arrange a meeting.

[Danny Beales (Uxbridge and South Ruislip) (Lab )]

I thank the Minister for announcing a bold, radical and ambitious plan—much needed after the appalling record of the last 14 years—to end homelessness. I draw her attention to the target for eliminating the use of B&Bs for families. Having grown up in temporary accommodation and spent time in bed and breakfasts, I know that this is long overdue, so I thank the Minister.

The strategy is a major undertaking and will require cross-Government working. As a member of the Health and Social Care Committee, I am pleased that the awful practice of discharging people back to the street will end under the plan. To achieve this, does the Minister agree that, first, NHS trusts will have to start accurately counting those in hospital who are homeless, which shockingly does not already happen; and, secondly, that more support teams such as the wonderful Pathways teams in many trusts need to be rolled out across every eligible hospital trust?

[Alison McGovern]

I thank my hon. Friend for his question. He demonstrates his expertise, both from his life experience—and the House is so much the better for having people in it today who know what we are talking about—and the considerable work that he has done on this matter. He mentioned a couple of areas where we need to work with NHS and health colleagues. That is exactly the nature of the work we have been doing. I trust that he will use his place on the Health and Social Care Committee to hold us all collectively to account.

[James Wild (North West Norfolk) (Con)]

I welcome the ambition to end homelessness and pay tribute to the Purfleet Trust, King’s Lynn Night Shelter, the borough council and other groups that are working hard and collaborating to end rough sleeping and homelessness. How will this strategy and the resources help to support their efforts and focus on intervention and prevention and providing more local accommodation?

[Alison McGovern]

I thank the hon. Gentleman for his question, and through him I would like to give my own thanks to the organisations in his constituency that he just mentioned, which I am sure are doing vital and important work. One of the biggest challenges for local authorities in recent years has been living hand-to-mouth, with year-to-year funding, which they then pass on to the organisations that they fund. Having three-year settlements, which ensure a level of predictability, will not only help organisations to plan better, whether they are a council or a voluntary sector organisation, but will mean that they can engage more in preventive work, because they will have enough time to see the benefits.

[Andrew Cooper (Mid Cheshire) (Lab)]

I thank the Minister for her commitment on this issue and on the child poverty strategy, which is not unrelated to this work. I welcome the strategy she has announced today as a good first step in the right direction. The focus on prevention and the duty to collaborate are particularly important, as is the new money for supported housing. The lack of a Homes England plan for supported housing has been a real gap, and we have seen supported housing units close as housing associations have struggled to balance what they have to do on compliance, responsive repairs and new developments with wanting to offer supported units. Helping people to deal with the trauma of homelessness and the underlying reasons they became homeless in the first place is the best way of preventing recurrence, and we have seen that with Housing First programmes elsewhere. I was wondering whether the Minister will commit to monitoring the success of the supported housing element of the strategy and whether she will look to expand it in future if it proves successful.

[Alison McGovern]

I thank my hon. Friend for his apposite question. There is extra money for supported housing in the strategy, and we will be monitoring the success of that. There is also money for recovery, because there is no doubt that people live with the trauma of homelessness for many years, and we need to help them move forward.

[Jeremy Corbyn (Islington North) (Ind)]

I thank the Minister for the statement and for the aspiration to end homelessness, which is extremely welcome. I have two areas of concern. One is the insufficiency of council house building happening at the moment and the way in which almost every local authority seeks, in their terms, to balance a development, which includes properties for sale or properties for a rent much higher than a social level. That means that, in constituencies such as mine, a social cleansing of an entire borough ends up taking place as people cannot get council housing because so much is being built for other people to make money out of.

The second issue is related to the private rented sector. Even though I welcome the end of section 21 evictions, they are still going on and will do so until May. Hundreds—actually, thousands—across the country have been evicted through that process. Can the Minister not do something to bring forward the abolition of section 21 and look at the real issue, which is rent control within the private rented sector, because we are subsidising it through taxpayers’ money?

[Alison McGovern]

I think I have responded a number of times on our ambitions for social housing and mixed communities. On section 21, the right hon. Member will have noted that we are investing more in this year to help councils respond to the crisis that we face now, as well as having long-term objectives.

[Chris Hinchliff (North East Hertfordshire) (Lab)]

I welcome the Minister’s work on this important subject. Just after we came into office, Ministers committed from the Dispatch Box to a revolution in council house building. I have welcomed and noted the Minister’s statements on social housing, but she will be aware that there are growing concerns around an increasing corporate ethos in housing associations, many of which have a mixed record at best. I have heard directly from constituents about the stark contrast in security of tenure between when they were living in a council house home and now, when it is owned by a housing association. Given that Shelter estimates that nearly 400,000 people are currently homeless across the country, will the Minister set out what the Government will do to deliver that council housing revolution in constituencies such as mine?

[Alison McGovern]

Housing associations will have heard the comments that my hon. Friend has made. I am sure that they all aspire to treat their residents with the utmost respect and care, but they will have heard what he has said and will want to ensure that they fulfil that ambition.

[Bob Blackman (Harrow East) (Con)]

I remind the House that under the Homelessness Reduction Act 2017, which was implemented in 2018, 1.7 million people in this country have been prevented from becoming homeless in the first place. There is also a duty to refer on the health service, the Prison Service, the armed forces and every statutory body. If they come across people who are threatened with being homeless, they must refer them on.

The Minister talks about a duty to co-operate and assist, but we must ensure that if she needs to revisit that duty to refer and put the onus on co-operation between the two parties, that is fine. Equally, she could immediately implement the Supported Housing (Regulatory Oversight) Act 2023 that I piloted through this place so that the supported housing provided is taken away from rogue landlords who exploit vulnerable people. I look forward to that being implemented.

In the limited time that I have had to read the document, there does not seem to be a mention of the roll-out of Housing First. We know that works. It puts a roof over people’s heads and then we can build the network of support they need to get them back on their feet. Finally, if she needs legislative change, my Homelessness Prevention Bill received an unopposed Second Reading in this place but awaits Government approval, a Committee stage and potential funding. If she needs a legislative process, it is there, ready to go.

[Alison McGovern]

I thank the hon. Gentleman for his work over so many years on this issue. He mentions a number of legislative vehicles, some of which have already made a change and some of which could. I will work with him to do what we need.

On the Supported Housing (Regulatory Oversight) Act, he will have noticed in the Budget that the Chief Secretary to the Treasury is leading some work on value for money in that sector. I will write to him with details on that. On the duty to collaborate, I am sorry to say that we are all aware, as constituency MPs, of terrible cases where homelessness could clearly have been prevented at a number of turns and was not. Two things are necessary: we need to introduce a duty to collaborate and work across the House to do that, but we also need transparency about results. We know how many people present themselves to councils with a risk of homelessness. This strategy sets out an objective to increase the number of cases when homelessness is prevented. Let us have transparency, let us have clarity about where it is happening and not, and let us make sure that councils have the tools in the box to do the job.

[Lee Pitcher (Doncaster East and the Isle of Axholme) (Lab)]

This is deeply personal to me because I was one of those children, 34 years ago, sat on a double mattress in a room doing my GCSE revision and my coursework, and then having to sleep next to my mum and sister in a room while all that was going on. That is why today is so remarkably important, and why I am so proud to stand here and hear that we are going to do something about this. I can tell this House that when that happens to you, you feel alone, you feel isolated, you feel that no one cares, and your dignity and self-respect sits in somebody else’s hands. There are thousands of children out there today living in cramped B&Bs. I am so glad that the Labour Government will end that unlawful practice and protect those families from being placed in those unsafe, unsuitable conditions. Something that is massively important for me is my patience, but on this issue it runs out all the time. What is the timeline to stop that happening to those children in B&Bs?

[Alison McGovern]

I thank my hon. Friend for that contribution. Children who are stuck in inappropriate B&Bs should know that they have a champion in this House, they should know that there is someone who has been there too, and they should know that they are not alone. On the timeline for getting kids out of B&Bs, we will end the use of B&B accommodation by the end of the Parliament in all but the most extreme cases—an absolute emergency. It is already the law—it has been for 20 years—that children are not supposed to be in B&Bs for more than six weeks. What on Earth is going on in this country when there are 2,000 children in such a situation? Let us work together, let us do something about it and let us bring those numbers down very quickly.

[David Williams (Stoke-on-Trent North) (Lab)]

Before entering this place, I spent nearly two decades working for the YMCA. I have to say to Conservative Members, respectfully, that their cuts had consequences. It is no wonder that, as the money was taken away year after year, rough sleeping more than doubled since 2010. I therefore warmly welcome this statement. It is particularly important that we listen to people with lived experience of this—we have heard about some of that today—and that they help shape our services and solutions. In Stoke-on-Trent, Expert Citizens, under the leadership of Darren Murinas and Andy Meakin, is led by people with lived experience of homelessness, mental health problems and addiction, and they use their voices to help shape local services. Does the Minister agree that we must do all we can to support organisations such as Expert Citizens to continue their excellent work?

[Alison McGovern]

I agree with my hon. Friend. The fact that I and the ministerial team who produced this report agree with him can be evidenced by the foreword written by the people who did not just come to Ministers, give their experience and say what they have been through—although they did do that—but who shaped policy. That is exactly how it should be and I thank my hon. Friend for reminding us of that.

[Dr Lauren Sullivan (Gravesham) (Lab)]

I welcome the Minister’s statement and the focus on ending homelessness. I have met many constituents who have harrowing stories of homelessness, so this is a welcome step. There are not enough council homes, and where councils need to use private temporary accommodation, so much of that is of poor quality, yet those landlords are taking that public money. The additional funds are therefore welcome so we can expand the number of council homes. Will the Minister consider visiting Gravesham so she can see for herself the ambitious plans to help end homelessness?

[Alison McGovern]

My hon. Friend makes an important point about the use of taxpayers’ money. As she will have heard me say in previous responses, the Chief Secretary to the Treasury is leading some cross-ministerial work on value-for-money questions on the provision of support for homeless people. That is important, because we cannot afford to waste a penny in this mission. I would be delighted to visit her constituency.

[Mark Sewards (Leeds South West and Morley) (Lab)]

I thank the Minister for the strategy and I agree with its stated aims. I especially welcome the ending of the unlawful use of B&Bs for families. We have already heard the case powerfully made by my hon. Friends the Members for Uxbridge and South Ruislip (Danny Beales) and for Doncaster East and the Isle of Axholme (Lee Pitcher) as to why that is so important. In Morley, my team and I are supporting a particularly complex case of an individual who is homeless. Although the details are complex, the outcome is simple: they are sleeping in shop doors across Morley. Would the Minister consider meeting me to discuss this case to ensure that the strategy will cover them so that we can get them off the streets and into a home?

[Alison McGovern]

My hon. Friend makes his case well. If he would care to send me some details of the case, I will of course meet him.

[Dr Scott Arthur (Edinburgh South West) (Lab)]

I thank the Minister for her statement. I hope she will accept my apologies for being a little bit late; I missed the first few seconds of her statement, although I have read it.

In a few hours’ time, I will be getting the train back to Scotland. This is a place where Scottish Labour recently forced the Scottish Government to declare a housing emergency, made worse by the fact that they had cut the affordable housing budget in Scotland by 37% between 2023 and 2025. Hundreds of households are in hostels and B&Bs in Edinburgh. We are now in the crazy situation where the council will use tourist tax income to build houses to move homeless people out of B&Bs and into those houses so that tourists can actually get in the B&Bs where they should be—it is absolutely incredible. I am sure that my constituents will be listening to the Minister’s statement with envy and thinking about how that money could be spent in Scotland if the Government there had the same kind of ambition.

The Minister will know that one of the categories of the homeless that people are most concerned about is veterans. She talked about public services and public institutions, and I know the Ministry of Defence is doing great work to prevent veterans from becoming homeless and supporting them when they do. Does the Minister’s strategy connect with what the MOD is doing?

[Alison McGovern]

My hon. Friend is of course right. The great city of Edinburgh deserves a lot better in so many ways, and I support everything he said. I long for the day when we can have a pan-UK strategy, including Scottish Labour, to end homelessness where we work together, which we will do.

On veterans, it will be important to us all to know that people who have served our country are supported in every aspect of their life afterwards, and it is an absolute disaster if a former member of the armed forces experiences homelessness. That is why the MOD has played a full part in the creation of the strategy. I have spoken about it directly with my hon. Friend the Minister for Veterans and People. Through her work on Operation Valour and other things, we are ensuring that we have in place the necessary care and support for veterans, because they deserve the absolute best.

Homelessness: Funding

Alison McGovern Excerpts

Tuesday 2nd December 2025 Westminster Hall

[The Minister for Local Government and Homelessness (Alison McGovern)]

It is a pleasure to serve under your chairship, Mr Vickers. I congratulate the hon. Member for Harrow East (Bob Blackman) on his continued work on homelessness. He is respected across the House, as the shadow Minister, the hon. Member for Orpington (Gareth Bacon), said, and we are all grateful for his work.

I thank the 14 hon. Members who have contributed to the debate. I again agree with the shadow Minister that that number, along with the 17 hon. Members who spoke in the last such debate, sends a message to people outside this place that tackling homelessness is a priority for Members on both sides of the House of Commons. I will encourage all officials in the Department to read this debate to understand where MPs are coming from and the priority that this subject represents for them. The Supported Housing (Regulatory Oversight) Act 2023 of the hon. Member for Harrow East is a priority for me, and I want to work with him to implement it. I hear what he said about its delay and take that as an instruction to work harder to get it done.

More broadly, I thank hon. Members for their thoughtful contributions. As has been said, although homelessness is a problem of not having enough houses, it is not just a housing problem; it is a profound injustice that devastates lives. Everyone has a right to a roof over their head. Homelessness is a visible reminder that our society falls short in the duties that we owe to one another—something that the Labour Government are determined to change.

Some hon. Members mentioned the homelessness strategy, about which I can only say, “Watch this space.” I am determined to get on and publish it before Christmas, and I am really keen to work cross-party with hon. Members to make it work. We had an excellent parliamentary engagement session last week, which was less formal than this debate, and I think it works really well to have a combination of informal opportunities and debates such as this for hon. Members to talk through what they want to see in the strategy.

As we move towards the delivery phase of the homelessness strategy, it will be right for us to continue holding those parliamentary engagement sessions on a range of issues to make sure that hon. Members can feed into them. Last week, we talked through the preventive nature of the strategy from the point of view of housing and affordability, and how we can enable the support that the most vulnerable people need. A couple of hon. Members also made important points about people with complex needs.

You will forgive me, Mr Vickers, if I briefly mention the Budget. I have no doubt that, as with any Budget, not every hon. Member got all their heart’s desires, but ending the two-child limit was one of mine. I have met many kids in temporary accommodation, or otherwise living in poverty, who will benefit. I think of those children every day when I walk into the Department, and what we can collectively do to give them their futures back.

As my hon. Friend the Member for Cities of London and Westminster (Rachel Blake) said, we announced in the Budget that the Chief Secretary to the Treasury will lead a review, involving me and other Ministers, of value for money in homelessness services. It will include looking at ways to improve the supply of good value for money and good quality temporary accommodation and supported housing, such as through greater co-ordination in planning and procurement in different parts of the state.

A couple of hon. Members, including my hon. Friend the Member for Oldham West, Chadderton and Royton (Jim McMahon)—who I commend for his work as my predecessor as Minister for Local Government, setting in train a really important set of reforms that will help in this area—mentioned the absolutely dire state of temporary accommodation, both for the kids in it and for the taxpayer, and the fact that we are not getting value for money at the moment. I encourage all Members to engage with that value for money review; we want to see some of the worst cases so that we can provide an evidence base.

[Ayoub Khan]

The Minister is making some powerful points in recognition of the challenges that we face. On the Budget, it will always be difficult to balance the books and maintain the status quo. Does she accept that the mammoth task of addressing homelessness can be achieved only with the substantial amount of investment that can come through wealth taxes—with wealthy people paying more for the vulnerable in society?

--- Later in debate ---

[Alison McGovern]

I think the record will show that the Government have taken action to bring in more tax from people who owe it—from those at the top of society—and that, because we have done so, we have been able to get rid of the two-child limit and commit £39 billion to build more social and affordable housing. That investment will make a difference in tackling the social injustice of homelessness.

As a few hon. Members mentioned, we are taking action now, even before we have published the strategy. This year, we have invested more than £1 billion— the largest annual investment to date—to enable local authorities to invest in prevention, provide tailored support and reduce the reliance on costly short-term solutions.

Several hon. Members also mentioned the tension that exists between ringfencing funding and allowing local authorities the flexibility to lead solutions that work for their place. Following the work of my predecessor, I am very glad that we have been able to provide local authorities with a three-year funding settlement and reconnect council funding with deprivation. The twin effects of those policies will help in that area.

We as Members of Parliament have to recognise, however, that there is a tension between curtailing local authorities’ freedom through things like ringfencing, which might target resources in the right place, and enabling them to tailor support to their local area. We will square that circle through the local government outcomes framework that we will publish shortly with the full settlement. We will show how we will have visibility and transparency over outcomes so that we can understand exactly where the problems are and take steps to tackle them. I look forward to engaging with all hon. Members on that framework.

We know that our investment in councils on homelessness is making a difference. The latest annual figures show early signs of progress, with 11% fewer households in bed-and-breakfast accommodation. That is a small bit of progress, but I agree with all hon. Members who have expressed real concern about where we are at the moment; we still have a long way to go.

Far too many people are experiencing homelessness and we have to provide the homes that they need, as I have said. Alongside increasing supply, as I mentioned, we need to reform the private rented sector. Section 21 no-fault evictions are a leading cause of homelessness, forcing thousands of families into crisis every year, but we have abolished them through the Renters’ Rights Act 2025. The best way to prevent homelessness is to stop it before it starts, and that is what the Renters’ Rights Act will do. We have also strengthened protections for the social housing stock by reforming the right to buy.

Many hon. Members mentioned supported housing, which is crucial. I say to the hon. Member for Harrow East that I am working very hard on the implementation of his Act. It is vital that we drive out rogue landlords. As I mentioned, I will welcome the engagement of hon. Members on our value for money review, because we know that we desperately need more resources in this area and some of the resources that are there at the moment are not being spent in the way that we as Members of Parliament would wish. We have a collective duty to resolve that situation in the strategy’s implementation phase.

I will conclude and allow the hon. Member for Harrow East to say a few words. In the end, we want to see lasting change, whether through social homes being built or our goal to improve disposable incomes so that people are less likely to be unable to fulfil their tenancy. Those are the steps that we can take to end homelessness for good and make sure, for anybody experiencing homelessness, that it is a brief period and never repeated. We need the cross-party collaboration that we have demonstrated again here today, and a whole-system approach. On hospital discharge, on prisons, on victims of domestic abuse and on veterans, I have engaged with Ministers in those areas and I will continue to do so. We have an interministerial group meeting coming up before we publish the strategy, and I can report that all those other Departments are engaging enthusiastically on the strategy.

We need to prevent homelessness. That will mean less cost for the state and, crucially, much better outcomes for families and individuals who desperately need better support. I thank all hon. Members who have contributed today. It has been inspiring, again, to understand how important this issue is. Most of all, I thank the hon. Member for Harrow East for securing the debate. I have absolutely no doubt that when it comes to debates in Westminster Hall on this subject, this ain’t going to be the last.

Local Audit Build-back: Progress

Alison McGovern Excerpts

Tuesday 2nd December 2025 Written Statements

[The Minister for Local Government and Homelessness (Alison McGovern)]

Since this Government came to power last year, we have worked tirelessly to fix the broken local audit system in England, so people can trust that their council tax is being spent well. To ensure continued progress and that the Government’s wider programme of systemic reform is set up for success, we must speed up the process of rebuilding assurance at local bodies.

Clearing the backlog

The local audit backstop programme, comprising a series of six statutory publication deadlines for audited accounts, has continued to deliver against its statutory milestones. While the reset has meant many disclaimed audit opinions, as the Government made clear that we would last July, it has cleared the local audit backlog and made significant progress on restoring the discipline needed for timely publication of both unaudited and audited accounts.

After two backstops, there has been a significant improvement in the publication of audit opinions. As of 31 August 2025, 99% of local bodies had received and published audit opinions for all years up to 2022-23, and 94% had published audit opinions for 2023-24. Updated non-compliance lists for the latest backstop has been published today.

There has also been an improvement in the prerequisite publication of draft unaudited accounts. By 16 January 2025, just under 95% of bodies had published unaudited accounts ahead of the second backstop on 28 February 2025. Ahead of the 27 February 2026 backstop, 98% of bodies had already published their 2024-25 draft accounts as of 5 November 2025.

The advances that local bodies and audit firms alike have made in complying with the backstop programme have put the system in a much more secure and stable position. In turn, this will better enable the rebuilding of assurance and the implementation of wider reforms.

Progress on rebuilding assurance

Given the large number of disclaimed opinions, the backstops were announced alongside a five-year programme for building back assurance, with an aspiration that local audit recovers as soon as possible within that period.

Due to the scale of the local audit backlog and the limited capacity of audit firms and local bodies, the process of rebuilding assurance at local bodies was always going to be highly challenging. The process is technically difficult, resource-intensive and time-consuming, and the fundamental challenges facing the local audit system set out in the Government’s 2024 strategy remain a significant barrier to progress for some bodies. Both auditors and local bodies continue to navigate disproportionately complex financial reporting and audit requirements.

Our ambition is for local audit to recover assurance as early as possible, and we will continue to work with local bodies and audit firms to achieve this aim. However, despite significant efforts by all parties involved, progress has been slower than anticipated. It is now clear that the more immediate aspiration for the majority of disclaimed opinions driven by backstop dates to be limited to the first two years of this period—up to and including the 2024-25 backstop date of 27 February 2026—will not be realised. This will mean many local bodies continuing to receive disclaimed opinions for 2025-26 and 2026-27.

Evidently, it remains in the public interest that disclaimed opinions are cleared as quickly as possible. Effective local audit ensures transparency and accountability for public money spent on vital services. I am committed to working with all those in the system to do everything in our power to get back on track and ensure that assurance is rebuilt within the five-year period.

Measures to help

Today, the Government have written to all audit firms and to all local bodies in the process of rebuilding assurance, underlining the need for everyone to work together to do everything possible to accelerate progress and encouraging them to prioritise resources accordingly. I have asked them to work together to provide information to my Department on progress at individual bodies, including where there seem to be systemic issues with capacity, governance or financial management preventing assurance from being rebuilt. I have also requested that audit firms escalate serious issues to local bodies promptly, ensuring that my Department is also aware, and to issue statutory recommendations or public interest reports where appropriate. This will enable the Department to undertake its responsibilities in relation to overall accountability and stewardship and provide additional support and guidance most effectively.

In order to ensure that recovery can be completed within the overall five-year timeline, my Department will continue to assist affected local bodies, with additional training and support events led by the Chartered Institute of Public Finance and Accountancy planned for next year. Rapid work is also under way to develop a new approach to audit quality oversight tailored specifically to audits focused on the rebuilding of assurance.

The Government are also considering what further measures may be necessary to support both auditors and local bodies in accelerating progress, in line with the Government’s ambition of the system clearing all backstop-related disclaimed opinions by the end of 2027-28.

Ongoing reforms

The challenges encountered serve to further underscore the vital importance of the Government’s wider reforms, for which there remains strong and widespread support. The private sector has committed to working with us to rebuild the system, and its confidence in the reforms is demonstrable. All audit firms with existing local audit contracts have agreed with Public Sector Audit Appointments Ltd to extend their current contracts for a further two years, until the end of 2029-30.

Recognising the urgency of change, new secondary legislation is now in force to raise local audit regime thresholds. This will help to free up auditor capacity by enabling audit firms to work in a more proportionate way.

The English Devolution and Community Empowerment Bill, which contains key elements of our reform programme, is progressing through Parliament. The Bill includes measures to create the local audit office, which will provide vital oversight and streamline the system. The Government’s intention is for the local audit office to be established in autumn 2026. It will take responsibility for statutory functions in relation to regulatory oversight and standards from day one, subsequently increasing to its full range of duties as it builds capacity and staff transfer from existing organisations. The local audit office will take responsibility for the backstop programme and oversight of the process of rebuilding assurance at local bodies from April 2027. My Department has today published a transition plan, setting out detail on the timeline for implementing the new local audit system and how the transition will be managed.

Timeliness of assurance through audit is underpinned by the need for high-quality accounts and financial reports. As such, we are also working with the Chartered Institute of Public Finance and Accountancy and the devolved Governments to address underlying issues and prioritise solutions to simplify financial reporting.

We will restore the local audit system back to health and rebuild confidence in local finances.

[HCWS1119]

Local Government Best Value

Alison McGovern Excerpts

Monday 1st December 2025 Written Statements

[The Minister for Local Government and Homelessness (Alison McGovern)]

The Government are committed to taking the action necessary to fix the foundations of local government. Today I am updating the House on the steps that we are taking to support two councils to recover and reform: Birmingham city council and Nottingham city council.

Birmingham city council

Today I am publishing the Birmingham commissioners’ third report, alongside my response.

I welcome the commissioners’ assessment of the period since January 2025, in their first report since the start of all-out industrial action in the waste service. The commissioners highlight that the council has made clear, positive progress in key areas. A landmark equal pay framework agreement has been signed, and there has been externally validated improvement in children’s and adult services. These are important steps towards delivering the improvement that residents deserve and are testament to the committed and focused leadership of Councillor John Cotton and his cabinet, with the support of the commissioner team, and the hard work of council staff.

During this period, the council has been managing the impact of continuing industrial action by Unite the union in the council’s waste services. The Government’s priority throughout this industrial dispute is, and has always been, Birmingham’s residents. While industrial action continues to affect waste disposal services at Birmingham city council, in the spring the Government took decisive action, in lockstep with the council, to ensure that waste in the city can be safely and sustainably managed. The result has been to establish a regular, reliable waste collection service despite industrial action. But this new wave of strikes threatens to derail progress for residents. Despite efforts to resolve the dispute by the council, commissioners assess that the ongoing waste dispute has diverted attention away from the vital improvements that the council has been making and slowed progress in key areas. The council still has work to do to move towards financial sustainability and is being hampered by this ongoing issue. Once again, we urge Unite to call off these strikes and end the disruption and misery caused to local people. Unite has acknowledged that, on occasion, behaviour on the picket line during this dispute breached a court order. This behaviour must not be repeated.

The distraction of the waste dispute is deeply disappointing and frustrating for the residents of Birmingham. We have seen again that, due to protest and picketing action relating to a new industrial dispute between Unite and an agency of the council, Birmingham has had to suspend its waste collections today. Further disruption is in no one’s interest. This remains a local issue for employers and the council to deal with in the first instance, but in the interests of Birmingham residents we remain in close contact with commissioners and the council and continue to monitor the situation. Commissioners continue to support the council in its operational response to the ongoing dispute, and in developing much-needed transformation plans for the waste service.

If the council can continue to progress and focus on improving critical areas of risk, we would hope to review the shape and focus of the intervention, with phased reductions at the appropriate time. I have asked Tony McArdle OBE to set out options for that in the next report from the commissioner team, as part of the work he is leading on the intervention exit strategy.

It is vital that the council is able to continue the pace at which it is delivering necessary improvements. I look forward to receiving an update on the steps taken to tackle the remaining risks and the development of an exit plan through the next commissioners’ report.

Nottingham city council

Nottingham has been in intervention since January 2021, and commissioners were appointed in February 2024.

On 21 November 2025, I published the commissioners’ third report, received in August, alongside my response. I am encouraged by the commissioners’ report, which highlights the steady progress being made by the council in delivering its improvement plan. It is reassuring that the council is now showing some “early signs of a shift towards continuous improvement thinking” and that positive changes are beginning to embed. I note that while noting that some key challenges remain. To maintain capacity and oversight until the current directions expire on 22 February 2026, the Secretary of State has made some changes to roles within the existing commissioner team and appointed Sharon Kemp OBE as lead commissioner, with Tony McArdle OBE and Margaret Lee OBE continuing as commissioners.

I look forward to receiving the commissioners’ next report in December and will carefully consider this before determining the next steps for Nottingham.

Conclusion

I am committed to working with these councils to ensure their compliance with the best value duty and the high standards of governance that local residents expect. This Government are working to deliver a consistently fit, legal and decent local government sector that provides good-quality essential services for all residents.

I will deposit in the House Library copies of the documents referred to, which are being published on gov.uk today. I will update the House in due course.

[HCWS1116]

Oral Answers to Questions

Alison McGovern Excerpts

Monday 24th November 2025 Commons Chamber

[Patrick Hurley (Southport) (Lab)]

2. If he will take steps through the planned homelessness strategy to increase Housing First provision.

[The Minister for Local Government and Homelessness (Alison McGovern)]

Our homelessness strategy will be published soon. Our overall goal will be to prevent homelessness before it starts, saving people from trauma and saving taxpayers the cost of failure. Councils can use our homelessness funding flexibly to meet those needs, including by commissioning Housing First services, which evidence has shown can transform the lives of people with complex needs.

[Patrick Hurley]

Housing First is a tried and tested, proven intervention to reach those who most need our help, so will the Minister expand on what plans she has to roll out Housing First, especially in the Liverpool city region, to ensure that we work effectively across state agencies and that we support people experiencing homelessness into stable, long-term housing?

[Alison McGovern]

I thank my hon. Friend, who has a long-standing record of campaigning for those who have experienced rough sleeping or homelessness. Housing First, as we have discussed, is one way that areas can provide person-centred and trauma-informed support for people with complex needs, which is important in preventing long-term rough sleeping. Areas across England can use flexible funding, including our £255 million rough sleeping prevention and recovery grant, to do so. The Liverpool city region combined authority, which includes his constituency of Southport, received nearly £4 million of funding through the grant this year.

[Mr Mark Francois (Rayleigh and Wickford) (Con)]

We do need to build more homes, including more affordable homes, but they have to be built in an environmentally sustainable way. Why are Ministers, through the Planning and Infrastructure Bill, taking powers such that any planning application for more than 150 houses, if turned down by the democratically elected councillors, is sent straight to the Secretary of State? Why have local elections and elect people who know their own area to take decisions if they will simply be overruled automatically by someone whose whole mantra is “Build, baby, build and let the devil take the consequences”?

[Alison McGovern]

There we have it: in a question about homelessness, we have a Tory MP getting up and asking how he can say no to more homes. [Interruption.]

[Mr Speaker]

Order. I call the shadow Minister.

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

When we look at the statistics, we see that homelessness and rough sleeping are surging under this Government, with London and the south-east hardest hit where social housing delivery has collapsed under the current Mayor of London. Will the Minister commit to lifting the restrictions that this Government have placed on councils’ use of the homelessness reduction grant, and will she commit to funding councils for the growing impact that asylum seekers are having on homelessness pressures, so that Housing First can become more than just a slogan?

[Alison McGovern]

Homelessness and rough sleeping doubled under the previous Tory Government. Our homelessness strategy will be published very shortly. Last week we published our policy statement on the fair funding review, which will stabilise council funding and target it at those areas with significant levels of deprivation. I look forward to the hon. Member’s support in ensuring that councils have the powers they need to ensure that everyone has a roof over their head.

[James MacCleary (Lewes) (LD)]

3. Whether East Sussex county council elections will take place in 2026.

--- Later in debate ---

[The Minister for Local Government and Homelessness (Alison McGovern)]

The Government are changing the way we fund local authorities, reconnecting funding with deprivation after 14 years of Tory Governments cutting councils in the poorest places. The vast majority of upper-tier councils will see their income increase in real terms over the next three years. For 2025-26, the local government finance settlement made available up to £577 million for Buckinghamshire council—a 5.7% cash-terms increase in core spending power on the year before.

[Greg Smith]

That is a curious answer, because modelling by the County Councils Network indicates that, assuming there is a punishing 5% annual council tax increase, core spending for Buckinghamshire council will go up by only a below-inflation 2.2%—a real-terms cut. What assurance can the Minister give Buckinghamshire council that it will not find itself with a real-terms cut in spending power as it delivers essential services to my constituents?

[Alison McGovern]

As I said in an earlier answer, we made a policy statement on the fair funding review consultation last week. In addition, as I have said, the vast majority of upper-tier councils will see their incomes increase in real terms over the next three years. More details will come as we finalise funding arrangements. The Department will work closely with Buckinghamshire and all other councils to ensure that their finances are stabilised after 14 rocky years.

[Mr Speaker]

I call Callum Anderson, a Buckinghamshire MP.

[Callum Anderson (Buckingham and Bletchley) (Lab)]

Multi-year funding settlements can help councils such as Buckinghamshire to prepare for the future and ensure the continuity of local services, but that approach was not necessarily applied by the last Conservative Government. In the north Buckinghamshire towns and villages that I represent, there is particular pressure on the economic and social infrastructure that meets rural requirements. Will the Minister set out in a bit more detail how the fair funding review will take all that into account so that residents in my community have the services they need?

[Alison McGovern]

I know how important it is for my hon. Friend to champion those towns and villages. He is right to say that the three-year funding settlement for councils will help, including with forward planning. Where we are considering cost pressures—those in adult social care, for example—it will help us to change the way in which services are delivered so that we can support people and ensure that councils across the country, such as Buckinghamshire, have more stable finances in the future.

[Maureen Burke (Glasgow North East) (Lab)]

5. What assessment he has made of the potential impact of Pride in Place funding on Glasgow North East constituency.

--- Later in debate ---

[Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

14. What steps he is taking to support people out of temporary accommodation.

[The Minister for Local Government and Homelessness (Alison McGovern)]

Our Labour Government will build the homes that Britain needs and put our country on a path to end homelessness for good, unlike the Tories, who—if people have not heard us say this already today—allowed homelessness and rough sleeping to double. We will publish the child poverty strategy and the homelessness strategy shortly, and both will set out steps to defend families against the risk of getting stuck in temporary accommodation.

[Liam Conlon]

The number of people in temporary accommodation in my constituency soared during the last 14 years. Hundreds of families in Beckenham and Penge are stuck in unsuitable accommodation for months and years on end, and one in 50 Londoners are now living in temporary accommodation. From speaking to fantastic local charities such as Living Well, as well as local schools and NHS staff, I know that the housing crisis left by the last Conservative Government is also a leading driver of deprivation and inequality. Will the Minister set out what her Department is doing to address that?

[Alison McGovern]

That is a very important point: London is a fine city, but we need to ensure that everyone there is housed well. That is why the Labour Government are investing more than £1 billion in homelessness services this year—an increase of more than £300 million. That includes £10.9 million of top-up funding, announced last month, to increase access to support services in areas with the highest number of children in temporary accommodation, like the one mentioned by my hon. Friend. We have to get everybody in this country properly housed.

[Dame Meg Hillier]

As the Minister says, we do need that housing. There are some solutions locally, where Education or Health land has become available. Will she undertake to talk to those Department—I can talk to her in more detail about local issues—to ensure that that land can be released as soon as possible, with the prospect of it becoming social housing for local families?

[Alison McGovern]

My hon. Friend is an expert in these matters. She knows that the Secretary of State has taken recent steps to make sure that we do build homes, including social and affordable homes, in London. We will certainly work very closely with her, and with the information she mentions, to get homes built.

[Sarah Dyke (Glastonbury and Somerton) (LD)]

There are nearly 300 households in temporary accommodation in Somerset, and 120 of them include children. Somerset is spending nearly £3.4 million per year on additional temporary accommodation to help to meet that demand, but it is clear that a long-term solution must be supported. What steps is the Minister taking to increase the number of affordable homes to help address that situation?

[Alison McGovern]

The homelessness strategy will be published soon, so the hon. Lady does not have long to wait. She characterises the situation well. We can fund sticking plasters and we can fund help, but in the end we have to get to the heart of the matter: No. 1—build homes; No. 2—make sure that families have enough money coming in to pay the rent. That will be at the heart of our strategy.

[Munira Wilson (Twickenham) (LD)]

With London councils now spending £5.5 million per day on temporary accommodation, it is clear that we need to build more social homes in London. Richmond council has been prioritising sites that it is selling for social housing. As the Member for Hackney South and Shoreditch (Dame Meg Hillier) has just suggested, will the Minister look at incentives for other public bodies—whether it is the NHS or Government Departments—to prioritise for social homes land and buildings that they no longer need and are selling, as I have been campaigning for with respect to the former Teddington police station in my constituency?

[Alison McGovern]

I refer the hon. Lady, who asks a very reasonable question, to the response I gave some moments ago. Collectively, we must leave no stone unturned when it comes to available land for housing, particularly in the capital, where we desperately need more social and affordable homes.

[Mr Speaker]

I call the Chair of the Housing, Communities and Local Government Committee.

[Florence Eshalomi (Vauxhall and Camberwell Green) (Lab/Co-op)]

I thank the Minister for outlining those points. The situation is not just isolated to London; many councils are seeing an overspend—still going up —in this really tricky area. Just today, Epsom and Ewell borough council reported an overspend of £500,000, rising to £800,000 by next year. Slough estimates a £22 million overspend on TA; Woking, a £330,000 overspend; Waverley, a £165,000 overspend; and Waltham Forest, a £31 million overspend. That is just on temporary accommodation. This situation is not sustainable financially for councils or taxpayers. What more can the Minister do? Can she speak to Treasury colleagues about the big sticking point: the increase in and freeze on local housing allowance, which is not allowing people to live locally and rent locally?

[Alison McGovern]

I thank the Chair of the Select Committee for setting out that, aside from the fact that we care about temporary accommodation because every child deserves the space to play and do their homework, this problem is putting local councils under a financial pressure that is not bearable. We have to get a grip of this situation. We will have more to say about this crucial issue in the homelessness strategy, and I look forward to engaging with the Chair and the whole Committee on it.

[Tim Farron (Westmorland and Lonsdale) (LD)]

Westmorland has 3,500 empty properties—the fifth highest number of any local authority in the country. The council has invested in three additional staff to make sure we bring some of those properties back into permanent use to house homeless people, but what powers could the Minister give the local authority that would bolster its existing powers to requisition homes that have been empty for a long period of time to be used as temporary and emergency accommodation for people in communities like ours?

[Alison McGovern]

I thank the hon. Gentleman for his important question. We all want to see empty homes brought into use, and councils already have extensive powers in this area. My job as the Local Government Minister is to make sure that we stabilise councils’ funding so that they are able to invest in that action, but if the hon. Gentleman would like to engage with the Department on the powers he would like to see, our door is very much open.

[James McMurdock (South Basildon and East Thurrock) (Ind)]

12. What steps he is taking to improve homelessness guidance for local government.

[The Minister for Local Government and Homelessness (Alison McGovern)]

I thank the hon. Gentleman—[Interruption.]

[Mr Speaker]

Order. The Minister is answering the question. Please, Mr Law: you could at least wait until she has finished before entering the Chamber.

[Alison McGovern]

The Government keep the homelessness code of guidance under regular review, and this will continue once we have published the strategy that I mentioned previously. We will develop further good practice guidance and toolkits to support local government to deliver homelessness services.

[James McMurdock]

Ministers will be well aware that the maximum period of time for which the most vulnerable people should ever be placed in temporary accommodation is six weeks, but I have seen repeatedly from Labour-run Basildon council a tweaking and gaming of the rules, whereby a single-room bed and breakfast property is incorrectly reclassified as a self-contained unit through the addition of a microwave and a fridge. Vulnerable people, including pregnant women or women with children, are being crammed into one room for periods of time that we recognise as unlawful, essentially because the rules are not strict enough. I do not blame Ministers for that, but I do blame the local Labour council for abusing those rules. What will the Minister do to strengthen things up?

[Alison McGovern]

As the Homelessness Minister, my responsibility is to get the homelessness strategy published so that we can look at issues such as those the hon. Gentleman has mentioned, make sure that the guidance is good enough, and—most importantly—get our country’s children out of temporary accommodation and give them a proper roof over their heads.

[Chris Vince (Harlow) (Lab/Co-op)]

I declare an interest, as I formerly worked for a homelessness charity in Harlow called Streets2Homes. Can the Minister tell me how the increased funding of £1 billion to tackle homelessness will support local authorities—which we have discussed—as well as Streets2Homes and other charity groups to get people off the street and into secure tenancies?

[Alison McGovern]

I would be grateful if my hon. Friend would pass on my very best wishes and thanks to Streets2Homes. In the best case, the money we are investing can stop homelessness before it starts through good advice. If a family or an individual do find themselves homeless, support can be in place to get those people into a more stable situation and properly housed. Every penny is worth it, because in the end, long-term homelessness costs the state more.

[Graham Leadbitter (Moray West, Nairn and Strathspey) (SNP)]

13. What assessment he has made of the adequacy of Pride in Place funding eligibility criteria in Scotland.

--- Later in debate ---

[Jo White (Bassetlaw) (Lab)]

22. What progress he has made on the fair funding review 2.0.

[The Minister for Local Government and Homelessness (Alison McGovern)]

On Thursday 20 November, the Government published a policy statement setting out our plans for the 2026-27 to 2028-29 multi-year local government finance settlement. Through the settlement, we are introducing a system based on need and evidence. In doing so we will target a greater proportion of grant funding at deprived places, ensuring best value for money for taxpayers.

[Sarah Hall]

In Warrington we see some of the starkest inequalities anywhere in the country. One area is ranked the 899th most deprived, and the highest position is 33,480th, a gap of more than 32,500. Those vast disparities are masked by population-weighted averages, with Warrington ranking 199th overall and only 43rd in range. Will the Minister ensure that fair funding 2.0 truly reflects vast internal inequalities, so that resources reach the communities most in need?

[Alison McGovern]

I admire my hon. Friend not only for standing up for Warrington, but for her command of the statistical detail. The fair funding review will distribute more funds to deprived areas, and, as she has just demonstrated, the distribution is underpinned by granular data from households in lower-layer super-output areas consisting of between 400 and 1,200 people. That means that we can account for pockets of deprivation within more affluent areas. More broadly, I will happily work with my hon. Friend to ensure that we can stabilise Warrington council’s finances, and I will ensure that officials are in touch with the council.

[Jo White]

Under the last Government, cash-strapped authorities like Bassetlaw district council saw support grants slashed from a 66% funding commitment in 2011 to a 25% commitment in 2024. The compounded damage that this has done to areas like mine can be calculated in multimillions of pounds. Many authorities are on their knees. Can the Minister explain in more detail how they will be able to plan for the year ahead?

[Alison McGovern]

I know that my hon. Friend always stands up for her constituency, and that she always will. Under our proposals, shire district councils are expected to see an average funding increase of 2.7% over the spending review period. Across the Department, we will support district councils in that and other ways, and I look forward to discussing the issue in detail with my hon. Friend and her council.

[Ben Obese-Jecty (Huntingdon) (Con)]

Cambridgeshire fire and rescue service is funded through a formula that relies on population density and sparsity figures from the 2001 census. Since 2001, Cambridgeshire has grown by over 150,000 people and 30,000 new homes, making the service one of the leanest per head in the country. We have effectively built a city the size of Cambridge in Cambridgeshire and given it no further funding. Over-reliance on council tax to bridge funding gaps undermines the core principle of risk-based resource allocation, so what assurances can the Minister give me that the fairer funding review 2.0 will not require the difference to be made up by simply increasing the council tax precept by the maximum?

[Alison McGovern]

The hon. Gentleman mentions fire. The Minister responsible and I are keeping this issue under review, and we are happy to hear further from him if he has concerns about it.

[Dr Ellie Chowns (North Herefordshire) (Green)]

Rural counties like Herefordshire face additional costs in delivering services because of rurality. Extra cost pressures mean that we need another £35 million next year to provide the same services, but it looks like the fair funding review will reduce central Government funding for Herefordshire by £12 million. Does the Minister recognise the extra costs of rurality, and will she ensure that the fair funding review properly allocates the funding that rural communities need to deliver public services in a fair way?

[Alison McGovern]

When it comes to rural areas, there are particular challenges for public services. This Government have increased funding for council spending on areas of demand, such as adult social care. We need to make sure that all councils can be financially stable, and can develop the way that they deliver public services, particularly given the challenges that the hon. Lady mentions.

[Emma Lewell (South Shields) (Lab)]

T1. If he will make a statement on his departmental responsibilities.

--- Later in debate ---

[Rachel Hopkins (Luton South and South Bedfordshire) (Lab)]

T6. This follows on from previous questions about the fair funding review. Luton has seen local services decimated, due to years of Conservative decisions, which stripped consideration of deprivation and need from the funding formula. Under a fairer funding system, Luton is set to gain. What can we expect to see from the formula in places like Luton, which suffered so badly under the Conservative Government?

[The Minister for Local Government and Homelessness (Alison McGovern)]

Under our new approach to funding, in places like Luton, which were starved of the resources that they needed for far too long, and for which we can evidence significant levels of deprivation, councils can expect to see the resources that they need in order to help people properly.

[Mr Speaker]

I call the Liberal Democrats spokesperson.

--- Later in debate ---

[Amanda Martin (Portsmouth North) (Lab)]

In cities such as Portsmouth, outdated formulas for local authority funding have long failed to reflect real levels of deprivation. I would like to see a Labour Government increase support for children’s services, with a fairer system using up-to-date data. That would make an enormous difference to my constituents. Will the Minister meet me to ensure that funding allocation is being considered for Portsmouth to finally receive the funding it deserves?

[Alison McGovern]

Yes, I will very happily meet my hon. Friend. She is an incredibly powerful champion for Portsmouth and I would be very happy to meet her to discuss her council’s funding.

[Blake Stephenson (Mid Bedfordshire) (Con)]

T7. The Government have said that they want to improve standards in public life, which I entirely agree with. At a recent council meeting, the leader of Milton Keynes council swore and was abusive following the speech of a 16-year-old resident. Does the Secretary of State agree that that behaviour is totally unacceptable?

[Alison McGovern]

We recently put forward our response on improving standards. We are looking for an opportunity to take that forward, for the reasons the hon. Gentleman mentions.

[Brian Leishman (Alloa and Grangemouth) (Lab)]

I have residents from Tillicoultry who have not had access to their homes for two years because of RAAC—reinforced autoclaved aerated concrete. Their lives have been turned upside down. A year ago, the Scottish Government were given the largest settlement figure in the history of devolution, but they have not helped my residents. Will the Secretary of State inform me what discussions his Department has had with regard to residential RAAC with Scottish Government counterparts?

--- Later in debate ---

[Alison McGovern]

With Cornwall Labour Members of Parliament standing up for Cornwall in this House as they are, I feel assured that Cornwall will be in a much better place. I look forward to working with my hon. Friend to make sure that that is the case.

[Alison Griffiths (Bognor Regis and Littlehampton) (Con)]

T9.   Flooding costs the UK economy up to £6 billion a year. Aviva estimates that 2,000 more homes will be at risk of surface water flooding by 2050 in Bognor Regis and Littlehampton alone, as well as 115,000 of the Government’s planned 1.5 million new homes. That is why flood resilience is a growth issue. Will the Minister tell me what he is doing to ensure that new homes are flood resilient, to protect both my constituents and the UK economy?

--- Later in debate ---

[Baggy Shanker (Derby South) (Lab/Co-op)]

For years, Derby residents have felt the full force of Tory austerity, with many services at breaking point. Does the Minister agree that Derby deserves better, and what can the Government do to ensure that the fair funding review delivers for communities such as Derby?

[Alison McGovern]

Councils up and down the country deserve better, especially in great cities like Derby—and with my hon. Friend as their MP, his community will not want for a brilliant champion.

[Sir Jeremy Hunt (Godalming and Ash) (Con)]

I thank the Minister for Housing and Planning for his constructive meeting last week on the community infrastructure levy. Could he tell the House whether Liberal Democrat-controlled councils such as mine in Waverley should be charging the community infrastructure levy to private householders who do a straightforward extension on their house?

--- Later in debate ---

[Alison McGovern]

I am considering the issues that Hillingdon is facing, which are really serious and important, and I will be in touch with my hon. Friend soon so that we can discuss them extensively.

[Lincoln Jopp (Spelthorne) (Con)]

Is Surrey going to get a mayor?

[Connor Naismith (Crewe and Nantwich) (Lab)]

Cheshire East council area has pockets of severe deprivation, centred largely around my constituency. Under the previous Government, local government funding allocations never really took account of those deprivations. Will the Minister meet me to discuss how we can rebalance funding towards the deprived areas in my constituency that have been left behind for too long?

[Alison McGovern]

I will happily meet my hon. Friend—great railway towns like Crewe ought to be invested in. He will have heard from previous answers today that the new measure of deprivation uses fine-grain data, so we can identify those pockets of deprivation, like in Crewe and Nantwich. I look forward to talking with him at length on this subject.

[Ian Roome (North Devon) (LD)]

In rural areas like my constituency, private renting is very expensive and is unaffordable to many. What is the Minister doing to ensure that more housing is available at social rent rather than market rent, which people can simply not afford?

Multi-year Local Government Finance Settlement and Fair Funding Review

Alison McGovern Excerpts

Thursday 20th November 2025 Written Statements

[The Minister for Local Government and Homelessness (Alison McGovern)]

Today, the Government have set out details of the first multi-year local government finance settlement in a decade, through which we will deliver the long-overdue fair funding review 2.0 reforms and deliver on our commitment to make the system fairer and more transparent.

The last decade and a half saw local government services slashed to the bone by a misguided programme of austerity. The services people see every day outside their front door were systematically undermined, and people’s lives got harder as a result. We celebrate the hard work of councillors, frontline staff and mayors, who kept vital services running during those hard years, but they did not get the backing they deserved from central Government.

Austerity expected local government to act as caretakers, providing only the most basic statutory services. Our long-term aim is a future where councillors have the freedom to innovate, rebuilding public services, renewing the public realm, and investing in their high streets, youth clubs, and libraries. The past has been written, but the future of local government is up for grabs. This is about providing visible proof that the state can still improve people’s lives and keep its promises. The journey will at times be difficult, but the end result will be a new role for councils as agents of renewal.

This Government believe in treating every area fairly. Some authorities have benefited disproportionately from the unfairness of the current system, something which the previous Government recognised when consulting on funding reform. However, they did not take action. This Government are taking the tough decisions to create a fairer, evidence-based funding system. This means that poorer local authorities that have been unable to generate as much funding through local tax will finally receive the funding they deserve. As a result, areas will be able to rebuild the public services on which our communities rely.

We recognise the challenging reality still facing local authorities, and the sky-rocketing demand for critical services that cannot be overcome by these changes alone, but these reforms are a vital part of getting the sector back on a sustainable footing and ensuring that every pound goes where it is most needed.

The Government are bringing forward a wider reset, which will radically redefine local government in England, making the system fit for the challenges that the country faces in 2025, and making sure that we have strong local leaders and councils, ready to drive economic growth, grow our towns and cities, and raise living standards for working people in every region—the Government’s No. 1 mission. That is why, as well as introducing funding reforms, we remain committed to ending the two-tier system in this Parliament; to focusing on outcomes, over micro-management; and to overhauling local audit, conduct and standards. Yesterday, I launched a series of consultations on local government reorganisation, published on gov.uk.

We also thank local government, interested organisations and members of the public who have engaged with our consultations on reforming the local government funding system over the past year.

The broken system we inherited

The austerity of the 2010s was imposed on every community, but the worst effects were felt by those in the most deprived local authorities. The places which historically had been most supported by Government were left furthest behind, breaking the link between funding and need. Dozens of fragmented funding streams, outdated funding formulas—including those that used data from the 1970s—and short-term settlements contributed to the overall issues in the funding system. As a result, many councils have been pushed to a financial cliff edge, meaning poorer services for residents.

The first steps toward a fairer approach

Undoing this damage will take time, but this Government took immediate steps in our first year to make funding fairer. We made over £69 billion available to local authorities through the 2025-26 settlement. That included a £600 million recovery grant, targeted at areas that suffered most from austerity, and that had greater need and demand for services, and less ability to raise income locally. At the spending review, we announced over £5 billion of new grant funding over the period 2026-27 to 2028-29 for local services, including £3.4 billion of new grant funding, which will be delivered through the multi-year settlement. We have been working closely with the local government sector over the past year. We have consulted twice on our proposals for reform and once on resetting the business rates system, and we now plan to put them into action.

Fairer funding through the 2026-27 multi-year settlement —undoing a decade of damage

This Government believe in treating every council and community in England fairly. We will act where the previous Government did not to target funding to deprived areas, enabling them to deliver vital services for communities up and down the country. We are:

Giving councils more certainty with the first multi-year settlement in a decade, which will allow local leaders to focus on longer-term financial planning and opportunities for ambitious regional growth plans, rather than giving them year-to-year settlements, and an opaque funding system of fragmented pots.

Providing better access to frontline services by closing the gap between local deprivation and council funding. We are using up-to-date data to paint a true picture of councils’ needs and resources—a picture that encompasses population projections, the 2025 English indices of multiple deprivation, cost of service delivery, and demand for services.

Reforming children’s social care, with over £2.4 billion over the settlement to support vulnerable families by focusing on prevention and early intervention. We are updating the children and young people’s services formula, so that it uses the latest index of deprivation affecting children. That will mean that no matter where people grow up, they get the support they need to have the best start in life.

Providing at least £2.4 billion for a new, ring-fenced, combined homelessness, rough sleeping and domestic abuse grant over three years, which includes dedicated funding for councils to invest in prevention. This will move us away from over-reliance on temporary accommodation, which has led to unsustainable costs for councils in recent years.

Undoing the damage of austerity by maintaining the targeted £600 million recovery grant allocations from 2025-26 across the multi-year settlement. We are also introducing a recovery grant funding guarantee to upper-tier authorities in receipt of the grant.

Unlocking the dream of home ownership for more people by boosting incentives for councils to build new homes, as projections on future house builds will be omitted from funding allocations over the settlement, so authorities will benefit from all additional council tax raised for each new home they build.

Improving efficiency and value for taxpayer cash by cutting needless paperwork and red tape by simplifying 33 funding streams, worth almost £47 billion over three years, to provide councils with certainty and more flexibility to invest in community priorities.

Supporting councils through change by providing funding floors, and phasing in new allocations across the multi-year settlement to provide more financial protection for councils and consistency of services for local people.

The recovery we embarked on in 2025-26 is just the beginning for deprived places that suffered most from austerity. We will maintain recovery grant allocations from 2025-26 across the multi-year settlement as a targeted fund to support those worst affected by austerity. We will also provide a funding guarantee to upper-tier authorities in receipt of the grant, which will ensure that they see a more than real terms increase across the multi-year period, except for where a £35 million cap applies.

The Government will maintain core referendum principles as they were in 2025-26 over the multi-year settlement, including core council tax and adult social care precept referendum principles of 3% and 2% respectively. This acts as an additional democratic check and balance, giving taxpayers the final say on council tax increases through a local referendum. The £3.4 billion in new grant funding in the settlement, taken together with these referendum principles, results in a 2.6% real-terms average annual increase in core spending power over the spending review period.

This multi-year settlement will better align funding with deprivation and need, as part of a simplified funding landscape that is fit for the future. By 2028-29, we expect that the 10% most deprived authorities will see a significant increase in their core spending power per head, compared to the least deprived. People living in the places that suffered most from austerity will finally see their areas turned around.

We know there is more to do. There are no quick fixes, and it will take time to deliver the change this country needs. Our reforms will get money to where it is needed most, but we cannot undo a decade of damage overnight. We know some councils will ask for additional help, and we will continue to have a framework in place to support those in the most difficult positions. We made important strides in our first year and, in partnership with local government, we will rebuild a state people can rely on.

More detail on these proposals will be provided in the local government finance policy statement and fair funding review 2.0 response, to be published on gov.uk later today. Proposals for the 2026-27 settlement will be subject to the usual consultation process at the provisional local government finance settlement. This written ministerial statement covers England only. The policy statement will be deposited in the House Libraries.

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