Local Government Finance

Anne Marie Morris Excerpts

Tuesday 10th February 2015 Commons Chamber

[Anne Marie Morris (Newton Abbot) (Con)]

This Government have done a tremendous job in rectifying some of the wrongs the previous Administration inflicted on local government. Local authorities provide key services for all of us—care for the elderly, care for the disabled, care for children, the highways, street-lighting, libraries, youth services, economic development and so on. In that context, there is a real challenge for local authorities that service the rural community, and my community is very rural and is in the heart of Devon.

One challenge we face, in common with many rural communities, is that we have an ageing population. We also have significant infrastructure challenges given the amount of road there is in Devon. Devon has, I believe, more roads than Denmark, and that gives rise to a huge number of challenges, never the mind the challenge of the pothole.

The Government’s comprehensive spending review of 2010 changed the system for funding local authorities and, rightly, looked at a programme of significant funding reductions. It did not take account of the particular needs of rural communities, however. Consequently, in Devon funding has fallen by £80 million and it has had to look at saving £128 million in total, so it has reduced staffing, introduced pay freezes, rationalised the estate and reduced management costs, and by all accounts has done all that a responsible local authority could do.

Therefore, in the context of the funding settlement for 2015-16, looking at what further it can do is a real challenge. Devon’s core funding has been reduced by £29 million, a significant sum given the work that has already been done. There is also significant concern about the implications of the Care Act 2014, which implemented the Dilnot findings and introduced a cap on lifetime cost of care. The authority therefore has concerns about what additional funds it is going to have to find. The Care Act also changed the threshold at which people contribute. All of those uncertainties add to the challenge, and the Care Act is particularly significant for us given the ageing profile of Devon’s population. That said, Devon is grateful for those chunks of money that it has received: the £16 million schools funding—the minimum funding level for school block units—is welcome, as is the £871,000 sum for welfare and social care, which we badly need. None the less, that does not deal with replacing the old grant of £1.3 million to support the vulnerable, which is now gone.

What can we do now? Where can we move forward? How can we rectify that imbalance between the urban community and the rural community? As has been said, the Government recognise the challenge and that something must be done. Indeed, they have already begun to deal with it. The challenge was that the changes in the sparsity weighting were lost in damping, and the reality is that rural areas on average still receive £153 per head less in Government grants than urban areas. The rural services delivery grant was, again, a welcome help, but £15.5 million equates to £1.20 per head. Realistically, that is a drop in the proverbial ocean, and that amount fills about 1% of the gap in the settlement funding assessment. We need £30 million each year, on a cumulative basis, to begin to right that wrong.

My concern, on top of the lack of funding, is that our rural communities are also being penalised by having to pay a greater level of council tax—indeed, £81 more than the average urban constituent. Locally, if we compare Teignbridge district council with the nearest city, which is Plymouth, the residents of Plymouth will get £93.84 more under the latest Government funding settlement. That simply cannot be justified.

There are huge pressures on local authorities, which are really challenged. Whatever they do with council tax, they are still struggling. It is not surprising that the new homes bonus has in effect come to their rescue, to fill the gap, or that, equally, communities feel deeply frustrated and concerned that that is leading to overdevelopment. In our communities, including my Devon community, there is real pressure on care, day care centres, children’s centres and libraries. We are getting to the point at which we will be squeezing the pips and they will be squeaking.

The Government must act to rectify the imbalance and they need to set a new formula. I want to see something set out in the upcoming and final Budget, with real recognition of the real need of rural communities. Even more, I would love to see a manifesto commitment. We need recognition that, for rural communities, social care is a huge cost and a real issue and that infrastructure is a real challenge.