Local Government Funding: North-west England

Lisa Smart Excerpts

Tuesday 21st October 2025 Westminster Hall

[Mr Morrison]

I completely agree. There has to be a two-way dialogue, in which the Government talk and work with local government to work out the challenges that need to be fixed.

The Local Government Association reports that 29 councils needed exceptional financial support in 2025-26 to set a balanced budget. That is 11 more than the previous year, and I am afraid that number will only continue to grow. The Government’s pride in place strategy is meaningless when local authorities are still being encouraged to sell community commodities such as libraries and leisure centres to avoid financial ruin. That is no way to set our communities up for success. It is stripping away the key things that make a community, the places where people gather and access the support and services that they need. Drawing on dwindling reserves is not a sustainable financial plan.

However, there are also regional inequalities to the issue, which slice across all aspects of daily life, from transport to potholes. Last year’s fairer funding review lacked all nuance, basing criteria for recovery grants on deprivation figures from over a decade ago. Stockport council missed out on any recovery funding; it is now left to pick up the pieces, and to continue fighting tooth and nail without the £20 million it so desperately needs to sustain long-term services, despite having some of the most deprived wards in the UK in our borough. In just three years’ time, Stockport council will be underfunded by £63 million. Despite that, the council won local authority of the year in 2025—a testament to its officers and councillors.

Stockport is a council that does not shy away from hard decisions. It was promised more from the Government, yet things have not changed. In opposition, the Labour party decried the underfunding of local councils across the country and said that things could only get better under its tenure. Well, councils are facing the same problems across the north-west, and we are seeing the same lack of ideas from the Government that we did under the Conservatives. Real-time cuts to local government funding in Stockport alone have reached more than £133 million in the past few years. As a result, Stockport council was forced to find £24.5 million of savings just for the 2025 budget.

[Lisa Smart (Hazel Grove) (LD)]

As a fellow Stockport MP, I am delighted that my hon. Friend has secured this debate. I strongly agree with the points he is making about the underfunding of local government over a period of years, particularly in our part of the world. I wonder if he agrees that the root of some of the problems is the unsustainability of social care. As his constituent Stuart mentioned, for Stockport council, £3 in every £4 is spent on either adult or children’s social care. The demand for that is increasing, yet the funding available is not. Does he agree that the Government taking three years to do a review into social care is too long, and that they should crack on?

[Mr Morrison]

I completely agree. The point, when it comes to social care, is political will. All parties have talked about the importance of social care and of getting the funding right. There is no need to wait for three years; we should indeed crack on.

Regional growth drives national growth. If regions are not invested in, we cannot expect the country to thrive. There are ever-expanding divides between regions, which have consequences on the quality and even length of people’s lives. According to the Institute for Public Policy Research, transport illustrates that divide exceedingly well. In London, people receive £1,183 per head for transport, but in the north-west it is less than half that figure, at just £540 per person. In total, across the north, that is an investment gap of £140 billion.

Our growth is low and slow as a country because areas outside the south-east have been neglected time and again. Anne, another constituent of mine in Bramhall, wrote to me recently to explain her frustrations. She said:

“Residents are being asked to pay more while receiving less and now must pay extra just to maintain a service that was previously included. Public frustration is escalating rapidly across online forums, community groups, and social media. What can be done about this?”

It is no wonder the public are increasingly frustrated when core spending power for local government remains 16.4% lower in real terms this year compared with 2010. The services that local government provides are vital to people’s everyday lives: bin collections, green space maintenance, street cleaning and social care for our most vulnerable residents.

If local governments can no longer sustain those services, our country will decline rapidly as people’s everyday quality of life suffers. Although the guarantee of multiyear settlements and a move away from fragmented, ringfenced grants are a step in the right direction, that is still not enough. Those changes will not be felt and frustrations will continue to grow, especially as the Government continue to work on the basis that local authorities will continuously raise council tax by the maximum 4.99% each year.