Funding for Local Authorities

Debate between Robin Walker and Rory Stewart

Thursday 10th October 2013 Commons Chamber

[Mr Walker]

My hon. Friend is extremely generous. I believe this campaign has strong support across the Back Benches. It is an issue that we can take forward; we must see real progress made on it. I am grateful for my hon. Friend’s comment, but it is, of course, a team effort in which many others have played their part.

In Worcestershire as in many other counties, the education department shares staff and resources with the broader children’s services area, so wherever education funding is under pressure, it places additional pressure on other aspects of children’s services, including looked-after children and safeguarding—issues raised by a number of Opposition Members. As a long-standing supporter of the f40 campaign and having met Ministers many times to discuss it, I know that reform of the school funding formula is on the way and I have every confidence that we will eventually get a fairer deal, but we need to learn the lessons of what seems to have gone wrong with local government funding and not repeat the same mistakes.

It appears that in this case the Government set out to correct some of the imbalance in funding for rural local authorities, but then introduced a damping mechanism that outweighed the impact of the change—effectively, as my hon. Friend the Member for Beverley and Holderness said, putting the whole thing into the deep freeze rather than simply damping it. In effect, a funding reform designed to move things in a fairer direction has been so watered down as to make the problem worse. That cannot be allowed to happen when it comes to school funding, and it should not be allowed to happen to the wider CLG funding for local authorities.

[Rory Stewart]

Would my hon. Friend touch, perhaps briefly, on health funding, which is one of the other great examples of this problem?

[Mr Walker]

My hon. Friend is absolutely right; it is exactly the problem I was about to move on to. As I mentioned earlier, health funding is another area of major concern. Rural areas tend to have higher numbers of elderly people and a higher life expectancy than the major cities. As so much health funding is allocated according to life expectancy and targeted towards areas of high perceived deprivation, it means that the population of big cities is generally much better funded than that of rural areas.

With an ageing population and more people living with long-term conditions that require regular treatment, this creates enormous pressure on all rural health services, particularly on community health services. Worcestershire as a whole gets lower health funding per person than do more urban areas of the west midlands, but it has an older population, placing greater demands on our health service. Shifting the balance of health funding from mortality to morbidity would help to address this, as would having a more activity-based formula for community health. In health as in education, however, the local structures do not exist in isolation from local government. There are close links between the health and the social care systems, while pressures on both the acute and the community health systems create additional pressure on local authority-run social care. The fact that we are underfunded for health means that our underfunding for social care is a more serious challenge for our local authority.