“Councils cannot provide the services nor the council homes that are needed if they are not funded on the basis of social needs.”
At the launch of Labour’s local government campaign Keir Starmer was asked if a Labour government would plug the £4 billion funding gap of local authorities over the next two years; the amount the Local Government Association has called on the current government to provide. There is “no magic money tree” he said. Councils would only be better funded “at the end of an incoming Labour government”. It would not be through a “lump-sum cash injection”, but by “reducing the burden on councils” through measures such as curbing inflation and banning no-fault evictions.
Yet with an unprecedented financial crisis, unless that £4 billion gap is plugged by Labour then councils will be issuing section 114 notices (indicating that they cannot balance their budgets).
The Local Government Association has warned that placing extra demands on councils will come at a time when they are already struggling to pay the bills and called on the next government to urgently address the funding issue. Labour councillor Peter Marland, chair of the LGA’s resources board, said:
“The amount of funding available to councils is out of line with the requirements on them. As well as needing to address this, any incoming government needs to give urgent attention to the entire system of funding local government.”
Whilst a three year funding settlement would be an improvement on the current annual one, without an injection of significant extra funding that will only mean councils planning their cuts over a longer timeframe.
In the document issued for the local election campaign it says that Labour will “Deliver the biggest boost of social and affordable housebuilding in a generation, embedding security and stability in our economy.” However, this contradicts what Shadow Housing Minister Matthew Pennycook has said – that Labour will not increase the current funding of the Tories Affordable Homes Programme. Without a step change in council house building then many people will continue to be trapped in the private rented sector, often in poor quality housing.
Secretary Martin Wicks said:
“Councils cannot wait four or five years for better funding. Peter Marland’s comments hit the nail on the head. Councils cannot provide the services nor the council homes that are needed if they are not funded on the basis of social needs. The consequences will be people who need support going without, as many currently do.
We live in a country which is awash with money. There are many ways to fund what needs to be funded. Equalisation of capital gains tax with income tax is just one example. The ‘growth’ we need is of quality services and decent homes. We cannot rely on the market.
Our campaign around our Open Letter on resolving the local government and housing crises calls for a break from austerity and a return to a progressive taxation system. Overcoming regional and class inequalities depend on equalising funding for local authorities: funding based on need rather than dependent on property prices and council tax, which means poorer communities are worse off.
A vast array of organisations from Shelter to Inside Housing, housing campaigns, to tenant groups, are demanding that the next government funds at least 90,000 social rent homes a year. If the Atlee government could set up the NHS and build nearly a million council homes in far worse economic circumstances than we face today, it can be done by the next government. It is a question of recognising it as a priority, an emergency, and of political will.”
Labour Campaign for Council Housing Chair, Ben Clay, added:
“Council house building pays for itself many times over. It is investment which will save on homelessness, Housing Benefit & Discretionary Housing Payment costs. As well as being the right thing to do it will stimulate socially useful growth and create well paid, skilled jobs. Reducing house prices and rent inflation will alleviate the cost of living as well as making it easier for first time buyers to afford a home. Capital investment that creates growth and revenue budget savings, as well as providing wider social benefits should never be excluded by fiscal rules because the investments pay for themselves.”
Labour Campaign for Council Housing 