“Pay more but get less”: Labour responds to council funding statement

Labour has argued that people “pay more but get less” under the Tories and that the government is hitting people with higher taxes to “paper over the cracks” of austerity.

Following a statement from Michael Gove on Thursday, Labour’s Mike Amesbury highlighted the £16bn of cuts inflicted on local government funding for services over the past 11 years.

Criticising the austerity that he said had hit “the poorest councils and populations hardest”, the shadow local government minister said: “Now, the Conservatives are turning to taxpayers to paper over the cracks.

“From the energy price cap going up, soaring food costs and fuel prices hitting another record high – the list of price rises under this government goes on and on. Now the Tories in Westminster are hitting people with higher tax twice for social care, with an increase in National Insurance and a council tax rise.

“Instead of taking meaningful action to tackle the cost of living crisis, the government has trapped us in a high tax, low growth cycle. The message today is clear: you pay more but get less under the Conservatives.”

Gove announced £1bn of extra funding for social care on Thursday, alongside a one-off £822m grant for councils’ general funds. He said England’s local authorities would get £3.5bn more funding than they did this financial year.

But just £700m of the £1bn social care funding is from central government. Most councils will be allowed to raise council tax by at least 3%, adding £57 to the current £1,898 average band D bill. This is up £1,439 from the year 2010/11.

The few councils in England that did not raise council tax by 3% on the last occasion will be allowed to make up the difference in the next rise, meaning residents in some areas could see their bills rise by more than 5%.

Gove, the new Local Government Secretary, claimed on Thursday that the funding package will “make sure councils can improve vital frontline services, support vulnerable people and protect residents from excessive council tax rises”.

Local authorities have seen a reduction in core funding of £16bn over the last decade. Between 2012 and 2020, local councils lost 60p out of every £1 that central government had provided to spend on local services.

Councils across the country have responded to the reduction in central funding by making deep cuts to services, as well as finding new ways of operating while still delivering the vital services on which their residents rely.

Local Government Association research conducted before the pandemic showed that local services already faced a funding gap of £7.8bn by 2025. The LGA declared – before the pandemic hit – that the funding situation represented an “immense challenge”.

Commenting today, LGA chair and Conservative councillor James Jamieson warned: “While the additional funding for adult and children’s social care is good, it will not go far enough in addressing the very real existing pressures these vital services face.

“With the spread of Omicron, Covid-19 pressures are intensifying and costs are rising, underlining the urgency for government to extend outbreak funding for councils beyond March, to tackle rising cases and meet a surge in demand for local contact tracing.”

Two-thirds of 152 councils responsible for social care in England responded to a survey last week confirming that they will likely raise council tax to fund services. The LGA said this would mean residents “shelling out twice” for social care.

Earlier this year, the government put its plan to parliament to increase National Insurance contributions by 1.25 percentage points to raise £12bn for the NHS and social care. Ministers said the cash will be used to tackle the healthcare backlog caused by Covid before the rest is directed towards social care.

Responding to the survey, Labour’s Lisa Nandy warned that it would be “the communities the government promised to ‘level-up’ who will be hit hardest”. The Shadow Levelling Up Secretary added: “The government’s double whammy National Insurance and council tax will leave people worse-off.”