The Rt Hon Jeremy Hunt MP
Chancellor of the Exchequer
HM Treasury

15th November 2023

Dear Jeremy,

Local Government funding

I am writing to you in advance of both the Autumn Statement on 22 November and the Local Government Finance Settlement.

I and many of my constituents are deeply concerned about the acute financial pressure that councils face, including Brighton and Hove City Council. Local Government is the fabric of our communities and I am writing to urge you to take the necessary steps to address this pressure and increase funding for local services.

According to the NAO, even before the pandemic, local government was grappling with funding cuts of nearly 50% since 2010-11. On top of this, local authorities are facing an inflationary storm coupled with increased demand for their vital services.

Local Government Association analysis shows that by 2024/25 the cost of delivering council services will have increased by £15 billion since 2021/22. That is nearly a 30% increase (28.6%).

Despite additional funding, the LGA estimates there are funding gaps of £2.4 billion in 2023/24 and £1.6 billion in 2024/25. These gaps are based solely on a calculation of the funding needed to maintain services at current levels. To put the figures into perspective, the LGA explains that the 2023/24 funding gap is equivalent to councils stopping all spending on waste collection, library services, recreation and sports combined.

Local services are already struggling with increased demand and there are huge pressures on the key areas of council activity that involve caring for people who are vulnerable. I see this demonstrated every week in my constituency casework. The struggle is also evident from the shocking state of our broken social care system, child poverty, increased foodbank use, and a very serious increase in the number of homeless households.

This is a matter for the Treasury - it is clear the problems facing Brighton and Hove are also replicated at national level. For example, on social care, the King's Fund note that local authorities are running into increasing financial difficulty, and that three quarters of social care directors across English councils say they ‘aren’t confident’ about being able to fully offer the minimum social care support required by law.

It is critical that local government is given the funding necessary to ensure it can properly support people who are living longer with multiple, complex, long-term conditions. The additional money provided last year it is not sufficient and I urge you, at the very minimum, to agree to the following three calls from the LGA to:

Provide funding to enable improvement in pay (parity with comparable roles in the NHS), conditions and career development opportunities for the frontline care workforce not directly employed by councils.

Introduce an independent review of care worker pay for those not directly employed by councils.

Provide substantial new investment to help tackle unmet and under-met need through an expansion of provision, including preventative services, and in new models of care, including housing, and funding for the voluntary and community sector.

Turning to the funding councils need to look after people who are homeless, in Brighton and Hove there is an unprecedented housing and homelessness crisis. In recent times, around 15 to 20 households would approach the council each week as “homeless on the day” but recently that number has risen to more than 50 a week.

In July, Shelter found Brighton and Hove had 3,538 people living in temporary accommodation, including over 1,300 children. The grim consequences of this Government's policies on housing include thousands on council waiting lists, with little hope of getting help. Councils in England are spending £1.7bn a year on temporary accommodation and the funding they are receiving from central Government does not match what is needed.

I urge you to uprate Local Housing Allowance (LHA) rates to the 30th percentile of local rents and introduce an explicit, national-level focus on homelessness prevention, with an associated funding regime. Alongside adequate funding for LHA so that people can pay their housing costs in the short term, a radical approach must be taken to deliver a new mass programme of zero-carbon council homes. Such a programme would create a significant national asset, so a major grant programme to allow councils to build the necessary homes under the prudential borrowing regime is required. This would be an investment with returns for the Treasury, as less money would have to go to private landlords in LHA payments, and councils would have more rent receipts to use for repairs and to build more social homes.

Failure to properly fund local government harms the most vulnerable, particularly children. The costs to children of homelessness and poor housing are horribly clear. In addition to funding for councils to build homes, more resources are urgently needed to ensure councils can meet existing cost pressures in children’s social care, including fully funding placements for unaccompanied asylum-seeking children and care leavers.

It is also critical that Ministers finance the roll-out of well-evidenced interventions to reduce demand for children’s social care placements and to retain and expand placement capacity. The Independent Review of Children’s Social Care found that investment of £2.6 billion over four years was needed to reform the children’s social care system and rebalance spending towards early intervention. To date, the Government has committed £200 million over two years. This is grossly inadequate.

Children are also losing out because Special Educational Needs and Disabilities provision has not been allocated sufficient central Government funding. This is a major issue in my constituency and across the country, and I urge you to provide the additional funding required to meet the real need for Education, Health and Care Plans.

I will conclude this letter with a final example of underfunding of vital local services that has been relayed to me by our local fire and rescue service, East Sussex Fire and Rescue Service (ESFRS). The need for a fully funded local fire and rescue service proportionate to need was highlighted this year when Brighton and Hove suffered a high-profile fire, at the Royal Albion Hotel, which required support from across the region.

After meeting with ESFRS, I wrote to the Minister for Local Government and Building Safety about the allocation of the Protection Uplift Grant, and the need to provide ESFRS with adequate capacity to deliver their core function of responsibility for building safety. I received a muddled reply that confused funding for core functions with funding for new regulatory burdens.

The bottom line is my local fire and rescue service is not getting enough money to keep residents as safe as possible. All the while, they are being asked to find around £2million in "efficiencies" to meet inflationary costs and to address the need for investment in things like cyber security, estates and replacement of equipment. This is something I urge the Treasury to address with the DLUHC.

The perfect storm of a decade of funding cuts, combined with inflation, energy costs prices and insufficient funding settlements, have created a stark situation. I urge you to provide the funding that local services so desperately need to carry out their vital work.

Yours sincerely,