Mansfield – Labour leader Sir Keir Starmer says he will reform council funding if his party is elected into power after Nottingham City Council declared itself effectively bankrupt in November last year.
Speaking during a visit to King’s Mill Hospital on Monday, April 8, Sir Keir said should the Labour Party be elected into power, it would begin to reform council funding straight away.
“Many councils are in financial crisis and that is councils that are run by Tory Party, the Labour Party, because of the chaos and underfunding over many years,” he said.
“It is another to be added to the list of failures under this government. Almost everything is broken, whether it is the NHS, public services and now our councils. They touch it they break it.
“We will have to pick it up and fix it if we are privileged enough to come into power.”
Nottingham was the latest in a list of councils declaring effective bankruptcy, including Birmingham City Council before it.
Sweeping cuts to jobs and services were then approved in March, owing to the significance of the financial challenges the authority is facing over the next few years.
While the £38m collapse of council-run Robin Hood Energy was cited as a reason for the authority’s poor financial resilience; reduced funding from the Government, soaring inflation and increased costs and demand for social care have led to unprecedented pressures.
So much so the council could only set a balanced budget with exceptional financial support from the Government, whereby it has been given a £66m loan which must be paid back through the sale of assets.
One of the main issues raised by Nottingham councillors is the financial settlement provided by central government.
While the Conservative Government has been criticised for reducing its revenue support grant by almost £100m every year over the last decade, the nature of how funding is given is also a cause for concern.
This is because the financial settlement is provided just before Christmas and on an annual basis, which the council says is preventing it from planning effectively.
Sir Keir added: “There are things we can do straight away. The funding settlement should be over three years at least, that is what council leaders are saying to me.
“They could make much better use of their money and use it more effectively. We could do that straight away.
“We could reduce the pressure by making sure the economy is stable. This government smashed the economy, inflation went through the roof, that put a direct pressure on councils who spent a fortune on the effects of inflation and of course the Government has gone back on its promise for no-fault evictions.
“That means whichever council you are if someone is evicted and they become homeless or potentially homeless then that is another burden on council that could and should be removed.
“There are things we can do, but it is the same old story I’m afraid, which is 14 years of failure.
“Everything is broken and it will now fall to an incoming Labour government, if we are privileged to come in and to serve, to pick that up, pick the country up and move us forward.”
The Department for Levelling Up, Housing and Communities was contacted for comment.
It said previously the final local government finance settlement for 2024/25 makes available up to £4.5bn more for councils in England, an above-inflation increase of 7.5 per cent on the previous year, with £64.7bn for councils overall.
It says the package includes the £600m in extra support to bolster council budgets, including £500m for social care, as announced in January.
• Mansfield: Kier Starmer and Wes Streeting visit King’s Mill Hospital
