Lord Jamieson (Con)

My Lords, I also support my noble friend Lord Fuller’s amendment. Local government finance is in a parlous state, with more than 70% of funding used for adult and children’s social care, which, due to demographic pressures, is growing substantially above GDP and inflation. In some places, this is exacerbated by housing costs due to the housing shortages across the country. The latest local government finance settlement has not helped, as the additional government funding is the worst I can recall, after taking account of national insurance, since I became chair of the Local Government Association in 2019. I agree with my noble friends’ comments on this. Yet the financial pressures on local government continue, forcing many councils to put up council tax by the maximum of 5% and, in several cases, to seek additional rises above that. National insurance rises pose a particular burden on local councils. The LGA, as mentioned by my noble friend Lord Fuller, estimates that the cost is around £1.7 billion, of which around £1.2 billion is indirect. The Government have committed to fund the direct costs of the national insurance rise but, as my noble friend Lord Fuller mentioned, that does not even cover the full direct costs. I emphasise that figure of £1.2 billion. There has been some commentary that it needs to be absorbed by suppliers. Frankly, that is not realistic. For instance, in one of the biggest areas—social care staff and care workers—you have agencies that just are not capable of absorbing that level of cost. They will have two options: get a price rise from the council, or stand away from their contracts. We councils cannot afford that so we will inevitably be forced to pay the extra amounts of money. For example, in Central Bedfordshire Council—where I am a councillor and therefore declare an interest—the shortfall is around £2 million for the direct costs after the financial settlement. I talked to the finance director yesterday and he estimated indirect costs of around £10 million. To put that in context, that is more than a 5% council tax rise will generate. So, even after such a rise, we will not cover the national insurance rise. That will inevitably mean that we will have to look at cuts to our essential services, the majority of which are statutory—the classic potholes, parks, libraries, et cetera. They are all up for grabs, so to speak. That is just not fair on our residents, who are paying additional council tax and seeing cuts to their services. I support the amendment, so that the impact of the national insurance rise can be truly worked out on a council basis and then properly funded.