PARLIAMENTARY DEBATE
Deprived Areas: Funding - 14 July 2025 (Commons/Commons Chamber)

We are committed to improving how we assess need to ensure that central Government funding is distributed fairly to the places that need it most. We began at the last settlement with the £600 million recovery grant, and subject to the fair funding review 2.0 consultation, our proposed reforms mean that the most relatively deprived places will see larger increases in income than the least deprived places.

Newcastle-under-Lyme is at the heart of our industrial heartlands. In communities such as Silverdale, Knutton and Cross Heath, we see higher levels of health inequality and lower levels of life expectancy than in many wealthier areas. These communities were let down by those who went before us and were left behind. Will the Minister meet me to discuss how best to support industrial communities like mine in Newcastle-under-Lyme, so that we can finally tackle this entrenched inequality?

My hon. Friend makes a very fair point. There are two aspects to this. First, we must make sure that places get the investment they need to realise their full potential. We are working on that with our plan for communities, which the Under-Secretary of State for Housing, Communities and Local Government, my hon. Friend the Member for Nottingham North and Kimberley (Alex Norris) is engaged in. But that has to be built on fair funding at the base of what the local authority does. There was nothing fair at all about the previous Government impoverishing councils in the most deprived communities, sending many to the wire. We are putting that right.

I am grateful to the Minister, who has named Barnsley’s local authority in the £1.5 billion plan for neighbourhoods. The spending review has confirmed neighbourhood-level investment for 350 deprived communities. However, Chapeltown and High Green in my constituency have communities in the bottom 10% nationally in the indices of multiple deprivation, while Dodworth has a community within the bottom 20% nationally. These areas would benefit significantly from neighbourhood-level investment to build a sense of pride in place for my constituents. Will the Minister consider including these three communities among the 275 areas that are yet to be announced?

I am sure that the Under-Secretary of State for Housing, Communities and Local Government, my hon. Friend the Member for Nottingham North and Kimberley has heard those diligent representations. It is true that many parts of our country have talent and potential that are not being met by opportunity. This fund is about making sure that every area has seed investment to begin to rebuild, supported by fair funding for the local authority. We cannot underestimate the effect of the 14 years of constant hits and attacks from the previous Government. There is a reason why many communities have the resilience to stand up for themselves regardless of all that: the power of their unity. Finally, they now have a Government on their side.

It is often harder to see because it is more sparsely spread across larger rural areas, but I remind the Minister of what I know he knows: deprivation exists in our rural areas. Can I urge him to ensure that this does not become an issue of north versus south or urban versus rural, but that the Government use taxes to address deprivation wherever and whenever it arises, including in my constituency?

I thank the former Minister for those representations. On the point about fair funding and unpicking where money is needed, there is a lot of commonality on this issue in the Chamber. We absolutely accept that in rural areas the cost of service delivery is higher in some cases, such as for refuse collection and adult social care. It is common sense that if people have to travel further to pick up bins or make a home care visit, it will cost more money as a result.

However, that is not the only thing we need to take into account. We must take into account deprivation and the ability of a council to raise money at a local level. Daytime visitor numbers are also a factor, where a council is not getting a tax take from those visitors but there is a public service take on the other side. Importantly, we must consider the ability of a local authority to raise tax at a local level to meet the demand. It is the Government’s job to act as an equaliser in the system.

It is absolutely right that funding follows need, but may I gently urge the Minister to look at how the proposed new funding formula for local authorities affects boroughs across London, given that it does not consider housing costs, which we know are the biggest driver of poverty and deprivation in London?

We are in a consultation now, so we are willing and ready to hear representations, but many people—I am not accusing the hon. Member of this—have jumped to conclusions based on headlines that are not supported by the evidence when we track where money ultimately goes. All the matters that she rightly said need to be taken into account are taken into account. In the consultation, we have included the cost of temporary accommodation in the base formula for the first time ever, so she will find that outer-London boroughs in particular will benefit from that. So far, they have been underappreciated for the cost of that pressure.