Sunak denies ‘crisis’ in local government funding despite bankruptcy warnings | Rishi Sunak

Rishi Sunak has denied there is a “crisis” in local government funding despite warnings that well-run councils are on the brink of bankruptcy and local services at risk without more support.

The prime minister admitted that councils faced “challenges”, in particular with inflation, which has significantly outpaced recent cash injections, at the cross-party liaison committee.

The Local Government Association has warned that councils are starting this financial year in a “precarious position” financially, and having to scale back or close a wide range of local services.

It has calculated that English town halls need an extra £4bn over two years just to maintain services at current levels, or risk a financial crisis, against a backdrop of significant spending cuts since the Conservatives came to power 14 years ago.

Clive Betts, the chair of the levelling up, housing and communities committee, asked whether there was a crisis, to which Sunak responded: “I wouldn’t characterise it that way.

“Of course there are challenges, particularly with inflation, which is why … the overriding economic priority of the government was to bring inflation down because that will help local councils with their finances too, as well as helping families up and down the country.

“And if you look at what’s happened from central government to local government over this parliament, since 2019, the grant in cash terms has more than doubled.” However, Betts pointed out this was in the context of a 30% cut in councils’ spending power since 2010.

Tuesday’s appearance was Sunak’s last before the committee before local council elections on 2 May, in which the Tories are expected to face a wipeout.

In a wide-ranging session, the prime minister pledged that the public could “safely assume” the pensions triple lock will remain in place throughout the next parliament if the Tories win the election, after Jeremy Hunt confirmed it would be in their manifesto.

The triple lock has become a hallmark of successive Tory governments since it was announced in 2010 but there has been a debate about its long-term future due to its costs. Sunak, however, insisted that it was affordable.

Sunak suggested that while public spending will continue to grow in real terms, public services must become 5% more productive. “I do think it’s right that we focus on productivity to get more out of the investment we’re putting in to public services,” he said.

“To give just one statistic – public sector productivity is around 5% lower today than it was before the pandemic. So, no one is asking anything heroic; it’s just a return to where we were. Obviously the private sector has managed that.”

There was a heated row over the government’s flagship Rwanda deportation scheme, with Sunak objecting to SNP MP Joanna Cherry’s question about whether he was proud of telling Tory MPs to vote against an amendment preventing Afghans who had supported British forces from being deported to Rwanda.

“I really disagree with that characterisation,” he said, adding that in light of recent debates in parliament about MPs’ intimidation, “I actually think characterising like that is deeply unhelpful.”

The prime minister refused to say if the government had finally found an airline willing to fly asylum seekers to Rwanda, suggesting it would be subject to commercial confidentiality.

Responding to other questions, Sunak declined to give a date for when defence spending will hit the 2.5% of GDP target. He also said the UK would continue to push Israel to allow more aid into Gaza, particularly by land.

He acknowledged concerns that the UK had backed the UN security council’s Gaza ceasefire resolution even though it didn’t explicitly condemn Hamas’s actions. But he added that “whilst not perfect”, the UN’s position was “close enough” to the UK’s position that it should support it.

In a lighter moment, the prime minister gently mocked his predecessor Liz Truss’s claim that the “deep state” had brought her down. Asked whether he was a member of the deep state, he replied: “I probably wouldn’t tell you if I was.”

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