Cash-strapped councils will see no extra funding from Labour, Gove claims

Cash-strapped councils would have little hope of seeing spending pressures relieved under Labour, Michael Gove has said, pointing to Sir Keir Starmer’s “admiration” for Margaret Thatcher.

Communities Secretary Mr Gove suggested Labour MPs would be “raising false hopes” if they suggested a victory for their party at the next general election would mean extra funding for local authorities.

It comes after Opposition leader Sir Keir used an article in the Sunday Telegraph newspaper to praise Conservative former prime minister Mrs Thatcher for having “set loose our natural entrepreneurialism”, in a bid to appeal to natural Tory voters.

The Labour leader has since warned that if he wins a majority at the next election, he would not be able to “turn on the spending taps” because of the UK’s precarious economic situation.

A total of 12 councils have issued what are effectively bankruptcy notices since 2018, amid rising demands and cuts to funding.

The latest is Nottingham City Council, which issued a Section 114 notice at the end of November.

In the Commons, Chi Onwurah, Labour MP for Newcastle upon Tyne Central, said: “The cost to councils of delivering their services will exceed their core funding by £2 billion this year. Newcastle expects a funding gap of £56 million.

“That is following £369 million worth of Conservative cuts to funding and years of Conservative economic failure.

“So, can my constituents rely on council services under a Conservative Government?”

Mr Gove responded: “Well, they certainty can’t rely on a Labour government, because the Leader of the Opposition just this morning has been talking about his admiration for Margaret Thatcher and cost cutting.

“I am afraid all she is doing is raising false hopes which have no chance of being satisfied under a Labour government.”

Elsewhere in the debate, local government minister Simon Hoare said he would not “name and shame” councils in financial trouble, amid concerns over further local authorities effectively declaring bankruptcy.

Since Nottingham issued its Section 114 notice, Labour-led Brighton and Hove City Council has warned it is facing “financial peril” next year.

Shadow local government minister Jim McMahon highlighted warnings over councils failing because of “high inflation, interest rates and service demand”, adding: “Can I ask, by the Government’s own assessment, how many more councils are at risk between now and the budget being set next year?”

Mr Hoare replied: “Nobody is going to doubt that Section 114 is a serious issue. I have said to the LGA (Local Government Association) and to others that I don’t think it’s right for us to name and shame, point the finger etc.

“What we are intent on doing is working with councils who have already alerted us to see what we can do to help and to work alongside councils as well who have concerns to ensure that they don’t fall into that situation.

“I am not going to give a running commentary, save to make this pledge – that we will work with those councils to ensure that they can continue to deliver for their voters.”