Local Government Finance

Debate between Rosie Winterton and James Brokenshire

Tuesday 5th February 2019 Commons Chamber

[The Secretary of State for Housing, Communities and Local Government (James Brokenshire)]

I beg to move,

That the Local Government Finance Report (England) 2019–20 (HC 1916), which was laid before this House on 29 January, be approved.

[Madam Deputy Speaker]

With this it will be convenient to discuss the following motions:

That the Report on Referendums Relating to Council Tax Increases (Alternative Notional Amounts) (England) 2019-20 (HC 1917), which was laid before this House on 29 January, be approved.

That the Report on Referendums Relating to Council Tax Increases (Principles) (England) 2019–20 (HC 1918), which was laid before this House on 29 January, be approved.

[James Brokenshire]

Strong, vibrant, resilient communities are, more than ever, key to unlocking a brighter future for our country. We must therefore celebrate them and help them to succeed, and, in turn, support councils and the many people who serve them every day in delivering essential services and changing lives. I hold those dedicated public servants in the highest regard and have faith in them to rise to the challenges that lie ahead, seeing their people and places flourish with no one left behind. To achieve that, they must have the necessary tools and resources to do their job and I am determined to ensure that they get them. That was why I published the provisional settlement on funding for local authorities in England late last year and invited contributions as part of our formal consultation on that.

We received around 170 responses and I am grateful to those who engaged so constructively with me and my Ministers. My particular thanks throughout the process go to the Under-Secretary of State for Housing, Communities and Local Government, my hon. Friend the Member for Richmond (Yorks) (Rishi Sunak), for all his work and immense efforts.

That important work has helped to shape the final settlement, which recognises the pressures that councils face and acknowledges their impressive efforts to drive efficiencies and strengthen our public finances. That paves the way for more confident, self-sufficient and reinvigorated local government.

I am pleased to confirm on behalf of the Government that, importantly, core spending power is forecast to increase from £45.1 billion in 2018-19 to £46.4 billion in 2019-20. That amounts to a cash increase of 2.8% and a real-terms increase in resources available to local authorities, which is good news for the many communities that will benefit.

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[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. The Secretary of State has the right to take as many or as few interventions as he wishes. He is aware that there is pressure on time. I am not sure whether the hon. Gentleman has put in to speak, but he really does have to wait until the Secretary of State wants to give way. I do not like points of order getting in the way of speeches, because I do not think it is fair on others who are waiting to speak.

[James Brokenshire]

Thank you, Madam Deputy Speaker. I know that a number of Members wish to speak this afternoon. I hope I have been generous in taking interventions, but I am conscious of allowing sufficient time for right hon. and hon. Members to make their points for their individual communities. I did not mean any disrespect to the hon. Member for Coventry South (Mr Cunningham), as I know he takes these issues extremely seriously. It was on that basis that I sought to be generous but I need to make progress now.

As well as more control, councils want and need to see a clearer link between the allocation of resources and local circumstances. That is why we are working with them to overhaul a funding formula that is currently far too complicated and badly out of date. We need to look at this afresh and do away with anomalies such as double weighting for urban roads compared with rural roads, which the Labour party was far too comfortable imposing. Let us not forget that local people paid the price for Labour: under the last Labour Government the average band D council tax bill went up by a staggering 109% between 1997 and 2010, costing families, on average, an extra £751 a year. Given that track record, one would think that the Opposition might have learned a lesson or two about excessive tax rises, but no. Labour’s manifesto set out plans for a new land tax on family homes, which would punish those with gardens. Labour’s garden tax would send tax bills soaring and house prices plummeting, and would pressure families to build over their back gardens. By contrast, our approach has been informed by a strong consensus on the need for fairness, for local authorities and for local taxpayers. It is now critical that everyone takes a pragmatic approach, recognising the trade-offs that are necessary to ensure we get this right and deliver a new and fair formula on time, as agreed.

This important work—on the funding formula and on increased business rates retention—reboots our system of local government, creating the space for communities to re-imagine what they can do and can be in the 21st century, and helps to renew the bonds with communities. This is of the utmost importance as we strive to ensure every part of our society and country benefits from a modern, outward-looking Britain after Brexit. No one is better placed to deliver on that than local authorities. That is why last week I released £56.5 million, to be used across this year and next, to help councils to prepare for EU exit, and it is why we are backing them to deliver every day through this settlement and the extra funding announced in the Budget. In doing so, we are delivering on what they have asked for: a real-terms increase in spending in 2019-20; support for the vulnerable; a boost for housing, with the removal of the Government cap on how much councils can borrow to build, for quality public services and local economic growth; and help for our high streets. The Labour party may turn its face against this, but it is no less than our councils and communities deserve. I commend the settlement to the House.