Local Government Finance
Debate between Clive Betts and Stephen Williams(9 years, 3 months ago)
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The Parliamentary Under-Secretary of State for Communities and Local Government (Stephen Williams)
We have had 13 Back-Bench contributions to the debate. Most of them have been thoughtful and reasonable, with Members standing up for their constituents, as our electors would expect. We have heard a lot about different areas, including the reinterment of Richard III in Leicester and the lollipop people, if I may put it that way, in Birmingham. We heard about cities and counties. The speech I found most enjoyable was that of the hon. Member for Birmingham, Edgbaston (Ms Stuart), who addressed not only the history of her great city, but the future vision. There may be a face-off between her and my hon. Friend the Member for Beverley and Holderness (Mr Stuart) as to who can milk the cow most productively. As someone who grew up in a Welsh village surrounded by sheep, I will not offer any rural contribution.
What we heard from the Opposition Benches was long on what problems there are and how awful the position is, but had very little recognition of the fact that one of the reasons for the current difficulties is the situation that we inherited in 2010. A couple of Members looked through that rear-view mirror and were in almost complete denial about that legacy. That might have been understandable in 2011 or 2012, but at this point in the political cycle, 90 days before the country goes to the polls, we expected to hear more of the vision that the hon. Member for Birmingham, Edgbaston spoke about—the solutions to funding local government in the future.
Thanks to this Government’s policies of stabilising the economy, getting the public finances under control and rebalancing the economy, we are now seeing a better future for this country. Local government, like every part of the public sector, has made a significant contribution to getting to where we are. As my right hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke) said, councillors from all parties should be congratulated on that. The Government continue to need to make difficult decisions to put the public finances on to a sustainable path. In that context, it is inevitable that councils, which account for a quarter of all public spending—this year they will spend about £115 billion-worth of taxpayers’ money—will have to operate with reduced budgets.
Let me assure the House that, contrary to claims that have been made, in this settlement, like those before it, councils with the greatest needs and the highest demand for services still get the most funding. Indeed, the 10% most deprived local authorities in England receive 40% more spending power per head than the 10% least deprived. Several questions were asked about different authorities. Let me take the top and the bottom as examples. Hackney is the most deprived local authority area in England, and its spending power per dwelling will be £3,706.89, while Hart—I am putting together the district and county services and comparing like with like—will receive £1,854.57. At the top and the bottom, we can see that need is still reflected within the system.
Stephen Williams
That would indeed seem rather odd on the face of it, but we are talking about the settlement now, not making projections about the future. What happens in future will be a matter for the next Government, in whatever configuration they are, and we will have to see where we are at that point.
Several hon. Members talked about additional resources for rural authorities. We recognise the challenges that those authorities may face in delivering services to their communities. My right hon. Friend the Member for Mid Dorset and North Poole and my hon. Friends the Members for Beverley and Holderness and for Newton Abbot (Anne Marie Morris) made a powerful case. We have listened, and that is why, for the ongoing settlement, we are adding £15.5 million for the most sparsely populated rural areas. My hon. Friend the Member for Beverley and Holderness said that poverty is found in rural areas as well as in urban areas. Indeed, the only area of the country that still has objective 1 funding from the European Union is Cornwall—not one of our big cities.
Oral Answers to Questions
Debate between Clive Betts and Stephen Williams(9 years, 6 months ago)
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Mr Clive Betts (Sheffield South East) (Lab)
There is a chronic shortage of social housing in this country, not least in my constituency. Despite that and despite the cuts in the grants for building affordable homes, will the Minister confirm that £800 million of grants have not been bid for and are sitting, unused, in the coffers of the Homes and Communities Agency? Does he blame the providers for not putting in bids because they do not see the need for social housing, or does he blame Government policy, under which the amount of grant per unit has been cut to such a low level that providers no longer feel able to bid for the money?
Stephen Williams
In fact, the Homes and Communities Agency and the Greater London authority, which is responsible for this matter in London, have announced initial allocations of £1.3 billion under the next programme to deliver 62,000 new affordable homes from 2015 to 2018. We will open the bidding process for the next round soon.
Oral Answers to Questions
Debate between Clive Betts and Stephen Williams(9 years, 8 months ago)
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Stephen Williams
I have indeed visited Tamworth, which already has a very handsome town centre with a statue of Peel that I went to visit. I suggest that my hon. Friend’s friends in the local authority look at the empty homes programme. I understand that, as of October last year, Tamworth has 579 empty homes, of which about 150 have been empty long term. If the council were able to work with the owners to bring just a third of those properties back into use, there would not only be new homes for people but a substantial new homes bonus of about £350,000 for Tamworth council.
Mr Clive Betts (Sheffield South East) (Lab)
In its current inquiry into the national planning policy framework, the Communities and Local Government Committee has had dozens of complaints from local residents about local councils having to find more greenfield sites to build on because brownfield sites cannot be included in their local plans as they are deemed not to be viable. At the same time, more and more applications are being considered under the presumption in favour of sustainable developments and are being approved for building on greenfield sites. Given that the vast majority of those complaints come from the constituencies of Government Members, what is the Minister going to do to address them?
Stephen Williams
It is up to local communities to work with their local councils and, indeed, their local constituency MPs to see what is most appropriate for each area. It is a mistake to make pronouncements from the Dispatch Box about particular circumstances in particular areas, but if the hon. Gentleman has a specific example he wants to put to me, I am sure we will be able to take it up.
Local Government Finance
Debate between Clive Betts and Stephen Williams(10 years, 3 months ago)
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The Parliamentary Under-Secretary of State for Communities and Local Government (Stephen Williams)
We have had 15 interesting speeches, plus other speeches from the Front Bench. I remind Members of the context in which the debate is taking place. The Government came to power with the pressing need to balance the nation’s books, and that meant reductions in all areas of Government spending, and local government has had to pay its fair share. Over the last few years the Government have had to make some tough decisions about public finances—tough decisions that the last Government shied away from in their last two years in office. The crash, remember, was in 2008.
But those tough decisions are now paying dividends. The national deficit has been reduced by a third, unemployment has fallen and employment is at an all time high, so it is vital that we stick to the disciplined course that we have set for ourselves. Like every part of the public sector, local government has had to pay its share to reduce that deficit and get the nation’s finances back on a stable footing. If I can characterise the comments made by most Labour Members, with some exceptions, this has all led to total unfairness to all of their cities and constituencies.
To remind Members again about the context, this Government have decided to protect the national health service budget in real terms. This Government have protected the schools budget in cash terms. This Government have put huge amounts of money behind children who, like me, were on free school meals. All of that money will benefit Salford, Liverpool, Sheffield and other places. We have also taken the poorest in society who are working out of the income tax threshold. We have raised the national minimum wage. We have raised the apprentice wage. We have raised the state pension. We have built more social houses than the last Government, and this Government will be the first in 30 years to leave office with more affordable and social housing in the housing stock. Together, we are building a stronger economy and a fairer society, in which everyone can get on in life.
Stephen Williams
I will take one intervention, from the Chairman of the Select Committee.
Stephen Williams
Many Members have contrasted the spending power of cities with that of southern authorities. However, it is absolutely clear that the spending power of authorities such as Newcastle is far in excess of that of many other authorities with similar responsibilities but entirely different demographics. It is completely wrong to say that unfairness is built into the system, given that the top 10% of the most deprived authorities in the country are the authorities with the most power to spend on their citizens.
As has been acknowledged during the debate, we are moving to an entirely new system of local government finance. I accept that there is more to be done and that there is a need for reform in the system, but I am sure that that reform will come when the economy has fully recovered.
Reference has been made to the amounts that are raised through council tax, and the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Great Yarmouth (Brandon Lewis), was criticised for his “language of begging bowl”. As someone who, when I was a council opposition leader in Bristol, went on deputations to local government Ministers in both the other parties, let me put it this way: local government had a supplicant relationship with central Government, and that is what this Government are trying to change. We are putting more incentives in the system for local authorities to build more houses. The business rates retention will encourage local economic growth: for the first time, local authorities will retain more of the benefit from economic growth in their own areas rather than handing 100% of it to the people in the Treasury, so that they can decide how much should be distributed around the country according to their own formulas and principles.
Another of the new incentives is the new homes bonus. I am sure that the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Keighley (Kris Hopkins), will be pleased that his authority in Bradford is to receive £2 million in new homes bonus. Leeds will receive £3 million in new homes bonus, and my city of Bristol will receive £2.2 million.
The other major criticism that we have heard today is that some parts of the country have lost out at the expense of others, either as a result of this settlement or over a long period. However, the settlement represents a fair deal for every part of the country—north and south, district and county, city and shire. As I said a few moments ago to the Chairman of the Select Committee, councils have an average spending power of £2,089 per household, and the average spending power reduction will be just 2.9% in the forthcoming year. Moreover, protection is built into the system for the most deprived areas of the country, which are the most dependent on grant.
We have also recognised that services are sometimes more difficult and expensive to deliver in rural areas. Many Members, particularly those on the Government Benches, recognised the real difficulty that rural authorities experience in delivering services to their constituents. I certainly recognise that poverty is found in all parts of the country. It is not necessarily concentrated only in city-centre constituencies such as mine; it is found in Barnstaple, in St Austell, and in many other rural and sparsely populated parts of the country. That is why we have already set aside £9.5 million—£1 million more than last year—to help the authorities in the most sparsely populated rural areas.
I thank my hon. Friend the Member for North Devon (Sir Nick Harvey)—there were many Devonian speakers in the debate—for saying that we ought to go a little further. In fact, today we have announced a significant amount of extra money: £2 million. That means an extra £44,000 for North Devon district council. My hon. Friend the Member for St Austell and Newquay (Stephen Gilbert) said that the average per authority was £30,000, but Cornwall’s unitary authority will have just over half a million pounds extra.
Local authorities need to protect taxpayers by keeping their council tax down. For many of our constituents, the council tax bill represents a huge part of their monthly outgoings. In many cases, it is much more significant than other utility bills, so to denigrate the Government’s policy of encouraging local authorities to freeze council tax is to miss a major point of what the Opposition call the cost of living crisis. If they do not recognise that council tax is part of the cost of living pressure that all our constituents face, they are living in another world.
It is no surprise to find that Labour Members live in another world. Under the previous Government, council tax more than doubled, pushing a typical bill up to £120 a month for hard-working people and pensioners. This Government, however, have done everything possible to protect families from further increases. Over the past three years, council tax bills have been cut by 10% in real terms across England, and we are encouraging local authorities to continue to freeze their council tax. We will further incentivise them to do that not only by offering them a grant but by putting that grant into the baseline so that they can have certainty for future years.
Already, 137 local authorities have confirmed that they intend to reduce or freeze their council tax bills, including—as my hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke) pointed out—almost all the Liberal Democrat local authorities. They include the local authorities led by directly elected mayors in Watford and Bedford, and the Liberal Democrats in my own city of Bristol want our city’s mayor to follow their example.
The referendum principle has been mentioned by many speakers today. The hon. Member for Sheffield South East criticised the Government for taking time to announce what the referendum threshold should be. We confirmed on 5 February that it will remain at 2%, which was the assumption that the local authorities were working on when planning their budgets. The hon. Gentleman was around during the last Parliament, and I must gently remind him that the previous Government frequently capped local authority council tax increases without announcing the cap until March, after the local authorities had set their budgets and started to prepare the bills to pop through people’s letter boxes. We have certainly improved on that situation.
There are many things that local authorities can do to balance their books in an efficient way. The Government are encouraging such efficiencies, and there is still plenty of scope. For instance, the Liberal Democrat council in Kingston-upon-Thames is investing in a combined heat and power system that will benefit its council buildings and private sector buildings, saving money and carbon at the same time. Cambridge council is protecting and enhancing local shops, which is good for local residents, good for tourists and good for local economic growth. The process is now being incentivised by the retention of business rates.
Oral Answers to Questions
Debate between Clive Betts and Stephen Williams(10 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text
Stephen Williams
I take the hon. Lady’s point, but the transfer of public health from the NHS to local government is a welcome reform by this Government that builds on what was done on public health in her own city by Joe Chamberlain back in the 19th century. It is a major opportunity for local government to address health inequalities, including in cities such as hers.
Mr Clive Betts (Sheffield South East) (Lab)
Both the National Audit Office and the Local Government Association have expressed concerns that unless there is a change of policy, some councils are simply not going to be able to make ends meet over the next two or three years. The Government have powers under section 31 of the Local Government Act 2003 to help councils in that situation, but Ministers have also pointed out that there is potential to use a referendum to increase council tax. Who would vote for an increase in council tax in such circumstances unless the Government make it absolutely clear in advance the criteria under which they will use section 31 powers? Can the Minister tell us what they will be?
Stephen Williams
The Government will make the referendum criteria clear shortly, but council tax bills are a major part of every household’s budget—often far more significant than utility bills—and it is right that, rather than mandating local authorities or imposing caps as previous Governments did, this Government should give those in local government the discretion to raise council tax if they wish while expecting them to go to the people to get endorsement of that decision.