Local Government Finance Settlement

Lord Shipley Excerpts

Thursday 15th December 2016 Lords Chamber

[Lord Bourne of Aberystwyth]

I think that is what the noble Lord said. I wrote it down. In fairness, he then went on to cite the use of the £240 million funds, so perhaps a careful reading of what was said will indicate that one of us is wrong. However, I think he did say that no provision was being made for adult social care. We have allocated £240 million in the next financial year, from savings from the new homes bonus, which is specifically to address what I acknowledge is a serious issue. That, together with the precept and the ability to reprofile the increase in the precept of 3% and 3% then 0%, recognises £900 million additional spending in the next two years. That is a significant amount for what is, admittedly, a serious issue.

I will home in on an area that the noble Lord quite fairly raised in relation to the business rate retention. As noble Lords are probably aware, there will be legislation on this in the new year. It will be introduced into the Commons first and will come subsequently to your Lordships’ House, so there will be more detail about how that will operate well ahead of it coming to us.

[Lord Shipley (LD)]

My Lords, I declare an interest in that I, too, am a vice-president of the Local Government Association. I found the settlement announcement today to be extremely worrying. I think it contains a major mistake in its use of council tax, which is a property tax—and an out-of-date property tax because it needs a number of higher bands. It is being used to make up for a failure by central government to fund adult social care adequately. Despite the extra tax that can be raised, it is still inadequate because there will still be a huge gap between income and expenditure in adult social care. Secondly, councils with a lower council tax base will get less money than councils with a higher council tax base. Thirdly, the settlement will end up leading to further cuts in other services, such as more library closures and reduced levels of service in universal services such as leisure centres that are enjoyed by many local people.

I accept that there was a consultation on the new homes bonus, but it is nevertheless a big worry to see so much money diverted from that to help to fund adult social care. Will the Minister agree to publish the modelling done by the department on the impact of that on individual authorities? I also point out to the Minister that there is no mention in the Statement of planning fees. There is an implicit criticism of local authorities for not building quickly enough, but the constraints on staffing being produced by cuts have meant that there are simply fewer planners in post. It would help enormously if the Government would permit there to be a variation in planning fees to allow local councils to appoint more planners to recoup that cost.

Finally, I associate myself with what was said about business rate devolution. I am in support of 100% business rate devolution, but I am deeply worried by the impact of that on those councils that cannot grow as fast as some others. That is why the fair funding review becomes so important, because we must not end up in a position in which there is full local control of budgets but actually the income for some councils is much lower than they need to run an average level of services that residents and businesses have a right to expect.

[Lord Bourne of Aberystwyth]

My Lords, I thank the noble Lord, Lord Shipley, for his contributions and will try to pick up on the points that he quite fairly made. First, in relation to the equity of the settlement, he will be aware—and perhaps I should clarify—that the £240 million fund available next year will be channelled to authorities in relation to need. I hope that that picks up the particular point he raised.

Planning fees are not mentioned in the Statement because its more laser-like focus is on other issues, but that is something that I hope will be covered in the housing White Paper that will be issued in the new year. Perhaps we can pick that up then.

I note the points made by the noble Lord on business rate devolution. They are quite fair, but I repeat that business rate devolution will be the subject of legislation next year which obviously will be considered in detail by both Houses.

On the fair funding review, I have indicated that the Government are very much committed to this. My right honourable friend the Secretary of State has said that he will report on the review in another place in the new year, and no doubt we will pick it up from there. It is an important part of getting this right, as is health and social care integration, which is key to the whole issue and is being driven forward by the Government.

I come back once again to what I think is a very important point. We want to ensure that the performance of the best-performing authorities across the political divide is picked up across the piece by all local authorities.