Telecommunications Infrastructure (Relief from Non-Domestic Rates) Bill

Rishi Sunak Excerpts

Ping Pong: House of Commons
Tuesday 23rd January 2018 Commons Chamber

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

I beg to move, That this House agrees with Lords amendment 1.

[Madam Deputy Speaker]

With this we may take Lords amendments 2 to 13.

[Rishi Sunak]

It is an honour to begin my first Bill as a Minister. The Government have been and remain relentless in our pursuit of seeing every home in Britain provided with a decent broadband connection. My right hon. Friend the Member for Wantage (Mr Vaizey) is not in his place, which is a first for a broadband debate in this Chamber in recent times, but thanks to the good work he started, by the end of last year around 95% of premises had superfast broadband.

Under the universal service obligation introduced by this Government, every home in Britain will gain access to a high-speed connection within the next three years. That goal is indispensable to creating a cohesive, modern and economically vibrant Britain, and this Bill is another important step in ensuring we achieve just that.

At the autumn statement in 2016 the Chancellor announced a rate relief scheme for new telecom fibre. The relief will apply for five years, retrospectively from 1 April 2017, and it forms part of a wider package of support for digital infrastructure worth £1.1 billion.

The Bill provides us with the powers needed to introduce the relief scheme, and the relief itself will be introduced by technical regulations. In September 2017 we published detailed draft regulations for consultation. My Department is now considering responses to that consultation and is holding further discussions with stakeholders on the details. I am pleased to report to the House that the responses have been very positive, and I can therefore confirm that we will be ready to introduce the relief scheme shortly after the Bill receives Royal Assent.

As hon. Members will recall, the Bill received wide- spread support when it was considered by the House last year, and that support continued through the debates in the Lords. The Lords amendments make a helpful improvement by ensuring the five-year relief period appears in the Bill, as Opposition parties called for and as welcomed by my ministerial colleague Lord Bourne of Aberystwyth. The amendments will give telecom operators the added assurance that the relief scheme will operate for five years.

The amendments will still allow us to extend the period of the rate relief beyond five years, if we wish, through secondary legislation. Stakeholders wished to see that ability retained in the Bill, and it means that if the Chancellor wants to repeat or extend the relief scheme, we can do so quickly without a further Bill but still with the approval of Parliament. As a tax measure, it will of course be for the Chancellor to decide in the future if such a repetition or extension is desirable.

I commend the amendments to the House.

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

I congratulate the new Minister on his promotion. I look forward to working with him on matters of common interest such as local government finance, which is a niche subject that does not always attract wide attention, but it is important, and it is important that we see reform. I made that offer to his predecessor, and most of the issues are not partisan at all. They are technocratic but essential, and if there is room for us to work together, we should seek to do so.

I am pleased to see the Bill return having been amended in the Lords, and I am pleased that the Government have received the amendments in the way they have. As we have seen in our debates, this is not necessarily a subject that gets Members excited or that results in mass attendance, but the people who do attend understand how important it is. This financial relief is intended to ensure that as many parts of England and Wales as possible benefit from high-speed fibre broadband. A financial incentive is an important mechanism for achieving some of that.

We were very probing in Committee and, unsurprisingly, we will be looking to see how the Bill works in practice. In particular, can we ensure that this is not just a tax relief for the big providers and that it gets to the smaller providers, too? Can we ensure it has a net effect on the extension of fibre broadband, or will it basically provide a subsidy for installations that would have happened regardless? Have we been able to reach a position where the providers themselves are satisfied that the Bill goes some way towards balancing the revaluation that they met with a degree of concern? I read recently in the Financial Times that BT and Virgin had hinted at the possibility of considering legal action against the revaluation, and I am interested to know the outcome.

Fundamentally, the Bill does two things. First, it rescues an element of the Finance Bill that fell when the election was called. The Bill contained many important reforms that were not contentious or party political but would have allowed local government finance to catch up with the changing times. I encourage the Minister to look at other provisions in the Bill to see what else could be brought forward to benefit local government.

Secondly, the measure proves that the Government can look at financial incentives for business growth, but business rates, of course, cover a wide range of business activity. It has been a long-standing criticism that we have not yet managed to address the impact of the treatment of plant and machinery, for instance, on business investment in new technologies and in new plant and machinery in those premises.

That has also been a concern on our high streets. When banks and building societies close, they are often the only provider of a cash machine in town. When a local convenience store agrees to take on the cash machine, it generally finds itself in a worse position at the end, despite providing a community service, because the turnover at the cashpoint will count towards its rateable value.

I raise those two points because I think there is a demand in industry and the community to ensure that business rates add value to our communities, rather than detract from them. As we embark on Brexit, we need to ensure that our country is in the most robust position possible to attract investment and ensure that we have strong infrastructure.

Finally, I pay tribute to Members in the other place, particularly Lord Kennedy, who spent a great deal of time on the issue and was involved in amendment 2. Let us see whether it makes a difference on the ground, because we pass legislation here not for the sake of it, but to make a material difference to public policy and the community. I will be waiting with interest to see whether this has a net effect on infrastructure investment.

[Rishi Sunak]

I thank the hon. Member for Oldham West and Royton (Jim McMahon) for his kind words of welcome. He has a long and distinguished track record in local government, and I very much look forward to working with him in the constructive manner he outlined. He made a couple of points that I would like to address briefly. The first point was about who is eligible for the relief. As he knows, it is available for any company deploying new fibre. One of the expectations and hopes for the relief is that it will bring more alternative and smaller providers into the market. We will be watching that closely, as I know he will, because we would all welcome a broader diversity of suppliers.

The hon. Gentleman made a good point about the relief being gamed, and ensuring that it is targeted specifically at new fibre deployments. That was raised in the Commons stages by my right hon. Friend the Member for Wantage (Mr Vaizey), and indeed in the other place by Baroness Harding of Winscombe. I am pleased to tell the hon. Gentleman that, following those exchanges, my Department worked extensively with Gamma Telecom and Ofcom to conduct a detailed study of the potential for the relief to be gamed. The results of that analysis clearly support the conclusion that, based on the evidence available to date, neither the Government nor Ofcom expect the rate relief for new fibre to give rise to gaming in the system. Without going into the details, simply the cost of deploying new fibre, withdrawing dark fibre, opening up the ducts and then reconnecting everything would in almost all cases be more expensive that the saving from business rates.

The hon. Gentleman mentioned other measures in the Local Government Finance Bill and the importance of ensuring that we have a business rates system that supports economic growth. I wholeheartedly agree with him and am keen to use the opportunity for the business rates reset, the revaluation and the fair funding formula to ensure that our financial system does indeed support local authorities in their aspirations to grow their local economies.

I put on record my thanks to Members in the other place and, of course, the officials who brought me up to speed on the legislation incredibly quickly. I also thank my predecessor in this role, my hon. Friend the Member for Nuneaton (Mr Jones), who did so much to get the Bill to the point at which we are in a position to approve it. As I have said, demands on broadband are doubling every couple of years. It is vital that we stay ahead of that need and move quickly to implement the relief scheme that has been promised. I am delighted that we are making good progress on the draft regulations, which will be implemented swiftly. I am grateful to Members in this House and in the other place for the swift progress we have made. This is only one small part of the Government’s strategy, but it is an important one called for by all stakeholders.

Lords amendment 1 agreed to, with Commons financial privilege waived.

Lords amendments 2 to 13 agreed to, with Commons financial privilege waived.

Telecommunications Infrastructure (Relief from Non-Domestic Rates) Bill: EVEL

Rishi Sunak Excerpts

Monday 22nd January 2018 Written Statements

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

I am today placing in the Library of the House the Department’s analysis on the application of Standing Order 830 in respect of any motion relating to a Lords Amendment, for Commons Consideration of Lords Amendments to the Telecommunications Infrastructure (Relief from Non-Domestic Rates) Bill.

Attachments can be viewed online at:

http://www.parliament.uk/business/publications/written-questions-answers-statements/written-statement/Commons/2018-01-22/HCWS420.

[HCWS420]

Oral Answers to Questions

Rishi Sunak Excerpts

Monday 22nd January 2018 Commons Chamber

[Alex Cunningham (Stockton North) (Lab)]

8. What recent discussions he has had with the Secretary of State for Education on outcomes for looked-after children.

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

Like the hon. Gentleman, this Government have high ambitions for looked-after children and care leavers. The forthcoming corporate parenting provisions in the Children and Social Work Act 2017 will ensure high-quality care and support for these vulnerable young people.

[Alex Cunningham]

I welcome the Minister, my near neighbour, to his new post. When will the Government actually provide adequate funds properly to support these special young people?

[Rishi Sunak]

The hon. Gentleman will be pleased to know that, shortly, the Government will announce the winning applicants to their social impact bond to provide funding for local authorities to improve outcomes in education, training and employment for care leavers.

[Lucy Allan (Telford) (Con)]

I, too, welcome the Minister to his position, and I know that he will be excellent in his role. Does he agree that no child should be taken into care if family support would allow them to stay safely at home? What will he do to provide more support to struggling families to prevent children from being taken into care?

[Rishi Sunak]

I thank my hon. Friend for her warm words and wholeheartedly agree that, where possible, children are of course looked after best by their own families. That is why the troubled families programme, in which we are investing £1 billion through to 2020, is working with those families to reduce the need for children to go into care. I am delighted to tell her that the results in December show a decrease in the number of children in need in that programme.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

14. May I remind the Minister that, whether we are talking about children in care or the elderly in care, the real question that he must answer is what has happened to the fabric of social support and care, which has been driven down by local authority cuts over the past few years?

[Rishi Sunak]

This Government are ensuring that local authorities have the resources they need to provide important local services: £200 billion over these five years; a real-terms funding increase over these two years; and £2 billion announced in the last Budget specifically for social care.

[Lilian Greenwood (Nottingham South) (Lab)]

19. What assessment he has made of the effect of the local government finance settlement on the ability of local authorities to meet their statutory responsibilities.

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

Our fair and sustainable financial settlement gives local authorities the ability to protect important local services. It marks the third of a four-year deal, providing funding certainty to local government and a real-terms increase in available resources to the sector.

[Karen Lee]

How does the Minister intend to ensure that, under the fairer funding review, individual local authorities receive an adequate level of funding that is not only fair, but sustainable, given that the Government’s intention to reset the business rates baseline from 2020-21 may result in all the individual growth that has been built up since the start of the business retention scheme being taken away? Can the Minister provide any assurances that this growth will be protected?

[Mr Speaker]

Order. May I gently encourage colleagues in preparing their questions to recognise the merits of the blue pencil? Usually something drafted can be shortened.

[Rishi Sunak]

The Government are piloting 100% business rates retention and have seen extraordinary applications for those pilots, and we are learning from them to design the appropriate system to take over in 2019-20 together with, as the hon. Lady said, a full review of fair funding, so that we can get the allocations right.

[Lilian Greenwood]

This Government have deliberately targeted their cuts at the most deprived communities. Nottingham City Council has lost a staggering 80% of its funding since 2010. Now the Government’s only answer to the social care crisis is to add another 3% to council tax bills. In Nottingham, that will raise just £3 million, which is way short of the extra £12 million the city needs to meet the costs of caring for more elderly and disabled people. When will the Minister stop dumping the financial burden on to Nottingham’s taxpayers and start funding social care properly and fairly?

[Rishi Sunak]

I gently point out to the hon. Lady that core spending power per dwelling in the 10% most deprived local authorities is actually 23% higher than that in the least deprived, and indeed in her local authority, it is 11% higher than the national average.

[Mr Philip Hollobone (Kettering) (Con)]

rose—

--- Later in debate ---

[Mr Hollobone]

I welcome the Government’s best value inspection of Northamptonshire County Council. Will the Minister ensure that the transfer of the fire service out of the council to the police and crime commissioner is not delayed by this inspection?

[Rishi Sunak]

As my hon. Friend knows, the Secretary of State has asked Max Caller to look at the authority, and we await his findings eagerly. It is difficult for me to comment further at this time, as I am sure my hon. Friend appreciates.

[Mr Marcus Fysh (Yeovil) (Con)]

I welcome my hon. Friend to his new post. Somerset, which is underfunded relative to other local authorities, was disappointed not to be part of the business rates pilot. Will he meet me to discuss the upcoming local government finance round?

[Rishi Sunak]

As my hon. Friend will know, we had an overwhelming number of applications for the pilot, and I am disappointed for him that Somerset is not a member. He should encourage his local authority to apply again when we rerun the pilot this year. In the meantime, I would be delighted to meet him to discuss fair funding for Somerset.

[Yvonne Fovargue (Makerfield) (Lab)]

The local government finance settlement descended into a complete and utter shambles last week. The figures sent to local authorities were wrong. Back in March 2017, the National Audit Office was concerned that there was not the capacity within the Department for Communities and Local Government and the Valuation Office Agency to handle the Secretary of State’s plans. This new error will certainly not engender confidence in the Department. What steps are being taken to ensure that the error is not repeated?

[Rishi Sunak]

The Valuation Office Agency made a mistake with the initial calculations. That was corrected and the Department has moved swiftly to provide accurate information to local authorities. I gently point out that overall the error meant that local authorities will receive an increase in the business rates retention forecast for this year.

[Yvonne Fovargue]

The last time we were able to question the Secretary of State, we asked how he planned to address the unsustainable and insufficient funding for children’s services and what he would do about the £2 billion funding gap. He told us to wait and see what happened in the local government finance settlement. Well, we waited and looked at his proposal, but there is no new money for these vital services. Was that another error, and will it be corrected in future?

[Rishi Sunak]

As I have already mentioned, local authorities will receive a real-terms increase in their aggregate funding this year and next. The Government have also invested £200 million in a social care innovation programme to look at ways to improve the delivery of children’s social services.

--- Later in debate ---

[Mr Speaker]

Order. It is very well meaning but topical questions are supposed to be shorter than substantives. That was just as long.

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

Gateshead will receive a 1.5% real-terms increase in core spending power this year and, thanks to the steps taken in the spring Budget by my right hon. Friend the Chancellor, an additional £40 million to fund adult social care in the forthcoming financial year.

--- Later in debate ---

[Rishi Sunak]

The Government recognise the pressure on local councils and are determined to get them the resources they need, which is why there will be a real- terms funding increase for local authorities across the country this year, together with the flexibility to deliver more money for adult social care, in the hon. Gentleman’s council and elsewhere.

[Thangam Debbonaire (Bristol West) (Lab)]

Will the Government please commit to reviewing the situation whereby street homeless people are crossing local authority boundaries, going from one where there is little support to others such as Bristol, where there is a great deal?

Holocaust Memorial Day

Rishi Sunak Excerpts

Thursday 18th January 2018 Commons Chamber

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

I thank the Backbench Business Committee, and I commend my hon. Friend the Member for Brigg and Goole (Andrew Percy) for securing this vital debate. I am honoured that this will be my first speech from the Dispatch Box. I thank my hon. Friend for his warm words, and I hope that I am able to offer the House even half the eloquence with which he spoke this time last year and earlier this afternoon. I agree entirely with the hon. Member for Makerfield (Yvonne Fovargue): it has been a privilege to hear hon. Members from across the House make powerful and—especially in the case of the hon. Member for Leeds North West (Alex Sobel)—very personal contributions to this debate.

This year the theme for Holocaust Memorial Day is the power of words, and that has been demonstrated perfectly in the Chamber today. Like many others, my right hon. Friend the Member for Chipping Barnet (Theresa Villiers) and my hon. Friends the Members for Hendon (Dr Offord) and for East Renfrewshire (Paul Masterton) shared moving stories from their constituents. As the last of those who survived the holocaust are lost to us, the weight of those words, stories and memories only becomes greater. My young daughters’ generation will not have the privilege of hearing about the horrors of the holocaust from those who lived through it, and the task falls to us, and to the young ambassadors mentioned by my hon. Friend the Member for Walsall North (Eddie Hughes), to keep alive the terrible lessons that the holocaust teaches. We must remind a new generation of where the road of prejudice, hatred and dictatorship ultimately leads.

In truth, the words so often associated with the holocaust —“never again”—have too often proved false. Whether in the tragedies of Srebrenica or Rwanda, the violence that stems from prejudice has never truly left us. Sadly, as we heard today, that prejudice is still prevalent. A comprehensive survey by the Institute for Jewish Policy Research concluded that 30% of the UK population hold one or more anti-Semitic attitudes—30%. Anti-Semitic incidents recorded by the Community Security Trust rose by 30% in the first half of last year, to their highest level since the trust began collecting records in 1984.

The truth that the holocaust teaches us is that the fight against anti-Semitism, racism and religious intolerance never truly ends. Every generation must fight it again, and every generation must choose between a common humanity, which is the shared inheritance of all, and the narrow bigotry that sees some as more human than others.

[Ian Paisley]

Does the Minister consider that it would be beneficial to reach out to those young ambassadors and lay on a special reception for them, either at Downing Street or here in Parliament, so that they can be inspired and know that they can go out and advocate with courage, strength, humility and power the words that are necessary to convey this important memory to the next generation? I am talking about people such as Keri Bickerstaff of Bloomfield Collegiate School, and other young women and men who have decided to become ambassadors for this cause.

[Rishi Sunak]

The hon. Gentleman makes an excellent point which I will consider and take up with the right people in my Department and others.

The holocaust did not begin in the gas chambers; it began in the minds of ordinary people—people who, spurred on by Nazi propaganda, allowed spoken words slowly to erode the value of Jewish lives. The story is always the same. From so-called “class enemies” in Cambodia, to the so-called “cockroaches” in Rwanda, the terrible power of words is all too clear.

Education is crucial to fighting prejudice, and I note that many Members of the House have powerful memories of their visits to Auschwitz-Birkenau. For that we must of course thank Karen Pollock, the CEO of the Holocaust Educational Trust, who along with her team is an inspiration to us all. My hon. Friend the Member for Harrow East (Bob Blackman) correctly highlighted the trust’s new initiative to use the Lessons from Auschwitz programme to challenge anti-Semitism on university campuses, and the Government are proud to support that.

We must also pay tribute to the work of the Holocaust Memorial Day Trust and its chief executive officer, Olivia Marks-Woldman, who along with her team delivered the most successful Holocaust Memorial Day to date last year, with almost 8,000 local events. The Government are proud to support and work along these and many other commendable organisations.

It would be remiss of me not to mention a notable absence today, the Prime Minister’s post-Holocaust issues envoy, Sir Eric Pickles, whose passionate speeches those who have attended previous debates will no doubt recall fondly. Sir Eric was the driving force behind the Government’s adoption of the International Holocaust Remembrance Alliance’s working definition of anti-Semitism, making the UK the first country in the world to formally adopt the definition. As we have heard, the Government are also planning to build a new national Holocaust memorial and learning centre, a project that was kick-started with £50 million of funding.

I would like to end by paying tribute to those survivors honoured in the Queen’s new year’s honours list: men and women of enormous courage who have relived again and again their lives’ most painful memories so that we might all learn from them. It is both a great privilege and a responsibility to call such remarkable people our fellow citizens. Having listened to so many outstanding contributions here today, I believe that we remain a nation worthy of that honour and that we remain a Chamber that through our own words will never forget and will play our part in honouring these heroes’ stories.

Local Government Funding: Isle of Wight

Rishi Sunak Excerpts

Tuesday 16th January 2018 Westminster Hall

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

It is a pleasure to serve under your chairmanship, Ms Dorries, in my first Westminster Hall debate in my new role. I congratulate my hon. Friend the Member for Isle of Wight (Mr Seely) on securing this vital debate. In the short time that he has been in Parliament, he has already made an impression as a passionate and committed advocate for the Isle of Wight, and his speech demonstrated exactly why he has that reputation.

I welcome the chance to respond to my hon. Friend and thank him for sharing his knowledge of the Isle of Wight, an island of which I am particularly fond, having grown up just across the water in Southampton—or, as he described it, on the “north island”. His reflections on the Island, which is, as he says, the jewel of southern England, prompted me to recall the summers I spent enjoying all it has to offer to visitors. Just this weekend, while I watched Gary Oldman bring to life Winston Churchill in “Darkest Hour”, I recalled the Island’s Churchill trail. I remembered that, as a child, the former Prime Minster stayed at the home of his friend Jack Seely, and I wondered whether he had any connection to my hon. Friend’s family. Perhaps he will touch on that when he winds up the debate. Regardless, whether it is the Isle of Wight festival or Carisbrooke castle, Blackgang Chine or the Needles, I know just how much there is on the Island to enjoy, to educate and to entertain.

Members may know that today is the last day for responses to the consultation on the provisional local government finance settlement. I will say a few words about that before I come to the specific points my hon. Friend made. Last month, the Secretary of State confirmed the local government settlement, which provides two years of real-terms increases in the resources available to local government. The extra council tax flexibility that we have announced means that total core spending power, which is £44.3 billion this financial year, will rise to £45.6 billion by 2019-20. For the Isle of Wight, that means £132 million in 2019-20, up from £127 million in 2015-16. That represents a 4% cash increase overall, which is double the national average.

Councils know their communities best. They know their priorities, challenges and opportunities. I am aware that my hon. Friend is already looking at ways to raise the Island’s profile, generate jobs and support the tourism industry, and my Department applauds and supports those efforts. Indeed, councils across England are showing that they are capable of finding efficiencies while continuing to provide for their communities. They are playing their part in tackling the deficit, to which this Government remain committed. I am keen in my new role to build on the good work that is already under way. An important aspect of that will be giving local authorities the levers and incentives to grow their local economies. I was delighted to hear that the Solent authorities have been selected as one of the 100% business rate retention pilots for the forthcoming year.

The pilots have proved incredibly popular, with more than 200 authorities having put themselves forward for consideration. I therefore know that the Isle of Wight authority will be excited to have this special opportunity and am keen to see what we can learn from it. It is worth noting that the ability to retain 100% of business rates is estimated to benefit the Solent authorities by up to £3.3 million this year—extra resources that will be welcome and are a due benefit from driving local economic growth.

I turn to the specific points made by my hon. Friend, first and most importantly in relation to the geographical position of the Island. I am grateful to him for comprehensively setting out a number of the key issues affecting his constituency. I have noted carefully his concerns about how we currently distribute the funding available across local government. Clearly, the Isle of Wight’s geography makes the council’s position distinct and creates both opportunities and challenges. My hon. Friend made that point passionately, and it was acknowledged by the former Secretary of State for Communities and Local Government, my right hon. Friend the Member for Tunbridge Wells (Greg Clark), on a visit to the Island in 2016.

It is right that we recognise the specific situation of the Isle of Wight and our other islands in many areas of policy, and not just fiscal policy. What do we intend to do? First, I have asked my officials to continue exploring the various mechanisms in place in Scotland in relation to islands, which my hon. Friend mentioned, with a view to building our knowledge and evidence base. The Department will continue to take steps to inform our understanding of the various factors affecting the cost of delivering services on islands. For that reason, I was delighted to receive copies of the important research undertaken by the University of Portsmouth regarding the Island’s particular situation and potential consequences. Although I am not in a position to comment academically on the report as my hon. Friend asked me to do, it is welcome to have such thoughtful and detailed analysis to help inform the Department’s work. I note that he highlighted several other reports in addition.

I can tell my hon. Friend that this will not be analysis for analysis’ sake. He highlights this issue at a once-in-a-generation time when there is a possibility to do something about it. That is because my Department is embarking on a fair funding review. I reiterate the Secretary of State’s commitment to undertake a thorough, evidence-based review that uses the most up-to-date information available to assess both current and future resources and needs of local authorities. Members may be aware that we issued a 12-week technical consultation seeking views on exactly that at the end of last year. The idiosyncratic island factors we heard about today that drive specific costs are exactly what we need to hear about and consider in formulating a new funding formula.

I urge the Isle of Wight Council to submit any relevant evidence it has alongside other points it wishes to make in its response to the consultation, which we will consider carefully. Furthermore, I will take the opportunity offered by my hon. Friend to meet him and perhaps colleagues from the University of Portsmouth and his local authority to discuss the findings in more detail, as part of future conversations on the fair funding review. More broadly, I will be encouraging input from all Members and representatives from across local government so that we can work together to create an updated and more responsive local government financial system.

My hon. Friend also raised the rural service delivery grant, noting that the Island is not currently a recipient. That is, as he said, due to the particular sparsity methodology it uses. We recently announced that the grant will be funded through increased business rate retention from 2020-21, when we aim to implement our fair funding review, which will redistribute business rates across the sector. He may well have given us a good example of why we need to revisit the underlying basis for relative needs allocations between local authorities, as many of the formulae have not been updated in more than a decade.

Similarly, my hon. Friend made the point about population growth, particularly in the age categories that drive social care. As I have discovered in the past week, the formulae we currently use are relatively old and do not dynamically take into account changing populations, which his council is experiencing. As I have said, the review is looking afresh at how we take such key factors—rurality, remoteness and population growth—into account. I therefore welcome Members’ support in helping us to deliver an outcome that is robust, collaborative and evidence-based. This is the perfect time to shape the discussion, with our consultation currently live.

My hon. Friend mentioned the local government finance settlement. As he knows, we are three years into a four-year deal that provides funding certainty for those councils that published efficiency plans. I am delighted that the Isle of Wight took up that offer. We recognise the pressure faced by all local authorities, particularly in the light of pressures in areas such as social care. That is why, subject to Parliament’s approval, the Government will increase the core referendum principle. As a result, the Isle of Wight specifically will have the flexibility to increase its council tax by up to 6% this year, delivering funds of up to £4.9 million.

I understand that the council is awaiting responses to its consultation on the 2018-19 budget and that there is to be a public meeting today with members about how best to allocate funding. It is good to see the Island’s community steering the council’s vision on issues such as partnership working, adult social care and housing. I look forward to receiving the council’s response to the provisional settlement. My officials will look carefully at that and consider all the responses ahead of the imminent final settlement in a few weeks.

On devolution, the Government are committed to empowering local authorities and rebalancing the local economy through local devolution and growth deals. We know that devolution can bring multiple benefits, including more accountable and effective institutions at the right scale, but I note my hon. Friend’s points. It is clearly important that we work towards a model that works for each individual area. I understand that the Minister for Local Growth, my hon. Friend the Member for Rossendale and Darwen (Jake Berry), is visiting my hon. Friend’s area in March, and I look forward to hearing about those discussions.

Lastly, on infrastructure, skills and business support, I recognise that my hon. Friend has an inspiring vision and strong ambitions for the constituency he represents so proudly. It is right that Government do their best to support those aspirations. I am pleased to note that the Government have supported investment in those areas on the Isle of Wight through the growth deal awarded to the Solent local enterprise partnership. Through the LEP, £14.7 million of funding has been invested locally, through the centre of excellence for composites, advanced manufacturing and marine at the Isle of Wight College and the Floating bridge at Cowes. The LEP has also invested £750,000 of regional growth funding, which was used to set up the rural business fund. All of that will help contribute to the Island’s economic growth, leveraging private investment, creating jobs and assisting the rural sector.

Again, I thank my hon. Friend for calling this important debate and for bringing these issues to my attention so early in my tenure. He is right to be ambitious for his Island and to fight for it to get the consideration it deserves. I look forward to working closely with him in the coming months to address the challenges and opportunities he has highlighted.