Simon Hoare
Main Page: Simon Hoare (Conservative - North Dorset)Local Government Funding: Rural Areas
Simon Hoare Excerpts
Simon Hoare (North Dorset) (Con)
It is a great pleasure to follow the hon. Member for Workington (Sue Hayman), who said not a word with which I could possibly disagree, and who underscored in not only what she said, but how she said it, the point my hon. Friend the Member for Beverley and Holderness (Graham Stuart)—I thank him, on behalf of everyone in the House, for securing the debate—made in his opening speech: this is not a debate about party politics or affiliation; it happens to be a debate about geography. It is a debate about something that we would all hope underpins everything that any Government do: to strive for equity and fairness.
As a new Member of the House, I rise more in sorrow than in anger. I am disappointed that I find myself incredulous about the proposals that has been outlined for my county of Dorset. I have a bit of form in this regard. About nine years ago the leader of West Oxfordshire District Council—I lived there at the time—called me up and asked me to join his executive committee. I said yes, but I thought to myself, “So long as it has nothing to do with finance.” He then asked me to take the resources portfolio, so for seven years I struggled with the budget. We were all very sensible about it, as I believe most local government—particularly, though not exclusively, Conservative local government—has been in helping the Government of the day respond to the pressing financial challenges and the huge black hole in our national finances. Therefore, those of us who rise with concern about this settlement do so not like an ostrich with its head in the sand—we are not ignorant of the pressures on the Treasury—but because we are keen to ensure equity and fairness for our constituents.
Victoria Atkins
Will my hon. Friend allow me to demonstrate exactly what he has just said by giving the example of East Lindsey District Council? It is a Conservative council that has tried to look ahead and has planned and saved because it suspected that central Government would make funding decisions that would lead to a lower allocation. Those in the council have done their best, but with the latest funding settlement they are holding their heads in their hands and asking what more they can do.
Simon Hoare
My hon. Friend is absolutely right. She sets out a repeating pattern of change and evolution that we have seen in local government, and my hon. Friend the Member for The Cotswolds (Geoffrey Clifton-Brown) will know of the work that his council did with my old council. Let me give an example of what North Dorset District Council has done. It is a low-spending, low-taxing, Tory-controlled, rural shire district council. It has been on its efficiency journey for well over 10 years, during which time it has developed a mixed economy of services, transferring some services to community groups and town councils. For example, Blandford Forum Town Council chips in £50,000 for the running of the town’s leisure centre, which just a few short years ago was the sole preserve of North Dorset District Council. It has transferred other services to commercial operators. Its final asset—the last jewel in its crown—is the council office site, and it has already agreed to dispose of that as part of its survival campaign.
North Dorset District Council is part of the Dorset councils partnership, which is the only tri-council model in the country, covering the constituencies of my right hon. Friend the Member for West Dorset (Mr Letwin), my hon. Friend the Member for South Dorset (Richard Drax) and myself. We share a chief executive, a senior leadership team and staffing with two other local councils. When the district council started this journey we had 300 members of staff, and we now have 100. This is not about arguing for the status quo; it is about arguing for fairness.
Mrs Sheryll Murray
My hon. Friend mentioned the funding settlement, and I understand about the level of funding, but does he not welcome the four-year budget plan that now gives councils at least the opportunity to plan ahead?
Simon Hoare
No, and for reasons that I will explain to my hon. Friend in just a moment.
If I took Members to my North Dorset constituency—this echoes what my hon. Friend the Member for Beverley and Holderness, the hon. Member for Workington and others have said—they would see that it looks lovely, and it is lovely. But we have poor public transport, notwithstanding the excellent service that Damory tries to provide with the budget it receives from the county. The majority of my residents are retired. We have poor and patchy broadband. We have an historical low skills base. We have a poor road infrastructure. One of our straplines is, “Come to Dorset; there are no motorways.” Forget motorways; we have no dual carriageway in my constituency. Indeed, a passing place on a B road is greeted like an oasis in the desert. Access to affordable housing is constrained. The average salary of a vast number of my residents is well below the national average—the national average is about £24,000, but in my constituency it is about £17,500. A large number of my constituents are tenant farmers, or those associated with agriculture, living in tied accommodation.
Therefore, although those wonderful rolling hills and green pastures of the Blackmore vale look enchanting, and while the area of outstanding natural beauty of the Cranborne Chase is indeed beautiful, there are pockets of deprivation in those rural areas, for example in Blandford Forum, Shaftesbury and Gillingham, and for some unknown reason no wise expert in either the Treasury or the Department for Communities and Local Government can find a perfect mechanism for measuring that rural deprivation. That is a huge gap in how we approach the settlement.
James Heappey (Wells) (Con)
My hon. Friend is speaking with his customary eloquence. I simply rise to add to his list of challenges. It is not just public services that challenge us; the inability to access banks and other amenities means that people in our communities have to travel that bit further to do their banking or grocery shopping, and that all adds to the cost, particularly when it comes to public transport.
Simon Hoare
My hon. Friend is absolutely right. He can add to that litany the fact that something as simple and mundane as a waste collection service costs far more in a rural area than it does in an urban area. It is far easier for a large rubbish truck to trundle up and down the terrace streets of Cardiff, Bristol, Manchester or Birmingham than to go up hill and down dale, and from one house here to two farms there, so it is more expensive. The costs of getting children to school on transport provided by the county council is higher. The cost of everything is higher. It costs more to heat homes, because they all predate cavity wall insulation, and because conservation area status and listed buildings simply preclude double glazing, solar panels and the like.
At every step, when we analyse it in the cold light of day, there is precious little reason to live in a rural area today. The difficulties are compounded when a Conservative Government who had had at the heart of their manifesto the firm commitment, on which I certainly stood, of rural-proofing these things, free from the fetters of the yellow peril of the Liberal Democrats—[Hon. Members: “Hear, hear!”] The House is free of it now, too. The Government are now suddenly appearing to shirk the task that Conservative Members wish them to undertake.
Let me deal with the three things that I find particularly irritating within the proposed settlement and pick up the point made by my hon. Friend the Member for South East Cornwall (Mrs Murray). If only Dorset County Council had four years to deliver the medium-term financial strategy that it had planned—the £13 million-worth of savings that it had identified—but Dorset, like Buckinghamshire, has been given two years, and then its revenue support grant disappears. That is why I am afraid I cannot welcome what my hon. Friend asked me to welcome. East Dorset District Council, in which part of my constituency falls, sees its RSG disappear after one year. With no prior warning, no consultation and no advice, its medium-term financial strategies are now shredded.
That is unfortunate, because the local government of Dorset was significantly reviewing what it did. Exciting proposals were coming forward and a vivid debate was going on about large unitary districts, a combined authority and so on, all with the expressed aim of helping my hon. Friend the Minister and my right hon. Friend the Chancellor achieve what we all want to see—economic efficiency, with services delivered at the best possible price for the council tax payer. All those potential proposals have had to be put on hold while a reduced officer corps desperately tries to focus on which service is more, or less, important and must not just have the fat trimmed off—we have gone through the surface of the bone and, in some instances, are sucking out the marrow.
Michael Tomlinson (Mid Dorset and North Poole) (Con)
My hon. Friend and neighbour mentioned east Dorset, part of which falls within my constituency, but he is making a very good case for Dorset as a whole. Does he agree that we are not calling for special favours for Dorset, but simply for fairness, and that the aim should be to reduce the inequality rather than increase it?
Simon Hoare
My hon. Friend is absolutely right. This is not special pleading. We are not saying, “Do this because these rural areas all, or broadly, vote Tory.” This is not some sort of banana republic in central Africa where the governing party’s Members of Parliament have more of the lion’s share because they are of the governing party. All we are asking for is equity and fairness—for the same rules to be applied across the piece.
Neil Parish (Tiverton and Honiton) (Con)
My hon. Friend is making a very strong speech. Rural areas, particularly the rural counties, many of them Conservative controlled, have made these reductions to their budgets and run a very prudent house. In Devon, we are cutting back by £28 million. We have had a £2 million increase, and that is welcome, but when the budgets of inner-city and metropolitan authorities are being increased, it is time that we had a greater redistribution. As he says, we now have these seats in the south-west, and across the country, and we expect a really fair deal. Because of roads, transport and schools, we do need that extra money.
Simon Hoare
My hon. Friend is right. His comments have the extra weight of his being Chairman of the Environment, Food and Rural Affairs Committee.
The Minister should be clear that this settlement will create some jobs as local government sheds yet more staff and services are cut. I expect to see job advertisements for local government commissioners appearing in lots of publications, because a number of chief executives and leaders will be seeking, in effect, to hand the keys back to the Department, saying, “Look, pal, we have tried our best. We have done what we think we can. We can make no further cuts, hand on heart, without thinking that our electorate and our residents will be unduly hurt.”
Geoffrey Clifton-Brown
As my hon. Friend said, many of our rural councils have done exactly what the Government have asked. In Gloucestershire, four district councils now share back-office services. We share a chief executive. We have a common Gloucestershire-wide rubbish policy. We share business rates and second home bonuses. We have become super-efficient, yet we are one of the hardest hit local authorities, and we now have very little left to cut.
Simon Hoare
My hon. Friend is right. He amplifies a golden thread that has run through the debate.
I have two further points that I urge the Government seriously to reconsider. The Care Act 2014 implementation grant has hitherto always been free-standing of the RSG—a little bit of icing on the cake. The proposed settlement rolls it into the RSG, and that seems rather unfair. I am happy to stand corrected by the Minister, but it is certainly the collective view across local government in my county that, in essence, the strategy that the Department is setting out has a counter-Conservative mindset whereby every single year council tax will have to increase by below whatever the capping figure is prevailing at the time, so arguably 1.99% today, and that the ring-fenced and extremely welcome—we are grateful to the Chancellor—2% hypothecation for social care will have to be year on year. I urge the Minister to unravel the knitting that the Department has done in meshing the grant with the RSG.
On the implied and presumed increase in council tax, the insult is compounded still more by the situation, as we understand it, on business rates. We cheered my right hon. Friend the Chancellor to the rafters in Manchester just a few short months ago when he gave ground on the localisation of business rates, which local government had been campaigning on for many a long year. I hope that the Minister will be able to clarify this, but our understanding is that while we will be allowed to set it and will continue to collect it, the centre will determine how much of it we retain and top-slice or cream off that which it believes we do not need in order to underpin and subsidise other, less efficient, authorities. That is, in itself, an insult, but when we add the factored-in, year-on-year increase in council tax of at least 3.99%, things start to get very tricky.
As my late and noble Friend Baroness Thatcher would have said to those three points, taking off her glasses with a sweep, I too have to say to the Minister, “No, no, no.” The increase of the rural services delivery grant to £65 million is welcome but way south of the £130 million that the network believes is required. It might just about make a fig leaf for a dormouse but will not add up to anywhere near what is required to service rural local government.
I have some questions for the Minister, for whom I have personal liking and huge respect. I do not envy him his position as he sits like Daniel in the lions’ den with the lions not having been fed for many a long month. The questions boil down to this: where is the equity in this proposal?
Andrew Bridgen
My hon. Friend is making an impassioned speech. The people of Leicestershire roared at the prospect of business rate retention, and the settlement for Leicestershire suggested full retention by 2020. The combined Government grant for local and county councils in Leicestershire is £136 million a year, and our current business rates are £226 million a year—a difference of some £90 million a year. I would be interested to hear from the Minister how soon we will be able retain those extra funds, especially given that North West Leicestershire has Coalville, which is the most deprived town in Leicestershire. North West Leicestershire is vibrant and has high economic growth. We have produced 23% of all the county’s business rates and we need those funds for the regeneration of Coalville. If that does not happen, we will be very disappointed indeed.
Simon Hoare
My hon. Friend makes a valid point and he can speak about Coalville with more detailed knowledge than I can. The underlying point is that there seems to be an incorrect assumption that Tory taxes in Tory shires will have to go up in order for Tory business rates in Tory areas to be relocated to other areas. That is a kick in the teeth and I fail to grasp the logic.
Why is the sparsity grant being back-loaded rather than front-loaded? The money is needed now. We are a two-tier county and the figures for Dorset County Council alone show that it loses 43.3%. The planned reduction was 30%, so it is not as if we did not expect some reductions, but 43.3% seems particularly high. I met district council leaders on Friday and they said that they are being led inexorably to the view that Her Majesty’s Government must have a vision for the reorganisation of English local government, but they have not quite worked out what it is yet, and that they are starving them into a form of submission.
Importantly, I welcome the fact that, for the second year running, the Government have delivered the £5 de minimis increase in council tax under the capping regime. If North Dorset takes advantage of that, it will give us an extra £160,000 a year. If we go with 2%, it would give us only £60,000 a year. I invite the Minister to give serious consideration to embedding the de minimis approach in future thinking.
Could we also end the cat and mouse game—it takes place every year—of, “Will they or won’t they cap the town and parish councils”? It is like baiting the lower tiers of local government. Blandford Forum Town Council in particular has made that plea to me. It wants to step into the breach, as evidenced by the 50 grand it is stumping up to help run the local leisure centre. It wants to help fill the vacuum, but at every step and turn it, too, feels constrained, because it does not know from one year to the next whether it will be capped.
North Dorset District Council’s Conservative leader, Deborah Croney, and its chief executive, Matt Prosser, have asked me whether the Minister will consider giving local control over matters such as local planning fees. At present, the council subsidises its planning function with some £600,000 a year, because of the complexity of planning and the very small fees it is able to set.
Graham Stuart
I have a word of warning for my hon. Friend. I would not wish too strongly for the Government to be given licence to put up council tax and fees even more, because our residents already pay substantially more, even though they are poorer and older. The central feature of the proposed settlement is to stick up an already overly high council tax rate by even more, while subsidising urban residents who are richer and pay less.
Simon Hoare
I find myself pained, because I disagree not only with the settlement, but with my hon. Friend. Although he is absolutely right to say that this should not become a new cash cow for local authorities, surely to goodness most planning applications are either for very large-scale schemes—I speak with some authority, having been involved in that area for a number of years, and am pretty certain that such schemes could absorb a proportionate increase—or for domestic planning applications that will add value to the property. If someone is having an extension built, they will pay a fee of £120 and then possibly add £10,000, £20,000 or £30,000 to the value of the property, so there could be a small increase to the fee. If we believe in the narrative of localism, that would help local councils to set their own agenda.
I have been asked whether the settlement and subsequent measures take into account both the increase in the national minimum wage and the living wage, both of which are welcome. Frankly, I do not know the answer to that, so I ask it as an open-ended question. At a time of significant reduction, when costs are going to go up, that will be a difficult situation. I have already said that the costs of delivering services in a rural area are, by definition and de facto, more expensive than they are in urban areas. The impact on adult social care, particularly in a constituency such as North Dorset, which is predominantly, though not exclusively, peopled by the retired, would, I fear, be lamentable. I fear for the future safety and security of many of my residents, many of whom will live in what Douglas Hurd used to describe as slight decayed gentility, afraid to ask for help but certainly needing it. I fear that all of us are likely to face a tsunami of headlines, both local and national, concerning elderly vulnerable people who have been caught in this unappetising pincer movement of a reduction in income and being left in their own homes and to their own devices.
Simon Hoare
In a moment. The Government have been absolutely right to pursue a policy that says that adult social care, particularly of the elderly, is best delivered in the home, not a home, but the reduction in the moneys available to county councils to deliver adult social care turns that welcome policy firmly on its head and renders it undeliverable.
In summary, this is a very poor and disappointing deal for my county of Dorset. My residents and councillors, and the officers who work flat out in my county and district councils, are only asking for equity and fairness. The current proposal delivers neither. It would reduce local government to being neither sustainable nor deliverable. In its current form, I cannot support it.
Mrs Murray
I completely agree. Cornwall Council seems to be taking revenue from its revenue-raising amenities, but offloading the costly amenities we provide in tourist areas on to town and parish councils.
Simon Hoare
Does my hon. Friend share my view that when town and parish councils take on public conveniences, it would be enormously helpful if they became exempt from business rates?
Mrs Murray
That is another thing I fully support. If we are providing a public facility, we should at least help town and parish councils to run them—but I digress.
Councillor Toms has claimed, of the whole issue of car parks:
“With the last minister saying that he would do something about this I was wondering what the new minister will do. Can you ask and see what can be done because there is a problem and coastal towns are being hit?”
It is important to find a funding solution for our transport issues in rural areas, rather than to slam these costs on to the motorist time and again. I have some sympathy with the Minister. As a councillor in the early 2000s, I saw the effects on rural areas of the changes made by the Government of the time, and we must rebalance those changes, although I appreciate that that will take time.
I remind the Minister that many people see the car as an essential in rural areas. I certainly could not do my job without access to one. I ask him simply to evaluate these important issues and to reflect on them when he considers local government funding.
Simon Hoare
These are simple questions that require a yes or no answer, and the hon. Gentleman cannot hide behind the obfuscation that he wants to see fair funding. Does he believe that the allocation of funding should be done on a fair and equitable basis? Does he believe that the gap between rural and urban authorities should be closed? Yes or no?
Mr Reed
I am afraid that I can insist on fair funding. I believe that when resources are available, they should follow need. Unfortunately, that is not what is happening under this Government. I spent a few happy days in the hon. Gentleman’s constituency over the new year—I spotted a marvellous picture of him on the notice board in Milton Abbas—but I understand that such areas are suffering because the Government have not managed to get this right.
Previously we have heard the Government talk about an alleged improved funding settlement for rural areas, and perhaps we will hear that again from the Under-Secretary of State for Communities and Local Government, the hon. Member for Nuneaton (Mr Jones) this evening. That is not what we have been hearing from his own Back Benchers today, however. The Government have been trying to play off poorer rural areas against poorer urban areas, but this cannot be a race to the bottom. This should be about helping communities in every part of the country to thrive.
Simon Hoare
I am enormously grateful to my hon. Friend. The four-year period to reduce and remove the RSG is understood across the local government piece. Will he advise me what I can say to Dorset County Council, and indeed what colleagues from Buckinghamshire can say to their county council, about what happens in two years’ time when the RSG disappears? All their budgetary planning is now shredded.
Mr Jones
That brings me back to why we introduced a four-year settlement. In a moment, I wish to talk about the move to full business rate retention. Hopefully, within those comments, I will be able to reassure Members that, at this point, it is by no means a done deal.
We have given careful consideration to the challenges that rural areas face. That has led us to propose an increase in support for the most sparsely populated rural areas by increasing the rural services delivery grant from £15.5 million this year to £65 million in 2019-20.
As hon. Members know, the new homes bonus was due to come to an end, but our view is that it has been a useful contributor to the increase in planning permissions being granted, with payments since its introduction in 2011 totalling just under £3.4 billion, reflecting the building of more than 700,000 new homes and the bringing back into use over 100,000 empty homes. We have been able to retain the new homes bonus, subject to reforms on which we are consulting and on which views are being encouraged.
Overall, our proposals are fair. Core spending power for councils will be virtually unchanged over the Parliament—£44.5 billion in 2015-16, and £44.3 billion in 2019-20. This is a substantially slower pace of spending reductions than councils had to deliver between 2009-10 and 2015-16.
The rural-urban funding gap has been falling year on year. Between 2012-13 and 2015-16 it went down by over £200 million, decreasing from 11% to 6% for unitary authorities and from 19% to 11% for districts. Our proposals mean that it will continue falling throughout this spending period, and core spending power will increase by 0.2% for rural areas, compared with a 0.7% reduction for urban areas, by the end of the Parliament.