Local Government: Finance Settlement
Debate between Baroness Hanham and Lord Bishop of Liverpool(11 years, 3 months ago)
Lords ChamberRead Full debate Read Hansard Text
The Lord Bishop of Liverpool
To ask Her Majesty’s Government what steps they are taking to ensure that financial settlements for local government funding are fair.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)
My Lords, the Government have proposed a fair settlement for 2013-14 and 2014-15. Each local authority’s baseline funding level and the calculation of its tariff and top-up are based on figures that take account of the different needs of each area. The settlement allows local government to keep nearly £11 billion of business rates and keep the growth on that share of business rates, providing a direct financial incentive for councils to deliver growth.
The Lord Bishop of Liverpool
My Lords, I thank the Minister for her Answer, and I assure her that my Question arises out of very genuine pastoral concern. Can the Government not think again in the interests of greater fairness and make more allowance for the highest levels of deprivation in both rural and urban areas? For example, in Liverpool there is to be a 52% cut in services over four years, which will directly impact upon services to mentally ill children, vulnerable families and the elderly housebound.
Baroness Hanham
My Lords, I know that the right reverend Prelate is very involved in the discussions that are taking place about settlements and the various levels of deprivation. I believe he held a conference last week that addressed this important subject.
However, the methodology that has been used and is set out in the formula funding document, which has been out to consultation several times, takes account of deprivation and the high cost of providing services in areas that have high deprivation, where local authorities have a low ability to raise funding. Such authorities will receive more funding than authorities with a low cost of providing services and a high ability to raise funding locally.
Local Government: Big Society
Debate between Baroness Hanham and Lord Bishop of Liverpool
Baroness Hanham
The Government are not in the business of regulating local authorities on these matters. It is for local authorities themselves to come up with sensible and sustainable answers. Not every local authority is finding itself in trouble. Many local authorities have recognised the value of the voluntary sector and are determined to continue to support it in all the ways that they can. We should not be too disheartened by all this because, as I say, there is a complete recognition that the voluntary sector is of great value.
The Lord Bishop of Liverpool
Is the Minister aware that there are those who believe in the big society concept and who also understand the need for fiscal responsibility, but who nevertheless believe that there is an unevenness in the distribution of finances across the country and in particular the financial settlement with local authorities? Will the Minister be prepared to look again at the financial settlement to ensure that there is a fair and just treatment of local authorities right across the country?
Baroness Hanham
My Lords, we are not really on the subject of local government spending at the moment. We have had several discussions on the finance settlement. All I can say is that that finance settlement was demonstrated against a formula, the relative-needs weighting was increased so that money followed socioeconomic indicators. Banded floors were put in place so that the most dependent authorities got the smallest cuts and social service authorities and shire district councils were grouped together in four bands reflecting their relative reliance on central government grant. The right reverend Prelate’s view would suggest that the Government have not taken the greatest possible care with the local government finance settlement in these very difficult circumstances, and that is not the situation.