Oral Answers to Questions
Debate between Chi Onwurah and Brandon Lewis(10 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
11. What assessment he has made of the adequacy of the discretion given to local authority officers in the national planning policy framework.
The Minister of State, Department for Communities and Local Government (Brandon Lewis)
Our planning reforms and locally led planning system have given more discretion to local authorities—to members, and through them, to local communities—especially when preparing local plans that identify where development should and should not go. Wherever possible we want local authorities to make decisions about their local areas.
Chi Onwurah
On Friday, following a concerted campaign by local residents, Newcastle city council exercised that discretion and rejected an application recommended by officers to site a two-storey McDonald’s drive-through opposite the city’s largest school at the northern gateway to our city. Does the Minister agree that the spirit of localism is best served by McDonald’s respecting democracy and not appealing?
Brandon Lewis
The hon. Lady will appreciate that I cannot comment on a particular planning application, but she is right to say that local democracy means that local decisions should be made by local members of local council authorities.
Oral Answers to Questions
Debate between Chi Onwurah and Brandon Lewis
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
T7. Residents, constituents and firefighters from across Newcastle are writing to me shocked and angered by the proposed closure of Gosforth fire station. Before the Prime Minister was elected to office, he promised that front-line services would not be impacted, but this Government are cutting Tyne and Wear fire authority’s budget by 23% by 2017. How on earth does the Secretary of State believe it can lose a quarter of its funding without that having an impact on front-line services?
The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis)
This body has had a cut of a couple of per cent. in spending power for each of the past couple of years, and has built up its reserves and been able to spend that on extra training facilities when the Government already have a training facility. The hon. Lady should put pressure on that fire chief to make sure he is making his decisions based on local risk. The local risk decision is one that only the local fire service can make.
Local Government Finance
Debate between Chi Onwurah and Brandon Lewis(10 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Brandon Lewis
I thank my hon. Friend for raising the important issue of damping. I know that hon. Members have differing views about it, but it means that we can have stability in the baseline. It also recognises need as we move towards a new system, the business rates retention scheme, which I will turn to in a few moments.
Councils can become masters of their own destiny in other ways. The new homes bonus rewards councils that have increased the local housing supply, helping them to meet the needs of a growing community. In 2014-15, the new homes bonus will be worth £916 million, which is money for councils to spend as they see fit. Those authorities that have had an increase in their funding—Members have mentioned some of them—have had that increase because they have done the right thing: they have built more houses, and they have got more money for doing so.
The business rates retention scheme has revolutionised the potential to grow local economies, and has given councils a hand in their success. Under the previous Government, councils did not get to see that money—£11 billion in business rates—that they can now retain. Councils sit on a total of £230 billion of assets, and we must do more to turn those assets into better services for local people.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
The Minister has talked about giving councils greater control over their spending, which has been reduced hugely—for example, Newcastle has lost £100 million—and about the new homes bonus, which is top-sliced from councils’ money and then controlled by this Government. How does he reconcile the Government’s apparent liberating of councils with their control of councils’ money?
Brandon Lewis
As we have said before, the Government are moving to a different system, in which councils are incentivised for doing things. The new homes bonus is a good example: if they build houses, they will get more money. Councils that need more support with creating or changing to cutting-edge services will now be able to use up to £200 million from asset sales to pay the one-off costs of service transformation.
The autumn statement protected local authorities from further cuts to services by setting out a two-year settlement, so allowing councils to plan for the longer term and to have stability in the services they provide to taxpayers. This year, we are publishing illustrative figures for 2015-16 to enable councils to do that.
As was announced in the spending round, £3.8 billion will become available from the better care fund in 2015-16. That touches on a point made by the right hon. Member for Salford and Eccles (Hazel Blears). The better care fund is a real opportunity for local authorities. It will give our civic leaders a once-in-a-lifetime opportunity not only to encourage better working between their local NHS and social care services but, importantly, to change for the better the lives of the most vulnerable people in our communities. Such a stable platform for forward planning, which is part of our long-term economic plan, will provide councils with the scope to merge back offices, to tackle fraud and to save £2 billion. Improving council tax collection will help to bring in the outstanding total of £2.4 billion in uncollected council tax. Our proposals put councils in charge of their finances and, for the first time in the history of local government finance, give them a direct stake in the success of the local economy.
We recognise the crucial role that councils can play in helping with the cost of living. We have offered councils support so that they can freeze council tax bills, despite the fact that those bills doubled under the previous Government. Since 2010, council tax bills have fallen by an average of 10% in real terms. The total freeze funding up to 2015-16 is £5.2 billion. That is a serious commitment by the Government to help hard-working families. Over the lifetime of this Parliament, the average band D taxpayer could save up to £1,100 thanks to our council tax freeze. The Chancellor has agreed, as he has in previous years, to put the next two years of funding into the baseline. That eliminates any risk of a cliff edge and offers the maximum possible certainty to councils.
Everyone in this House should expect councils to do their bit for hard-working families. They must recognise that they have a duty to take up the freeze offer. Councils that do not accept the freeze and instead want to raise bills by 2% or more may do so, but only by holding a binding referendum. We believe that that strikes the right balance between direct and representative democracy. I say to all councils, take the freeze. If they do not do so, but want to avoid a referendum, the increase will benefit them to the tune of just 0.9%. My message to councillors who are considering that is to go back and push their officers to deliver more for their residents. We have given local electorates the power to veto excessive rises through a referendum. Councils should trust the people if they are confident that they have a case for putting up taxes.
Local Authority Funding
Debate between Chi Onwurah and Brandon LewisWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
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Brandon Lewis
I will come to the issue outlined by the right hon. Gentleman, but I remind him that the independent report, which is in the Library, outlined that this year’s settlement was fair to areas in the north and south, rural and urban. It is important to remember the legacy that we inherited. My area—Great Yarmouth—is in the east and, thanks to the previous Government’s policy decisions, was left with a £3 million black hole, which this Government have had to fix. When we talk about spending power, we must remember that a Labour Government left my local authority with what would have been a 20% cut in spending power in one year— something this Government have had to deal with.
The hon. Member for Corby (Andy Sawford) mentioned councils such as West Somerset. He might like to do a bit more research and homework on what is going on in West Somerset and look at the work it is doing with its neighbours, on which I congratulate it. More and more small district authorities are moving to ensure that money on the front line is not spent on bureaucracy and red-tape administration. Many small district authorities particularly have budgets of under £20 million and should be looking to share management and chief executives to ensure that their taxpayers’ hard-earned money is spent on the services that we all want and not on bureaucracy and red tape. It is logical for authorities to do that. Instead of using childish language such as “takeover”, Labour Members should realise that this is about working in partnership and with efficiency for the benefit of local people.
It is important to understand that there has been a landmark change for local government this year. After years of doffing their caps to Whitehall, all councils now have the ability to control their own destiny. In the midst of the clamour of deficit denial and doom-mongering from some people, that message is in danger of not being heard. The size of the deficit and the debt must be dealt with, and local government is one of the biggest players in the public sector.
I want to make it clear to hon. Members that the current settlement and the one that we will soon propose for 2014-15 are fair to all—the north and the south—as the Library outlined. The hon. Member for Newcastle upon Tyne Central referred to what will happen next year, and I hope that she appreciates that we are only a couple of weeks from next year’s assessment, so she will not have to wait long for the details.
Chi Onwurah
I urge the Minister to focus on the key point of this debate, which is that money is being held back from local authorities and redistributed. He said that local authorities can take their destiny into their own hands and drive forward, but that necessitates imposing no such holdbacks in future. Will he confirm that?
Brandon Lewis
The hon. Lady’s point highlights where we are. The current structure for local government is that councils will benefit and see their income rise as a reward for the good work that they do for their communities. I will touch on that directly.
Manchester, Liverpool and Newcastle all have higher spending power per dwelling than the national average. When talking about what local areas have, it is important to put that in the context of the starting point. The average reduction in spending power is only 1.3% this year and we are protecting individual council tax payers by offering a council tax freeze. We are protecting councils through the rates retention scheme’s safety net, which generates a minimum level for their baseline funding, which Newcastle will benefit from, although it was unable to do so previously.
The settlement is fair because even for councils like mine, which now benefits from the efficiency support grant, we have provided protection for those who were hit worst by the policy decisions of the previous Government, and that brings me to the important point of how the system now works in a council’s favour. Following the Localism Act 2011 and financial reforms to the settlement, 70% of an authority’s income is raised locally and, most importantly, the growth incentive ensures that local government will keep up to 50% of all the growth that it generates. Councils have more power than ever before, but they must understand the implications. They must act in their residents’ best interests and work hard on their behalf. Redesigning council tax benefit to cut fraud, which costs around £2 billion, promoting local enterprise and getting people back into work, or redesigning services to make them more efficient and sustainable, especially as there are still savings to be had across the sector, all make a difference.
Some cutting-edge councils understand that and lead by example in developing good practice for the rest of the country to follow. Getting the ball rolling can be the hardest part of radically overhauling local services. The Government established the transformation challenge award to help councils, particularly small ones, to demonstrate innovation, to protect services and to reduce costs to the taxpayer. Just a few months ago, I was pleased to announce 18 successful schemes, including projects to accelerate the integration of local health and care services, which hon. Members have outlined this afternoon, and to create shared finance and human resources for emergency services.
The £3.8 billion that is coming across from the health service to be part of the local government family to provide adult social care is an indication of the work that follows on from the community budget pilots. That transformation touches on the point that the hon. Member for Corby made and is an important way to bring the public sector together and to drive out duplication and provide better services. We know from the community budget pilots that up to £20 billion of savings can be found across the public sector if we can get the work done correctly throughout the country. More importantly, they have shown better services for residents and more effective service delivery.
Brandon Lewis
The whole point of the change in the structure of local government finance is that council finance is partly in councils’ control. That is why 40 authorities have had an increase in their income this year alone. Today, a Labour authority has predicted a £500,000 increase in its income over the next couple of years, thanks to the business rate retention scheme. Hon. Members should focus on their councils’ decisions on what services they provide locally. Some £3.8 billion is going to local councils to ensure that they can deal with adult social care in a joined-up way, without creating further bureaucracy.
Local government has shown great skill in moving forward. The Audit Commission and a recent survey noted that residents believe that services have improved. Our community and neighbourhood budgets show that we are finding ways to rewire the system to provide better services at much lower cost.
Turning to the future, I recognise that councils are facing pressures. That is why the spending review set out a package of measures to support them in 2015-16, including the £3.8 billion pool of funding for integrated health and social care, which will help to ensure that services in the care and support system can be protected and will enable authorities to invest in prevention and early intervention.
We will make available a new fund of £330 million to accelerate the transformation of local services with a £200 million extension of the troubled families programme to support another 400,000 families, £100 million to build on the transformation challenge award to improve public service delivery and a further £30 million to drive change in the fire and rescue service. All that together shows that there is a huge opportunity for councils to save money and to achieve better outcomes by working collaboratively and innovatively for their communities.
Chi Onwurah
The Minister avoided answering the question asked by my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) about the impact of the funding changes on different councils in the north and south by re-emphasising the power that local authorities and councils have to direct their own funding. Will he specifically say whether he supports the principle of holding back funding, as has been described in several contributions this afternoon? He has listed some increases in some different funds. Are they coming from top-sliced funding or from new money, as we would understand it?
Brandon Lewis
I tell the hon. Lady again that what a local council does with its funding is a matter that she must put to her local authority. Councils must make the decisions about how they spend the money that they have. There is no point continuing to look at silo pots of money. The point of spending power is that it shows exactly what a local council has in total to spend on its local community. In Newcastle, the amount is one of the highest in the country. It is also why it is important that we offer support to people individually as well. We are pleased to be able to offer further support for council tax freezes in 2014-15 and 2015-16. We have been clear that if an authority wants to raise its council tax, it should do so with the assent of the public in a referendum locally. It needs to be able to explain to residents what it wants that money for and to convince residents of its case.
It is worth adding that in many cases, councils have more in reserves than they are losing through cutbacks. Liverpool, Manchester and Leeds all have reserves that are twice that of their spending power reductions. Indeed, this year, Newcastle has had substantial reserves. It is also important to note that local authorities will be spending about £4 billion extra this year across the country—well over the £100 billion of last year. It is also worth noting that local authorities have managed to increase reserves to a record level, going up by almost £3 billion to £19 billion. With that and the £2 billion in fraud and error, and with a further £2 billion in uncollected council tax, there is still a long way for local authorities to go before they can claim that they have done everything to drive out waste and bureaucracy.
We are in a new world for local government. The funding settlement used to be the endgame; now, it is just the starting point, with councils no longer tied to the settlement figures. They can get to earn their keep and retain £11 billion of business rates. That could deliver an extra £10 billion to our wider economy. It is worth noting that areas such as Manchester, Liverpool and Newcastle all saw business rates rise above the national average of 4.8% in recent years. However, thanks to the old begging bowl system, they missed out on the opportunity of making the most of that money—but no longer. From now on, it will be what councils make and not what they take that counts. If they bring in more businesses, more jobs and more homes, they will be rewarded. If they build those new homes through the new homes bonus, they will see a share of that money, which is worth £650 million this year and is growing. If they increase their business rates, they will retain some of the benefit of that increase.
Therefore, the message to councils is clear: if they are ambitious, become self-reliant and work hard on behalf of their local people, they will succeed and see the benefits. We want authorities to go further and faster, so that residents feel those benefits. We want to help and reward those who do the right thing and are innovative. Our funding approaches, as has been outlined independently, are fair for north and south, urban and rural, and rich and poor. I gently say to hon. Members who have outlined what they see as the funding draw from urban areas that even Labour Front Benchers have been arguing on the Floor of the House to move money away from urban areas into rural areas.