Local Government Finance
Debate between Derek Twigg and Robert Neill(12 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text
Robert Neill
It is ironic that we heard very little about whether the Opposition will encourage Labour councils to take the council tax freeze. I hope they will. Following the damascene conversion of the shadow Secretary of State to condemning the lack of transparency of Nottingham city council, I hope he will say that whatever the Opposition think about the Government overall, it is necessary above all to protect council tax payers and hard-pressed families and to adopt the council tax freeze.
Many authorities are doing that and they are using the breathing space. We have said that this year, because of the economic mess that we inherited, it is a one-year payment. Last year’s payment will be throughout the spending period. It gives local authorities a breathing space in which to manage the reconfiguration of their services. Good authorities are doing that.
Better procurement is an important issue and it should not be sneered at, as some hon. Members did. My hon. Friend the Member for Mid Dorset and North Poole is right to remind people that smaller authorities in rural areas often have less flexibility in managing budget pressures than larger authorities. We must recognise, therefore, that we cannot necessarily draw comparisons. Our system specifically builds in fairness, and not only because we have increased the needs element in the formula. I know it is a shock to Opposition Members, because they have the intellectual arrogance to think that only they have a conception of fairness; that they have a monopoly on the subject.
That is the fundamental arrogance that got Labour into opposition after all those years. The Opposition promised the electorate in their 1997 manifesto that they would hand back the business rate to councils, and they spent 13 years not doing that. The right hon. Member for Leeds Central said that he wanted certainty. Did it take him 13 years to be certain that he would not do it? That is what he managed to do. Instead, the coalition is getting on with it. Although it is not easy to fix a broken system, the coalition is making an honest stab, and local government deserves—
Robert Neill
I have given way twice already and made it clear that I will not do so again. I am sorry, but I do not want the hon. Gentleman to get too worked up about it. I want to be fair to the right hon. Member for Leeds Central by responding to his other specific point.
With regard to the top-slicing of the local authority central services equivalent grant, my right hon. Friend the Secretary of State will of course make an announcement in due course. As always, that is being considered through discussions between Government Departments. I hope that the right hon. Gentleman will welcome the fact that the Secretary of State, in making his decisions, has taken note of a number of recommendations and concerns raised by local authorities. We must strike a fair balance in that regard and will do so. In relation to pooling and whether there will be a surplus, I think that—
Robert Neill
I hope that the hon. Gentleman will do me the courtesy of letting me answer his party’s spokesman.
The right hon. Gentleman referred to pooling, but I think that he meant the provisions under the Local Government Finance Act 1988 by which the totality of the money raised by the national non-domestic rate, the business rate, must be returned to local government. That continues to be the case. In this year, when the totality of non-domestic rate raised was more than the formula grant, the rest was returned by way of grant to local authorities outside formula grant, and that remains an option. Everything comes back to local government one way or the other, and that is the statutory requirement that the Government have consistently met.
The right hon. Members for Wentworth and Dearne (John Healey) and for Leeds Central asked about referendums and what does and does not qualify. Referendum provisions apply to the billing authority in a two-tier area—a district or unitary council or a London borough—and to major precepting authorities: a county council, police authority or fire authority. In each case it is their own element that is subject to the referendum, so the district council cannot be forced into a referendum because of an increase by the county council, or vice versa. When we talk about levies, we are not talking about precepts, as the right hon. Member for Leeds Central knows, but about the rather more technical payments that we generally get from passenger transport authorities or drainage boards—
Oral Answers to Questions
Debate between Derek Twigg and Robert Neill
Derek Twigg (Halton) (Lab)
The Minister seemed to suggest earlier that the poorest communities would bear the brunt of the cuts. What is he doing to protect the poorest communities, such as those in Halton, from the cuts?
Robert Neill
The important thing that we have done is to protect formula grant, which is the largest single grant paid to local authorities. As I said, we have given local authorities considerably more leeway in how they use those moneys by ring-fencing a significant number of grants and removing significant burdens such as the inspection regime, which is estimated to cost local authorities something in the order of £2 billion a year.