Local Government Finance
Debate between Jonathan Reynolds and Brandon LewisUrgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
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Brandon Lewis
It is up to local residents to take a view on those local services. I say to the hon. Gentleman and to all Members in that area that, if the local authority is making decisions they do not like, they should lobby the authority to get it to do what they think is the right thing. I have to say that, when I have visited that area, I have found the residents to be very happy with the services. Some great work is being done there on shared services and shared management with Manchester, on freezing the council tax and on troubled families, to ensure that people are getting great services and improved services in that area.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
There is no doubt that, either by accident or design, this Government have redistributed money from poorer areas towards the more affluent ones. Let me give the Minister an example relating to the new homes bonus. The bonus excess each year is financed by the redistribution of the formula grant. Because of the collapse in housing completions that this Government have presided over—in Greater Manchester, that involves about a third of the homes that we had been planning for—there has been a redistributional effect away from areas that really need the funds and towards London and the south-east. That funding imbalance then goes into the local enterprise partnerships and the local growth funds that the Government believe should drive prosperity in local economies. Surely the Minister knows the impact of his own policies on councils up and down the country.
Brandon Lewis
The new homes bonus is fairly simple: you build more houses, you get more money.
Business Rates
Debate between Jonathan Reynolds and Brandon Lewis
Brandon Lewis
I am not quite sure what cuts to business the hon. Gentleman is talking about, but he is absolutely right about targeting. I agree with him about that, which is why I am so proud of what this Government have done with small business rate relief, to which I shall turn in a few moments.
No impact assessment was made of the ports tax, no consultation was undertaken and no concern was shown about the effect on the wider economy.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
What has this got to do with the debate?
Brandon Lewis
This debate is about business rates and the ports tax was a business rate. If the hon. Gentleman has a look at his own motion, perhaps he will appreciate what he is here for. The ports tax policy also contravened the Treasury’s own guidance on retrospective taxation. However, as proposed by both coalition parties before the general election, this Government have scrapped Labour’s ports tax, cutting business rates by £175 million and reversing the smash-and-grab on small businesses.
Let me take another example: empty property rate relief. As Chancellor, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) hiked up business rates by cutting back empty property rate relief, with no offsetting reduction. When was the stealth tax rise introduced? It was introduced at the very start of the economic downturn—precisely when businesses cannot find tenants for their empty properties. The Royal Institution of Chartered Surveyors slammed the change, saying it was
“purely a revenue raising exercise with no thought of the potential consequences”.
That is what we inherited from Labour, as well as the biggest deficit in our peacetime history. Unfortunately, we have not been able to reverse every Labour tax rise—I wish we could—but we have introduced new rate relief for empty new build property to help to kick-start development.
Let me raise another issue, which relates to my response to the hon. Member for Swansea West a few moments ago. I recognise that small business rate relief was introduced under the previous Administration, albeit funded by a higher multiplier on medium and large firms, but Labour made it as difficult as possible for small firms to claim, requiring reams of complex paperwork every year. In 2009, Labour Ministers blocked a Conservative-supported private Member’s Bill from the hon. Member for Mid Worcestershire (Peter Luff) that would have simplified the relief. This Government have changed that—the Localism Act 2011 made it far easier to claim—but we have gone further: with central Government funding, we have doubled business rate relief for small firms year on year, and an estimated 330 small firms are now paying no rates at all as a result.
Local Government Procurement
Debate between Jonathan Reynolds and Brandon Lewis(11 years, 11 months ago)
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Brandon Lewis
My hon. Friend tempts me into allowing central Government to dictate to a local authority what it should be doing—we get criticised for that—but I will say to him that authorities have the general power of competence. They can look around at some of the very good work that I have just touched on, at Waveney, Hertfordshire and Tameside, and see how to simplify the process. That will ensure that a local charity does not have the problem that such charities have had in the past, when I was in local government, of having to say, “We can’t bid for this. We haven’t got the staffing levels, because it takes days to understand these forms, fill them in and negotiate.” The forms for these contracts should be simple and straightforward. Any of us should be able to read and understand them and take part in the process. Local authorities still have some way to go with that. That leads me on to my next point.
Jonathan Reynolds
I am listening to the Minister’s speech, and he seems genuinely to be an enthusiast for the role that local authorities can play in shaping their local economies. Is he in any way concerned that the financial situation that local government faces, which is a fact—this is not the time to debate whether it is right or wrong—is limiting their ability to do that and is to the detriment of getting this country back towards growth and jobs for everyone, which is what we all want?
Brandon Lewis
No, I do not agree with that. The hon. Gentleman mentioned cuts earlier. The Labour party has announced £52 billion of cuts in the Department for Community and Local Government budget and has not itemised any of them. We have to be realistic about that. Actually, the situation should drive local authorities to want to do better with procurement, to free up money to use on services rather than procurement.
Councils can now do many things to improve procurement, and many authorities need to go much further. They can consider abolishing requirements to complete a pre-qualification questionnaire for contracts below the EU threshold. They can publish all their tenders and contracts online, build up a supplier network and engage with suppliers in the way some already do. They can stop gold-plating on equalities. Equality impact assessments are not and never have been a legal requirement. Officers can use their judgment to pay due regard to equality without resorting to time-consuming, bureaucratic, tick-box exercises. Breaking up contracts into smaller bite-sized chunks or using subcontracting can open up procurement.
Local authorities have a key role in supporting their local economies through procurement. Councils can take steps to use their spending power to support economic growth, but procurement processes need not be complex. All councils can simplify them, as I have outlined, and make future contract opportunities easier for small businesses. Making those changes will also save councils money by reducing unnecessary red tape and bolstering business rate returns. There is an in-built incentive for local authorities to do that now. Some councils have grasped that and made great strides to help local businesses to bid effectively for contracts, but the majority have a long way yet to go. They owe it to local taxpayers to rise to that challenge.