Local Government Finance

Debate between Lindsay Hoyle and Rishi Sunak

Tuesday 5th February 2019 Commons Chamber

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

It is a pleasure to close the debate. I start by joining my predecessor, my hon. Friend the Member for Nuneaton (Mr Jones), in paying tribute to all the committed people who work in local government and deliver for their communities every single day. We are all grateful to them for their hard work and dedication. I thank all hon. Members for their passionate speeches today, particularly those who brought their personal experience of local government to the Chamber—our debates are the richer for that. Although I may not agree with the content of Labour Members’ speeches, I respect the passion with which they represent their local communities.

As a northern MP, I feel that the north is lucky to have, in my hon. Friend the Member for Carlisle (John Stevenson), a champion for the northern powerhouse. He is committed to pushing the Government on rebalancing the economy and working constructively with them. That sentiment was echoed by my hon. Friend the Member for Stoke-on-Trent South (Jack Brereton), who spoke well about the importance of economic regeneration in his constituency and what the Government are doing to support his residents as they look to a brighter future.

My hon. Friends the Members for Northampton South (Andrew Lewer) and for Lewes (Maria Caulfield) made excellent speeches about the need for all Members and all local authorities to think about how we can serve our constituents better and at cheaper cost every single day. We should always strive for ways to achieve that, given that the taxes that fund our public services are paid through their hard work and efforts. My hon. Friends the Members for Rugby (Mark Pawsey) and for Waveney (Peter Aldous) do a great job in this Chamber of representing their district council and county council respectively, and I thank them for all their engagement with me and the Department over the few months in which I have had this job. I can tell my hon. Friend the Member for Rugby that the Secretary of State is well aware of the excessive activity of a few councils with respect to borrowing for commercialisation, and this is something that the Department is actively looking at as we speak to the Treasury.

Many Conservative Members, including my hon. Friends the Members for Bromley and Chislehurst (Robert Neill), for Gloucester (Richard Graham), for Lewes, for Thirsk and Malton (Kevin Hollinrake), for Waveney, for Redditch (Rachel Maclean) and for Bexhill and Battle (Huw Merriman), made powerful and compelling cases for a root-and-branch review of how we distribute money in local government today. We heard about the specific issues that councils face on the ground that our current funding formula simply does not capture. I pay tribute to their work in bringing this to my attention and that of officials. They mentioned issues such as the rapidly changing demographics that are driving up demand for adult social care. These are the kinds of things that a new formula fit for the 21st century should absolutely cover, and I look forward to working with all of them as we develop a funding formula that is right for every part of this country.

My hon. Friends the Members for Northampton South, for Thirsk and Malton and for Bexhill and Battle spoke of the absolute importance of getting adult social care right. I know that my colleagues in the Department of Health and Social Care are committed to doing exactly that, and I agree that the solutions should be radical, not statist. I hope that they will include consideration of the excellent work of the Select Committee.

Three themes have run through the speeches that I have heard in the debate, and they are the three things that everyone agrees that our local councils do: first, they support the most vulnerable in our society; secondly, they drive economic growth in their areas; and, thirdly, they build strong communities. I am proud to say that this Government are backing them to do all three. It is local authorities whose hands are the first to reach out to those who fall on hard times, and I am delighted that this settlement provides them with a real-terms increase in financial resources to support that vital work.

Councils told us that the most acute pressure that they faced was in adult and children’s social care, so this Government responded with £650 million in incremental funding in the Budget. Councils told us that they wanted to do more to support people with disabilities, so this Government responded with an extra £55 million to make vital home adaptations. Rural councils highlighted their particular challenges, so this Government responded by maintaining the rural services grant at record levels. But Conservative Members measure success not by how much money we spend, but by how many lives we are changing, so we are supporting local authorities to innovate and improve to ensure that we are careful with taxpayers’ hard-earned money and that people are getting the best possible services.

In children’s care, where there is a huge variation in performance, we are investing £84 million to spread best practice from Leeds, Hertfordshire and North Yorkshire across the country so that children everywhere will benefit from best-in-class practice. In technology, we recently launched an innovation fund to support councils in embracing the digital revolution. Working with the Local Government Association, we are developing a tool to help councils to benchmark, analyse and drive performance. Across local government, whenever there are opportunities to improve lives, save money and transform services, this Government will be relentless in pursuing them.

The Government understand that the only sustainable way to pay for our public services is to create the economic growth that will fund them. Let us not forget the vital role that councils play in creating prosperity for their communities. Rather than being reliant on central Government handouts, local authorities should be empowered and rewarded for their entrepreneurship. I am pleased to say that our business rates retention scheme does exactly that, and local authorities are expected to retain almost £2.5 billion of business rates growth this year. Across the nation, from Yorkshire to Southampton, our 15 new business rates retention pilots demonstrate this Government’s commitment to backing councils’ ambitions for their local economies. We all know that the enemy of that growth is the higher taxes that the Labour party would inflict on our residents.

Local authorities are key to strengthening our communities. Every single day, they ensure that people are proud of the places in which they live. Those communities must start with the houses that people call home, so this Government are backing local authorities to fulfil those people’s aspirations. The new homes bonus part of the settlement has awarded councils almost £8 billion since it started for 1.5 million additional homes that they have brought forward, each one providing incentive and rewards for those councils that are trying to ensure that every one of their residents can fulfil the dream of homeownership.

However, local authorities told us that they want more. They want greater flexibility to build more of their own homes, so this Government listened and lifted the housing revenue account borrowing cap. Strong communities also need vibrant high streets, so this Government are trusting local councils with a £675 million fund to transform and revitalise our town centres. Finally, when it comes to our communities, the only holes that I want to be pouring money down are the ones on our local roads, so this Government were pleased to ensure that councils have £420 million to fill potholes for our motorists. From homes to roads to high streets, this Government are backing local authorities to create communities where everyone can thrive.

We have heard a lot about deprivation today, and there was an accusation that this Government are somehow trying to massage the numbers. When we put together the new funding formula, we listened to the Housing, Communities and Local Government Committee report that was published at the end of 2017, which made a compelling case for reducing the number of indicators to fund local government without sacrificing accuracy. That is exactly what our funding formula does. Deprivation accounts for less than 4% of the variation in spend for universal services—[Interruption.]

[Mr Deputy Speaker (Sir Lindsay Hoyle)]

Order. I need to hear what the Minister has to say. I am sure that he is nearly at the end.

[Rishi Sunak]

We heard a lot about Liverpool and a lot about Surrey. Members of this House should know that households in Liverpool have £400 more to spend on local services than households in Surrey. Only a third of spending in Liverpool is financed by council tax versus almost 85% in Surrey. This funding formula is accurate and based on the facts.

In conclusion, I will continue to listen to local councils to learn from their expertise and to champion their cause across Whitehall. I tell them that their voice is heard loud and clear and that they will be supported by this Government. I commend the settlement to the House.

Question put.

The House proceeded to Division.

[Mr Deputy Speaker (Sir Lindsay Hoyle)]

I remind the House that the motion is subject to double-majority voting: of the whole House and of Members representing constituencies in England

Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Bill

Debate between Lindsay Hoyle and Rishi Sunak

Tuesday 16th October 2018 Commons Chamber

[Mr Deputy Speaker]

You also should not test ours. [Laughter.]

[Rishi Sunak]

As my hon. Friend mentioned, this measure will strengthen the incentive for owners to bring long-term empty properties back into use. Hon. Members will recall that this Bill received widespread support when it was considered by the House earlier this year. I am very pleased to say that that cross-party support continued through the debates in the other place.

Before we turn to the detail of the amendment, I thought it would be helpful to recap the purpose of this clause and the background to the policy in general. Our housing market is not working as we would want. Young people are often struggling to get on to the property ladder—struggling to enjoy the same opportunities as their parents and grandparents.

--- Later in debate ---

[Rishi Sunak]

rose—

[Mr Deputy Speaker (Sir Lindsay Hoyle)]

Order. The Minister has now taken up 50% of the time. It is only an hour’s debate, so I am concerned. We have a lot of Members in the Chamber, and I hope that he is not trying to take up all the time.

[Rishi Sunak]

Thank you, Mr Deputy Speaker. I have tried to take any interventions that have come my way from all parts of the House, but I will take your steer and try to reach my conclusion in a slightly more swift fashion, if that will help.

I am sure, as I said, that hon. Members will agree that this amendment is in keeping with the spirit of the legislation and will enable local authorities to do more. However, we are not proposing to alter the provision on homes empty for at least two years and less than five years, as we have discussed previously.

Non-Domestic Rating (Nursery Grounds) Bill

Debate between Lindsay Hoyle and Rishi Sunak

3rd reading: House of Commons & Committee: 1st sitting: House of Commons & Legislative Grand Committee: House of Commons
Tuesday 10th July 2018 Commons Chamber

[Rishi Sunak]

It is a pleasure to respond briefly to the various points raised. I thank my opposite number, the hon. Member for Oldham West and Royton (Jim McMahon), for the typically constructive way he has approached this type of legislation; of course, we do not agree on everything, but it is fantastic to be able to move these relatively technical matters through the House speedily.

The hon. Gentleman expressed, as he has before, a specific concern about whether the presence of an automated teller machine in a convenience store could take the rateable value of that small shop above the threshold for small business rate relief. Having looked into the matter, I am delighted to tell him that we do not believe that that should be the case. If an ATM is rateable, it would appear as a separate assessment on the ratings list and the ratepayer would typically be the financial institution that operates the ATM, not the shop itself. I assure the hon. Gentleman that we are discussing the specific issues with the Association of Convenience Stores to ensure that its concerns are investigated and addressed.

The hon. Gentleman turned to the important topic of high streets. I know that all of us in this House celebrate our local high streets; they are vital parts not just of our communities, but of our economies. I am very pleased to tell him that my hon. Friend the Member for Rossendale and Darwen (Jake Berry) is the Minister for high streets and is fully focused on the issue at hand through the Future High Streets Forum. More excitingly, he has just launched the Great British High Street Awards 2018. I will do a plug and call on all Members to nominate their local high streets. Nominations are open until the end of August. The last iteration of the competition saw almost 1,000 entries from across the country and hundreds of thousands of votes from the public to choose the eventual winner. There is a considerable cash prize on offer for the winner and, indeed, a new rising star category. The winner will also receive expert advice from industry professionals. I hope that the hon. Gentleman knows that we take the issue of high streets very seriously indeed.

Let me touch briefly on some of the other contributions. My hon. Friend the Member for St Austell and Newquay (Steve Double) should take enormous pride in the role that he has played in ensuring that we are discussing this important issue today. Hopefully, this legislation will eventually receive Royal Assent and that will be in no small part owing to his efforts to put this issue on the agenda of Ministers, and he deserves enormous credit for that.

My hon. Friend the Member for Nuneaton (Mr Jones), who had this job before me, put in motion the Bill that we are discussing today and engaged with my hon. Friend the Member for St Austell and Newquay on this important topic, ensuring that when I arrived in the Department this agenda was ready to take forward, and he also deserves credit for that. It is always intimidating to have to respond to him in this Chamber, as I am always reminded that so well did he do this job before I inherited it that the job had to be split between two different people. The Under-Secretary of State for Housing, Communities and Local Government, my hon. Friend the Member for South Derbyshire (Mrs Wheeler), sits beside me on the Bench. The two of us together do our best to replicate what he did before us and we are grateful that he left everything in such good shape for us to pick up.

My hon. Friend the Member for Boston and Skegness (Matt Warman) has been a stalwart in speaking about business rate tweaks. I join him in hoping that there are far fewer of these to come in the immediate future, but thank him for his support of the Bill. He spoke eloquently about defending the rural interests in his constituency, which will benefit from this Bill, as he did when we enabled business rates relief for new fibre installations, a topic that is dear to his heart and which he pushed hard for. He should shortly be seeing the benefits of that policy in action across the country.

My constituency neighbour, my good hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke), has, as I know at first hand, a very mixed constituency. As ever, he did an excellent and eloquent job in talking about the importance of small businesses across Teesside and the efforts that this Government have put in place to ensure that the tax burden on those small businesses is as low as possible. I welcome his support for the £10 billion-worth of measures to alleviate the burden of business rates on small enterprises across Teesside. I am glad that they are benefiting from that. In the rural part of his constituency in East Cleveland, the agricultural community will, I am sure, welcome his support and lobbying for this measure as it can ensure that its productivity remains high in the months and years to come.

What better place to end than with my hon. Friend the Member for Taunton Deane (Rebecca Pow)? As ever, she gave us a brilliant defence and a brilliant celebration of our rural economy and everything that it contributes to our national life. We are, of course, grateful to her for gracing us with her presence today, when she could have been at Wimbledon enjoying the strawberries, the Pimms, the cream and everything else on offer. I must say that, when it comes to slipping requests, she clearly has a much better relationship with the Whips than I do, as my previous requests for various exemptions for cricket matches and tennis matches were firmly denied, so I have something to take up with the Whips in due course.

I am glad that we have had a very constructive discussion today and that there is widespread support for this particular clause.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.

Clause 2 ordered to stand part of the Bill.

The Deputy Speaker resumed the Chair.

Bill reported, without amendment (Standing Order No. 83D(6)).

[Mr Deputy Speaker (Sir Lindsay Hoyle)]

Order. As indicated on the Order Paper, the Speaker has certified that the Bill relates exclusively to England and Wales on matters within devolved legislative competence. As the Bill has not been amended, there is no change to that certification. Copies of the certificate and the consent motion are available in the Vote Office. Under Standing Order No. 83M, a consent motion is required for the Bill to proceed. Does the Minister intend to move the consent motion?

[Rishi Sunak]

indicated assent.

The House forthwith resolved itself into the Legislative Grand Committee (England and Wales) (Standing Order No. 83M).

[Sir Lindsay Hoyle in the Chair]

[David Linden (Glasgow East) (SNP)]

On a point of order, Mr Deputy Speaker. I beg to move that the Legislative Grand Committee do sit in private.

Local Government Finance

Debate between Lindsay Hoyle and Rishi Sunak

Wednesday 7th February 2018 Commons Chamber

[Mr Deputy Speaker (Sir Lindsay Hoyle)]

Excellent—sorted. Minister.

[Rishi Sunak]

Thank you, Madam Deputy Speaker. [Laughter.] I am sorry—Mr Deputy Speaker.

[Mr Deputy Speaker]

I may be called Lindsay, but—[Laughter.]

[Rishi Sunak]

We have gone above and beyond the four-year deal in listening and responding to what the sector wants. That is why last year we allowed increased flexibility in the use of the adult social care precept, and why this year we have proposed additional flexibility on the core council tax referendum principle.

On adult social care, of which we have heard much today, on top of the extra £2 billion announced at the spring Budget last year, we have now announced an additional £150 million extension to the adult social care support grant, and we have increased the rural services delivery grant to its highest-ever level.

We are also building on the highly popular business rates retention scheme. Local authorities estimate that in the year just finishing they will keep about £1.3 billion in business rates growth, and we expect this to be maintained going forward.

[Rishi Sunak]

I thank my hon. Friend for his intervention. He rightly points out that he raised this issue in Prime Minister’s Question Time earlier and has made representations to me about it. I am pleased to confirm that my officials and I are looking into the matter. He makes the point well. The existing system does leave some scope for ambiguity, and we will look into that.

The vital funding that comes from business rates retention—over £1 billion—is a direct result of local authorities driving economic growth in their areas, and it is on top of the core settlement funding that we have announced today. Over the long term, local government will be transformed, becoming increasingly self-sufficient with local resources funding local services. But to achieve that, we all know that the funding formula needs to become fairer, more transparent and more responsive to changing demands. Getting it right will of course be a challenge, but the prize if we can do that is a system that will be truly fit for the modern world and allow councils to face the future with confidence.

The business rates retention proposals that we mentioned earlier are a key step in this journey, and we hope to see local authorities retaining 75% of business rates from 2020-21. There is a great deal of enthusiasm across the country for this new model, and I can assure the House that I and my Department are committed to working with the sector to make this a success.

I turn briefly to some of the specific points that have been made. The hon. Member for Sheffield South East (Mr Betts) and my hon. Friend the Member for North Dorset (Simon Hoare) were right to pay tribute to local councillors who have, we acknowledge, made difficult decisions and have done an extraordinary job over the past few years. My hon. Friends the Members for Shrewsbury and Atcham (Daniel Kawczynski), for North Dorset, for Waveney (Peter Aldous), for Redditch (Rachel Maclean) and for Ludlow (Mr Dunne) talked about rural areas and the need for fair funding. I can assure them that we are committed to that. The fair funding review will specifically take a fresh look at how council tax should be taken into account when redistributing income, and relative costs of delivering services will also be considered.

My hon. Friends the Members for Corby (Tom Pursglove) and for Wellingborough (Mr Bone) rightly talked about the role of governance and leadership in local councils. They were followed by my hon. Friend the Member for Newton Abbot (Anne Marie Morris), who rightly said that it is not just about how much, but how it is spent. Unaccompanied asylum seekers and the costs that councils have to bear were raised by my hon. Friend the Member for Corby and the hon. Member for Dover (Charlie Elphicke). I am pleased to announce that the Government have allocated funding from a £29 million pot for exactly that. My hon. Friend the Member for Corby will be pleased to know that Northamptonshire will receive £231,000 from that grant, and the hon. Member for Dover will know that Kent will receive more than £1 million.

Opposition Members talked a lot about whether the funding was fair. They pointed to Knowsley, so they will be pleased to learn that it receives core spending power per dwelling 26% higher than the average. Indeed, across the country, the 10 most deprived local authorities receive core spending power per dwelling 23% higher than the least deprived. We heard a lot from the Opposition about money. Indeed, the hon. Member for Dover put it well: there is no question to which the answer is not more money. We all know where that money has to come from—our hard-working taxpayers. Under the last Labour Government council tax doubled, and that is what we would have to look forward to again.

This is a settlement that honours our commitment to local government—delivering certainty, recognising the challenges and making additional resources available, all while keeping excessive council tax rises in check. It gives councils the resources they need to provide the world-class services that their communities expect and deserve. I commend it to the House.

Question put.

The House proceeded to a Division.

[Mr Deputy Speaker (Sir Lindsay Hoyle)]

I remind the House that the motion is subject to double-majority voting: of the whole House and of Members representing constituencies in England.