Lord Shipley
Main Page: Lord Shipley (Liberal Democrat - Life peer)
Baroness Williams of Trafford
I think that that will be in place for 2019 and it will be based on wide consultation with local authorities.
The noble Lord also asked why the council tax freeze grant was going. For many local authorities, the council tax freeze grant was a mixed blessing, because, while councils received it, it would also put their baseline down the following year. So many local authorities are pleased in many ways not to be dealing with the freeze grant but having far more control of their own destinies.
The noble Lord asked also about the Independent Living Fund. That will continue to be a separate grant made available to local authorities.
Lord Shipley (LD)
My Lords, I am grateful to the Minister for repeating the Statement. I should declare that I am a vice-president of the Local Government Association. I welcome the four years of the settlement period. The decision by the Secretary of State to extend the consultation to October is the right one. Will the Minister confirm that underlying that four-year settlement is an expectation by the Government that council tax will rise by up to 4% a year, each year, for the period of this settlement? Secondly, in issuing a Statement of this kind, I wonder whether greater care might be taken with words. It says that a four-year settlement is better for generating efficiency savings, but it is not just about efficiency savings. There is rising demand and there are rising costs, of which the living wage is one.
On the extra £3.5 billion that is going to be available for social care by 2019-20, £1.5 billion of that will be from the better care fund. What more can be said about how the better care fund is going to be distributed and, indeed, whether it could be distributed starting earlier? The point is that some councils are under exceedingly great pressure on the matter and need to have support earlier—and we need to ensure that the distribution reflects that need.
We welcome the extra help that is being given to rural areas. Will the Minister confirm that that is real, extra money for the whole of the settlement period and will not in the future be simply a transfer from other parts of local government, particularly the urban areas?
Finally, on the issue of business rates, as we move to 100% retention, there is an issue about those places less able to raise money from business rates because they grow more slowly than others. It is good that there is going to be a two-year transition period, but what is going to happen after that? I hope that the consultation that was announced in the other place a little while ago is going to be a genuine one that will end up with a revision of the formula for central government support. The Statement reminds us that all local government spending is going to be,
“funded by local resources, not central grant”,
and says that there will be a consultation to determine the transition to 100% business rates retention. The noble Lord, Lord Beecham, talked about this. The implication is that the transition is going to be a great deal longer than two years. Will the Minister comment on that?
Baroness Williams of Trafford
I thank the noble Lord for raising some important points. His first question was about the four-year settlement and whether there was an assumption of council tax rises. We are not making any assumptions about what councils might want to do; in those figures we are making an assumption of CPI plus 2%.
The noble Lord asked about the better care fund and how it might be distributed. It is intended to benefit most those with the lowest tax bases, so that it is fairly distributed and helps the places most dependent on central government grant. The better care fund is distributed to take into account additional income that could be raised through council tax.
Did the noble Lord have another question?
Lord Shipley
It was about business rates and the two-year transition and how the consultation will be done to reflect needs.
Baroness Williams of Trafford
The Government are quite clear that the consultation will be done to reflect needs. The transitional fund is designed entirely to meet some of the pressures of getting through the period to 2018-19 that councils were talking to us about.