Local Government Funding

Alberto Costa Excerpts

Wednesday 28th March 2018 Commons Chamber

[Sajid Javid]

I hope that the hon. Lady will appreciate what I am about to come on to: an understanding of how we got into this situation and how we can avoid getting back into it. Liverpool City Council is part of the Liverpool city region, which has been getting a lot more money recently—especially for investments, to encourage growth and jobs. If other members of the Liverpool city region, such as Wirral, for example, stopped wasting a quarter of a million pounds every year on some council Pravda, perhaps they would spend money more efficiently.

[Alberto Costa (South Leicestershire) (Con)]

My right hon. Friend mentioned a moment ago that he is going to explain how we got into this position. Will he elucidate what was meant by the last Labour Chief Secretary to the Treasury in the note that said that there was no money left?

[Sajid Javid]

I thank my hon. Friend, who brings me to precisely the point I was about to make, which will help explain exactly why the last Labour Chief Secretary left that note for his successor.

In considering how this climate was created, we need to step back and remember what the Government inherited in 2010: the biggest budget deficit in peacetime, of £150 billion, and Labour’s great recession—the deepest in almost 100 years. If that was not enough, there was also the biggest banking bail-out ever: just one bank bailed out to the tune of £50 billion.

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[Sajid Javid]

Yes, I can give my hon. Friend that reassurance. I shall say more about how the system is going to work in a moment.

Our aim is to go further and for local authorities to retain 75% of business rates from 2020-21, as we work towards 100% retention. With that in mind, in December I announced an expansion of the 100% retention pilots that have proved so popular. More than 200 authorities came forward to bid for the new 100% business rates retention pilots that we are going to run in 2018-19. I was pleased to respond to that enthusiasm by doubling the number of initial pilots to 10, covering some 89 authorities. The 10 that we have selected, taken alongside the existing pilots, give a geographic spread to help us to see how well the system works across a broad range of areas and circumstances. The pilot areas will keep 100% of the growth in their business rates if they expand their local economies—that is double what they can keep now. There will also be opportunities for others to get involved, with a further bidding round for pilots in 2019-20, which will open in due course.

[Alberto Costa]

I thank my right hon. Friend for making that point. Would he encourage Leicestershire County Council and other well-run Conservative-led councils to make further bids for the pilots?

[Sajid Javid]

Yes, I would certainly encourage all those councils that are creative and innovative, and that want to support local businesses and to look at new ways of funding and delivering services, to bid when we open up opportunities for new pilots.