Oral Answers to Questions

Debate between Alex Cunningham and Lord Stunell

Monday 30th April 2012 Commons Chamber

[Andrew Stunell]

I thank my right hon. Friend for his question, and draw his attention to the national planning policy framework. In drawing up its housing strategy, Northumberland unitary authority must take account of the needs in its area. Of course, the Government are funding a social and affordable homes programme, which will deliver 170,000 affordable homes by 2015. I very much hope that housing providers in Northumberland will be bidding for money from that fund in a suitable way.

[Alex Cunningham (Stockton North) (Lab)]

2. What assessment he has made of the potential effect of funding reductions on the operational activities of fire and rescue services.

Business Rates (North-East)

Debate between Alex Cunningham and Lord Stunell

Tuesday 25th October 2011 Westminster Hall

[Andrew Stunell]

Yes, most certainly. It will be transparent. I think that the hon. Gentleman, for whom I have a great deal of respect, knows that the formula system, which was made even more convoluted during his period in office, has clearly passed its sell-by date. It is impenetrable, even to chief finance officers of local authorities, not to mention voters on the street.

In the time remaining, I will explain some of our proposed scheme’s features and talk about the consultation process. The aim of the proposals is to change the dynamic from a centrally controlled system to a locally controlled system. That is the purpose of the reform.

[Alex Cunningham]

The Government do not let local authorities set the business rate and they dictate the council tax through freezing, so where is this great accountability and devolution of power to our elected councillors when it comes to finance?

[Andrew Stunell]

I do not want to go too far astray, but I point out to the hon. Gentleman that the referendum proposal in the Localism Bill, which will change who is accountable to the local electorate for excessive council tax rises, is a huge transfer of control from Whitehall to local communities over the council tax income-raising power of councils. The transfer of business rate distribution from a formula determined by central Government to one that gives local councils a real incentive to build their own income base is a fundamental change in both of the aspects that have been mentioned. I am sure that the hon. Gentleman, like me, would like to go much further than that, but let us be clear: these are significant steps.

The consultation was published on 18 July and was backed up by the publication of eight technical papers on 19 August. They included an interactive, electronic paper that allows councils to feed in different parameters of the consultation so that they can establish what the outcome would be for their local authority. I can only suppose that local finance officers in the constituencies of certain Members who have spoken during the debate have not shared that information with them, because there is a clear gap between the worst possible case constructed by that interactive model and the worst case presented in this debate.

I want to make it clear that the baseline will be based on the formula grant that would have been received by a local authority had there been no reform of the system, and that it will be neither better nor worse than that. We made that clear in the consultation. That baseline will not get lost in the future, so local authorities in the north-east will have it as their fixed point for the future. Once we get beyond the period of the comprehensive spending review, growth beyond that baseline will be theirs to have.