Local Government Finance

Andrew Love Excerpts

Tuesday 10th February 2015 Commons Chamber

[Kris Hopkins]

I shall give way in a few moments.

We continue to recognise the challenges faced by rural communities. Through consecutive settlements, we have helped address the gap in urban/rural spending power. We expect the gap to continue to close. In the meantime, the settlement confirms another year of additional resources for the most rural authorities to recognise the challenges they face in delivering services. For 2015-16, in direct response to Members of all parties, we have increased the grant to £15.5 million.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

Does the Minister recognise the challenges faced by London, whose population is on the increase? The population of my own borough, the London borough of Enfield, will increase by 10% up to 2020, putting enormous strain on services, not least on children’s school places. What recognition has the Minister given to that population increase, and will he include it in the baselines so that it is reflected in the grant settlement?

[Kris Hopkins]

What I recognise is that London is a great international city, which has thrived under this Administration, and will continue to deliver significant jobs, wealth and income to the individuals out there. That is the root issue. Many Labour Members stick their hands out and ask for more money; the reality is that this Government are setting about ensuring that we grow our economy, get people into work and give them the ability to stand on—[Interruption.]

--- Later in debate ---

[Kris Hopkins]

This Government continue to ensure there is a substantial welfare net to look after the most vulnerable individuals, and we have put additional funding into the budget. I applaud the council for reducing its council tax, however, and I would just note that it is following the trajectory given by the previous Conservative administration. That may be only a small glimmer of light, but somebody appears to have learned from the excellent previous Conservative administration.

The local government finance report 2015-16 sets out a fair settlement, which ensures councils continue to have significant spending power. Even with the savings that have been made to date, local authorities in England were expected to spend over £115 billion in the current financial year. When we factor in councils’ new responsibilities for public health, the amount local government are expected to spend is higher than it was under the last Administration.

[Mr Love]

My local authority, the London borough of Enfield, is the 64th most deprived in the country, but its ability to deal with the problems of need is hampered by the long-term impact of the damping formula. I understand what the Minister said earlier about the need for floors, but can he offer any support to those local authorities struggling to address the needs of their boroughs because of capping over a long period?

[Kris Hopkins]

There are two things. First, there is not a cap; there is an opportunity for people to increase their council tax, and if councils believe that their public would support them, they may hold a referendum. Secondly, I go back to a point that I made earlier about the success of individuals. The route out of poverty and deprivation for an area such as my former council area of Bradford involves getting people skilled up, with local councils supporting them, and those individuals getting a job and being able to stand on their own feet. Breaking the cycle for an individual trapped in one has to be the responsibility of both central and local government.

The referendum principles report sets a sensible threshold for council tax increases, unless local people are happy to approve something else through a referendum. It is more important than ever that councils can demonstrate to local taxpayers that they are using every pound of their money to best effect to deliver efficient and effective services and to achieve sensible savings.