Local Government Finance Settlement

Anna Turley Excerpts

Thursday 15th December 2016 Commons Chamber

[Sajid Javid]

I agree absolutely with my hon. Friend. He kindly reminded the House of Labour’s track record and of how taxes increased. He rightly said that council tax doubled in the 13 years of the last Labour Government. During those years, they had a manifesto commitment to deal with adult social care, a royal commission in 1999, two Green Papers in 2005 and 2009, a comprehensive spending review and the Wanless review. All that, they said, would solve the adult social care challenges, and all they did was make it much worse.

[Anna Turley (Redcar) (Lab/Co-op)]

First, I want to say that the 1% rise in the precept in Redcar and Cleveland will raise just £500,000, which is meaningless given the scale of the rising demand in need. I want to ask the Secretary of State two questions because the answers were not clear from his rather rushed statement. The first is about the new homes bonus, and the key words are “the savings from the reforms”, not the new homes bonus. If it is just the savings from the reforms, that is not an awful lot of money, so I hope that he can clarify that.

Secondly, is the Secretary of State saying that local authorities will keep what they make in the new homes bonus, or will it be distributed nationwide from one pot on a needs basis? If it is the latter, yet again he reinforces the inequality that already exists in this country, because the new homes bonus is based on council tax rates.

[Sajid Javid]

I can tell the hon. Lady that for her local council, Redcar and Cleveland, the precept next year could raise £2.2 million, and the following year it could raise £3.4 million. The numbers are considerably higher than she may think at the moment.

On the new homes bonus, let me be clear: it is being reformed, but it is staying in place. The bonus that is currently equivalent to six years’ band D council tax will fall gradually from five years to four years, but the essential principles remain the same. The savings that are generated from that change from six years to four years are national savings—that is the £240 million pot—and will be distributed nationally across authorities that provide social care services. That will be based on a needs formula.