Local Government Finance Bill

Baroness Primarolo Excerpts

Tuesday 31st January 2012 Commons Chamber

[Mr Nick Raynsford (Greenwich and Woolwich) (Lab)]

I beg to move amendment 79, page 4, line 35, at end insert—

‘(1) Each local authority in preparing its council tax reduction scheme should start on the basis that, all other factors being the same, the total cost should be no greater or less than in the previous financial year.’.

[The Second Deputy Chairman of Ways and Means (Dawn Primarolo)]

With this it will be convenient to discuss the following:

Amendment 85, page 5, line 19, at end insert—

‘(5A) Any grant payable to a local authority in England in support of a council tax reduction scheme for a financial year beginning with 1 April 2013 shall not be less than the amount paid in council tax benefit subsidy for the financial year beginning with 1 April 2012.

(5B) The total amount of any grant payable to a local authority in England will be assessed each year or financial year beginning with 1 April 2013 in line with the Government’s New Burdens Doctrine.’.

Amendment 80, line 31, at end insert—

‘(5A) The Secretary of State must ensure that local authorities receive no less in subsidies under the council tax reduction schemes than they would have expected to receive under the earlier scheme.’.

Amendment 78, in schedule 4, page 49, line 39, at end insert—

‘(2A) In circumstances where a deficit arises in the billing authority’s collection fund the authority shall be able to make an application to the Secretary of State for a payment to cover that deficit.’.

New clause 11—Payment of additional grant

‘The Secretary of State shall be required to pay an additional grant to a local authority if, at the end of any financial year, the total expenditure incurred by the authority under any scheme approved pursuant to Schedule 4 of this Act is greater than the amount of grant received from the Secretary of State to fund the scheme. The amount paid to the authority shall be the difference between the sum originally received and the total cost to the authority of the scheme.’.

[Mr Raynsford]

Amendment 79 and the linked amendments, 78 and 80, aim to put this part of the Bill, which devolves responsibility for council tax rebates to local authorities, on the same basis as the earlier parts of the Bill, which we have debated over the past two weeks. Those parts sought to localise business rate revenue. Hon. Members will recall that, during the debates on the business rate localisation, Ministers were emphatic in insisting that the baseline from which the new business rate arrangements would operate should not involve any local authority losing revenue. In other words, the scheme was designed to be revenue neutral in year 1. That is precisely what the amendments seek to achieve for the new local council tax reduction schemes.

My hon. Friend the Member for Sheffield South East (Mr Betts), the Chair of the Select Committee, seeks to achieve a similar result through his amendment 85, which is linked to this group. My hon. Friend the Member for Warrington North (Helen Jones) has tabled new clause 11, also linked to this group, which seeks to protect local authorities from any additional costs that might fall on them during the course of a year. That might happen, for example, as a consequence of more people becoming eligible to claim benefits if a local factory were to close, or if more people were to lose their jobs for other reasons. Currently, local authorities are reimbursed for unforeseen expenditure, and Government grant meets the full cost of the benefit scheme, which is of course an integral part of the overall national scheme of welfare benefits, including housing benefits, that are the responsibility of the Department for Work and Pensions.

Some would query the logic of separating council tax benefit from the other benefits at a time when the Government are arguing for simplifying the whole benefit structure through the universal credit. However, I do not propose to pursue that argument today. There are good reasons for localising this aspect of benefits to local authorities, but there is no justification for doing it in a way that imposes harsh cuts in benefits from the outset and leaves local authorities, and therefore benefit recipients, vulnerable to further cuts because they have to take the downside risk of any increased expenditure caused by additional benefit claims in-year.

--- Later in debate ---

[Andrew Stunell]

That is an important consideration for local authorities when they look at the speed and pace of change in the schemes they devise, but I have to say that practically everything that Labour Members have contributed to the debate has been on the basis of trying to preserve the existing scheme and associated costs. [Interruption.] I think that local authorities will probably take a cautious approach to changing their local schemes in the first year. I have to say, however, that we believe it is absolutely the case that those that wish to make a more radical change will be able to do so. I am encouraged to hear that IT suppliers are considering the possible changes to existing software and are working with local authorities to—[Interruption.]

[The Second Deputy Chairman of Ways and Means (Dawn Primarolo)]

Order. It is getting very noisy. If Members wish to speak to each other, it would be a good idea to go outside and do it.

--- Later in debate ---

[George Hollingbery]

I beg to move amendment 72, page 5, line 26, at end insert—

‘(3A) Local authorities will have the right to pool schemes for council tax refund purposes both in terms of administrative arrangements and the pooling of funds.’.

[The Second Deputy Chairman of Ways and Means (Dawn Primarolo)]

With this it will be convenient to discuss the following:

Amendment 52, in schedule 4, page 47, line 16, at end insert—

(f) the number of persons estimated to be eligible to make an application, and estimated to be entitled to a reduction under the scheme.’.

Amendment 74, line 43, at end insert—

‘(8A) Before making regulations under sub-paragraph (8), the Secretary of State must consult with local authorities regarding any proposed requirements for schemes.’.

Amendment 55, page 48, line 15, at end insert—

(d) notify all persons within their area receiving council tax benefit on or immediately following 1 April 2012, of the implications of the draft scheme, including the estimated impact of that scheme on their living standards.’.

Amendment 75, line 22, leave out sub-paragraphs (4) and (5).

Amendment 53, line 37, leave out ‘about the making of reasonable charges’.

Amendment 76, page 49, line 14, leave out sub-paragraphs (2) and (3).

Amendment 77, line 28, leave out section (6).

Government amendments 86 and 87.

[George Hollingbery]

It is a great pleasure finally to be able to speak to amendment 72. I have missed a Select Committee visit to the Netherlands to do so—my furthest trip so far has been to Manchester.

It is a pleasure to serve under your chairmanship today, Ms Primarolo. Let me make it clear to the Committee at the outset that the amendment is probing. I do not intend to press it to a vote. My aim is to give the Government an opportunity to clarify their thinking on administrative arrangements for distribution of council tax reduction schemes. There is clearly some sense in local authorities being able to pool their sovereignty—[Interruption.]

[The Second Deputy Chairman of Ways and Means]

Order. The Committee needs to be a little quieter, so that we can hear Mr Hollingbery moving his amendment.

[George Hollingbery]

I am grateful, Ms Primarolo. As I was saying, there is clearly some sense in local authorities being able to pool their sovereignty in relation to their schemes to administer council tax rebates, especially in two-tier areas such as mine in Meon Valley. If one accepts that local conditions in, say, Hampshire will be at least somewhat similar, it makes sense for a uniform scheme to be adopted by all councils in the county. That may well allow schemes to be run more cost-effectively: for example, not only could one processing centre rather than many be used, but it would create one point of contact with other agencies that need to be consulted. Furthermore, assuming that fraud investigation is to be run locally, such an arrangement would allow the accumulation of expertise and critical mass that would otherwise be diffused between many offices.

That type of arrangement would also greatly assist the achievement of a commonality of expectation and understanding of a scheme across a wider area. Several right hon. and hon. Members this evening have talked about the potential for confusion in very localised council tax schemes.

--- Later in debate ---

[Mr David Winnick (Walsall North) (Lab)]

On a point of order, Madam Deputy Speaker. I know that Mr Speaker is very keen to defend the rights of Back Benchers. Tomorrow, as you know, we will debate Lords amendments to the Welfare Reform Bill. The first amendment, on employment and support allowance, deals with cancer patients and others. Obviously, I do not want to go into its merits or otherwise now. I have checked with the Clerks, and I am concerned because, whatever time that debate starts, it must end at half-past two. After Prime Minister’s questions and the ten-minute rule Bill, there would be an opportunity to debate the amendment for nearly two hours. However, if there is a statement or other parliamentary business, a matter that concerns many of our constituents could be debated for just half an hour. I therefore ask you, Madam Deputy Speaker, whether anything can be done to give at least nearly two hours to debating such a crucial issue.

[Madam Deputy Speaker (Dawn Primarolo)]

The hon. Gentleman, who is an experienced Member, is correct to say that Mr Speaker takes defending Back Benchers’ rights very seriously. However, he also knows that timetabling Bills is not a matter for the Chair, but for the House. I am sure that all those present will bear his comments in mind.