Oral Answers to Questions

Debate between Brandon Lewis and Andy Sawford

Monday 30th June 2014 Commons Chamber

[Brandon Lewis]

My hon. Friend makes a good point. What the Government have been able to do with the council tax freeze has shown a real saving for families across the country in keeping council tax down. That is in the context of the fact that council tax roughly doubled under the Labour Government.

[Andy Sawford (Corby) (Lab/Co-op)]

Far from there being a freeze, the Government have hit more than 2 million of the poorest households with large council tax increases. In the light of the recent evidence from Citizens Advice, which shows that council tax arrears have become the biggest debt problem reported to it, will the Minister commit to carrying out a full review of the real impact of the policy before the end of the Parliament?

[Brandon Lewis]

I am not surprised at the hon. Gentleman’s question. As I said, his party presided over the near doubling of council tax until 2010. I see why it would resist this Government’s work to freeze council tax and help hard-working families. Local authorities could go even further and follow some good councils that have reduced council tax by cracking down on not just fraud and error but uncollected council tax. Uncollected council tax in Liverpool, for example, is costing every council tax paying household there £500 a year.

Oral Answers to Questions

Debate between Brandon Lewis and Andy Sawford

Monday 7th April 2014 Commons Chamber

[Brandon Lewis]

My hon. Friend gives a very good example of how authorities can work together, and we are seeing that around the country. Another Labour authority in High Peak is sharing with Conservative-led Staffordshire Moorlands, under an arrangement set up under the Conservative administration. That is another one of many examples of authorities sharing management and sharing chief executives, and saving about £600,000 a year. That is a substantial percentage of the money for those local authorities and this is a good way forward. The transformation network and community budgets show that this can be done.

[Andy Sawford (Corby) (Lab/Co-op)]

Newcastle has four times as many looked-after children as Wokingham, but because of the unfair way in which this Government have distributed the cuts, even on the Minister’s own measure of spending power per household, Newcastle will have less funding than Wokingham by the end of this Parliament. How can he tell us that that is fair?

Local Government: Combined Authority Orders

Debate between Brandon Lewis and Andy Sawford

Tuesday 18th March 2014 Commons Chamber

[Andy Sawford]

Well, I know petty politics when I see it, and the hon. Gentleman’s remarks sound very much like it. His remarks were inconsistent with his earlier comments about the importance of the partnership between the authorities that surround York. I will come on to the arrangements in that area of the country: I want to raise issues about York, which may interest the hon. Gentleman. Whether or not he will agree with me on them remains to be seen.

For economic success across the country, we must make the most of the strengths of different sectors across our country, and develop new skills and industries. Clearly, greater local collaboration and co-operation can produce much better results on issues such as transport, housing, employment, skills and training than can national programmes run from Whitehall. Combined authorities have a key role to play in that, as many councils believe that to deliver the best outcomes for their communities, the time has come to take current governance models to the next level, moving from informal collaboration to joint decision making on some issues.

There is an irony in the fact that the Government now recognise the value of combined authorities, which were first introduced in the Local Democracy, Economic Development and Construction Act 2009, about which Government Members have been contemptuous both in opposition and in government. The Act made provision for the establishment of economic prosperity boards and for combined authorities. After some years of drift, during which the Government tore up the regional development agency structure in an act of economic vandalism at a time when our economy was beginning to recover from a global recession, Lord Heseltine’s much-trumpeted review in 2013 came up with the big idea of combined authorities. We welcome the Government’s conversion, however reluctant it is, but we regret the delay.

The new combined authorities will bring many benefits, including the strong and visible collective leadership of an area with democratic accountability and an influential and unified voice. That leadership will be able to have a single conversation with the Government, national agencies and business leaders and to align decision making and economic growth at a strategic level so that there is a single framework underpinned by a coherent strategy and investment programme. It will have the opportunity to draw together a range of funding sources, including EU funds—this has been a key issue in the recent interregnum, during which there has not been a clear strategy from central Government—and a devolved local growth fund. The combined authorities also create the opportunity for closer working across the public sector to integrate functions and services and provide innovative solutions to the challenges of reduced budgets, which particularly affect the authorities in the combined authority areas that have had an above-average cut in a deeply unfair funding settlement.

The Greater Manchester combined authority shows the benefit of the system: its achievements include the major refurbishment of Bolton and Rochdale railway stations; the revolving infrastructure fund, which is worth £30 million a year; permission for up to 7,000 new homes to be built by 2017; a programme of low-carbon measures; and overall savings of £11.7 million a year.

I recommend that all Members of the House read the excellent report recently published by Labour’s local government innovation taskforce, which includes many of the success stories of the Greater Manchester combined authority and local authority partnerships across the country. I firmly believe that the West Yorkshire combined authority, the South Yorkshire combined authority and the Halton, Knowsley, Liverpool, St Helens, Sefton and Wirral combined authority will succeed as Greater Manchester has. I also hope that the order will soon be tabled for the north-east combined authority.

The Association of North East Councils tells me that establishing a combined authority for the north-east, to put into legal form what the north-east leadership board has been doing by consent for some time, is widely supported. I hope that there can be progress.

[Brandon Lewis]

I can provide a piece of information to help the shadow Minister: that order was tabled on 13 March, so it will come to us for consideration shortly.

[Andy Sawford]

I thank the Minister for that clarification and we hope that the order will be before us soon. I understood that the conversation in that region between the local authorities had made substantial progress and that they were looking to move forward. The Opposition will support the establishment of the north-east combined authority when that is proposed, however it is named.

Today’s steps on combined authorities are welcome but still more can be done on additional freedoms. The Opposition are considering the case being made by organisations including the Local Government Association, the special interest group of municipal authorities, ANEC and other bodies for additional powers. We agree with them that there is a need for a clearer plan for sub-national government that, crucially, works for all areas of the country. There is a need for further consideration of what arrangements will work best in two-tier areas, for example. There needs to be further devolution of funding streams. The Opposition are committed to significant reform in that area: for example, we will give local authorities a strong role in co-commissioning the Work programme.

The new combined authorities are keen to have a dialogue with the Minister, as he is no doubt aware, about “earn back” schemes for their areas. Such a scheme has been a feature of the Greater Manchester combined authority. It will be useful to hear the Minister’s thoughts, and to hear about any progress that has been made with the three new combined authorities.

There is also the question of legal restrictions around the combined authorities’ ability to borrow for non-transport purposes. The authorities have argued that that will remove a significant barrier to the unlocking of local resources to support infrastructure and growth. That change has been strongly advocated by Greater Manchester. What is the Government’s view on that and how do they intend to respond? Are the Government prepared to consider the request for combined authorities to be able to recover VAT, as local authorities do?

In relation to York, may we have an update from the Minister on the important matter of non-contiguous boundaries affecting authorities’ ability to combine? The Minister and I have discussed that issue informally on several occasions, and there have been exchanges in the House between us and between the Secretary of State and the shadow Secretary of State on the matter. Although those exchanges have been encouraging, there is frustration in some parts of the country about the delay. The Minister may be aware that Portsmouth and Southampton councils, for example, are keen to work more closely together but feel that they are being prevented from doing so by Hampshire county council, which does not wish to be involved in such joint arrangements. We urge the Government to consider how that issue can be dealt with in all parts of the country, but the Government may choose to make specific arrangements in individual cases.

As the Minister knows, my right hon. Friend the Member for Leeds Central (Hilary Benn) has made the case for the City of York, which wishes to join the Leeds city region. The Secretary of State has agreed that that makes sense. He told my right hon. Friend on 28 October 2013:

“I am confident we can have a resolution before Christmas.”—[Official Report, 28 October 2013; Vol. 569, c. 690.]

However, in a written answer in February the Under-Secretary of State for Communities and Local Government, the hon. Member for Great Yarmouth (Brandon Lewis), who is in his place, said that

“we are now considering consulting before the summer on a Legislative Reform Order”—[Official Report, 24 February 2014; Vol. 576, c. 120W.]

That may be the order to which he referred earlier, which the Government hope to bring forward before the purdah period.

My right hon. Friend raised the delay at Communities and Local Government questions on 3 March. The Secretary of State said:

“I did not specify which Christmas I meant. However, I gave the right hon. Gentleman an undertaking, and it was a proper undertaking. Various legal obstacles were put in our way, but we intend to consult, and, subject to the position being legally satisfactory, there will be a resolution. Given that I gave an undertaking from the Dispatch Box to resolve the matter, I will not lightly do otherwise.”—[Official Report, 3 March 2014; Vol. 576, c. 621.]

We welcome that assurance. We have appreciated the constructive dialogue that has taken place between the Opposition and the Government. We accept that the Secretary of State’s undertaking was given in good faith, but I am sure the Minister understands that there is some disappointment that the matter is dragging on.

Community Budgets

Debate between Brandon Lewis and Andy Sawford

Thursday 6th February 2014 Westminster Hall

[Brandon Lewis]

There is still a lot that Essex can do within the abilities and powers that it has been given. We arranged a meeting with BIS directly, which I think has now happened, but I will pass on the hon. Gentleman’s message and ask BIS to respond directly to him on where it is at.

The Government have invited local areas to make public service reform proposals as part of the local growth deals, which are currently being negotiated with the cross-Government local growth team. We have also provided an extra £10 million a year for Jobcentre Plus, working in partnership with local authorities, to help young people find apprenticeships and traineeships. I hope that we can all agree that the focus on better outcomes, which is at the heart of the community budget pilots, is evident across all Departments and all parts of the public sector.

Members asked, “What exactly is there?” The network has 30 staff and a budget of £2 million. The network is accountable to Sir Bob Kerslake, but it reports to Ministers in the Department for Communities and Local Government, the Cabinet Office and the Treasury.

The Chairman of the Select Committee made a point about localism. The community budget pilots, the transformation network and some of the great work being done by councils across the country to bring public services together and to get on with changing how we deliver services for the better—this is what really matters—proves that the power the Government have devolved to local communities and local councils goes way beyond the central process that we had in the past. That is a revolutionary change that, hopefully, local government will grasp and take forward. It would be wrong for us in central Government ever to pretend that we have taken a vow of silence on what we think of certain decisions or on pointing out good examples of best practice for providing residents with the great services that all taxpayers deserve.

[Andy Sawford]

Bin collections.

[Brandon Lewis]

Whether for weekly bin collections or any other service that the council provides. I suggest to the hon. Gentleman that most council tax payers would expect, at the very least, to have their waste collected in a good and weekly manner.

I welcome today’s thoughtful debate. We can all agree on the critical need for public services to work together in the interest of residents, service users and taxpayers. The community budget pilots showed how local services can be transformed. Continued commitment and strong leadership, both locally and centrally, means that everyone can benefit. There is an opportunity to see something different and something better for our country. I hope that local councils will take a grip, make the most of it and deliver for all our residents.

Local Audit and Accountability Bill [Lords]

Debate between Brandon Lewis and Andy Sawford

Tuesday 17th December 2013 Commons Chamber

[Brandon Lewis]

The hon. Gentleman makes a fair point, and he will appreciate that it is now noted and on record. I hope that I have been able to provide sufficient assurances to persuade him not to press his new clauses and amendments to a vote.

I shall not detain the House for long on Government amendments 1 to 5. Amendment 1 would require an authority to include the period of the auditor’s appointment in the public notice confirming the appointment of the auditor. Clause 8 requires authorities to publish such a notice within 28 days of making the appointment. The hon. Member for Corby will recall that he tabled a similar amendment in Committee and suggested that it would be helpful for the public to know the term of the auditor’s appointment. It was also suggested that knowing when the existing contract would end would be useful to potential bidders for any new appointment.

There was a similar discussion in the other place, where Lord McKenzie tabled an amendment to require that information on the term of appointment should be included in the published notice. At the time, the Government expressed sympathy with the intentions of the amendment, but questioned whether such a requirement needed to be set out in legislation, because it could simply be a matter of good practice and guidance. However, having considered the case further, and in the light of the points made by the hon. Member for Corby in Committee, the Government accept that it might be useful to put the matter beyond doubt through this amendment.

Amendment 2 is a minor and technical amendment to ensure that references throughout the Bill cover subordinate legislation made under part 42 of the Companies Act 2006, as applied by schedule 5 to the Bill. It will make it clear that provisions on eligibility and regulation apply to the whole local audit regime.

Amendment 3 removes from schedule 2 internal drainage boards that are partly in England and partly in Wales. There are two such boards: Powysland and Lower Wye. Both are mainly in Wales but currently fall under the Audit Commission regime. The local audit provisions in the Bill will therefore not apply to those cross-border internal drainage boards after the Audit Commission is abolished. The Welsh Government intend to transfer the functions of the two cross-border IDBs, along with the functions of one IDB that is wholly in Wales, to a single body, Natural Resources Wales, and to bring them under the Welsh audit system. They intend to do this by the time the Audit Commission is abolished—by April 2015. Both bodies will continue to fall under the Audit Commission regime until then.

The Welsh Government supported a legislative consent motion to make audit arrangements for the two bodies under the Bill as a stopgap measure until the new governance arrangements are in place. However, the legislative consent motion was not passed by the National Assembly for Wales. As a result, in line with the devolution settlement, the amendment removes these two bodies from schedule 2. Welsh Ministers have agreed that we should retain the power in clause 2 as a backstop power to add cross-border bodies back into schedule 2 by regulations at a later date, should the transfer of functions take longer than expected. Regulations made under this power will be subject to consultation and the affirmative procedure, and would require consent from the National Assembly for Wales.

Amendment 4 is a minor amendment to clarify that paragraph 6(1) of schedule 4 does not apply in the case of health bodies. The paragraph currently provides that, when an authority uses an existing committee as its auditor panel, wider enactments that usually apply to committees of a local authority do not apply. A corresponding power in paragraph 5 then allows such enactments to be positively applied to the panel, to ensure that arrangements remain proportionate, given the panel’s limited role.

In the case of health bodies, however, their audit committees are covered by a specific existing framework, which is different from that applied to local authority committees. That framework reflects the different governance framework for health bodies such as clinical commissioning groups, and will need to continue to apply in full, even when the committee is acting as the panel. As drafted, paragraph 6 of schedule 4 could have the unintended consequence of disapplying that existing framework for audit committees within health bodies when they are acting as the auditor panel. The amendment therefore excludes health bodies from this provision.

Amendment 5 further modifies schedule 10 to the Companies Act 2006, as applied by schedule 5, in respect of auditors qualified in other European economic area countries. It has two main effects in respect of those individuals. First, it will enable the recognised supervisory bodies for local audit to recognise the qualifications of those auditors who hold the equivalent of a UK local audit qualification obtained elsewhere in the EEA. This is necessary to comply with the requirements of the recognition of professional qualifications directive, 2005/36/EC.

Secondly, the amendment specifies that recognised supervisory bodies can require an EEA statutory auditor to pass an aptitude test only if the auditor is seeking to become established as a local auditor in the UK on a permanent basis. The audit directive, which makes provision for an aptitude test, applies only to statutory audit. Unlike the audit directive, however, the recognition of professional qualifications directive does not permit the imposition of an aptitude test if an individual is seeking to provide services on a temporary and occasional basis. The amendment therefore seeks to align the regulatory frameworks for statutory and local auditors, as far as is permitted.

The amendment will also ensure that any indirect discrimination against EEA auditors is avoided and that the requirements for EEA local auditors and EEA statutory auditors are as consistent as possible. It will also ensure that a firm is qualified if it is eligible for appointment as a local or statutory auditor or is eligible for a corresponding appointment. I urge the House to support the Government’s amendments.

[Andy Sawford]

Thank you, Madam Deputy Speaker, for allowing me a moment to reply.

The amendments, particularly new clause 2, have had strong support from my hon. Friends and I am grateful to them for putting their views on record. I welcome the Minister’s statement that the Government will publish guidance to private sector contractors. He went further, saying that if that is not effective, the Government will consider extending freedom of information contracts to private suppliers. I consider that to be a significant move forward, certainly from where we were in Committee. It is a win for my hon. Friend the Member for Derby North (Chris Williamson) and others who have championed this. We very much look forward to seeing that guidance, but we also commit to taking the issue forward ourselves.

--- Later in debate ---

[Brandon Lewis]

First, let me be clear that good communication between a local authority and the public is important. Let me also be clear that what clause 39 delivers is a manifesto pledge by both coalition parties. Local authority publicity can be expensive and it can be controversial, so it is important that local authorities get it right.

In Committee I outlined our intentions and explained exactly what the clause seeks to achieve. We should be conscious of the fact that localism is about empowering local people to be able to challenge and see, transparently, what their local authority is doing. This is about true localism and making sure that we are also able to do our bit to defend the independent local press.

The code of recommended practice on local authority publicity ensures that publicity is, among other things, cost-effective, objective, even-handed and appropriate, and Labour Members have agreed in principle with the voluntary code. It ensures that taxpayers’ money is not wasted on issuing inappropriate publicity or publicity that political parties themselves should be issuing, rather than a local council using taxpayers’ money to do it. The code has been in place since 2011. It was debated and approved by both Houses of Parliament.

[Andy Sawford]

The Minister is right to say that the code seeks to prevent money being used on things that are politicised, but does he not see that his argument is not consistent with a Department that is sending out puff pieces about its Secretary of State for local authorities to issue?

[Brandon Lewis]

I suspect that deep down inside, the hon. Gentleman—we almost became hon. Friends in Committee—probably realises that there is a world of difference between a template press release sent to independent local journalists and a municipal taxpayer-funded newspaper that takes away the competition of a local independent press. None of the provisions in the Bill makes any changes to the publicity code.

Let me give a very clear example of how the process might work for a local authority publishing a weekly newspaper—such as Nene Valley News, which was mentioned by the hon. Gentleman—in direct competition to the local independent press that is so important in holding councils to account. Under the provisions, the Secretary of State, after advising the local authority that he intends to do so and giving it time to make any representations it wishes—such as that there is no other local paper—may, if he thinks fit, issue a direction requiring that the local authority comply with some or all of the code, but particularly, let us say, the part advising local authorities that council newsletters should be issued no more than quarterly. If the Secretary of State considers that a group of local authorities, or even all local authorities in England, should be required to follow the guidance in the code, he must of course make an order, which would need to be debated and agreed by both Houses of Parliament.

[Brandon Lewis]

I suggest that the hon. Gentleman looks at Hansard for the reports of our proceedings in Committee, where we outlined the evidence—including from the Newspaper Society, which complained about exactly that issue—particularly, as was noted, in relation to Tower Hamlets.

Amendment 14 confuses the very clear and necessary provision that the Secretary of State may direct a local authority to comply with some or all of the publicity code. The amendment would achieve little in practice, as the Secretary of State may of course issue more than one individual direction. Amendment 15 would also be far from beneficial. It would add layers of complexity and bureaucracy to what should be a straightforward procedure to allow the Secretary of State rapidly to address incidences of the guidance in the code not being observed.

[Andy Sawford]

Will the Minister give way?

[Brandon Lewis]

No, I shall make a little progress. The hon. Gentleman was keen to make progress during his speech.

Any local authority that already—rightly—complies with the guidance in the code would be wholly unaffected by a direction. Amendment 15 would remove sensible, proportionate measures and put in place a gold-plated bureaucratic process that requires the publication of not one, but two reports by the Secretary of State, all while taxpayers’ money might continue to be wasted.

Amendment 16 seeks to remove the provisions to ensure that a group of local authorities, or all local authorities in England, comply with the guidance in the code. We have sensibly decided to make provision for the Secretary of State to require compliance with the code not only by an individual local authority, but by a number of them or even, if necessary, by all local authorities in England.

The Secretary of State can issue an individual direction to an authority, but to require a group of local authorities or even all local authorities in England to comply with the code, the Secretary of State must make an order subject to the agreement of both Houses of Parliament. That was a recommendation of the Delegated Powers and Regulatory Reform Committee, and we were happy to amend the Bill to give effect to it. Amendment 16 would quite wrongly undo the power and the recommendation, leaving a ridiculous situation in which if the Secretary of State wanted to act to address widespread non-compliance by a group of councils, he might have to issue hundreds of individual directions. The amendment would also remove parliamentary scrutiny of the process.

We are obliged to make the provisions because although the vast majority of local authorities comply with the code, a very few do not; we accept that there are very few. It is to address that abuse of council resource and waste of taxpayers’ money that we have rightly decided to act. The provisions are important, proportionate and necessary.

[Brandon Lewis]

I am sure that the hon. Gentleman will have done his homework and will realise that for the Government to take action under the voluntary code, there would have to be a long and expensive judicial review.

The provisions are the right way in which to move forward so that we can enforce the code effectively, efficiently and swiftly. It is slightly baffling that the Opposition claim that they have no problem with the voluntary code agreed by Parliament and support it, but do not want it to be enforced. That just does not make sense, has no credibility and does not add up. The provisions ensure that we can protect the good, local independent press, and that taxpayers’ money is used efficiently and effectively, and not wasted on town hall Pravdas. I encourage hon. Members to resist the amendments.

[Andy Sawford]

What a shocking response. We will not press amendments 14 and 16, but we will press amendment 15 to the vote.

Amendment 15 would place a very simple expectation on the Secretary of State: that he would act on the receipt of evidence, that he would share that evidence with the local authority and that he would ask it to comment. As the Minister says, these matters should be subject to local discretion as well as to national direction. The Secretary of State would simply have to say, in taking enforcement action against a local authority, that he had found a breach of the code. It would be incredibly simple, straightforward and right to make that amendment if the Secretary of State feels that it is necessary to take these extraordinary powers, even though we do not.

The Minister’s response, as at each stage of the passage of the Bill, has made us far more concerned, not less, about the intention behind this very worrying and deeply anti-democratic clause.

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment proposed: 15, page 26, line 25, leave out subsection (4) and insert—

‘(4) A direction can only be made by the Secretary of State if—

(a) evidence of a breach of a code has been published by the Secretary of State to the local authority;

(b) a local authority, on receipt of a letter from the Secretary of State notifying them of evidence which purports to demonstrate a breach of the code has made a response to the Secretary of State within 28 days; and

(c) upon receiving any response the Secretary of State has published a report detailing his conclusions.’.—(Andy Sawford.)

Question put, That the amendment be made.

--- Later in debate ---

[Brandon Lewis]

Our amendments are precautionary measures to remove the risk of local authority budgeting being adversely impacted in the event of a delay to the Bill taking effect. Clause 41 currently provides that the council tax referendum calculations will take account of levies from 1 April 2014. The referendum principles, which we intend to publish in draft very shortly, will be put to this House for approval in February as normal. Those principles will take account of levies, but will be subject to the will of Parliament and the Bill, which will have come into force by then.

The amendments have a relatively simple effect. Together, amendments 6, 9, 10 and 11 provide that if the Bill is passed by 5 February—the likely date by which the referendum principles must be laid before Parliament—the provisions in clause 41 will take effect immediately and the changes to the referendum provisions will take effect for the 2014-15 financial year. Otherwise, the changes will take effect by order from 2015-16. There is no reason to believe that the provisions will not be in force before the referendum principles are approved, but we are tabling this group of amendments to give local authorities advance certainty over timings so that they can be confident that any delay in Parliament would not impact on their budget-setting timetable.

Amendment 7 is a minor amendment clarifying that the clause does not alter the existing discretion of the Secretary of State when determining categories of authority for 2014-15. Amendment 8 addresses the ability of the Secretary of State to determine categories of local authorities on the basis of whether their 2013-14 council tax increase would have been excessive had levies been taken into account. The clause puts this existing ability beyond question and does not extend it further. Similarly, the amendment does not extend that existing ability, but updates the references to increases in 2013-14 to include references to increases in 2014-15, should the provisions take effect from 2015-16. The current transitional provisions in subsections (14) to (16) ensure that council tax comparisons between 2013-14 and 2014-15 are made on a like-for-like basis. An amendment must be made to ensure that this protection for authorities still exists if levies are to be included from 2015-16. Subsections (18) to (20) in amendment 8 provide that protection.

In summary, these amendments are precautionary measures only and, apart from clarifications and restatements of existing legislation, have one purpose: to ensure that in the event of any unpredicted delay, local authorities will continue to be treated consistently and to benefit from the transitional protections already in the clause.

[Andy Sawford]

Our amendment 18 would give the Secretary of State some discretion to prevent any unintended consequences arising out of the levy changes from affecting city deals. The amendment states:

“The Secretary of State may, by Order, exempt from the calculation of an authority’s basic amount of council tax any levies agreed as part of a City Deal signed prior to this Act receiving Royal Assent.”

We are concerned that the provisions to include levying bodies could affect those city deals that have been agreed around the country.

--- Later in debate ---

[Andy Sawford]

My hon. Friend has considerable expertise in this and he is right. If a drainage board needed to take emergency action, clearly it would not be in the interests of communities—the very people who, during a cost of living crisis caused by the Government, we agree we want to protect from excessive council taxes—to leave them exposed to flood risk if we know that we can take emergency action to address that.

There are issues with pension authorities, particularly in some metropolitan counties and in London, which operates the legacy pension schemes of the Greater London Council. As with the rest of the local government pension scheme, there is little control over the costs of these, which are increasing with each successive valuation. Indeed, more levying bodies may be created in the future as a consequence of the pension governance reforms that the Department is considering.

In short, these proposals have not been thought through. We do not disagree with the fundamental intention behind them—to keep council tax down—but we do disagree about how they are being introduced, without further thought or consultation, and particularly about some of the issues that arise from retrospection as it affects drainage boards and city deals. We would urge the Government to go back to the drawing board. With the leave of the House, we will seek to press amendment 18 to a vote.

[Brandon Lewis]

Before dealing with amendment 18, let me touch on the issue of internal drainage boards, which some hon. Members have raised. IDB levels are not being singled out. This Bill will ensure consistent and fair treatment between all local authorities.

I shall now turn directly to amendment 18, which relates to local authorities that have collectively entered into “city deals”—agreements with the Government on additional freedoms and financial certainties in order to promote local growth and skills—before the Bill’s commencement. This area was touched upon on Second Reading and debated in more depth in Committee, where the hon. Member for Corby (Andy Sawford)was content to take away and consider the clarifications and assurances I gave in response to a similar amendment.

Since this amendment has been tabled, I am happy to repeat some of the points discussed in Committee and to provide hon. Members more widely with any further expansion I can give. Although the amendment would have a wider effect, I understand that its intent is to address a single specific case—that of the Leeds city region deal— where there are plans to create a transport investment fund that would allow about £1 billion to be raised from grants, contributions from stakeholders and borrowing. Repayment of that borrowing will be met by the constituent authorities via modest increases in the transport levy over the next decade. This arrangement is novel. It will provide much-needed investment in the region and remains an arrangement that the Government are committed to and happy to support. However, the figures generated by Leeds and the other authorities taking part show that if those levy increases were passed straight on to local taxpayers in the form of higher bills, it would be affordable without the need for a referendum. It would amount to an increase of between 0.2% to 0.9% per year.

[Andy Sawford]

I understand the Minister’s point, which he made in Committee. It is a fair point, but does he accept that the consequence would be to restrict the ability of local authorities across that area, in a way that they never imagined, to raise council tax in a way that local authorities outside the city deal could? The amount that would trigger the referendum would mean that they were limited?

[Brandon Lewis]

I will come on to that very point in a few seconds.

I have to say that there is no basis for suggesting that these levies would result in authorities being forced to hold referendums. Given the relatively small increases involved, I would urge those authorities to freeze their council tax instead and take advantage of the grants we are making available to support them in doing so, thus holding down council tax for hard-working people.

Let me gently suggest to Labour Members that this is an area where the facts do not support the claims being made. It is right for the Opposition to test and challenge the statements of the Government of the day, but where there is shown to be no basis for criticism, we should move on and focus our attention elsewhere. In this case, we are proceeding over ground already debated several times here and in the other place, and the figures involved are not disputed by the Opposition or the authorities themselves. However, in the same manner as for any other authority, if Leeds, Bradford or any other council wishes to make representations about how the proposed referendum principles will apply to their particular circumstances, the Secretary of State would take them into account when asking the House to approve the final principles in 2014.

Local Authority Funding

Debate between Brandon Lewis and Andy Sawford

Tuesday 3rd December 2013 Westminster Hall

[Brandon Lewis]

I tell the hon. Lady again that what a local council does with its funding is a matter that she must put to her local authority. Councils must make the decisions about how they spend the money that they have. There is no point continuing to look at silo pots of money. The point of spending power is that it shows exactly what a local council has in total to spend on its local community. In Newcastle, the amount is one of the highest in the country. It is also why it is important that we offer support to people individually as well. We are pleased to be able to offer further support for council tax freezes in 2014-15 and 2015-16. We have been clear that if an authority wants to raise its council tax, it should do so with the assent of the public in a referendum locally. It needs to be able to explain to residents what it wants that money for and to convince residents of its case.

It is worth adding that in many cases, councils have more in reserves than they are losing through cutbacks. Liverpool, Manchester and Leeds all have reserves that are twice that of their spending power reductions. Indeed, this year, Newcastle has had substantial reserves. It is also important to note that local authorities will be spending about £4 billion extra this year across the country—well over the £100 billion of last year. It is also worth noting that local authorities have managed to increase reserves to a record level, going up by almost £3 billion to £19 billion. With that and the £2 billion in fraud and error, and with a further £2 billion in uncollected council tax, there is still a long way for local authorities to go before they can claim that they have done everything to drive out waste and bureaucracy.

We are in a new world for local government. The funding settlement used to be the endgame; now, it is just the starting point, with councils no longer tied to the settlement figures. They can get to earn their keep and retain £11 billion of business rates. That could deliver an extra £10 billion to our wider economy. It is worth noting that areas such as Manchester, Liverpool and Newcastle all saw business rates rise above the national average of 4.8% in recent years. However, thanks to the old begging bowl system, they missed out on the opportunity of making the most of that money—but no longer. From now on, it will be what councils make and not what they take that counts. If they bring in more businesses, more jobs and more homes, they will be rewarded. If they build those new homes through the new homes bonus, they will see a share of that money, which is worth £650 million this year and is growing. If they increase their business rates, they will retain some of the benefit of that increase.

Therefore, the message to councils is clear: if they are ambitious, become self-reliant and work hard on behalf of their local people, they will succeed and see the benefits. We want authorities to go further and faster, so that residents feel those benefits. We want to help and reward those who do the right thing and are innovative. Our funding approaches, as has been outlined independently, are fair for north and south, urban and rural, and rich and poor. I gently say to hon. Members who have outlined what they see as the funding draw from urban areas that even Labour Front Benchers have been arguing on the Floor of the House to move money away from urban areas into rural areas.

[Andy Sawford]

Will the Minister say which Labour Front Benchers have been making that argument?

[Brandon Lewis]

The hon. Gentleman’s colleague, the hon. Member for City of Durham (Roberta Blackman-Woods), made that point in a petition in the House just a couple of weeks ago, in pushing to have that gap between urban and rural moved more towards rural areas.

[Andy Sawford]

I inform the Minister that I also put a petition from local residents in the Speaker’s petition bag, as did many hon. Members of all parties in representing their constituents. However, the Labour Front-Bench team’s position was clearly set out, as the Minister is very well aware, only a few weeks ago in the debate relating to SPARSE—the Sparsity Partnership for Authorities delivering Rural Services. We were clear that we see the current formula as fundamentally unfair.

[Brandon Lewis]

I gently say to the hon. Gentleman that the hon. Member for City of Durham was in the Chamber on the night giving in her petition, in which the case that was being made was not about having more money, but about ensuring a different distribution between rural and urban areas, but I shall let him take that up with her, rather than me. She was the one who was making the case to move the money to rural away from urban, so I suspect that the Labour party has some work to do with its own Members.

We now ensure that the system rewards innovation and imagination, as we saw this year with the transformation fund. We have given councils more power than they have had before, and we are developing a new ethos for local government, where they are generating more income through the work that they do locally, rather than holding out a begging bowl to central Government. If councils are willing to look to the future, they have a once-in-a-generation chance to step out from Whitehall’s shadow and to use the income from local growth to support, develop and improve the services that they give their residents.

Local Government Finance (England)

Debate between Brandon Lewis and Andy Sawford

Wednesday 13th February 2013 Commons Chamber

[Brandon Lewis]

I will make a bit more progress, following Mr Deputy Speaker’s comment.

I have been appalled by things such as we have seen in Lambeth, especially where there are still savings to be had. Last year, local government showed commendable skill in reducing its budget in many areas while protecting front-line services; many residents actually reported that their services had improved. That goes back to this core point about how we spend money rather than just how much we think we can get from a begging bowl. It is not about how much we spend; it is about how we spend it.

Let us examine our approach to troubled families. Instead of having multiple people dealing with a family, we now have just one no-nonsense worker telling them how it is. For example, Barnet council has worked out that the cost of an effective intervention for an average troubled family has reduced from almost £100,000 to just £10,000, so through our community and neighbourhood budgets we are rewiring the system.

[Andy Sawford (Corby) (Lab/Co-op)]

I thank the Minister for giving way on that point about how the cuts are having an impact on children and families. He may not agree with Baroness Eaton, although he was not clear on that point, but has he read the evidence from the Joseph Rowntree Foundation? It says that the

“evidence points to the distinctive impact of cuts on services for children and young people”.

What assessment has the Minister made of the impact of these cuts on children and young people, particularly the poorest?

[Brandon Lewis]

The hon. Gentleman is forgetting that most of these cuts are Labour cuts, and that this is about designing services. It is about moving away from the approach taken by too many authorities, including Corby’s, where they do something because they do it because they do it. They should be looking at the outcome they want for the residents and how best to provide it with the best value for money.

Oral Answers to Questions

Debate between Brandon Lewis and Andy Sawford

Monday 4th February 2013 Commons Chamber

[Andy Sawford (Corby) (Lab/Co-op)]

11. What plans he has for reform of council tax benefit; and if he will make a statement.

[The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis)]

Spending on council tax benefit doubled under the last Administration, and welfare reform is vital to tackle the budget deficit we inherited from the last Labour Government. Replacing council tax benefit with local support schemes gives councils control over how to achieve a 10% saving, and a direct incentive to help local people into work.

[Brandon Lewis]

I hope that the hon. Gentleman will make the case clearly to his own local authority, which is looking at a scheme at the moment that would not necessarily do the most to help local people into work. The whole point of what we are doing is that it will give local councils the power to be part of their local economy, to drive economic growth and to get people back into work.

[Andy Sawford]

One council told the Communities and Local Government Select Committee that the reduction would create additional financial pressures through administration and debt collection, as well as having an effect on services such as debt advice, welfare support and housing advice, and a huge effect on homelessness. Given that that was Tory-controlled Croydon council, does the Minister accept that even his own friends recognise that this is an ill thought out cut that will hurt the poorest?

[Brandon Lewis]

Similarly, I hope that the hon. Gentleman will talk to Corby council about coming up with a scheme that will help people back into work. Our scheme will give local authorities the power to look at what their communities need and to deliver for their communities. It will then be up to the communities to hold their councils to account, as I hope they will in Corby.