Local Government Finance (England)
Debate between Brandon Lewis and Gordon Marsden(11 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Brandon Lewis
I want to make progress.
This is a new dawn for local government. The local funding settlement used to be the end game, but this year it is just the starting point. Councils are no longer tied to the settlement figures, and they can earn their keep and retain £11 billion of business rates, which could deliver around an extra £10 billion to the wider economy by 2020. In recent years, Newcastle, Manchester and Liverpool all saw their business rates rise above the national average of 4.8%, but thanks to the old begging-bowl system, they missed out on the opportunity of making the most of that money. The old formula grant paid to fail, but from here on in, it will be what councils make, not what they take, that counts. If they bring in more business and more jobs, they will be rewarded. If they build more homes they will get the new homes bonus, worth more than £650 million this year and even more in 2014-15. Almost two thirds of authorities are expected to gain from the scheme in the first year alone.
Mr Gordon Marsden (Blackpool South) (Lab)
Is that not a slight sleight of hand? The new homes bonus money is not new money; it has been derived from top-slicing local government funding at national level, as my borough finance officer confirmed to me yesterday.
Brandon Lewis
Yet again, an Opposition Member highlights the fact that they simply do not get it. This is about local authorities getting money for what they do; we are moving to a new way of working. Under the business rates scheme, they will get more money if they bring businesses and jobs in. If they build houses, they will get more money from the new homes bonus. The message to authorities that do not like it is that they should go out and build some houses. Two thirds of authorities are expected to gain, so the message to councils is clear: if they oppose the settlement, they oppose the opportunity for a brighter future. However, if they are self-reliant and ambitious, and work hard on behalf of local people, they will win the day.
This Government are keen to do everything they can to reward radical, forward- thinking councils, so today I am pleased to announce a new incentive for councils to join forces to bring management together, not just sharing the usual back-office functions and services that we hear of, but real front-line changes for the benefit of citizens as well. This is about looking at some of the excellent work done by great authorities and following in the footsteps of some—for example, the tri-borough initiative. Hammersmith and Fulham, Westminster, and Kensington and Chelsea are on track to save around £40 million by 2015-16. We are bringing in a new £9.2 million challenge award to help other councils to follow their lead.
I want councils such as West Somerset, which was mentioned on Monday—
Mr Marsden
Well yours might be, but I am not sure about the Minister who opened this debate.
If the Minister got away from that distorting mirror and went back to his constituents in Great Yarmouth—to some of the houses in multiple occupation, the people living in bad private housing or some of those groups of his constituents who will be most affected—perhaps he would not come to this House with a speech so full of complacency and smugness.
Brandon Lewis
I wonder whether the hon. Gentleman is talking about the same people who will now benefit from the £7 million transitional grant or the next £4 million to £5 million of efficiency grant that the council will get, following the cliff edge left by the last Labour Government, leaving them without that money.
Mr Marsden
I am interested that the Minister has turned to the transitional grant, because in percentage terms the average transitional grant will cover only a quarter of the original 10% cuts. It just so happens that my council in Blackpool will receive the lowest proportion of the transitional grant, so I am afraid the Minister will win no plaudits from Opposition Members or, I suspect, from many of his own constituents for the settlement he has imposed on them. The reality of this settlement is that it is unfair and unjust for some of the poorest people who are working hard as carers, part-time workers and single mums. Such people in Blackpool and many other places can ill afford to pay this money, and the Government should be ashamed of the incoherent and unequal settlement that they have put before the House.
Local Government Funding
Debate between Brandon Lewis and Gordon Marsden
Mr Marsden
Not at this point, but I may do later.
I shall not stray far from the motion before us, but I want to mention, in passing, the significant assistance provided by the Northwest Regional Development Agency, and the same point applies to seaside and coastal towns elsewhere.
Mr Marsden
I would like to make a little progress before giving way. As I was saying, the regional development agencies provided a significant benefit.
What has happened since June this year? First, we had the area-based grants cuts in the emergency Budget. If we look at the figures on the cuts in seaside and coastal towns generally, and particularly at those in Blackpool, we find that in most cases the cuts were twice the level of those made in other areas. It is not necessary to take just my word for it; let me cite the words of Peter Callow, the leader of Conservative-controlled Blackpool council. On Radio Lancashire, commenting on the cuts, he said that
“it is 33 million for a part year remember which equates to £4 million for the whole year, that is a sizeable sum and what I have got to explain to government and what I am doing is saying look behind the glitz and the glamour of Blackpool there is deprivation, we are one of the most deprived areas in the land and we shouldn’t be singled out like this, I understand some of the leafy lanes of Surrey and places have got away with it, well that can’t be right”.
That is what the leader of our Conservative-controlled council said back in June.