Local Government Finance

Christian Matheson Excerpts

Thursday 17th December 2015 Commons Chamber

[Greg Clark]

I and my team stand ready to meet colleagues to discuss local circumstances. I can tell my hon. Friend that as a result of this settlement Somerset will receive an increase in its spending power of 4% by 2019-20, which I know will be a big help.

[Christian Matheson (City of Chester) (Lab)]

Cheshire West and Chester Council’s budget is being cut by central Government by £47 million. I hope the Secretary of State is clear that when local services are scrapped or cut, responsibility for that will lie squarely at the feet of himself and the Chancellor.

May I ask the Secretary of State about the new homes bonus grant, particularly in the light of his longer-term and four-year budgetary proposals? I understand that when it was first introduced, payments were to be made to councils for six years, and councils have planned their income on that basis. We understand now that payments might be made for only four years, which will of course restrict the ability of councils to respond to that grant. Will the Secretary of State clarify the situation?

[Greg Clark]

If the hon. Gentleman believes councils should be in charge of their own destiny and count on their own resources, he will need to understand that we are moving into a world in which councils are financed locally, not centrally. He will want, I am sure, to discuss with his council how it is going to make spending decisions.

On the new homes bonus, the good news for councils across the country is that we are continuing that very successful policy. We are consulting on some possible changes, and one option is to reduce the period from six years to four for new developments. Councils will continue to receive the funding that they have expected for developments they have approved. If we do go with that option, the funds that are released will be invested in social care.