Non-Domestic Rating (Lists) Bill

Clive Betts Excerpts

2nd reading: House of Commons & Money resolution: House of Commons & Programme motion: House of Commons & Ways and Means resolution: House of Commons
Monday 17th June 2019 Commons Chamber

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

I beg to move, That the Bill be now read a Second time.

This Bill makes a major improvement to the rating system that delivers on Government commitments and addresses ratepayers’ concerns. It will ensure that business rates bills will be updated at more frequent revaluations to reflect changes to the rental property market. In doing so, it will ensure that business rates become more responsive to economic changes.

Business representatives such as the CBI, the British Property Federation and the British Chambers of Commerce have all asked for more frequent revaluations. They were promised that by the Chancellor at autumn Budget 2017 and again at the 2018 spring statement. This Bill delivers on those promises.

Business rates bills are based on the rateable value of the property, which, broadly speaking, represents its annual rental value. The rateable value is therefore the tax base for business rates and it is assessed by the Valuation Office Agency, independently of Ministers.

Since the current system of business rates was introduced in 1990, the Government have had regular revaluations of rateable values, to ensure that they remain up to date. These revaluations ensure that the amount paid in business rates—money used to fund important local services—is distributed fairly among all ratepayers, having regard to their rental value.

Regular revaluations are an important part of maintaining fairness in the system, but the Government must strike a balance between the uncertainty created by regular revaluations—because it is inevitable that rate bills will change at that time—and the stability of businesses being able to plan for the future.

[Mr Clive Betts (Sheffield South East) (Lab)]

The Minister just made an important point about the fact that revaluations are there to ensure fairness in the system. On that basis, does not council tax completely fail the test? If the Minister really wanted to go down in history, would it not be more appropriate to have a non-domestic rating and council tax valuation Bill?

[Rishi Sunak]

I am not sure I would like to go down in history as the man who revalued people’s homes to tax them more. The Chair of the Select Committee on Housing, Communities and Local Government makes a fair point, but the difference is that the statutory basis for business rates requires that the overall revenue raised remains neutral in real terms, taking account of appeals and increases, so it is necessary to ensure that that happens in practice. As a result of doing that every five years since 1990, the Government have enacted a revaluation.

Following the 2010 revaluation, and in the face of the economic downturn, the planned 2015 revaluation was postponed to 2017. That reflected the need at that difficult time to give businesses more certainty. Quite rightly, however, it also led to renewed interest in business as to how often we should in the future revalue for business rates.

--- Later in debate ---

[Mr Clive Betts (Sheffield South East) (Lab)]

I draw the House’s attention to my entry in the Register of Members’ Financial Interests. I am the vice-president of the Local Government Association.

I do not want to keep the Minister too long from his exciting bedtime reading, which he was telling us about in questions earlier. In principle, I accept what the Bill tries to do and I think it is a sensible move. The Housing, Communities and Local Government Committee has conducted an inquiry into business rate retention and, more recently, the high street. The view generally has been that business rates should be revalued more often and that three years is a reasonable compromise. Five years is too long, because we get major changes in rating values that we then have to catch up with, and we then have dampening mechanisms, appeals and so on. Any more frequently would be too much change too quickly, so three years is a reasonable compromise on which I think there is general agreement.

I hope the Government really mean it and that we will have three years. In 2015, when we had five years, the valuation was postponed for two years. Why? It was because we were going to have a general election in 2015. That was the reason and everyone knows it. That meant seven years between revaluations, which created an even bigger problem with even bigger changes and a lot more difficulties, from which we are still suffering.

Are there any implications for the business rate retention scheme? Presumably, the Government are still going ahead with the 75% figure. Is it going ahead from next year? We are still not quite sure, in these changed circumstances. Will it have any impact particularly on the issue of resets within the system? Presumably not, particularly if a rolling reset is done. I presume that would be covered and would not be affected, but it would be helpful to have reassurance on that.

I echo the point made by my friend the hon. Member for Harrow East (Bob Blackman). All the evidence we have heard, in our high street inquiry and the business rate retention inquiry—I am currently a guest on the Treasury Committee inquiry into business rates—shows that we just cannot carry on not recognising the change of circumstances, particularly with regard to the high street and 20% of sales now being done online, which is the highest percentage anywhere in the world. At some point, the system will have to change. Amyas Morse, the then Comptroller and Auditor General, made the point to the Committee that simply having a system based on another age and on floor space was taking no account of the changes happening now in modern society. That was not sustainable in the long term and there had to be change.

There could be a complete comprehensive review, moving to a completely different system of raising money from businesses. That is one way. I still think it is hard to avoid taxation on physical buildings and that they are probably a good basis for a system, but there has be some reform and some addition. The Select Committee’s inquiry into the high street recommended that we look at a number of alternatives, including the potential for an online sales tax. That would take the pressure off those elements of business, particularly high street shops, which are most under pressure. That still needs to be looked at.

Finally, appeals are still a problem. We hear that local authorities are holding reserves for very obvious reasons. We have changed the system and we now have a check and challenge. We have been told that it is discouraging businesses from appealing, so there is that disadvantage, compared with having lots of appeals that were bogging down the system. Fundamentally, the evidence showed that the valuation office is understaffed and under-resourced to deal with appeals. That came up in the Treasury Committee inquiry. I hope Ministers will look at that.

Whatever system we have, there has to be a proper appeals system that works expeditiously for the benefit of the appellant and local authorities. A number of issues still need to be considered, but the principle behind this small Bill is a good one that should be supported.

--- Later in debate ---

[Mrs Wheeler]

I thank my hon. Friend for that question. The last time this matter was raised, the Under-Secretary of State for Housing, Communities and Local Government, my hon. Friend the Member for Richmond (Yorks) (Rishi Sunak) facilitated meetings between the professional groups and the people involved. There were ongoing discussions that became very fruitful.

The Bill will ensure that rateable values and therefore business rate bills are more responsive to changes in the rental market. It requires revaluations after 2021 to take place every three years and I am delighted that Opposition Front Benchers have accepted that. Some businesses have asked us to go further and move to annual revaluations, but we are delighted to have peace reigning in the Chamber today.

Let me try to answer the question about business rate retention from the hon. Member for Sheffield South East (Mr Betts), the Chair of the Housing, Communities and Local Government Committee. The revaluation does not affect councils’ local income, as there are adjustments to make sure that that is dealt with. As regards resourcing the VOA, that will form part of the spending review later this year.

[Mr Betts]

The Minister made a commitment that this will be reviewed later this year as part of the spending review. Does that mean that the spending review is going ahead this year?

[Mrs Wheeler]

Very sadly, apparently I am not running to be leader of the Conservative party—[Hon. Members: “Shame!”] How kind! It is subject to that.

The Bill brings forward the next revaluation to 2021 but ratepayers do not have to wait two years to benefit from our reforms to the rating system. Ratepayers are now benefiting from a multiplier linked to CPI rather than RPI and from a small business rate relief scheme that has removed 655,000 small businesses from rating. They are benefiting from a retail discount of one third off small and medium retail properties. I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read a second time.

Non-Domestic Rating (Lists) Bill (Programme)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Non-Domestic Rating (Lists) Bill:

Committal

(1) The Bill shall be committed to a Public Bill Committee.

Proceedings in Public Bill Committee

(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Tuesday 2 July 2019.

(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.

Proceedings on Consideration and up to and including Third Reading

(4) Proceedings on Consideration and any proceedings in legislative grand committee shall (so far as not previously concluded) be brought to a conclusion two hours after the commencement of proceedings on Consideration.

(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion three hours after the commencement of proceedings on Consideration.

(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on consideration and up to and including Third Reading.

Other proceedings

(7) Any other proceedings on the Bill may be programmed.—(Amanda Milling.)

Question agreed to.

Non-Domestic Rating (Lists) Bill (Money)

Queen’s recommendation signified.

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Non-Domestic Rating (Lists) Bill, it is expedient to authorise the payment out of money provided by Parliament of any increase attributable to the Act in the sums payable under any other Act out of money so provided.—(Amanda Milling.)

Question agreed to.

Non-Domestic Rating (Lists) Bill (Ways and Means)

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Non-Domestic Rating (Lists) Bill, it is expedient to authorise provision for, or in connection with, changing the dates on which non-domestic rating lists must be compiled.—(Amanda Milling.)

Question agreed to.

High Streets and Town Centres in 2030

Clive Betts Excerpts

Thursday 13th June 2019 Westminster Hall

[Mr Clive Betts (Sheffield South East) (Lab)]

I beg to move,

That this House has considered the Eleventh Report of the Housing, Communities and Local Government Committee, High Streets and town centres in 2030, HC 1010, and the Government response, CP 84.

It is a great pleasure to serve under your chairmanship, Mr Stringer. It also gives me great pleasure to discuss the report by the Housing, Communities and Local Government Committee on high streets and town centres in 2030. I thank everyone who contributed to our inquiry, including our witnesses. We took a range of evidence from retailers, councils, landlords, planners and academics, and we came to our conclusions after eight evidence sessions and two visits. I thank the Committee staff for their work in putting the report together.

The reason why the Committee decided to conduct this inquiry is, I think, pretty obvious. The decline of the high street is a matter of concern to Members across the House because it is a concern to our constituents and the general public. The change—the reduction in the number of people shopping, in some cases the empty shops, and in the worst cases the decay and deterioration across villages, small towns, larger towns, cities and district centres—is almost entirely down to online shopping.

Some 20% of sales are now done online: the highest percentage anywhere in the world. That has happened in the UK over a fairly short period—the past 10 or 15 years—and in many cases the use of shops and the reaction of councils and the Government have not kept pace with that very rapid change. We as politicians cannot and should not want to halt it, but we must look at what we can do to mitigate its impact and address the situation.

We concluded that the days when the high street was 100% retail—for much of the 20th century, people went to their high streets or town and city centres to shop—have gone, and that there now needs to be a strategy in each area, backed by the local community, initiated by local councils and supported by local traders, to create a different approach to the activities on the high street. We concluded that if high streets and centres are to survive and thrive by 2030, they must become

“activity-based community gathering places”,

with a reduced retail element and a wider range of uses, including green space, leisure, arts and culture, health and social care, and housing, with the community at its heart. Retail will be there, but there will be a number of other activities drawing people in. People will be drawn in by the coffee shops and leisure activities, and then they will go shopping, which will be an important part of a wider experience. That is what we see for the future, and our report looks at ways in which we can get there.

We concluded that local councils have a really important role to play in developing that approach. They need to work with their communities and businesses, and try to create a sense of place for the area, which might be very different from the place next door. On one of our visits, we went to Stockton, which had been badly hit by the loss of retailers. It was putting on bike rides, fun runs, marathons, outdoor theatre and other activities to try to encourage people, particularly in the summer months, to come into Stockton centre and use the retail facilities. We heard about Malton, which is successfully branding itself as a place to go for food. Centres can identify themselves in different ways to show that they are an attractive place for people to come to.

Business improvement districts, where local businesses come in, can play an important part. We were pleased that the Government accepted our recommendation that community representatives should be encouraged to sit on BIDs. BIDs should be about not just business, but community. That is in keeping with our general recommendation to change the whole approach of high streets from simply retail and business to wider community uses.

A key issue from a council perspective was local plans, which should be living mechanisms that are kept up to date. We urged all local authorities to adopt

“living documents, regularly updated to capture and reflect changing trends,”

which

“must be forward looking, anticipating what will happen in five years’ time.”

Local authorities should have dynamic strategies for the high street of the sort we have just talked about. We were pleased that the Government basically accepted that all local plans should be reviewed every five years, and that town and city centre strategies should be looking at least 10 years ahead. They were on the same wavelength.

All I would say to the Government is, go look at the cuts of about 50% that councils have made to their planning budgets. When planning departments prioritise planning applications, they often lack staff with the capacity and capability to think ahead and do the necessary local plan work. There is a concern that councils often have not caught up with the rapid change in online shopping, and therefore their local plans are out of date and do not reflect that change. They are not looking at the changes that they need to make to the land use in their town and city centres.

When we went to Darlington, it was readily accepted that a whole retail area might simply have to be closed down, and that a completely different use might have to be found for that part of the town. It is very simple maths: if 20% of the shopping that was done on the high street 30 years ago is now done online, we need 20% fewer shops. We do not want that to happen in a pepper-potted way, which would simply mean a bit of decay everywhere; we need to concentrate it and change how that land is used in the future.

We recognise that, as part of this process, the Government’s £675 million future high streets fund was helpful. It was there for councils and businesses to tap into and use for this change process. Of course, we do not think it is enough, although the Government do: that is one point of disagreement. We also made the point that the taskforce that the Government set up— Sir John Timpson came along and talked about it—is a really helpful way forward, but we said that it cannot be a talking shop. It must be a place where councils and others can go and get real, hard advice, and where we can collect examples of good practice. Very often, what is done in one area can be learned from and implemented in another. That is something that we can greatly benefit from.

We identified two additional areas of interest where local government is trying to work with business to change, and where change is needed from central Government. The first is compulsory purchase orders. We learned that where councils try to change land use in an area, they often have to compulsorily purchase some properties. Again, we are pleased with the Government’s response. They accepted that and said that they will review the whole process, which is cumbersome, long-winded, time-consuming and costly.

A slightly more difficult area was permitted development rights, for which the Government consulted about extensions at the same time. We said that before the Government further extended permitted development rights, it would be helpful if they carried out an assessment of the impact on the high street of their previous extensions to those rights. The Government did not agree to that, which is disappointing. It is always good to have an impact assessment on what has already happened before doing something else, but we disagreed on that.

We were clear that permitted development rights should not be allowed to get in the way of a local plan that tries to change the fundamental land use of part of a centre. If a local authority is trying to change buildings from retail into housing, leisure or a park, for example, it is not helpful if someone converts the odd shop into a house a few months before that local plan comes into effect. The local authority would then have to say, “Actually, you did that under permitted development rights, but now we have a local plan, which means we need to compulsory purchase those properties and fundamentally change the land use.”

There ought to be a proviso that if a local plan is going to re-designate an area and affect particular properties, it is not helpful to have permitted development rights for the same properties at the same time. The Government need to think carefully about that. At the end of the day, it is not helpful to the individuals to be given that freedom, which is not really a freedom.

The biggest issue on which we disagree with the Government is that of business rates. Every bit of evidence we received showed that there is a problem. I am serving as a guest on the Treasury Committee, which is conducting an inquiry into business rates, and exactly the same sort of evidence is coming forward. Not everyone has the same solution; some want wholesale reform of business rates, while others simply want some changes to make them fairer, but the demand for change was pretty consistent. The reason is that it is considered unfair that Amazon pays 0.7% of its turnover on business rates, and it took quite a bit of extraction to get that figure out of Amazon, while high street chains spend between 1.5% and 6.5% of their turnover on business rates—in other words, more than double, and in some cases it is 10 times as much.

That simply is not fair—this is about the element of fairness. People on the high street are trying to trade at a significant cost disadvantage. Only the Government can alter that. Simply altering business rates will not change the high street back to how it was 20 years ago, but there needs to be a recognition that shopping habits are changing and that taxation policy ought to change in line with that.

We recommended that the Government look at a number of options: an online sales tax, an extension to VAT, a green tax on deliveries, or anything to reflect changing shopping habits. That money could be used to reduce the general business rates paid on the high street, to give a holiday when a business carries out improvements to stop an immediate rise in its business rates, or to add to the Government’s fund to help high streets. The Government had all those options—we were not totally prescriptive—but they came back and said no; they did not want to do anything at all.

The Government said that they were bringing in lots of reliefs, which they are, but a point that has been made to us quite strongly is that although the sticking plaster of reliefs is a welcome and useful mechanism, lots of those sticking plasters on top of one another becomes an unsightly and terribly confusing mess. Lots of people said that the system was now really confusing, with a number of reliefs in place. The evidence that I heard at the Treasury Committee evidence session the other day clearly suggested that the need for so many reliefs so frequently indicates that the basic system is flawed and in need of more substantive review.

Interestingly, Sir Amyas Morse, in his retirement swansong before the Committee at our evidence session on local authority finance—he is normally forthright in his views—said:

“I am concerned as to how realistic basing everything on business rates really is…it is concerning as to whether something that is based on a square footage formula in the modern day is going to be terribly relevant to measuring business activity… Even though it may be convenient to go forward with it now, I cannot believe it will endure forever, because it is just such an odd way of trying to measure business activity.”

He is right. Business rates are easy, and we are probably not going to tear them up, forget about them and change them tomorrow, because they are relatively easy to collect—that is a great benefit of them—but thinking that all business taxation at local level should rely on square footage is something that goes back historically, because it was an easy thing to do when everybody shopped in a shop. Ministers have to think a bit about the longer term.

Sir Amyas said that the situation will not endure forever. Well, Ministers do not tend to endure forever. Perhaps this Minister has other aspirations but, realistically, at some point a Minister will have to grasp the nettle and consider, if not completely scrapping business rates, then at least recognising that reform has to happen in the light of changing shopping habits. That is the big issue on which we really want to push Ministers, because at some point this is going to change, and we cannot carry on disadvantaging our high street retailers in the meantime.

As I explained, local government has a role here in developing strategies and local plans; central Government have a role in looking at changes to business rates, compulsory purchase powers and other things; and retailers also have a responsibility. I mentioned that Stockton is doing interesting things, and I asked, “Is bringing all these ventures into Stockton centre really helping?” They said, “Yes, sort of, but when we asked some of our retailers how many more people they got through their shops, they said, ‘Not that many, because we close at 5.30.’” Retailers have to understand that they have to change their approach to suit the customer—that is really important. We heard other examples of retailers, even small ones, using social media to advise their regular customers of changes to products in their store.

Landlords also have to get real. There are still landlords with completely unrealistic retail unit asset values on their books, based on rental values as they were 10 or 15 years ago. Some big retailers are proactive and engaged. They engage in BIDs and look at how they can improve their shopping facilities, while others just see them as a money-making venture. We saw examples of shops lying empty, but there was a long lease, so the landlord was just sitting there and getting the money in, and had no real incentive to go and find another tenant. There have to be changes in that respect.

We asked the Government to review the Landlord and Tenant Act 1954, and they say that they will look at whether that should be reviewed. That was a helpful response. However, we also asked the Government at least to consider how they might look again at upward-only rent reviews, and they said, “No, we’re not going to interfere in contracts between landlord and tenant.” We only asked them to look at that. I hope that they might have another think about looking at it, because it was raised with us on a number of occasions.

There are challenges not merely for local government, but for central Government, retailers and landlords. We have said that there are real challenges. We can all see the challenges and problems on our high streets. We were worried and we said in our concluding remarks:

“Unless…urgent action is taken, we fear that further deterioration, loss of visitors and dereliction may lead to some high streets and town centres disappearing altogether.”

Given what has happened over the past 10 or 15 years, and if another 10 or 15 years are spent going in the same direction, we can see that happening.

We cannot predict what lies ahead, but online sales have doubled in the past five years, so it is almost certain that they will grow. The situation will not stand still. People will not reverse their shopping habits but carry on in very much the same direction, which will further undermine retail sales on the high street—it is bound to.

In our report, however, we said that provided that everyone, including the Minister—who is present, while others are not, so we will direct this to her—considers and puts into place our recommendations, high streets and town centres can have a better future. That will require a shift from retail-focused activities to new purposes and uses that foster greater social interaction, community spirit and local identity.

I am pleased to recommend the report. I hope that we can all work together to have it implemented. Many of our recommendations have been accepted by the Minister, but I have pointed out some that have not; I hope she will give us an even more helpful response about those today.

--- Later in debate ---

[Mr Betts]

I thank all hon. Members for their contributions, and particularly members of the Select Committee, whom I also thank for agreeing this report unanimously. We did very well: it was 45 minutes before Brexit was mentioned and 70 minutes before Mike Ashley was mentioned.

We started off with failures of retail, whether British Home Stores, which is gone, or House of Fraser, which is restructuring, and we subsequently heard about Arcadia, Marks & Spencer and Debenhams closing stores and small businesses going out of business altogether. We looked at a situation that could get worse, with some high streets failing completely, but then we looked at the possibilities for the future. We recommend that all stake- holders get together, including local councils, Government, retailers and landlords. We can have a brighter future by changing the nature of the high street, with changing uses—coffee shops, leisure, open spaces, public services and residential—all being brought in, led by the local authorities with BIDs through their local planning processes, involving their local communities and businesses in a package.

We also said that there has to be a level playing field for retail, which will still be an important part of the high street. We held our inquiry after all the Government’s initiatives on business rates had been brought in, and no one who gave evidence said that they were sufficient. That is the reality. The Government simply have to go away and look again at the possibility of alternatives, such as an online sales tax. They should read the excellent report from Tesco that said how this could be done and how it could benefit the high street.

Question put and agreed to.

Resolved

That this House has considered the Eleventh Report of the Housing, Communities and Local Government Committee, High Streets and town centres in 2030, HC 1010, and the Government response, CP 84.

Grenfell Tower Fire

Clive Betts Excerpts

Thursday 6th June 2019 Commons Chamber

[Mr Clive Betts (Sheffield South East) (Lab)]

I will speak in particular about the work of the Housing, Communities and Local Government Committee. First, I congratulate my hon. Friend the Member for Kensington (Emma Dent Coad). I say in a heartfelt way that I do not think her constituents—particularly those most directly affected by this disaster—could have a better champion. She has the respect of Members across the House for what she has done to represent her constituents forcefully, with emotion and with detailed knowledge of these matters. She certainly has my respect for what she has done.

In looking at a disaster and a tragedy such as Grenfell, we can occasionally look at what can come out of it that will help others—in this case, what will help other people to be safer in their homes as a result. As a Committee, we have not looked at the causes of the disaster and the reasons for it, because that is a job for the inquiry to do. It was not our job to go into that area and second-guess its findings, but we have tried to follow up particularly on the work of the Hackitt report. We have looked at what improvements can be made to regulations and rules on buildings and building safety to make other people safer in their homes and other buildings they are in in the future.

We produced a report last July after taking evidence. Prior to that, we had had a session with Dame Judith after both her interim report and her final report. We have had Ministers before us on a number of occasions. I see the Minister for Housing in his place. He came most recently in January, and he is coming again in a few weeks’ time. Dame Judith came in January, and she is coming again at a session before the Minister. We have tried to follow through not merely on what the promises were, but on how far they have been implemented and what more needs to be done. We have had a very detailed exchange of correspondence with Ministers. Indeed, I am still waiting for some answers on the most recent questions we have asked. As I say, we tried to concentrate in our inquiry on the issues of cladding, building safety and building regulations.

In the end, this is a story of a response by the Government with a recognition that dangerous or potentially dangerous material on high-rise and high-risk buildings needs to be removed. However, it is also a story of probably quite a slow response in some respects, and of a response that is still completely inadequate in others and one that has not been finalised. I hope it has not been finalised because I hope that the Government will go further. It is a story about ACM cladding—the cladding on Grenfell—and clearly a requirement for that to be removed, and it is a story of other materials that may be just as dangerous as ACM cladding. It is a story of materials generally that are not of limited combustibility and what should happen to them. It is a story not merely of high-rise residential buildings, but of other high-risk buildings such as hospitals and old people’s homes. Very importantly, it is a story not merely about new building, but about existing buildings, and I will make particular reference to that in a few moments.

It was immediately agreed that the ACM cladding—the cladding on Grenfell—on other high-rise residential buildings should be removed. However, the Government initially produced no funding to go with that. It took till 16 May 2018—roughly a year after the disaster—for the Government to come forward with £400 million, which was welcome. It has generally meant quite a lot of progress on taking the cladding off high-rise social housing, and that progress is welcome. It is not quite complete, but it is welcome progress.

Alongside that, there has been a real problem in relation to private sector buildings and the refusal of the freeholders to accept responsibility. The Government’s reasoned response was that leaseholders should not have to pay for the responsibility. However, for a year after the announcement of the funding for social housing, there was virtually no progress at all on private high-rise buildings, except where some developers decided that they would accept responsibility for the material they had put on. We have to recognise that, in some cases, developers were no longer responsible for the buildings—they may have been bought out by other companies, which were often freehold companies with limited assets— while there were leaseholders who could not pay. It really was a situation that was never going to be resolved. Ministers kept saying—I think this was the famous phrase—“We rule nothing out”, but for the most part nothing actually got done for a long period of time. That was even though the Committee, when it did its report last July, recommended that an immediate fund be established, initially at a very low rate of interest, at least to provide the wherewithal to get this work done, and we could argue about who would pay for it afterwards. We are still very much in that position.

[Jim Fitzpatrick (Poplar and Limehouse) (Lab)]

Does the Chairman of the Select Committee accept that there was not only a financial impact on the leaseholders exposed to this pressure, but an emotional one on their mental health from the anxiety of living in what they thought was not a safe home and of worrying about where they were going to find the money to pay for the remedial work and other fire costs?

[Mr Betts]

I entirely accept my hon. Friend’s point. I suppose I am trying to take a practical and financial approach to this issue. I recognise that that is all right for me sitting in here as a Member of Parliament, but for the people who actually live in these properties it is a very different experience, given the impact on their daily lives and their mental health, as my hon. Friend has rightly highlighted.

The Government then gave additional powers to local authorities. I am not sure that a single local authority has used any of those powers yet. Indeed, when the permanent secretary came to see the Committee, she said there was a risk to local authorities if they used the powers in relation to whether they could actually make them hold and make them effective, and whether local authorities could actually get any money back if they went in and spent the money themselves.

Now we at least have the £200 million fund that the Government have announced for private sector properties, but there are a lot of questions about it. First, who applies for the fund? Who ensures the work is carried out? Is there a timeline by which all this work has to be carried out? What happens if no one applies and the building is still there with this cladding on it? What happens to the local authority if it goes in and does the work in default: does it get the money back? What happens where a developer has already, rightly, paid for the work themselves: can that developer claim the money back from the fund, or does it apply only to work that currently has not been carried out? In the end, who is responsible for the work being signed off as satisfactory? There are a lot of questions that need addressing, and I have written to Ministers about them on behalf of the Committee.

[Mary Creagh]

The Chairman of the Select Committee has proved very tenacious in following up on these issues. Does he agree with me that the Grenfell Tower fire was a systems failure—a whole-system failure—at various points, and that it is now imperative for the Government to put in whatever money is required to rebuild that system from the bottom up, so that in dealing with the consequences and the aftermath of that fire we do not recreate problems or create new ones in the systems for homes, inspections or fire regulations?

--- Later in debate ---

[Mr Betts]

I thank my hon. Friend for taking away from me my final, winding-up comments. She is absolutely right, and that is at the heart of Dame Judith’s report. This is about making sure that materials are right and are properly tested. In the end, it is not even about the building regulations in relation to fire; it is about the building industry as a whole and how it operates. There is a race to the bottom, and the industry is taking the cheapest on board all the time as the way forward. This is about making sure not merely that the materials are right, but that the materials specified are actually used, that the buildings are properly signed off and that they are properly maintained and managed. This is a whole-system issue.

[Sandy Martin]

Does my hon. Friend agree with me that the correct way of doing that is for local authorities, not private companies, to police the building regulations system?

[Mr Betts]

That is a really important point. In our report in July 2018, one of the things we highlighted was the conflict of interests in the building industry, which go right the way through. Fire authorities can actually be testing their own work and recommendations, which is wrong. This is also about the whole testing regime for products. We had evidence of producers going around different testing organisations until they found the one that actually approved their material, and there was no record of the failures from other organisations. Fundamentally, this is about building inspectors being appointed by developers and then signing off the work of the people that have appointed them. That cannot be right. This is not necessarily about local authority or private sector building inspectors, but about who appoints them to a particular job and whom they are accountable to, which is absolutely key. Dame Judith’s recommendations on that need to be followed through, because they are really an important part of the changes we need.

On other issues, when the Minister came to the Select Committee in January, we asked him about other forms of material. Rockwool had drawn to the Committee’s attention about 1,600 properties on which the material was not ACM, but could be as dangerous. The Minister was very open and direct about it, and he did say that all those properties would now be tested—I think there has been a delay in the testing, which is unfortunate, but it has started—but that if those tests showed that the material on those properties was as dangerous or as risky as ACM, the same rules would apply about taking it off and about having a requirement to take it off. That is what he said. There is, of course, disagreement about the testing arrangements, which have been a matter of contention right the way through our work. We must come to a conclusion whereby the industry in general is satisfied that the tests are fit for purpose, but nevertheless that testing is happening, and if any material is as dangerous as ACM, it must be removed. Will the Government pay for that as well as for taking ACM off homes in both the social and private sectors? That is a fundamental question. There is no point in banning the stuff if we then return to the same problems that we had with ACM.

The Government introduced a ban on materials that are not of limited combustibility immediately after Dame Judith’s report—on reflection she probably feels that she might have recommended that herself, and she is certainly comfortable with that recommendation, which was right. But there is a problem—the elephant in the room—how can we possibly say that it is too risky to put materials that are not of limited combustibility on new buildings, if we are happy for such materials to remain on existing buildings? How can we say to people, “You are safe in your homes, but we wouldn’t put that material on a new home because we don’t think it’s safe”? That is a fundamental problem.

I am sure that sums are going round in the heads of people in the Treasury, who will be counting the cost of taking material that is not of limited combustibility off all existing buildings. That cost will be considerable and probably far larger than the budget for dealing with ACM to which the Government had to commit, but is the Minister really comfortable with saying to people, “You’re going to live in a home that has material on it that we would not consider safe to put on a new building”?

I know that if building regulations are changed, we cannot always go back and retrospectively apply them to all existing buildings, but we are talking about a fundamental issue of safety and fire prevention that the Government must consider. Importantly, we must also think about non-residential buildings. Many hospitals, schools, student accommodations and residential homes are not covered by the current ban, although they are high-risk buildings. In 2018 the Committee said that this is about not just high-rise but high-risk buildings, and that provision must be applied.

Some progress has been made on many issues, but we have a lot more to do. Dame Judith recommended a whole review of building regulations, which is key, and we must get proper tests agreed. There is the conflict of interest to resolve, and the issue of existing buildings. Fundamentally, however, as my hon. Friend the Member for Wakefield (Mary Creagh) prompted me to say, this is about the whole construction industry not being fit for purpose. We need a fundamental review of how it operates, considering not just specifications, but including the management of projects and ensuring that people have homes and other buildings that are safe to live in.

[Several hon. Members rose—]

--- Later in debate ---

[Kit Malthouse]

As I am sure the hon. Gentleman understands, fire safety policy does not fall within my remit and is effectively a Home Office issue. I did recently meet representatives of the fire service, who said that this policy is under constant review but remains valid. However, I am happy to write to him with details of what the Government are doing with regard to “stay put”. I understand the concern that that policy has produced in the light of the Grenfell disaster and it is important that we are transparent about it. As I have said, I am more than happy to write to him with some details.

On building safety, we are determined to bring forward meaningful legislative reform. Just today, we launched a consultation on the new building safety regulatory system. The written ministerial statement was not actually laid, as the hon. Member for Croydon North (Mr Reed) said during the debate. It was raised at 10.30. I asked Doorkeepers to distribute it if they could, and it is now available for Members to read if they wish. In that review, we have accepted all 53 of Dame Judith Hackitt’s recommendations and in some areas we intend to go further. What we are proposing is a radically new building and fire safety system—a system that puts residents’ safety at its very heart. It will be a challenging but essential step to help drive the long-term culture change that we need and restore confidence in our country’s building safety system.

[Mr Betts]

I thank the Minister for giving way. I had not seen the details of the statement until I spoke earlier in the debate, but I welcome the Government laying it. I know that the Minister has made arrangements to speak to me later about it and to come to the Select Committee where I am sure we can ask further questions. May I just draw his attention to one interesting phrase where he says that we have proposed that the new regime should apply from the beginning to all new and existing multi-occupied residential buildings? Does that mean that the Government are having a careful think about whether the ban on materials not of limited combustibility should apply to existing buildings as well as new buildings? It says that the regime will apply to all buildings, including existing buildings.

[Kit Malthouse]

I am grateful to the Chair of the Select Committee for raising this issue. The hon. Member for Croydon North also implied that we were not willing to look at other buildings retrospectively or indeed at buildings below 18 metres, or at hospital or schools or whatever it might be. What we are trying to do is fix a starting point, but then design a system that allows for flexibility in response to evidence and research in the future. One lesson is that, obviously, as building technology develops and new issues emerge, the system must have the ability to respond. That is what we are seeking to do in the consultation. Certainly, we are open to representations as part of the consultation about whether the scope should be widened. I hope that the Committee will respond.

[Mr Betts]

Was that a yes? I was trying to work out whether the Minister would be willing to look again at this matter.

[Kit Malthouse]

The issue of retrospection is obviously a difficult one from a regulatory point of view. One of the things that we have said is that all building owners have a duty to ensure that the buildings that they own are safe. If that means that they have to take remedial action retrospectively to comply, to make it safe, then they should do so. The question of liability, as the hon. Gentleman knows, is also a difficult one. Nevertheless, in the light of the reformed building regulations, it will be for building owners to review whether the buildings that they are maintaining and owning are safe and to take appropriate action.

As I said, we have accepted all 53 of Dame Judith Hackitt’s recommendations and we will be going further. Indeed, we may well go further in scope in the light of the issues that are brought forward.

The final matter raised by a number of Members, particularly the hon. Member for Westminster North (Ms Buck), was the issue of the residents’ voice, the social housing Green Paper and, indeed, the place of social housing in our society. One of the most important legacies of Grenfell must be the rebalancing of the relationship between residents in social housing and their landlords. After the tragedy, we spoke to almost 1,000 people, including the bereaved and survivors of Grenfell Tower. It came through in those conversations, time after time, that residents feel excluded from the discussion about their homes; they feel that their voices are not being heard. I reject the idea that people in social housing can expect only a second-class system. This has been and is fundamentally wrong. Last August, we published our Green Paper, “A new deal for social housing”, and our response and action plan will be published in due course. I have given commitments in the various meetings that I have had around the country that there will be change on that too.

Nothing can undo the pain and devastation caused by the fire at Grenfell Tower. We remain determined to do right by the victims and survivors of the tragedy, and to provide a legacy of real change for them—to deliver fundamental reform, to end the stigma attached to social housing and to honour the memories of those who lost their lives. I thank everybody who has participated in the debate, and share the determination across the House to ensure that nothing like Grenfell can ever happen again.

Shared Prosperity Fund

Clive Betts Excerpts

Tuesday 14th May 2019 Westminster Hall

[Dan Jarvis (Barnsley Central) (Lab)]

I beg to move,

That this House has considered the UK shared prosperity fund.

It is a pleasure to serve under your chairmanship, Sir David. I am pleased to see so many colleagues present to debate an issue that will affect all corners of the United Kingdom and all our communities.

There has been considerable discussion and debate, especially within the Welsh, Scottish and Northern Ireland devolved Administrations, about the shared prosperity fund. Many of us have raised it formally with Ministers in written and oral questions, meetings and correspondence with the Government over the past year. However, it is right that today we take the opportunity to lead a national debate that seeks to heal the divisions in our country—divisions that were laid bare by Brexit but whose seeds were sown long before. Today is an opportunity to look at an important issue through the eyes of our communities, rather than through the prism of party politics.

The Government must respond to three key challenges: to accept that they cannot leave local areas facing major financial uncertainty, to signal that they trust devolved Administrations, mayoral combined authorities and local authorities to know their communities best, and to commit to a clear timetable for action. I speak not only as the Member for Barnsley Central, but as elected Mayor of the Sheffield city region—a unique position that gives me a unique perspective.

[Mr Clive Betts (Sheffield South East) (Lab)]

I congratulate my hon. Friend on securing this important debate; I apologise that before too long I will have to leave it to chair a meeting. Is it not disappointing that, despite the promise to consult on the shared prosperity fund by the end of last year, we still do not know its terms or the amounts involved? Secondly, should the Government not make a simple promise that no area will be worse off if we leave the EU than if we had stayed in?

[Dan Jarvis]

I agree. I will make those points later in my speech.

I have seen at first hand what local areas can do when they come together to drive economic growth, but also how they can be limited and constrained by the powers and resources available to them. European or Government funding can often come with limitations that inhibit creative thinking, making it difficult to deliver significant structural changes.

Local Government and Social Care Funding

Clive Betts Excerpts

Wednesday 24th April 2019 Commons Chamber

[Andrew Gwynne]

I will give way shortly, but I want to deal briefly with the issue of social care before I begin my concluding remarks.

The largest of the pressures on services remains the pressure on adult and children’s social care. According to the Local Government Association, adult social care services face a £1.5 billion funding gap next year, and £2 billion is needed for children’s services.

Given that the Cabinet are too interested in internal machinations, and given the absence of any leadership from the Prime Minister, we have yet to see the much promised social care Green Paper. In fact, this year’s April Fool revealed himself to be the Health Secretary after he missed his own new deadline of 1 April for the Green Paper—but no one was laughing, because that was the fifth missed deadline, following the summer of 2017, the end of 2017, the summer of 2018, and the autumn of 2018. Despite those delays, it seems that little progress has been made.

There is so much concern in the sector that last month 15 key organisations—including the LGA, the Society of Local Authority Chief Executives and Senior Managers, and NHS organisations and charities—were forced to write to the Government expressing their concern that Brexit was becoming a distraction from any action to deal with the real crisis that is affecting the services on which people rely.

[Mr Clive Betts (Sheffield South East) (Lab)]

Will my hon. Friend give way?

[Andrew Gwynne]

I will give way to the Chairman of the Select Committee.

--- Later in debate ---

[Mr Betts]

There are clearly differences between the cuts made in different authorities, but there is a collective view in local government about the crisis in social care. When Councillor Paul Carter, chair of the County Councils Network and leader of Kent County Council, gave evidence to our Committee during our last inquiry into adult social care, he simply said, “We are approaching a cliff edge.” It is possible that some councils will not immediately follow Northamptonshire over that cliff edge, but it will not be long before they do unless there is a fundamental change in the funding of social care in this country.

[Andrew Gwynne]

My hon. Friend is absolutely right. Let me say to the Secretary of State that if he will not listen to the Chair of the Committee, he should listen to the leaders of his party’s own councils, who are saying precisely the same. There is a cliff edge, and no action that the Government have taken so far has done anything to remove it. It may have pulled a few councils back and given them a few years before they topple over, but unless we fundamentally change the Government’s approach to social care services, we will not be able to solve the crisis in local government.

For the first time in England, we have seen a standard £2,000 tax bill introduced by a Conservative council. We have also seen the costs of the failures of this Tory Government. For instance, the cost of the failure of Tory-controlled Northamptonshire County Council has been pushed on to local people because the Secretary of State allowed it to raise its tax above normal limits as it grapples with bankruptcy. Local people are paying the price of Tory mismanagement: that is what happens when the Tories do not fund local government and are in charge of the town hall.

Austerity is not over, but across the country Labour councils and councillors are showing that it does not have to be this way. Under the shadow of the present Government, Labour councillors are innovating, standing up against austerity, and protecting local services. They are the torch bearers for the new politics that we will see with the next Labour Government. On 2 May, there will be a clear choice: continued austerity with the Tories, or proper investment, fairness and a real change, with Labour councils making a real difference to the communities they represent.

We need a Labour Government because we need a Government who are committed to funding children’s services, funding adult services, funding neighbourhood services, rebuilding our communities from the grass roots up, putting pride back into civic professions, and encouraging our communities to grow and prosper. We will rebuild this country, for the many and not the few. I commend the motion to the House.

--- Later in debate ---

[James Brokenshire]

I hope the hon. Lady will have noticed that, according to the latest figures, real wages are actually going up. I remind her of the fact that pay restraint across the public sector was a consequence of the mess that we inherited from the last Labour Government. I know that this has been difficult; it has been really tough and incredibly hard. Equally, we are determined to maintain the strong economic path for our economy and to ensure that our public finances are now back in the right space and not left in the fashion that the last Labour Government left them in. I am mindful of the essential role our local authorities play in helping the most vulnerable in our society, and I recognise the growth in demand in adult and children’s social care and the pressure that that brings.

[Mr Betts]

I am interested in the exchanges across the Chamber about which party has been the best, or perhaps worst, at the devolution of council funding. It was actually the Thatcher Government who introduced the capping of rates—it continued with council tax—taking away councils’ freedom to set their own business rates. Is it not the reality that neither the previous Labour Government, nor the coalition Government nor this Government have done anything fundamentally to increase the freedom of councils to raise their own funding at a local level? I hope that the Secretary of State will address that when we finally see his devolution framework.

[James Brokenshire]

I look forward to engaging with the hon. Gentleman and the Housing, Communities and Local Government Committee on issues relating to the devolution of business rates and so many other things. I profoundly believe in the merits and benefits of decisions being taken more locally and of local government having a sustainable position.

I am conscious of the number of Members who want to participate in this debate, so I will now make some progress.

Coming back to social care, £650 million out of the more than £1 billion of extra funding committed to councils at last year’s Budget will be going towards adult and children’s social care in 2019-20. Of that, £240 million has been allocated to ease pressures on the NHS, which comes on top of the £240 million announced in October to address winter pressures. The remaining £410 million can be spent on either adult or children’s social care where necessary to take the pressure off the NHS, meeting the request from local authorities for greater flexibility. Taken with the adult social care precept and the improved better care fund, the Government will have given councils access to £10 billion of dedicated funding, which can be used for adult social care in the three-year period from 2017-18 to 2019-20.

When it comes to protecting our children, we are investing £84 million over the next five years to expand three of our most successful children’s social care innovation programme projects. The projects will keep more children at home safely in up to 20 local authorities, but in the long run our work will ensure that our health and care systems are better integrated. That will be our most powerful tool in ensuring we have a sustainable approach in the years to come.

Returning to troubled families, which the hon. Member for Erith and Thamesmead (Teresa Pearce) rightly highlighted, I believe that our programme is helping local authorities to support families with complex needs and to improve outcomes for individuals. The programme has been a catalyst for local services, transforming how they work together, making them more integrated and cost-efficient, and reducing dependency and demand on expensive services. The results speak for themselves. The latest national programme evaluation shows that, when compared with a similar group, targeted intervention saw the number of children going into care down by a third, the number of adults going to prison down by a quarter, juveniles in custody down by a third, and 10% fewer people claiming jobseeker’s allowance. While I recognise that there is more to do, the results are a tribute to the tireless efforts of family workers, local authorities and their many partners in our public services and the voluntary sector. This is about so much more than the financial boost that someone can get from a regular wage. It is also about the pride and the dignity that comes with someone being able to take control of their own life.

The future of this country is not about an ever-growing collection of handouts and entitlements, but about growing prosperity and independence, and that equally applies to local government. This Government are working to build a more confident, self-sufficient and reinvigorated local government. With the end of the current multi-year deal in sight, we clearly need to take a longer view of how we fund councils as we move to a stronger, sustainable and smarter system of local government. This year’s preparations for increased business rate retention, a new approach to distributing funding between local authorities, and the upcoming spending review will also be pivotal. Important work is also under way with authorities and the wider sector to better understand service costs pressures.

For years, councils have asked us for more control over the money raised, and we are giving it to them through our plans to increase business rate retention to 75%. In the process, we will provide local authorities with powerful incentives to grow, and authorities estimate that they will retain around £2.5 billion in business rate growth in 2019-20 under the current system—a significant revenue stream on top of the core settlement funding. In addition to more control, councils want and need to see a clearer link between the allocation of resources and local circumstances, and our new fairer funding formula will ensure a more transparent link between local needs and resources and the funding that councils get.

I pay tribute to the leadership and creativity of our councils, which deliver high-quality services for their residents and efficiencies for the taxpayer. We are determined to give them the freedoms and flexibilities they need so that local government can continue to flourish and deliver vital services to meet the challenges and opportunities that lie ahead. As voters go to the polls at the local elections, this Conservative Government are providing a real-terms increase in spending power for local government and giving councils the freedoms to deliver for their local communities, and hard-working Conservative councillors are providing value for money for hard-working families and the quality services that their residents deserve.

--- Later in debate ---

[Mr Marcus Jones (Nuneaton) (Con)]

It is a pleasure to speak in this debate. It is an important debate, so I thought the tone set by the Opposition spokesman at the start was a real pity. The shadow Secretary of State, the hon. Member for Denton and Reddish (Andrew Gwynne), ran through things in a very selective manner. It was almost as though he had been in a time machine and missed out certain periods and certain significant challenges faced by the country. He did not acknowledge the situation in which the Labour party left the public finances in 2010, with a deficit running at £150 billion a year and the Government borrowing £1 of every £4 that they spent—the taxpayer was footing the bill for that. Nor did he acknowledge that at the time, unemployment was rising and employment was going down, so people were losing their jobs.

Something had to be done, and the ship had to be steadied. We have seen the results of that, and we now have record employment, record low unemployment and rising wages. Achieving that has involved many difficult decisions. I, for one, know how hard local government has worked, the sacrifices that it has made and the sacrifices that people have made. I pay tribute to councillors across the country, and particularly to Conservative councillors, who operate better-run authorities at lower cost. I also thank council officers, who have worked extremely hard to deal with the challenges that we have faced. They have made a massive contribution to the reduction of the deficit.

I am concerned that so far, this debate has been one-sided. The hon. Gentleman talked about the reduction in revenue support grant and direct money from Government, and that has certainly happened. However, he did not mention the other side of the equation, namely business rate retention and council tax, and he tried to present a distorted picture of individual local authorities’ funding. The reality is that the authorities that he described as worse off actually have the highest spending power.

I am setting out the approach that the Opposition have taken, but I think they should instead have looked at the challenges and considered how we might address them in a sensible and measured way. I am certain in my mind that we need to put more money into local government, and the Government are starting to do so. Spending power is on the increase, and since 2017 up to £10 billion has been made available to local authorities to fund social care. The Opposition’s motion mentions £8 billion being put into social care during this Parliament, but the Government are already putting in more than that.

There are significant pressures on social care, whether it is children’s social care, where there are more looked-after children; adult social care, where we have an ageing population—that is a great thing, but it means that we have to support more people in their later years—or the important group of people of working age who require social care, such as adults with learning disabilities or people with complex needs who need support. Those groups are all growing in size, and we need to make sure that they are looked after for the future.

In addition to increasing demand, services face challenges from rising costs. The national living wage is going up, and companies now have to pay additional pension costs. That is a good thing, because it means that additional money is being paid to people who do the extremely important and difficult job of supporting the most vulnerable. We need to make sure that those employees are paid more, that they are trained well and that the job becomes more professional, so I welcome those things, but they present challenges. We need to work out in a sensible and measured way how we will pay for the additional provision that is, and will continue to be, required.

The Opposition spokesman talked about how the Labour plans for social care were blown out of the water by the Conservatives during the 2010 general election. I thought that was a bit rich, because that is exactly what the Labour party did to the Conservatives at the 2017 general election. If we are going to have a debate, let us have a sensible, measured and proper one, rather than just talking about how big our pile of cash is and listening to the other side say, “We will create a bigger pile of cash to pay for social care.”

We have to acknowledge who is going to pay for social care, and we have to get the balance right. We cannot expect young people who have just entered the labour market—people who are starting work and trying to make their way in life—to pick up the whole tab. We cannot expect older people who have worked all their lives and built up assets to lose all those assets because they need care. We have to look at the matter carefully and proportionately, and try to make sure that there is a balance. We must provide the support that people need but reward people for doing the right thing.

Clearly, local authorities provide much of social care, but we need to look at how that fits in with other social care provision. For example, I always find that continuing healthcare is a real bone of contention. The system is opaque and hard for relatives to navigate. It is hard for people to figure out why their relatives are not eligible when somebody in the neighbouring bed is eligible. It can take forever for a claim to go through. I have known a number of cases in which, unfortunately, relatives passed away some time before a continuing healthcare claim was settled.

[Mr Betts]

The hon. Gentleman is making an important point. Anybody who has dealt with families in that position knows that money may be suddenly withdrawn after a continuing healthcare review goes through. Very often, an elderly person will be transferred to another home because they can no longer afford the one they are in. Is that not something that we need to sort out in advance of a fundamental reform of social care? It is a significant problem.

[Mr Jones]

The hon. Gentleman knows a great deal about the subject, and I certainly think that the issue he mentions needs to be looked at, as does the wider system.

We need to look at how social care works in the context of the wider health system. We need integration; we have talked about integration for years, and it does happen, but we need a system that is simple enough for people—for relatives, in particular—to understand and navigate. We need to make sure that the different parts of the system work together. Public health must work with primary care, and our GPs must work well with our acute sector. We must all work together with one common purpose, which is to keep people out of hospital for longer. That is how to improve people’s quality of life and reduce the cost to the taxpayer.

I wish to mention a small but important example from my constituency: a doctors’ surgery called Whitestone Surgery. I declare an interest because I am a patient there. I mention Whitestone because it does fantastic work through its patient participation group and social prescribing. The patient cohort in the catchment area is made up of relatively older people, and many of the patients who go into the surgery are passported through to the PPG, which runs several activity streams, including an allotment, days out and the odd visit down the pub for a meal at lunchtime. All those sorts of activities are really improving the situation in the area by reducing social isolation and loneliness. As a result of that ongoing work, the surgery is seeing the prescription of a significantly lower amount of antidepressants and fewer people being diagnosed with dementia than at other surgeries with a similar patient cohort. Warwickshire County Council is considering the work at the surgery carefully with regard to expanding it throughout Warwickshire, and studies are also being undertaken to see what merit it has more widely. I am delighted that such important work is taking place in my area. It is a good example of what we need to do to support people.

Local government has done its bit and is doing its bit for the deficit, and we need to support local government going forward. Now that we have the public finances far more under control, we need to put more funding into other services, such as the police and schools. We also need to think about how funding is distributed, because currently the fairness is not there—for example, the people of Warwickshire get a raw deal compared with people in many metropolitan areas. We also need to think about the context and the effect that putting more money into public services has on our public finances. We need to think about the effect on what tax people need to pay. In the light of those things, the motion does not address the whole picture. It is based purely on a political slant and is not there to support the people whom everyone in this Chamber wants to support. I am afraid the motion is there just to score a few points, so I shall not support it.

[Mr Clive Betts (Sheffield South East) (Lab)]

As the Chair of the Housing, Communities and Local Government Committee, I think the importance that Select Committees have attached to the issue of social care is shown in the amount of time we spend on inquiries on the issue. We have recently published three reports on adult social care, the last of which was done jointly with the Health and Social Care Committee last year. They were all unanimously agreed by our Committee, and in the latter case by the Committees jointly. We are currently inquiring into children’s social care, with the report due out next week. Those four social care inquiries show how important the issue is for the Committee and for local government as a whole.

As a Sheffield MP, I have to comment on the fact that my city and constituency have received funding cuts that are far higher than the average percentage in the past nine years, since 2010. Like other northern cities, we have been disproportionately hit, as cities with the greatest problems and needs have seen the Government cut their grants by the biggest percentage.

Putting all that to one side, if I look at the wider context, I see real problems for local government, because as a whole local government has had bigger cuts by percentage than any other area of Government spending. That has united councils of all political persuasions in their concerns about the unfair effect those spending cuts have had on local government as a whole. This comes at a time when demand for the main local authority services—care services—has been rising. The number of elderly people has been growing, which has meant that the number of elderly people who need care has been growing. That is great, because people are living longer. The number of people of working age with disabilities—an element of care that we should not forget—has also been growing, which is another success. In percentage terms, the demand for children’s services is going up faster than demand for any other current aspect of local government spending, so that comes on top of what I have described, too.

Those three rising demands mean that despite the fact that more people are in need of elderly care, according to Age Concern some 1.5 million people are not getting it. The threshold has been raised such that people with lower and moderate needs are now excluded from the care systems. People are ending up in hospital who should not be there because prevention is not happening, and people in hospital are not being discharged as quickly as they should be. We see all these things happening as a result.

The pressures on social care are causing other issues. With rising demand and spending on social care, as the cake has shrunk, the proportion of it spent on social care has grown, so the amount spent on other services has proportionately been cut by even more. The National Audit Office has done the figures, and they were given to the Select Committee: cultural and related services have seen a 35% cut; highways services and transport have seen a 37% cut; housing services, including homelessness and private sector housing, have seen a 45% cut; environmental and regulatory services have been cut by 16%; and planning has been cut by 50%. Those are massive cuts to the basic services on which we all rely day to day.

I worry about all that, because although it is of course important that councils concentrate on care, most people in the country do not receive care for themselves or for people in their families on a daily, regular basis; they rely on other services. They are seeing their council tax bills rise and what they get for their money fall. That is a real challenge and problem for local democracy. People are paying more but not getting any more. We ought to be very concerned about that indeed. It needs to be addressed in the widest sense.

I refer to the comments made by Councillor Paul Carter, but people from the Local Government Association, the County Councils Network, the District Councils’ Network, London Councils, and SIGOMA, the special interest group of municipal authorities, have made similar comments. Every council organisation has said that the current situation simply cannot continue and that we need a fundamental change in the amount of money provided for local government in the next spending review. The Select Committee will do an inquiry into that, which will hopefully give Ministers the ammunition with which to badger and berate the Treasury when they have discussions at that level.

We know from the estimates, which no one from the Government has challenged, that by the end of the next spending review children’s services are likely to be £3 billion adrift of the funding they need. Social care for the elderly is already £2 billion adrift, with estimates that the average annual increase required to keep pace with demand is around £800,000. That takes us to around £7 billion adrift.

The quality of care is often forgotten about. We need not only to continue to meet the increase in demand, but to do something to improve quality. If demand is going to increase, we are going to have to recruit more staff, and if we recruit more staff, we are going to have to pay them and train them better, otherwise, we will not be able to retain them. So the costs are going to go up even further.

[Louise Haigh (Sheffield, Heeley) (Lab)]

I speak as a co-chair of the all-party group on social care. Next week, we are launching an inquiry into the professionalisation of the social care workforce. My hon. Friend is making an important point about recruitment and retention and the need for more funding. The pressures and demands on funding are leading to a reduction in the professionalisation of the workforce, and as a result to reductions in the quality of care.

[Mr Betts]

Absolutely. The joint Committee report made the point that the quality of care is so important, and we have to think about the quality of the workforce and how much we pay them. The average social care worker gets paid 29% less than someone doing a similar job in the NHS. That figure demonstrates the challenge that we face.

What are we looking at, then? We have recently had a few welcome sticking plasters of funding from the Government; but next time, we will need a very large bandage, not just a few sticking plasters, to put this issue right. We look forward to the Green Paper, at some point on the horizon. Perhaps the Minister can tell us about the timing for that when she replies, but even now time is now too short for there to be a fundamental change in funding arrangements. We are going to need a lot more of the same.

The two Select Committees recommended that, at the funding review, we take the £7 billion extra that will be in the local government system from the 75% business rates retention and, instead of using it to replace public health grants and other forms of grant, we put it back into the system to deal with the problems of social care. That money can be there and we will not have to change the system. That can be done. We also proposed changes to make the council tax system fairer and less regressive. We can do those things for the next spending review and make sure that a quantum of money—around £7 billion— is available for social care. That would then relieve the pressure on other council services.

We then looked at what the longer-term system should look like. Of course, we need better integration at a local level between the NHS and social care. This is not about a national system of care that replaces what local authorities do; it is about better integration at local level. We must bear in mind that, while it is important that the health service and social care are linked together, the other great join-up that we must have is between housing and social care. The majority of people receiving social care live in their own home, and it is vital that we get those services linked as well.

[Emma Hardy]

Does my hon. Friend agree that we also need to include education on support for children with special needs and disabilities?

[Mr Betts]

Absolutely. We need integration on that level as well. The point is that these services are better joined up and delivered at a local level. It is an important role that local government has to play, and it is why local government’s hand should be strengthened in these matters.

In coming to our conclusions about long-term arrangements, the joint Select Committee inquiry looked at two very important bases. We went to Germany to see what existed there. Essentially, Germany’s model involves an extra percentage on the insurance payments that it gets from the public. There was a cross-party agreement 20 years ago, and the rates in Germany have been raised with no dissent from the public or the parties. It is a system that works and that people agree with, because they know that the money goes into social care. That is what we looked at, and it helped form the basis of our conclusion.

We had a citizens assembly—it was a great experience. We selected around 50 people from all over the country. They met for two weekends in a hotel in Birmingham, and came to unanimous views about how we should deal with social care funding. The principles were clear: we should have a system similar to that of Germany, with a social care premium, as we recommended, but very importantly—the Treasury hates this—the money must be dedicated for social care. People are willing to pay more if they know where the money is going. That was a fundamental principle that was laid down. There was also the principle of universal and high-quality care, and the point was made that a well-paid and well-trained workforce was needed to deliver it.

We also said that there had to be fairness between the generations and that the social insurance premium should be paid only by people over 40. However, we thought that it was fair to say that people of pensionable age who work should also pay. Another issue that we felt needed to be dealt with was the unfairness of people losing their homes in some cases and of all their assets going to pay for social care. The suggestion was that we could bring in a floor and cap system to make sure that people do not pay anything up to a much higher level and do not pay any more beyond the cap. We can pay for that by simply taking a percentage of inheritance tax, so that everybody pays a bit towards the system. We thought that that was fair.

We also said that, ultimately, we want to work towards a system where social care—personal care—is actually free. We did not think that we were there yet, which was why we recommended these changes to begin with, but we thought that we could get there eventually. We said that the extra money coming in had to be on top of the existing local government system.

This is a very good report. Two Select Committees unanimously agreed how we should raise the money for social care in the future. I say to Members on both Front Benches: why bother with the Green Paper? They should produce the White Paper and get on with it. The solution is there. We have given it to Ministers and shadow Ministers. This is a very good proposal. Please get on and deliver it now for the future.

--- Later in debate ---

[The Minister for Care (Caroline Dinenage)]

I start by recognising and paying tribute to those who care for us. It is a mark of our society how we care for the most vulnerable. Across the country, whether working in a care home, a person’s own home or at a day centre or another centre, so many dedicate their lives to caring for others. I also thank hon. Members from across the House who have taken the time to debate this important issue. We have heard a great number of passionate, measured, detailed speeches, and people have spoken about a range of issues and shown in-depth knowledge of and passion for their own constituencies.

My hon. Friend the Member for Nuneaton (Mr Jones) demonstrated the enormous knowledge one would expect from a former local government Minister in a wide-ranging speech that highlighted how most funding baselines take several factors into account, including deprivation. That is an incredibly important point. The hon. Member for Sheffield South East (Mr Betts), the Chair of the Select Committee, spoke passionately about the joint report that he and his Committee produced in partnership with the Health and Social Care Committee. He spoke about how it highlighted the importance of integration at a local level and the importance of housing, and he said it was important that the Government took that it into consideration and came back to the House with our Green Paper. I pledge to him that we will do that.

[Mr Betts]

The obvious question: when will we see the Green Paper?

[Caroline Dinenage]

We will bring it forward as soon as possible. The hon. Gentleman’s colleague, the right hon. Member for Exeter (Mr Bradshaw), made similar points about the importance of taking on board the hard work of the Select Committee, which came up with some interesting proposals for funding in particular.

Housing

Clive Betts Excerpts

Tuesday 9th April 2019 Commons Chamber

[Kit Malthouse]

My right hon. Friend, with his usual wisdom, has prefaced the part of my speech I am moving on to. He is quite right: we believe that modern methods of construction hold enormous potential not only to produce more homes but to produce them faster and better. I recently visited a factory in Walsall, in the west midlands, where Accord is building 1,000 homes a year using modern methods of construction. So good are the environmental standards that those homes for social rent have lower arrears, because people can afford to heat them.

That is something we are backing through our £4.5 billion home building fund, £2.5 billion of which is to champion small and medium-sized enterprises, custom builders and more diverse builders to get modern methods of construction and other cutting-edge tech into the mainstream. The fund has already allocated all of the original £1 billion of short-term funding. Over 94% of the funding contracted to date has gone to SME builders. We expect the fund to deliver more than 30,000 homes—around 5,000 more than the original target.

[Mr Clive Betts (Sheffield South East) (Lab)]

The Minister is quite right that we are going to need a whole variety of different types of houses and tenures to hit the 300,000 target. How many homes does he think will be built for social housing—not affordable housing—in the rest of this Parliament? What is his plan?

[Kit Malthouse]

I am constantly asked what targets might be for particular types of housing.

--- Later in debate ---

[Mr Clive Betts (Sheffield South East) (Lab)]

I take the Minister back to my intervention about social housing. Let us go back to 2010. The biggest cut in expenditure that the coalition Government brought in was a 60% cut in social housing capital funding. If we are to build the 300,000 homes that I think both the Government and the Opposition are now committed to building, we shall not get them built unless at least 100,000 or more come from the public sector. Just look at the figures since the war. We have built 300,000 homes a year in this country, although quite a long time ago, but in no year when 300,000 homes were built were fewer than 100,000 built by councils and housing associations—and mostly by councils. That is the reality. The Minister says that the housing revenue account cap has been lifted. That is really welcome and I applaud the Government for that, but that of itself will not get the houses built.

The Minister should not sit back and say, “I sit in my office and I cannot tell councils what to do.” It is about not just borrowing the money but being able to fund the borrowing. The Government will have to look at more revenue support for councils and housing associations to get those numbers up. Of course, there will have to be developments such as modern methods of construction, which the Select Committee is examining at present but, in the end, revenue funding is crucial.

I also say to the Minister, in terms of the HRA, the funding does not only go to build new homes; it is vital to make sure that existing homes are properly maintained. In 1997, when the Labour Government came in, there was a £19 billion backlog of disrepair in the social housing sector, which the decent homes programme had to deal with. So councils have that responsibility. They will need extra revenue support to build the homes.

I shall make a couple of points about the private rented sector. There are now more people living in the private rented sector than in the social housing sector. Hopefully, we might reverse that in future by building more social housing. I say three things to the Minister. First, let us have some more tough powers to deal with bad landlords. The Select Committee recommended, in extremis, confiscating the properties of landlords who put the health and safety of tenants at risk. Let us go for that. Secondly, let us give councils more freedom: selective licensing can work. If councils want to do it in their area, they should be free to do so. The Minister reviewing the whole process of selective licensing––I hope that is where we get to––but, in the end, selective licensing works where councils can go into properties proactively and seek out the problems and the problem landlords, and deal with them. Thirdly, the difficulty for councils is that selective licensing needs resources. Since 2010, the funding for private sector housing teams in councils has been cut by 60%, and it is not possible to deal with bad landlords proactively, constructively and properly without more money.

I say to the Minister, therefore, that there is a major financial challenge, both in terms of building social housing and of properly dealing with the problems in the private rented sector.

Oral Answers to Questions

Clive Betts Excerpts

Monday 8th April 2019 Commons Chamber

[Mr Clive Betts (Sheffield South East) (Lab)]

The Secretary of State will have noted that the question is specifically about social rented housing. If we are to achieve an overall target of 300,000 homes a year, does he accept that it is imperative that more than 100,000 of those have to be social rented houses, built by housing associations and councils? Lifting the housing revenue account cap is welcome, but does he accept that if we are to deliver that number of homes, the Government will have to give more financial support to councils and housing associations?

[James Brokenshire]

I hope that the hon. Gentleman will recognise the £9 billion affordable homes programme, and equally the extra £2 billion that has been provided on long-term funding. He will have noted in the recent spring statement that we now have £3 billion to enable housing associations to have funding guaranteed for the delivery of those homes. I hope that he also recognises that the flexibility of the affordable homes programme allows more homes for every pound of Government investment. Clearly, I want to see more homes built, and I want to see more council homes built for social rent too.

Permitted Development and Shale Gas Exploration

Clive Betts Excerpts

Thursday 28th March 2019 Commons Chamber

[Mr Clive Betts (Sheffield South East) (Lab)]

I am pleased to follow the hon. Member for Thirsk and Malton (Kevin Hollinrake), my fellow member of the Housing, Communities and Local Government Committee. Our Committee produced a report that focused not on whether fracking was good or bad per se, but on whether the planning guidance was right, and whether local communities had any real say and could address the impact of fracking through the planning system. As the hon. Gentleman said, we concluded that proposals on NSIP and permitted development were totally wrong. They are completely contrary to the localism agenda that the Government set out in the Localism Act 2011. During the Bill’s passage, the then Secretary of State talked of

“a ground-breaking shift in power to councils and communities”.

It appears from these proposals that that has gone into reverse.

In coming out against the proposal on permitted development, the Committee said that because of

“the contentious nature of fracking”—

which has already been demonstrated by a number of speakers—and the impact on local communities, those communities

“should be able to have a say in whether this type of development takes place”.

That, I think, is fundamental. Communities should not be excluded from the process.

It was very different when the Government introduced planning regulations on onshore wind. They said then that in order for a proposal to go ahead, it must be demonstrated that the planning impacts identified by affected local communities had been fully addressed and that the proposal therefore had their backing. So communities can veto proposals on onshore wind, but they can have no say in exploratory applications for the purpose of fracking.

As for NSIP, when we asked, “Why do the Government want to make these changes?”, the only answer that we received was, “Councils are probably delaying the consideration of applications.” We had plenty of evidence to show that that was not true, and that NSIP would not speed up the process at all. Indeed, we heard from Lancashire, where there had been complaints about the process taking a long time, that regulation 22 had had to be used four times, and the consultation had had to be paused and then started again because of extra information that the applicant had had to provide in response to questions from the public. There was no deliberate delay on the council’s part; the delay was part of the proper consultation and consideration.

The Minister took up his role after the consultation had started, and he never looks very comfortable when this matter is being discussed. I suspect that he is coming at it with a new eye; I hope that that is the case. I ask him to listen and to take account of the weight of opinion across the House, among his hon. Friends as well as Labour Members, and to conclude that whatever the merits of fracking per se, these two proposals are a row-back from the localism and the democratic agenda that we ought to be pursuing but are abandoning now.

--- Later in debate ---

[The Minister for Housing (Kit Malthouse)]

I congratulate the hon. Member for Bath (Wera Hobhouse) on securing this debate, which I will call “shale 2”, as it is a repeat of the Westminster Hall debate promoted by my hon. Friend the Member for North East Derbyshire (Lee Rowley). It is clear from today’s debate that passions remain as high on this subject as on that heady afternoon.

I know the hon. Lady was not trying to position herself as the sole custodian of our precious countryside. My party overwhelmingly represents the British countryside and recognises the precious nature of our green and pleasant land. As an unapologetic environmentalist myself, I share that view. Being genetically from Yorkshire—although I was brought up in the north-west and educated in the north-east—I also have the interests of the northern half of this country at heart. I now happily represent a part of the same bulge of chalk as my right hon. Friend the Member for Arundel and South Downs (Nick Herbert) —I also have oil production that goes on unnoticed and uncomplained about by my constituents—so this is a matter of extreme importance to me.

I emphasise that no final decision has been made on whether to bring these proposals forward. The consultations have now closed and the Government are currently considering the representations made and will issue a response in due course. These consultations are part of a range of measures to make planning decisions faster and fairer for all those affected by new shale gas development and to ensure that local communities are fully involved in the planning decisions that affect them.

As right hon. and hon. Members will know, my remit as Housing Minister in relation to shale gas development is focused on planning policy and delivering the related manifesto commitments. Given that hon. Members have raised matters beyond my remit, including energy policy and reported seismic events, I will refer those matters to the Minister for Energy and Clean Growth, my right hon. Friend the Member for Devizes (Claire Perry), for a response.

[Mr Betts]

The Minister has talked about having faster applications. Can he explain how precisely that would be done in a way that allows communities to be fully consulted? Furthermore, as I understand it, the Government have done no impact assessment on their proposals. Does he intend to do one at any stage?

[Kit Malthouse]

I will come to those exact issues, if the esteemed Chair of the Select Committee will give me a moment.

In summer 2018, we consulted on whether permitted development rights should be expanded to include shale gas exploration development, including the circumstances in which this might be appropriate. I would like to make it clear that any potential permitted development right granted for shale gas exploration would not apply to hydraulic-fracturing operations or the production stage of shale gas extraction.

I should also emphasise that any permitted development right would cover only the planning aspects of the development and would not remove requirements under other regulatory regimes from the three regulators: the Environment Agency, the Health and Safety Executive and the Oil and Gas Authority. It is important to note that all permitted development rights contain specific exemptions, conditions and restrictions to control and mitigate the impact of the development and to protect local amenity, and any potential permitted development right for shale gas exploration would be no exception.

A right could include things such as limits on the height of any structure, areas where a permitted development right would not apply and noise and operation controls. The consultation sought views on this.

Oral Answers to Questions

Clive Betts Excerpts

Monday 4th March 2019 Commons Chamber

[James Brokenshire]

I am sure that the whole House will want to send its condolences to the family of Jodie Chesney, my hon. Friend’s constituents, and equally, to the family of Yousef Makki, who also lost his life over the course of the weekend. My hon. Friend highlights the appalling situation with knife crime, which has claimed too many lives. I assure her that my Department is working closely with the Home Office to look at issues of prevention and, through programmes such as troubled families, is seeking to provide preventive services. In the last couple of weeks, I have provided £9.8 million for a fund supporting families against youth crime, to help workers to intervene early to prevent such senseless violence.

[Mr Clive Betts (Sheffield South East) (Lab)]

I have previously raised with the Secretary of State the Government’s proposal to remove deprivation as an element from the foundation funding part of the local government allocation. Is he aware of the research done by the University of Liverpool and the Institute for Fiscal Studies showing that although deprivation accounts now for only a 4% difference in spending, if we go back before austerity in 2010, in the early years before the disproportionate cuts in grants to the poorest communities, deprivation accounts for more than 10 times the amount of spending? In the light of that, will he review his decision to remove deprivation as a key element of spending allocations?

[James Brokenshire]

The hon. Gentleman, the Chair of the Communities and Local Government Committee, is obviously aware that there is an ongoing consultation on the formula. He highlights a point in relation to the primary formula and the way in which deprivation plays into that. We will look closely at the evidence that is presented to us and I encourage him to take part in that consultation.

Stronger Towns Fund

Clive Betts Excerpts

Monday 4th March 2019 Commons Chamber

[James Brokenshire]

My right hon. Friend rightly makes the distinction between the two elements of the fund and the town deals that we want to see emerging from both of them. On the first element, we have allocated this on the basis of a number of different factors, but I will be publishing a prospectus—that is the next stage—to set out the application process and the basis for the applications we want to see coming through from the towns that can apply under the £600 million fund. We will be setting that out in detail so that towns such as Harlow, which I know he is so passionate about, are able to apply.

[Mr Clive Betts (Sheffield South East) (Lab)]

The Secretary of State will be aware that, if the UK were still a member of the EU after 2020, South Yorkshire would again be eligible for less-developed region status because its economy has fallen back against EU averages since 2014. If it were entitled to EU funding, South Yorkshire would receive £1 billion over seven years. So either his announcement today is totally inadequate, or he is going to promise that, under the shared prosperity fund, South Yorkshire will get exactly what it would have got under EU funding if we were still in the EU.

[James Brokenshire]

One of the things that would encourage investment in the right hon. Gentleman’s area is getting the devolution deal done in relation to South Yorkshire, Sheffield and the Sheffield city region, as he well knows. He makes an important point about the distinction between this fund and the UK shared prosperity fund, which will follow. Those are separate, and there will be a consultation on the prosperity fund and, indeed, the settlement of amounts in the spending review. There is more to come, so this fund should not be seen in isolation. It links into more funding and more structures that will support growth in all areas.