Oral Answers to Questions

Clive Betts Excerpts

Monday 23rd July 2018 Commons Chamber

[Rishi Sunak]

I can confirm that I have met representatives of my hon. Friend’s council regularly to discuss this topic, including just the other week at the local government conference. We received more than 300 submissions to the recent consultation on fair funding. That is one of the topics raised, and the Department is considering all responses with a view to replying later this year.

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

There is a great deal of concern in local government about the financial cliff edge that is facing a number of authorities. The Public Accounts Committee recently asked the Department to do two things: to explain by the end of September why it believes that local authorities are sustainable in the current spending round; and to agree with local authorities within 12 months a definition of financial sustainability and a methodology for assessing risk. Those are both important requests. Will the Minister ensure that his Department complies with them?

[Rishi Sunak]

I thank the Chair of the Housing, Communities Local Government Committee for his question. As he knows, the Department is considering the Public Accounts Committee’s report as we speak. As for his broader question, the Department is constantly evaluating local government sustainability, and in the upcoming meetings, and ahead of the spending review, the topics that he has raised will of course be closely scrutinised.

Oral Answers to Questions

Clive Betts Excerpts

Monday 18th June 2018 Commons Chamber

[James Brokenshire]

I recognise the clear desire and intent to see to it that these buildings are made safe and that remediation is completed at the earliest possible opportunity. The works are complex and detailed, and they will take time. We continue to monitor and to work with local authorities to make sure that progress is made, recognising the real public safety issues that the hon. Gentleman underlines.

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

The Secretary of State is rightly consulting on banning all material that is not of limited combustibility from high-rise buildings, and the Housing, Communities and Local Government Committee hopes that he will bring in such a ban after the consultation. If he concludes that it is right to ban such material from all new buildings, does he accept that it would be completely untenable to leave the same material on existing buildings, and, in such a case, does he accept that the Government will have the responsibility to financially compensate the building owners affected?

[James Brokenshire]

The Chair of the Select Committee will know that we have committed £400 million to support the public sector in remediation costs and that, therefore, we are committed to seeing that the work is undertaken well. Obviously, we will reflect carefully on the consultation that will be launched and therefore look at its application. The key message is that we need to make progress and to get on with this, so that buildings that have been identified in need of remediation are dealt with.

Tower Block Cladding

Clive Betts Excerpts

Monday 21st May 2018 Commons Chamber

[James Brokenshire]

I am grateful to my hon. Friend for her question, because it touches on some of the issues in the Hackitt review about a culture change—a culture shift—across the whole sector in terms of the standards that should be applied. That is why I am determined that we will pursue this rigorously and follow through on the recommendations that Dame Judith Hackitt has given.

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

Last week, the Select Committee welcomed the Secretary of State’s decision to consult about banning all combustible material from the cladding on tower blocks. May I ask him, once again, whether he has given further thought to banning the material on existing blocks as well as on new blocks and refurbishment works? If he is minded to do that, does he accept that the Government would then have a responsibility to compensate building owners for the effects of building regulations that were changed retrospectively?

[James Brokenshire]

I welcome the action of the Select Committee in this regard. We are obviously working at pace to move forward with the consultation, which is intended to be forward-looking. I hear the hon. Gentleman’s point about building regulations that could only speak to the existing timescale. There is also an issue, which comes through very clearly in Dame Judith Hackitt’s report, about the risks of these sorts of systems and why these building owners need to take their responsibilities extremely seriously.

Tenant Fees Bill

Clive Betts Excerpts

2nd reading: House of Commons
Monday 21st May 2018 Commons Chamber

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

First, I refer to my declaration in the Register of Members’ Financial Interests: I own one property which I let out.

The Select Committee carried out pre-legislative scrutiny, and we unanimously warmly welcomed the principle behind this Bill. The principle we accepted was that the contract is between a landlord and a letting agent, and therefore it is up to the landlord to pay the cost of that contract; that seems a very simple principle to adopt. Evidence was given to the Select Committee that considerable savings to tenants could materialise from this; there was talk about average fees charged to tenants of £100 or £200, but Shelter gave evidence that they could be as high as £300 or £400 in some cases, so there are significant savings for tenants here.

There could in some circumstances be an increase in rents to compensate, and that would be legitimate if done properly from the beginning, but again there was evidence that if tenants were asked to pay a bit more each month, rather than a lump sum fee, that would help them in most cases. Organisations representing tenants generally accepted that point.

The Select Committee looked at the Bill and recognised that the good letting agents would accept it and willingly comply. The Bill tries to deal with those letting agents that would try to find loopholes to get around the provisions. We concentrated to a degree on default fees and how letting agents might seek to recover money they can no longer charge through charging extra for things that happen during a tenancy such as a lost key. It is reasonable that a lost key should be charged for, but it ought to be a reasonable charge. Letting agents might also charge more if they could in the first month of a tenancy to disguise an upfront fee, or indeed try to recover money in that way at the end of a tenancy. These were the sorts of matters we considered and made recommendations on.

I will not go into all the areas where the Government accepted our recommendations, because there is quite a long list of them, but I think the Minister will accept that the Bill is better for the consideration of the Select Committee and its suggestions. For example, section 21 notices cannot be used where the letting agent has kept outstanding prohibitive fees; that was a Committee suggestion. I am however disappointed that the Government did not accept our suggestion that we should have a clause about retaliatory evictions not being allowed as a result of this legislation. Indeed, the Committee looked at the issue of retaliatory evictions in our recent report on the private rented sector in general, and I think the Government must now review the legislation on retaliatory evictions and the Deregulation Act 2015, as it is not working at present. The Government are going to come back with some more information on how many cases there have been where a retaliatory eviction has been stopped because of the current legislation. This point might also apply to the private Member’s Bill of my hon. Friend the Member for Westminster North (Ms Buck); I can see retaliatory evictions coming into that as well. Therefore, we must extend the scope not just in terms of this legislation, but in terms of other Bills as well.

We did a lot of work on default fees. We need some specific figures on this, and my understanding is that the Government have generally accepted that default fees should only be related to the cost incurred by the landlord, and that more information will be provided in the guidance the Government issue. The problem is that the guidance will not be available to this House as the Select Committee suggested; it will not be available until consideration in the House of Lords. We are therefore taking the Government’s word that they are going to toughen the default fees powers without seeing that in practice.

Another important issue is enforcement. The Government have accepted the principle of the Select Committee suggestion that a tenant charged prohibitive fees should be able to recover them from the first-tier tribunal. That is the best place to go because it is fairly user-friendly for tenants, although they will often still need some help from advice services or local authorities. The problem is that if a letting agent does not agree to the first-tier tribunal decision the tenant has to go to the county court for enforcement, and that is not a user-friendly place, which might deter tenants from going. We have suggested that the first-tier tribunal might be given powers of enforcement or at least might have to take the case on behalf of the tenant to the county court if its decision is not being complied with. Will the Government look at that? It would also be nice to have a bit more information about their idea of a housing court reform and generally having one place where tenants can go for a whole range of housing issues. That is a good suggestion, but we have not seen any details so far; it would be good if the Government were to come back with some.

On local authority enforcement, we suggested that paying the costs the local authority will incur through civil penalties was not sufficient and that local authorities need extra funding from Government. They have accepted that in principle, but have committed only to doing that for the first year that the scheme is in effect and have not given any idea of the amount of money. We will need to look at that in more detail.

Finally, we talked about the size of security deposits. We heard conflicting evidence: organisations representing tenants wanted deposits equivalent to four weeks’ rent; landlords and letting agents wanted six weeks. Both made compelling cases, so the Committee suggested five weeks. We also heard some interesting ideas about alternatives to security deposits. We were not convinced that any had been sufficiently thought through to recommend them, but we felt that many of them needed further thought. Will Ministers therefore commit to carrying out a review of the various alternatives to security deposits and report back to the House in due course?

--- Later in debate ---

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

It is a pleasure to wind up the debate and I thank the hon. Member for Croydon Central (Sarah Jones) for her constructive support for the principles of the Bill. I very much look forward to discussing the details with her in Committee.

At the outset, I pay tribute to the Under-Secretary of State for Housing, Communities and Local Government, my hon. Friend the Member for South Derbyshire (Mrs Wheeler), who could not be with us tonight. She deserves enormous praise for the way she has brought the Bill to the stage in which we are discussing it tonight, through her tireless engagement not only with colleagues across the House, but the sector at large, and extensively with the Housing, Communities and Local Government Committee. I thank her for all her work. She is the reason that we are talking about a Bill over which there is so much agreement.

I start by agreeing with my hon. Friend the Member for Carlisle (John Stevenson). Like him, I am a committed believer in the power of free markets and competition. I approach cases of caps and bans with some scepticism as well, so I am pleased to tell him that after careful consideration of the Bill’s provisions, I came to the same conclusion as my hon. Friend the Member for Gloucester (Richard Graham): what this Bill does is address a failure of competition and a failure of the free market, which Government Members believe so passionately in. There is an inherent unfairness in a situation where a potential tenant is faced with a monopoly provider of a letting agent, and it does not strike any of us as being right. That unfairness was highlighted by my hon. Friends the Members for Rugby (Mark Pawsey) and for Walsall North (Eddie Hughes) and is most clearly evidenced in the charging of double fees, where letting fees are charging fees on both sides of the transaction. This is evidence of the broader imbalance in the market that my hon. Friend the Member for Harrow East (Bob Blackman) highlighted, and the Bill seeks to redress the balance between landlords and tenants.

We have heard many helpful contributions from members of the Housing, Communities and Local Government Committee on both sides of the House. I pay tribute to its work and in particular, to the hon. Member for Sheffield South East (Mr Betts) and my hon. Friends the Members for Harrow East and for Northampton South (Andrew Lewer), as well as their colleagues. They did an excellent job. It is worth pointing out that I counted 19 separate recommendations of the Select Committee’s report and the Government were pleased to accept 15 of those. I hope that that speaks to the value that we place on pre-legislative scrutiny—[Interruption.] We should not dwell too much on the differences that separate us.

My hon. Friend the Member for Harrow East, the hon. Member for Sheffield South East and many other hon. Members asked about retaliatory evictions, and I am pleased to say that the Government are considering the Committee recommendations arising from its wider inquiry into the private rental sector, including on retaliatory evictions, and will reply in due course.

My hon. Friend the Member for Northampton South raised the issue of new burdens funding. I can tell him with my other hat on—as a local government Minister—that there is probably no more passionate defender of new burdens funding than me, so I will ensure that the funding is there for our local authorities to enforce the Bill properly.

That brings me to the comments by my hon. Friend the Member for Lewes (Maria Caulfield). She asked about enforcement and about the fees that would be charged and gave examples of exorbitant £200 or £300 fees charged when tenants want to add a second tenant to their contract or request permission for a pet. I am pleased to tell her that the Bill seeks to end that practice. Such fees will be capped at £50 or reasonable costs, which I hope gives her some comfort.

Enforcement is, of course, incredibly important. I am pleased to tell my hon. Friend and others that there are multiple avenues by which tenants can seek enforcement of their rights: first and foremost, through redress schemes, which the Government made mandatory for letting agents some years ago and are consulting on making mandatory for landlords today; secondly, through trading standards authorities and district councils where they are not the trading standards authorities; thirdly, on the advice of the Select Committee, through the first-tier tribunal; and, if none of that works, subsequently through the county court. The fines, starting at £5,000 and scaling up to potentially unlimited fines, are significant and will act as a deterrent to errant landlords.

[Mr Betts]

On enforcement, does the Minister accept that going to a county court is quite an experience for a tenant and would probably put them off, and does he therefore accept that the first-tier tribunal itself should take the matter of enforcement to the county court on behalf of tenants who have already won their case?

[Rishi Sunak]

We do not fully agree with the hon. Gentleman on that particular point, but I hope he takes comfort from our having accepted his recommendation that in the first instance the first-tier tribunal be available for tenants to take cases to and that this will serve as a benefit to them.

On fines, in criminal cases parties will be liable to potentially unlimited fines and banning orders. I think that the combination of all those things will serve as sufficient deterrent to errant landlords.

In conclusion, the Bill will save millions of tenants hundreds of millions of pounds and will deliver fairness. It is one of the many measures the Government are taking to fix the broken housing market, and I commend it to the House.

Question put and agreed to.

Bill accordingly read a Second time.

Building Regulations and Fire Safety

Clive Betts Excerpts

Thursday 17th May 2018 Commons Chamber

[James Brokenshire]

I am very grateful to my right hon. Friend for her question. I do understand the concerns that Members on both sides of the House, including those in London, understandably have following the appalling tragedy of Grenfell. I can tell her that we will be providing details for local authorities and housing associations about how they can access the funding. We are working at pace to ensure that the relevant information and guidance is given, because I am certainly very conscious that we want to allocate the funding for remediation as soon as possible. I will announce more details shortly.

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

I thank the Secretary of State for his statement. As he knows, the Housing, Communities and Local Government Committee is taking evidence from Dame Judith this afternoon. Once we have heard from her and had a chance to read the report in detail, I am sure the Select Committee will want to let him have our comments, and we will pass them on before the deadline of 25 July that he has set for such comments to be received.

May I ask about the specific issue of combustible materials used in cladding on high-rise buildings? Shortly after the interim report, the Select Committee called for such materials to be banned. We took up that issue with Dame Judith, and we wrote to the then Secretary of State and other Ministers about it. I welcome the fact that the Secretary of State is now going to consult on banning combustible materials. Will the consultation on a ban apply to regulations for new buildings and the refurbishment of existing buildings, or does he intend to apply the regulations retrospectively to all existing buildings, so that if the consultation goes in such a direction, combustible materials will be taken off all existing buildings to make people safe?

[James Brokenshire]

I certainly recognise the importance of the contribution made by the Select Committee on these issues and of the hon. Gentleman’s points. I note that Dame Judith is providing further evidence this afternoon, and I look forward to hearing from the Committee about its recommendations.

The point is that we firmly want to consult on the issue of combustible materials because of the concerns that the hon. Gentleman and others, including in the industry, have raised. I will come forward with further details, and I will obviously publish the details of the consultation’s scale and extent. The clear intent is to ensure that there are not combustible materials on buildings—fire safety issues are of paramount importance in what we are doing—and I will certainly reflect further and carefully on the points that the hon. Gentleman has made.

Local Authority Overview and Scrutiny Committees

Clive Betts Excerpts

Thursday 17th May 2018 Westminster Hall

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

I beg to move,

That this House has considered the First Report of the Housing, Communities and Local Government Committee, Effectiveness of local authority overview and scrutiny committees, HC 369, and the Government Response, Cm 9569.

It is a pleasure to serve under your chairmanship once again, Mr Sharma. Today’s debate will consider the report of what is now the Housing, Communities and Local Government Committee. At the time it was the Communities and Local Government Committee, but what’s in a name change, after all?

The report looked into the effectiveness of local authority overview and scrutiny committees, which is an important subject. Perhaps it is a bit technical, and does not catch the main headlines in the popular press, but local government delivers important services to our local communities, including social care services for the elderly and children, emptying the bins, sweeping the streets, running libraries, and producing housing. Those are all important services, and it is important that they are done well and that the performance of authorities is scrutinised and monitored effectively.

Let us go back, for those of us who can remember, to how scrutiny came about in local government. We used to have a system—indeed, some councils are going back to it—in which all councillors were involved in the decision-making process, in the sense that they were members of committees. Then we had the idea that the Cabinet system, because it worked so well at national level, should be replicated at local authority level. Cabinets were set up in local government, and a number of councillors were appointed to them. I think someone either in Westminster or Whitehall then had the thought, “What do we do with the rest of the councillors who are not on the cabinet, who now haven’t got committees to be on?”

Councillors perform a very important role as representatives of their local communities. Acting in their wards on behalf of their constituents is key to their role. Then someone thought, “What else can we do with them; they are sitting around the town hall, city hall or county hall with nothing else to do? Scrutiny committees are a good idea—we’ll have those.” I think it was a bit of an afterthought on top of the cabinet system, although people who devised it at the time might say that it was not. Unfortunately, for some authorities, it has remained an afterthought—somewhere we can put to one side those councillors who do not have much to contribute anywhere else or, sometimes, councillors who have too much to say somewhere else and are a bit of a nuisance to the leadership of the council. Those in the leadership put such councillors on a scrutiny committee, and hope that they will go away and do something that does not really affect them.

Unfortunately, some councils see scrutiny as a problem. People can raise difficult issues that should not be raised, and sometimes it can become an issue of party political contention. Opposition councillors get put on scrutiny committees to make the life of the ruling party difficult, and ruling party councillors get put on them and told not to ask any difficult questions, because questions can always be raised in their group meetings afterwards. Councillors tell us that that is what is said to them.

However, there are very good examples of scrutiny; like Select Committees in this House, councillors challenge the executive, take on issues, investigate thoroughly and comprehensively, produce good reports and, rather than simply looking at something after the event, take policy initiatives and help to develop policy. Sometimes when there is a complicated issue—perhaps there is a general understanding in the council of where they want to get to, but not of how to get there—scrutiny committees can be really good at delving down and doing what they call “task and finish” to identify the key issues and technical difficulties, and come to agreed, well thought through conclusions. There are some really good examples of effective scrutiny.

There are good examples of councils going outside their council body and getting witnesses, expert witnesses and advisers in to help them, as Select Committees do. Unfortunately, such examples are rare. When councillors are asked why they do not get people from their local university to come in and help—those experts would probably be quite happy to be part of their local community engagement and democratic process—the response is often, “Oh—can we do that?”

We recommend looking at examples of best practice. Councils should learn from one another, and from the best examples of how to conduct scrutiny independently and effectively, by drawing in advisers from outside and engaging with the public in a meaningful way. Sometimes the way the public are engaged with—sitting at the back of a room while a council officer reads a report that has been written well in advance—is not very good. That does not engage the public, but we are looking at different ways of doing so. Taking scrutiny out to the community, setting up websites, and using social media are ways in which councils can develop and enhance scrutiny, as some of our Select Committees do.

This weekend I am going to Birmingham because the Housing, Communities and Local Government Committee, together with the Health and Social Care Committee, is doing an inquiry into social care. We are going to talk to the citizens’ jury that we have established to provide information and evidence to the inquiry. It is the first time that our Committee has done that. The Committee is also doing an inquiry into the high street. We are using a website to try to get the public engaged in feeding in their information about what is happening in their high street, and what they think should happen. We would like to see such initiatives reflected in local government. Sometimes they are, and local authorities can learn from one another as well.

The key recommendation of our report is about the culture in local government. Do those in the leadership, both politically and at officer level, see scrutiny as important? Do they see it as part of the council’s function, and as something that can add value to council decisions, or just as a bit of an irritant that can be put to one side and forgotten about? That was key to our recommendations. The reality is that if councils value scrutiny and want to make it work, they can do it, even if they may do it slightly differently in different authorities.

I do not want to keep hon. Members for too long this afternoon, but the Committee made a number of specific recommendations. The Committee’s key observation was that Government guidance on scrutiny has not been updated for a long time. The Government have accepted that, and they will produce new guidance—we had a positive discussion with the Minister about that at the evidence session. That is a good starting point, because it means that we can look at some of the other recommendations positively. Scrutiny committees should report not just to executive members of the council, but to the whole council. Again, the Government have accepted that, and we welcome it.

We recommended that scrutiny officers should have the necessary skills to help members of scrutiny committees to do investigations into detailed policy matters. We should not just have a clerk system in which someone says, “We’re here to keep a record of attendance and get the witnesses in the right places.” It should be about helping members with proper monitoring and policy development. The Government have basically accepted that recommendation as well.

Another issue was scrutiny of elected mayors and combined authorities. When any deal is done, it is really important to look at scrutiny, and ensure that resources are available for it. Those mayors and combined authorities are a further step removed, in some cases, from the people who elect them. The arrangements can be complicated, and it is important that there is proper scrutiny of them. The Government have accepted that point as well.

Moving on to issues on which the Government’s response has been less enthusiastic, and those issues that need more consideration, the Government did not accept that a summary of the resources spent on scrutiny should be published each year alongside the summary of resources spent on the executive. The reality is that, in many councils, when cuts are made scrutiny is one of the things that gets cut, because it is a bit of an inconvenience and nobody will miss it if it does not happen. Of course, the executive looks after itself. That does not happen on all councils, but there is sometimes a feeling that that happens, because the executive makes the budget recommendations. We thought that saying to councils, “Look, just publish those figures,” was an interesting way of demonstrating the extent to which they fund scrutiny, compared with other functions of the council. The Government said no to that. It seemed to us a fairly harmless recommendation, and we do not understand why the Government did not support it.

The Committee also said that a statutory scrutiny officer should be appointed in every council. Why not? They exist in unitary authorities and in counties, but not necessarily in second-tier authorities—the district councils—which perform very important functions. Why not a statutory scrutiny officer there as well?

The issue of what information is available to scrutiny committees is absolutely key. Following our report, I have done two or three talks to councillors on scrutiny committees and scrutiny officers. Everyone started nodding at the point we raised the issue of what information is available. So many times councillors on scrutiny committees have been told, “You can’t have that information; it is confidential.” There are examples of councillors having to use freedom of information requests to get information from their own councils. That is ludicrous. It is nonsense. The words “commercial confidentiality” often appear as the explanation and the excuse.

The Government’s response in that regard was an attempt to be helpful. They said that there should not be a blanket refusal to provide information and that information should be dealt with on its own merits. The very helpful point was made—I hope it is given some prominence in guidance to councils—that when contracts are let by councils, clauses should be put in to make it clear that information can be relayed to councillors and not just to a handful of people on the executive. Companies tendering for work should understand that right from the very beginning of the tendering process, before contracts are let. The Government need to build on that in the guidance because it is an absolutely key point—if the information is lacking, scrutiny cannot be done.

In many councils, more and more functions are not delivered in-house but are contracted out to private companies. Officers delivering a service in house can be called before the scrutiny committee, but if the information about a private contract is classed as commercially confidential, the contract cannot be scrutinised and nor can the service to the public. At the end of the day, that is the key point. Addressing that issue is fundamental to getting scrutiny right in an age when so many services are now delivered by third-party contractors. We must make sure not only that the information is available but that those individuals who are running the contract have to come before the scrutiny committees as well.

We also called for scrutiny committees to look at the work of local enterprise partnerships. Billions of pounds of public money is spent by LEPs, which are almost unaccountable to any part of the democratic process. The Government were receptive to the idea and said that there should be proper oversight and transparency of the operation of LEPs. They said that they would go away to think about that and write to the Committee. I know that the post is occasionally slow in this country, but I think the letter has got lost in the post. We have not received it yet. I hope the Minister has one in his pocket this afternoon to hand across the Chamber.

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

We are writing it now.

[Mr Betts]

Okay. Clearly, I think it is an important issue. Who else is going to oversee the spending and work of the LEPs if not council scrutiny committees? That is very important.

There is something that somehow got lost altogether in the Government’s response. Currently, councils have a right to oversee their own activities and the officers who perform them, although they need to do more about commercial companies. There is a very good set of rules for the health service. The service can be scrutinised by local council scrutiny committees and the health service bodies have to provide information. Officers have to come to scrutiny committees and be questioned about that. What about the other important public services?

The Department for Work and Pensions provides a lot of services at local level. So do the police. I know that the police have their own scrutiny arrangements for local police panels—I do not know whether they are quite the same—but certainly, lots of public services, such as those delivered by the DWP, are very important at local level. They do things that affect the public locally, but there is currently no local oversight. We suggested that they should be put in a similar position to health service bodies and that officials should have to provide information and evidence and be available to appear before scrutiny committees. The Government seem to have missed that out altogether in their response, as though they were a bit uncomfortable about it. I know that it might mean talking to one or two colleagues in other Departments, but it is a good proposal and one that would help transparency and monitoring of Government activity as well. I hope the Minister will be able to say a bit more about that this afternoon.

We look forward to the Government’s guidance, as well as clarification of the one or two issues that I have identified, including that long-awaited letter, but to a large extent, at the end of the day it is down to councils. We can give them guidance, but we need to encourage them to take account of the report and to work with each other to improve scrutiny.

I know that the Local Government Association is starting to look at the issues. We had a very helpful letter just before the debate from the Centre for Public Scrutiny, which has an important role to play. It gave evidence to the Committee and is now working with the LGA on how to deal with a number of matters in a practical way. They are looking at the issue of councillor training, and at examples of good practice. They are looking at how councils can be helped to understand their responsibilities. I hope that they are going to look at the idea we recommended, which the Government said they were going to talk to the LGA about, of doing some pilots on the election of chairs of scrutiny committees.

Councils are, in the end—the Committee is very clear about this—locally elected bodies, and on the Select Committee we are all, by and large, localists who believe that things can be best done and organised at a local level, but we thought the idea of having chairs elected by the home council was quite a good one. We did not want it to be imposed on councils, but we suggested one or two pilots to show what could be done. The Minister might be able to let us know how far that has gone.

We certainly welcome the work that the LGA is now doing with the Centre for Public Scrutiny to take those ideas forward. We look forward to the guidance that the Government are eventually going to produce on the basis of the report.

--- Later in debate ---

[Yvonne Fovargue (Makerfield) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Sharma.

I am grateful to my hon. Friends the Members for Sheffield South East (Mr Betts) and for Blaydon (Liz Twist) and the hon. Member for Harrow East (Bob Blackman), and I bow to their superior experience as councillors. I was a councillor for six years. It is a hard job, and I respect everyone who stands up to represent their community, putting their head above the parapet. I also have experience of the committee and scrutiny systems, and I have to say that as a back-bench councillor I preferred the committee system—I felt that I had more input—but I can see that that might depend on which local authority it is.

Scrutiny has to be a good thing. It is right and proper that the executive are held to account, that thorough assessment is made of whether policies represent real value for money, and that there is ongoing monitoring of how they affect the public. Scrutiny should not just be retrospective; it should also ensure that policy making can be improved. That is how we see scrutiny in Parliament —we hold the Government to account in debates such as this one, for example—and there is some parallel with local government, but sometimes councils do not always give their scrutiny committees the wonderful support and resources that we have in this place for our Select Committees. We have Committee Clerks, training, a wealth of resources and availability of information, which is why Select Committee reports such as the one we are discussing are so highly regarded.

Another issue in local authorities is that party politics can sometimes be more single state. As we know, in some parts of the country the Conservatives dominate, while in others things are the other way around. That is how constituents want it, which is quite right—it is democracy. However, that can have an impact on scrutiny. In some authorities one party sometimes has to hold itself to account, which can make life difficult for individuals. What incentive is there for a back-bench councillor to criticise his or her own ruling executive’s policies? To do so has been described, in some instances, as not a great career move. That is something to think about. Our Select Committees have a mix of Members and some are chaired by the Opposition, so they are truly cross-party, with real legitimacy and standing as a result.

All that means we have to be more nuanced in how we look at local government. One size does not fit all and, as we heard from my hon. Friend the Member for Sheffield South East, there is the culture. At their best, overview and scrutiny committees should be regarded as constructive, and as a critical friend, but there is a tendency, I fear, for some council leaders to see them as a challenge. That might be because of the political make-up of the council, but it might be an ingrained attitude—the executive makes the decisions, which are made in the best interests of the people, so challenging them is somehow disloyal. The report acknowledges that and points out that the culture at the top determines whether scrutiny is seen as effective.

Culture also determines whether councillors get the correct information to do scrutiny properly. That is a key issue that has been mentioned a number of times. When I was on the scrutiny committee, I had 24-page reports given to me the day before a meeting. I was also doing a full-time job, so that did not encourage effective scrutiny—it was in fact another way of discouraging it, which can be done either by giving no information or by giving so much information, in such detail, that no one reads it.

[Mr Betts]

My hon. Friend makes a good point about how councils work. Their challenge is greater than ours here in the House of Commons, where not only do we have independent Select Committees, but even Government Members are a little more removed from Ministers on a daily basis than councillors are from the cabinet members. Councillors are often in the same room with cabinet members, or part of groups that make the decisions for which cabinet members are responsible, in a way that does not happen in the House. It is a bigger challenge, so getting that culture right is key.

--- Later in debate ---

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

It is a pleasure to serve under your chairmanship, Mr Sharma, I think for the first time. I congratulate the hon. Member for Sheffield South East (Mr Betts) on securing the debate. I thank him and the members of his Committee for their important work. I stand here in some trepidation, responding to a debate in which I think I am the only parliamentarian who has not been a local councillor at some point.

[Mr Betts]

There is still time.

[Rishi Sunak]

One job at a time, perhaps. Collectively, there is probably over half a century’s worth of local government experience in the room. I pay tribute to that service. The hon. Member for Sheffield South East said that this may not be a topic that attracts front-page headline news, but nevertheless it is an important topic. It is a credit to him and his Committee that they took the time to thoroughly investigate a topic that deserves scrutiny but that otherwise may not have had the chance to be debated and aired in this place.

Scrutiny is fundamentally important to the successful functioning of local democracy, so I welcome the opportunity to reflect on the Committee’s findings. It has a key role to play in ensuring local accountability and the efficient delivery of public services. Scrutiny committees can play a key role in voicing the concerns of local people. I hope the Government response makes it clear that I value the role that scrutiny can play in supporting accountable and transparent decision making and the effective delivery of council functions. The principal takeaway point for me from the Committee’s report, which the hon. Member for Sheffield South East alluded to, is that the organisational culture determines whether scrutiny works well. Where there is a culture of welcoming challenge, the scrutiny process in councils is effective.

I would like to start by setting out the core principles that underpin Government’s approach to scrutiny, before turning to the specific recommendations of the report. First, councils are democratically elected bodies and are ultimately accountable to their electorate. Secondly, as a localist, I take the view that councils are best placed to know which scrutiny arrangements will suit their own individual circumstances. Thirdly, Government have a role to play in ensuring that councils are aware of what effective scrutiny looks like and how best to carry it out. Lastly, overview and scrutiny is just one part of the wider accountability framework for local government, along with the requirement to publish certain information online for transparency, the requirements for independent audit, the complaints process and the presence of independent local media.

The rationale behind the Government’s response was, therefore, to accept those recommendations that would increase councils’ understanding of the importance of scrutiny and how to conduct it, but to tread carefully with the requirements that would place additional requirements on local authorities or reduce their flexibility to decide for themselves which scrutiny arrangements to put in place.

I will turn to some of those specific recommendations. The Committee’s first recommendation clearly will enhance councils’ understanding of the importance of scrutiny and how to conduct it. The Committee pointed out, not unfairly, that statutory guidance was updated more than a decade ago. I was more than happy to agree to update that. I am keen that the new guidance is of genuine use to councils and is not just a tick-box exercise that simply restates their legal obligations. My Department is already at work with the sector to ensure that it delivers the right messages in the right way. Broadly, the guidance will seek to ensure that councils know the purpose of scrutiny, what effective scrutiny looks like, how to conduct it effectively and the benefits it can bring. More specifically, it will cover some of the specific things that were heard today, such as reports to full councils or the role of the public. I look forward to publishing that revised guidance before the end of this year.

The hon. Member for Sheffield South East and the hon. Member for Makerfield (Yvonne Fovargue) raised the concern of public scrutiny of local enterprise partnerships. The Committee’s report seemed to suggest that it was the exception rather than rule. I want to reassure hon. Members that I agree fully that local scrutiny is essential to holding LEPs to account. The local enterprise partnerships national assurance framework is set by central Government and LEPs must comply with it to receive funding.

Last year, one of the Department’s non-executive directors, Mary Ney, led a review into LEP governance and transparency. We are in the process of fully implementing all her recommendations; but I agree there is more to do to ensure that LEPs and local partners collaborate effectively to deliver better outcomes for the public. That is why we are currently undertaking a Minister-led review that will consider the role of local scrutiny in LEP governance. It will also bring forward reforms to LEPs’ roles, leadership, accountability and geography. It will be published in the coming months.

I apologise to the hon. Member for Sheffield South East and his Committee that he has not received the letter that he is due. I will ensure that gets to him in short order, to set out what has already happened and what is happening to improve governance and scrutiny for LEPS.

[Mr Betts]

I thank the Minister for that reassurance. We will get a letter in short order saying that something will happen in the coming months. Could the Minister be more precise about what “the coming months” might mean?

[Rishi Sunak]

I would love to be, but the review is being conducted by my colleague, the Under-Secretary of State for Housing, Communities and Local Government, my hon. Friend the Member for Rossendale and Darwen (Jake Berry), so I do not have the exact timing to hand. The review was announced through the industrial strategy White Paper. I am sure that we will share as much information as we are able to with the Committee. The hon. Gentleman knows that, alongside that, the assurance framework is in the process of being reviewed and updated. That work is going on with people in the industry, including the Chartered Institute of Public Finance and Accountancy and officials. I will make sure that all that is contained in the letter, with as much transparency on timing as we are able to give.

Another key concern that the Committee raised was that scrutiny seemed to be a second-order matter for combined authorities. I assure hon. Members that I take accountability in these new authorities very seriously. I am confident that the framework we have put in place provides the basis for a robust and consistent approach to scrutiny for combined authorities across the country. In particular, the Combined Authorities (Overview and Scrutiny Committees, Access to Information and Audit Committees) Order 2017 was a key step in implementing devolution deals, and will ensure effective accountability for the new budgets and powers that have been devolved.

Members raised the question of resourcing. The Government announced at the last Budget that they will make available to mayoral combined authorities a £12 million fund for financial years 2018-19 and 2019-20 to boost Mayors’ capacity and resources. Combined authorities are free to use that to ensure that scrutiny and accountability arrangements are effectively resourced and supported.

I turn to the recommendations that the Government are considering. Access to information was raised by all three Back-Bench Members who spoke—my hon. Friend the Member for Harrow East (Bob Blackman) and the hon. Members for Blaydon (Liz Twist) and for Sheffield South East. They made a persuasive and compelling case that we should have a hard look at that area. As a new Minister, I tell my hon. Friend that the point about information was the one thing that really stuck with me. In our response to the Select Committee, we committed to looking at that and deciding how best to manage it.

I agree that scrutiny committees should be able to access the information they need to do their jobs effectively. I can see that some executives might seek to deny committees access to that information if they do not appreciate their obligations or understand the value of scrutiny. I want to take soundings from the sector and figure out how best to move forward before committing, but hon. Members’ case that this is something we should consider carefully will stick with me, and I will ensure that I take it away. If we decide that new measures are appropriate, I will of course come back to the Select Committee with those.

My hon. Friend the Member for Harrow East and the hon. Member for Sheffield South East also raised the role of elected chairs. My officials and I will speak to the sector and think about how best we can establish the impact of elected chairs on the effectiveness of scrutiny committees. In general, chairs should be selected on the basis of their skills, experience, integrity and objectivity, not of how amenable they are to the executive. Although the new guidance will remind councils that they already have the option to elect rather than appoint a chair, it is right that every council should decide for itself how to select its members.

Let me say a few words about some of the recommendations about which there is a small difference of opinion, which I hope I can explain. On the point about councils publishing a summary of resources, although the Government require councils to publish certain information for transparency purposes, making available details of the resources allocated to scrutiny would be difficult in practice, for the simple reason that councils often do not have a dedicated scrutiny officer or staff. Instead, they pull in resources as and when they are needed, so it may be difficult for them to produce accurate figures.

--- Later in debate ---

[Rishi Sunak]

The hon. Lady is right. I note that in its oral evidence, the LGA recognised the need to get into councils that might not be doing scrutiny as well as they should. I think it will have taken that message away as a result of coming before the Select Committee and engaging on this topic, and I will pass that message on, too, to ensure that it was heard loud and clear.

[Mr Betts]

I am not sure whether the Minister covered this point. He spoke about the importance of access to information and about considering how that can be improved, but he did not make it clear whether that applies just to information held by councils themselves or to information held by other public bodies, such as the Department for Work and Pensions, the police service and the fire service, just as it already applies to the Department of Health and Social Care and its bodies at local level. Does he accept that scrutiny committees have a right to scrutinise and access information and witnesses from those other public organisations?

[Rishi Sunak]

I was talking specifically about information relating to councils’ own functions in the first instance. On the broader point, which was also raised by my hon. Friend the Member for Harrow East, there are existing mechanisms for health and crime because, when those structures were set up, those were the agencies that the sector felt it did the most partnership working with. I am happy to talk to the sector to find out whether there is appetite for a greater ability to scrutinise other bodies, whether that process would work practically, and whether the burden it would put on authorities is appropriate. It is important to recognise that many of those other parts of the public sector are scrutinised separately, and to ensure that there is not duplication of scrutiny. Every public agency tries to focus on its day job, so we need to get the balance right between having appropriate scrutiny and not duplicating scrutiny, which would mean taking focus and resources away from agencies doing their job.

[Mr Betts]

I thank the Minister for giving way a second time on this point. I hope that, having looked at that and talked to the sector about it, he will write back to the Select Committee with his findings. It is difficult to see where the Department for Work and Pensions has a spotlight shone on it often and effectively at local level. I recognise his point about putting burdens on local government. This is intended to be not a burden but an opportunity, which local authorities may take up if they wish. There would not be a requirement to scrutinise other bodies, but authorities would have the opportunity to do so if they wished.

[Rishi Sunak]

I will of course write to the hon. Gentleman when we have had conversations with the sector on that point.

--- Later in debate ---

[Mr Betts]

I thank the Minister for his response—whether it was positive or not will depend on the outcome of those further consultations. He gave us a general indication that he recognises the important role of scrutiny in local government, which is done well in many councils and not so well in others. Improvement is down to the sector, working with the Centre for Public Scrutiny. We look forward to receiving the guidance, which will be really important, and further information about how LEPs might be more effectively scrutinised.

The Minister has clearly got the message about information for scrutiny committees, which is very important, both within the council and hopefully more widely as we look at providing information to other public bodies. We look forward to his coming back to us on that point. Hopefully the Committee’s report and—eventually—the Government’s collective response can mean not just an improvement in scrutiny, which of itself is not the endgame, but an improvement in the public services that our constituents receive from their local authorities.

Question put and agreed to.

Resolved,

That this House has considered the First Report of the Housing, Communities and Local Government Committee, Effectiveness of local authority overview and scrutiny committees, HC 369, and the Government Response, Cm 9569.

Oral Answers to Questions

Clive Betts Excerpts

Monday 30th April 2018 Commons Chamber

[Rishi Sunak]

I thank my hon. Friend for his question; I know that he is following this matter carefully, as are his colleagues from across Northamptonshire. The Department and the new Secretary of State will consider all the representations received over the past couple of weeks, and we will be making an announcement shortly, most likely through a written ministerial statement.

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

I wish the Secretary of State all the best in his new role and for his future health.

Despite the figures that the Minister has given, the Local Government Association says that there is a £5 billion funding gap in local government finances from 2020, and the National Audit Office says that the position is financially unsustainable. Will he therefore look carefully at the Housing, Communities and Local Government Committee’s recommendation about business rate retention? When business rate retention changes from 50% to 75%, instead of using that to cut public health grants and other grants, we say that local authorities should be allowed to keep the extra money so that they can properly meet the rising demand for social care for the elderly, for looked-after children and for people with disabilities.

[Rishi Sunak]

It was a pleasure to work with the hon. Gentleman’s Committee, and I look forward to reading its report in detail.—I thank the Committee for its work. As for the quantum of funding, he tempts me to pre-empt the results of the spending review, which is due next year. That will be the time to consider his point.

Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Bill

Clive Betts Excerpts

2nd reading: House of Commons & Programme motion: House of Commons & Ways and Means resolution: House of Commons
Monday 23rd April 2018 Commons Chamber

[Dominic Raab]

My right hon. Friend is absolutely right, and that is precisely why we have a minimum period of two years, to ensure that we strike the right balance and encourage the use of existing resources in our housing stock without penalising those who want to get their housing stock on to the market but are taking a bit of time to do so, for whatever reason—perhaps because of renovations or the challenges of the local market.

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

rose—

[Dominic Raab]

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

[Mr Betts]

I want to return to the issue of the staircase tax, which the Committee looked at when we examined the draft Bill. We were generally content with the objectives and policy goals, but we raised a particular issue to which we have not yet had a satisfactory answer. It relates to the Government’s commitment that local authorities would be compensated for any financial costs incurred due to this measure. That was what the Government said they would do when they announced that they were bringing in this legislation but, since then, all we have had from them is, effectively, a nil. It seems that they are going to do nothing whatever about this, even though they accept that there could be an impact on individual authorities. We do not know what that impact will be because the Government have not given us their workings on this, but can the Minister at least give us an indication that he is prepared to look at this again and give us his assessment of the impact on individual authorities? Will he give us an indication that he is prepared to do something about this?

[Dominic Raab]

The Chair of the Select Committee makes an important point. We clarified the situation for local authorities after the Budget and we have written to them. I do not think it would be right to compensate local authorities for what would effectively be an inadvertent windfall resulting from a judicial determination. From the point of view of Government policy, that was not something we wanted to see, and we have moved as swiftly and reasonably as we can to correct this.

[Mr Betts]

We accept that the legislation takes the position back to what people thought it was before the court decision. In the meantime, however, we have had the court decision and local authorities will have done their estimates based on that decision, so the Government are effectively changing local authorities’ financial positions from what they thought they would be a few months ago. Given that the Government initially said they were going to compensate local authorities, why have they gone back on that commitment?

[Dominic Raab]

We did tell local authorities about this as soon as was reasonably possible and, as I mentioned in my previous answer to the hon. Gentleman, I do not think it is right for local authorities to gain from an inadvertent windfall at the expense of small businesses in our local communities.

I shall return to the second aspect of the Bill: council tax on empty dwellings. We are straining every sinew to build the homes that this country needs but, at the same time, we must make the best use of our existing housing stock, and that is what the second clause of the Bill is designed to achieve. It sets out an adjustment to the council tax empty homes premium, which will help to deliver on that.

--- Later in debate ---

[Bob Blackman]

All local authorities across the country which have had to issue these revised bills over a three-year period on business rates will be looking right now at what the bottom line is for them. The worrying factor about the way the Bill is being introduced is that the repayment is not automatic; each business that may have been affected will have to apply for revaluation. They will then be revalued and finally a bill will be decided, for potentially a three-year period, together with interest. Some businesses may not gain anything, but some will gain a substantial amount of money, with interest, and the local authorities will have to repay that. The current position, as I understand it—we need to press our Front Benchers on this issue—is that local authorities repaying that money would not have had this money if this judgment had not been made. However, they have applied that money to their budgets and they will have to find the money from within their budgets as one-off, windfall damage to their bottom line. That is unfair on the local authorities concerned. They have not taken the decision—this was not a decision any local authority took—so they should not be financially penalised as a result of this. I hope we can move to a position whereby the Department will agree to compensate all local authorities that are out of pocket as a direct result of these decisions, once we have got to a conclusion.

[Mr Betts]

I thank the hon. Gentleman for the work he did in scrutinising this legislation in my absence, and I agree with the point he is making now. Would it not be a lot more convincing from the Government when they say they are not going to compensate because the likely effect is small overall if they were to release to us their detailed calculations, which presumably they have done, about the impact on individual authorities?

[Bob Blackman]

I thank the Chair of the Select Committee for raising that issue. We are talking about 30,000 businesses, many of which will be concentrated in particular areas. We know that there will be a hit for some local authorities, which could be considerable. Hon. Members from across the House will not necessarily be aware of the potential hit for local authorities as a result.

Homelessness

Clive Betts Excerpts

Tuesday 27th February 2018 Commons Chamber

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

In 2016, the Communities and Local Government Committee conducted an inquiry into homelessness and addressed many of the issues, including the fact that we do not have a really good take on what homelessness is. It is about rough sleepers, sofa surfing, and people living in overcrowded accommodation and with in-laws. The statistics are not satisfactory. The Government have accepted that we need to do a lot of work in trying to improve them. The Select Committee also did pre-legislative scrutiny on the Homelessness Reduction Bill, as it was then—the first time a Select Committee had done pre-leg scrutiny on a private Member’s Bill. In the end, the Act that came through the House with all-party agreement and great support was significantly helped by that scrutiny.

There are challenges. Everyone can see that the Act’s content is really good. It tries to put the emphasis on prevention so that there is not the ridiculous situation of people being told to go away and wait until the bailiffs come before they will be considered as homeless. In a case I had recently, people were told to wait until twins were born in a cramped one-bedroom flat before they would be considered homeless. The Act ought to force local authorities to take proper account of such things.

People are entitled to a proper plan when they go to see an authority. Their expectations about what they need in respect of their jobs, their caring arrangements and the schooling of their children should be taken account of; in many cases, however, local authorities are simply not able to do that because of the shortage of housing. People who are not entitled to priority rehousing must get proper advice. One of the horror stories we heard during evidence was that people were often sent away with a scrap of paper on which there were a few telephone numbers—often out of date—and told, “Go and ring them if you want any help.”

[Mark Tami (Alyn and Deeside) (Lab)]

Does my hon. Friend agree that single men in particular are given that message—that they are right at the bottom of the queue, and sometimes wasting their time—very early on? They will often end up homeless and on the streets.

[Mr Betts]

It is single people in that situation—women as well as men. We had evidence from both at our Select Committee inquiry. They are not entitled to priority rehousing from the local authority, but they are entitled to advice, although they were not getting it in all too many cases.

The Government have given an extra sum, between £60 million and £70 million, to help the implementation of the 2017 Act. I do not think that anyone in local government thinks that sufficient. I hope that the Government are open-minded about the issue: it was emphasised over and over again, on a cross-party basis, both by the Select Committee and the Bill Committee, that the money will have to be looked at again. The Act must not fail because of a lack of resources for local authorities to implement it.

As it stands, the Homelessness Reduction Act is likely to reduce not homelessness but its growth. As the NAO report on the estimates highlights, the big growth in homelessness and in the percentage of people presenting as homeless and being accepted is because of section 21 notices being served in the private rented sector and people not being able to afford the rent in that sector, as local housing allowance does not keep pace with rent increases. That is the situation, and it seems that the Department for Work and Pensions and the Ministry of Housing, Communities and Local Government, as it is now called, simply have not got their act joined up.

There needs to be an analysis of the effectiveness of constraining local housing allowance and what impact that has on extra spending down the line by local authorities on dealing with the consequences of increased homelessness. That analysis needs to be done if Government are going to justify that position. Something needs to be done urgently.

Another problem is that many homeless people, including single people or people in temporary accommodation, are offered supported housing at some stage. All the evidence, from St Mungo’s and others, has been that the Government’s current proposal of grants being given to local authorities—albeit on a ring-fenced basis initially—to deal with supported housing of less than two years’ duration, which generally applies to people who are homeless, is not going to work. It will not encourage the provision of supported housing or allow existing housing to be maintained. St Mungo’s, the Salvation Army, Home Group and the YMCA have all given evidence to the Government and to my Select Committee to say that that needs to be revisited if we are going to have a proper service and system.

This should not be simply about trying to address the issues of people who become homeless. That is really important. Why have we got a problem? In the end, it is because we have a shortage of housing in this country. I know that the Government have an ambitious target, which I share, to get us to a point where we are building 300,000 new homes a year in this country. However, we are not going to build those new homes unless a very high percentage are built by local authorities and housing associations with Government support. That is the reality.

I welcome the Government giving a £1 billion lift to local authorities by raising the housing cap, but as the Treasury Committee has argued, we need to abolish that cap altogether, and the Government need to sit down with the Local Government Association and look at how we can start delivering social housing that people can afford. What is needed in this country is a major programme. That is needed for the people who cannot afford to buy and cannot afford rents in the private sector, and it is needed to hit the 300,000 target. We will not hit it any other way.

The other great advantage of social house building of that scale is that it is counter-cyclical. We all know that building by private developers will go up and down with the market. At least we can have a degree of certainty in the long term if we plan for a major social house building programme, which will continue through recessions. The Government ought to give serious consideration to that.

Finally, we have to think about the right to buy in areas of acute housing need. It cannot be right to give people a 70% discount to buy homes that are the only ones available for people in acute housing need and people who become homeless. Surely we need a review of the effectiveness of public spending, because that simply cannot be right.

Let us have a look at the discount in areas of acute housing need or at the possibility of suspending the right to buy for a period, with local support. Let us at least look at 100% of the receipts being reinvested in social housing, rather than the percentage of the receipts at present, so that we can deliver back not simply one-for-one replacements—even that is not happening—but like-for-like replacements. A family home being sold off and replaced by an upper maisonette really is not good enough for a homeless family with children who need a home with a garden to live in.

Local Government Finance

Clive Betts Excerpts

Wednesday 7th February 2018 Commons Chamber

[Sajid Javid]

My hon. Friend makes a very good point. Such certainty is of course very important for many local authorities, including his own, and I hope I can now make the situation clearer. It is our intention to deal with the problem of the negative RSG, but we have yet to determine exactly the best way of doing so and providing support to the local authorities affected, and that is why it is right to consult on it. I absolutely commit to him that we will do so, and when we do—our plan is to do it in the spring—I hope that he and others will make an input to make sure that we get it right and really deal with this problem for his authority and many others.

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

Will the Secretary of State reflect on the issue of the transitional grant? It may be important to some authorities, but will he confirm the figures Sheffield City Council has given me showing that the authorities that have had the biggest cuts to their core spending—cuts of over 30%—have between them benefited in this financial year to the tune of £10,000? That is the total figure for the authorities that have had the biggest cuts in grant over the past few years.

--- Later in debate ---

[Jim McMahon]

I am pleased the hon. Gentleman asks that question. At that time, there was already an in-built deficit in the Budget because of the increase in the national living wage and employers’ national insurance contributions, so even within the £2 billion allocated there was a £1.3 billion in-year deficit, because of the need to make sure that the provider market could be sustained. That is my response. It is just not enough money. Everybody in the House and our communities knows that. It is just a shame that the Secretary of State does not carry the weight in the Treasury to get the money into the Department and out to councils and into our communities.

[Mr Betts]

The Local Government Association has calculated that there will be a £2.3 billion gap in social care funding by 2020, having taken account of the 2017 Budget increases, and there are similar figures from the King’s Fund. The National Audit Office did a report for the Communities and Local Government Committee looking at these figures and basically confirmed their accuracy. There is a real problem here that cannot be disguised and that will not go away without extra funding being delivered.

[Jim McMahon]

Those figures are absolutely right. The analysis from Age UK shows that 1.2 million people who would have been entitled to social care in 2010 are no longer receiving social care because of cuts to the eligibility criteria by councils.

--- Later in debate ---

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

This debate has to be seen against the background of a 79% cut in direct funding to local authorities between 2010 and 2020—those figures are from the Institute for Fiscal Studies. Local government has faced bigger cuts than virtually any other part of the public sector, and how well local government has dealt with that is to the great credit of councils across the country of all political persuasions. There have been real cuts to services, and if central Government were as good at managing their resources as local government, we would probably see much better services being delivered by central Government Departments. The reality, however, is that the councils with the biggest needs, such as Sheffield City Council, have faced the biggest cuts. There have been more than £300 million of cuts in grants to my local authority, and we have seen the problems in Northamptonshire only too starkly in the past few days.

On Monday, as we looked at business rates and local government finance, the Communities and Local Government Committee heard from witnesses including Councillor David Simmonds from the Local Government Association and Councillor Paul Carter from the County Councils Network, both of whom are respected Conservative leaders. When we asked them whether other councils were likely to follow Northamptonshire, they said, “Not this year, but unless attention is paid to the growing pressures of adult social care and children’s services, which are becoming an even bigger problem in some authorities, there is a cliff edge that other authorities are going to fall over at some point.” Those Conservative leaders are not going off half-cocked or at a tangent; they are facing up to the real problems that local authorities are having to address daily.

The £150 million extra for social care is of course welcome. We are now somewhat used to having sticking plasters every year to address the social care problem, but it is just that the sticking plaster has got a bit small this year—it is £150 million rather than the billions we had perhaps come to expect. The LGA has said in its assessment that by 2020, the gap for social care will be £2.3 billion. That figure has been confirmed by the King’s Fund and by the National Audit Office in a report for the Select Committee. It is there for everyone to read, so this problem is coming at us—it is here and now, and it is growing. Conservative leaders of local authorities are saying this just as strongly as Labour leaders, and we are talking about a total funding gap of nearly £6 billion. That is the reality, and I have not heard Ministers challenge it in any way. These are the problems that local authorities are facing up to, and without extra resources, they will not be able to deliver the services that our constituents need.

I wish to pay particular attention to two issues, the first of which is business rates retention. Council leaders told us on Monday that there is a great deal of uncertainty. The four-year funding settlement that we are now in the middle of was welcomed by local councils, as they saw a degree of certainty, but they are now uncertain about what will happen in 2020. The Government’s intention is to have 75% business rate retention, which will give an extra £5 billion to the financing of local councils, but the Government intend to offset that by making the money pay for public health grants, rural delivery grants and other grants, so there will not actually be any net new money for local councils as a result. The leaders told us that when the move is made to 100% business rates retention, it will deliver another £5 billion, but local councils need that money to deal with the pressures on them now, and they will grow by 2020. The policy cannot be used to provide a reason for giving even more powers to local government in order to absorb that £5 billion, which is the Treasury’s intention. Ministers really have to think about that. There is a way to solve the funding problems in 2020: use this extra £5 billion from 100% business rate retention to fund dealing with the pressures that local government can identify.

Finally, I wish to talk about the fair funding review, which is a wonderful form of words to keep Conservative Back Benchers happy, is it not? Everyone smiles and says, “Fair funding means we are going to get more,” but one person’s fair funding is, of course, another person’s unfair funding, as we have seen over the years. Local government cannot agree among itself how fair funding should be sorted out. Of course it is right to review needs assessments every so often, and the Select Committee has put forward some evidence, following research we had commissioned on that review. But in the end, this is a zero-sum game, because when one council gains from the review, another will lose. What came out clearly from our evidence session on Monday—I believe that this was said by the Conservative leaders—is that if the cake is not large enough, the fair funding review will probably end up being seen by no one as fair at all. That is the real problem. If additional funding is not identified, the growing crisis in social care will mean that there will be an even worse failure to deliver for some of the most needy in our communities, with the risk that some local authorities will be so financially strapped that they will follow Northamptonshire. That is a warning of which we should all be aware, and we have to bear it clearly in mind in the next few months.