Arcadia and Debenhams: Business Support and Job Retention

Clive Betts Excerpts

Wednesday 2nd December 2020 Commons Chamber

[Paul Scully]

I know that my hon. Friend works tirelessly for his constituency and local economy. It is so important that we get together to look at the high street, because many of these conversations were about what the high street will look like in 10 or 15 years’ time, but now they are about what the high street will look like next year and maybe only the year after. We have to get a speedy but holistic response.

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

The business rate relief for retailers this year has been welcome, but it was obviously not sufficient for Debenhams and Arcadia and all their employees, who will tragically lose their jobs just before Christmas. There is a fundamental unfairness in the fact that Amazon pays only 0.7% of its turnover in business rates and high street retailers pay 2% or more. Last year, the Housing, Communities and Local Government Committee suggested that the Government look at bringing in a digital sales tax and use the money to provide long-term business rate relief for retailers on the high street. Given that the Government promised to look at business rate reform in 2015, will they now get on with it and give that certainty of reduced business rates to the high street as a matter of urgency?

[Paul Scully]

That is an important question, and it is exactly why we are doing fundamental business rates reform. The first stage of the consultation has ended, and we will respond in the new year, but we need to have a comprehensive approach to tackle this both online and offline.

Leaseholders and Cladding

Clive Betts Excerpts

Tuesday 24th November 2020 Commons Chamber

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

To ask the Secretary of State for Housing, Communities and Local Government if he will make a statement on whether leaseholders are expected to pay for the removal of dangerous cladding from their homes.

[The Minister for Housing (Christopher Pincher)]

I congratulate the hon. Member for Sheffield South East (Mr Betts), the Chair of the Select Committee on Housing, Communities and Local Government, on securing the urgent question, which is of huge interest and concern to many of our constituents up and down the country.

The question of who pays for remediation works is key for the Government and many of our constituents. We have been clear that leaseholders should not have to worry about the cost of fixing historical safety defects in their buildings that they did not cause. Test have shown clearly that aluminium composite material—the kind of cladding found on Grenfell Tower—is the most dangerous form of cladding material. We continue to engage with building owners, regulators and the wider industry to ensure that it is removed from high-rise residential buildings as quickly as possible.

ACM remediation costs are being funded through several sources, including warranties, building owners and developers. We have provided £600 million to fund the removal of ACM where funding has been a key barrier to remediation and the Chancellor of the Exchequer has allocated a further £1 billion to be spent on removing other types of unsafe cladding over the current financial year.

It is important to remember that this is a multi-year problem. Remediation work cannot be done overnight and it must be done properly so that it makes buildings and residents safe. That forms part of the ongoing discussion that my right hon. Friend the Secretary of State has with other Departments.

However, I am clear, and I hope that the House is clear, that public funding does not absolve the industry from taking responsibility. We expect developers, investors and building owners who have the means to pay to cover remediation costs themselves without passing on costs to leaseholders, but we recognise that there are cases where that might not be possible, and cases where there may be wider costs relating to historical defects. The Government are determined to identify suitable financial solutions and remove barriers to remediation.

The Government have asked Michael Wade to accelerate his work with leaseholders and the financial sector to develop proposals to protect leaseholders from the costs of remediating historical defects wherever possible. However, we must also ensure that the bill does not fall wholly on taxpayers. We will update leaseholders on that work before the Building Safety Bill, which has just completed its prelegislative scrutiny, is introduced in Parliament.

[Mr Betts]

Thank you, Mr Speaker, for giving me the opportunity to ask my urgent question. The Housing, Communities and Local Government Committee has just carried out prelegislative scrutiny of the draft Building Safety Bill. In general, the Bill is very welcome. It implements the recommendations of the Hackitt report, post Grenfell. However, clause 89 contains provisions for leaseholders to be charged a building safety charge. That could cover future costs, but it could also be used to recover the cost of historical defects, such as the removal of dangerous cladding. That is the concern.

I have a number of questions for the Minister. First, will he confirm very clearly and straightforwardly that leaseholders should not have to pay any of the costs of removing dangerous cladding from their homes, as has been the Government’s policy for some time? Those leaseholders bought their properties in good faith. They have not done anything wrong and they should not be financially distressed as a result.

If the Minister thinks that leaseholders should have to pay something—the Building Safety Minister said to the Select Committee that he thought an affordable amount was reasonable—how would he define an affordable amount? The Building Safety Minister said it was something that did not bankrupt an individual. However, if leaseholders are not going to pay—I hope the Minister will confirm that point—I accept that he should pursue developers, freeholders and others. In the meantime, if developers have gone out of business or are refusing to pay, does the Minister accept that, at least in the interim, the Government are going to have to step in and fund all the costs?

If the Minister accepts that point, does he also accept that the £1.6 billion so far made available to remove dangerous cladding will be totally inadequate? The Select Committee heard that to make all high-rise buildings totally safe and remove all defects, the total bill could be as high as £15 billion. Leaseholders should not have to pay that.

Finally, does the Minister accept that, without assurances on these points, many people are going to have a very miserable Christmas? They are trapped in properties they cannot sell, that they often cannot insure and where they are having to pay for waking watches, and wondering how on earth they are going to pay the bills that could arrive on their doormats at any time.

[Christopher Pincher]

I am grateful to the hon. Gentleman for his urgent question and for welcoming the proposals that we have tabled in the draft Building Safety Bill. He asks a number of important questions.

First, the hon. Gentleman asks whether the building safety charge will be retrospective. We envisage that the building safety charge will cover ongoing costs that leaseholders may have to pay for legal costs, building safety inspections and the like. In our proposals, we have said that the Secretary of State will be able to prescribe costs to ensure that unfair building safety charge costs do not fall unreasonably on the leaseholder.

We will of course look very carefully at the 80-page report from the Select Committee. I think there are somewhere north of 40 recommendations in the report. We want to look at it carefully and considerately, because we recognise it forms an important part of our answer to the challenge of building safety. I hope that we can develop a cross-party approach to our further scrutiny of the Bill when it comes before Parliament.

The hon. Gentleman asked me whether leaseholders will pay any costs at all. The point of introducing £1.6 billion of public money is to make sure that in the buildings that are most at risk and where there is no means to pay, the state steps in and supports those leaseholders, but, fundamentally, we expect developers and owners to step up and execute their responsibility to pay where buildings have been defective.

I cannot say that there will not be some costs at some point related to some defect in historical building safety that will not fall upon the leaseholder, but we want to make sure, through the public money that we are spending and through the work of Michael Wade, that we find innovative solutions to make sure that such costs are as minimal as possible. We cannot write an open cheque on behalf of the taxpayer. That would send the wrong signal to developers and those who are responsible for these buildings that they do not have to pay because the taxpayer will.

The hon. Gentleman asks about my noble Friend the Building Safety Minister in the other place. I can tell him that Lord Greenhalgh is working round the clock to find solutions to the challenges that face leaseholders up and down the country. He is determined, with the work that he is doing with insurers, developers and the financial services sector, to ensure that we come up with those solutions, and I look forward to working with him closely as the Bill, which he will introduce to Parliament, works its way through both Houses.

Oral Answers to Questions

Clive Betts Excerpts

Monday 16th November 2020 Commons Chamber

[Christopher Pincher]

I am obliged to the hon. Gentleman for his question. He will know, with respect to ACM cladding, that we have made £600 million available to remediate the most dangerous buildings. Something like 97% of buildings with ACM cladding have either completed or started their remediation. As a result of the expert support we have provided to private building owners, we have supported something like 100 ACM projects to remediation. With respect to the £1 billion fund for non-ACM-clad buildings, I can tell him that we have had a very significant number of applications, which have worked through. A very significant number have now been asked to make further information available, so we can advance those applications. We will get the money out of the door as quickly as we can. We will also encourage builders and owners to remediate the buildings themselves, because that is what they are obliged to do. It should not fall on the taxpayer to pay for remediation. It is the responsibility in the first case of building owners, through their warrantee schemes or through the original builders.

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

Could the Housing Minister clarify the Government’s policy on what costs leaseholders should have to bear for the removal of cladding? On 20 July, the Secretary of State, in a written statement, very helpfully said:

“The Government are clear that it is unacceptable for leaseholders to have to worry about the cost of fixing historic safety defects”.—[Official Report, 20 July 2020; Vol. 678, c. 89WS.]

However, by the time we got to 16 October, the Housing Minister himself said we should look for solutions

“that protect leaseholders from unaffordable costs”.

So, not any costs, but unaffordable costs. When the Minister with responsibility for building safety came to the Select Committee on Housing, Communities and Local Government, he could only define “affordable” as costs that did not make someone bankrupt. Does the Housing Minister understand the great concern and upset that the change of policy has caused for leaseholders, who thought they would bear no costs but could now be faced with substantial bills? Will he explain the change of policy or, better still, go back to the original policy the Secretary of State identified that the costs should not fall on leaseholders at all?

[Christopher Pincher]

I am obliged to the Chairman of the Select Committee and I am grateful for the report that the Committee produced on cladding. There has been no change in policy. The Government are quite clear that we do not expect, and we do not want, leaseholders to bear the costs of remediation of unsafe buildings for which they were not responsible. That cost should fall on the owners, through the owners, the builders or any warrantee scheme the owners have.

Covid-19 Lockdown: Homelessness and Rough Sleepers

Clive Betts Excerpts

Wednesday 11th November 2020 Commons Chamber

[Kelly Tolhurst]

My hon. Friend is absolutely right: it is by the good practice of councils such as Rugby Borough Council and programmes of that nature that they are able to work with those families and individuals before there is a need for them to sleep rough or become homeless—it is prevention. We know that since we implemented the Homelessness Reduction Act, that has had a significant impact in many parts of the country. I am pleased that we are determined and committed to make sure we implement that even further and work with local authorities to get better results.

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

First, congratulations are due on the efforts that were made to get rough sleepers off the streets from March onwards. Great work was done by councils with voluntary organisations and with good support financially from the Government as well. The real pressure on councils now, I am told by my own city of Sheffield, is from people presenting as homeless from the private rented sector. An increase has led Sheffield City Council, which is very good at dealing with these matters, to have 80 families now in hotels and another 200 in temporary accommodation. That will cost the council around £500,000 extra in this financial year. If dealing with homelessness has to be a priority for councils, which certainly it should be, will the Minister make it a priority for Government to make sure that councils have the extra resources they need directly to continue delivering the services that people in the private rented sector will need in the coming, very trying months?

[Kelly Tolhurst]

I thank the hon. Member for his comments and articulation of the work that has been done by the Government and many local authorities and the voluntary and charitable sector in the covid-19 pandemic. He is absolutely right that we need to monitor and make sure we are working intensively with local authorities to understand the needs and the challenges. That is why we are working with local authorities to provide plans, that is why we have put in the Next Steps funding, to provide that Move On and Next Steps accommodation support. We will continue that work through the winter and evaluate any impacts that we are seeing through the covid pandemic. We need to bear in mind that we have also provided councils with over £6 billion in funding to deal with some of the issues that are coming out of the covid pandemic.

Oral Answers to Questions

Clive Betts Excerpts

Monday 5th October 2020 Commons Chamber

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

Could I say that the Government’s decision to help councils with loss of funding, particularly for leisure centres, parking revenue and such things, is welcome? There is one group of authorities, however, that have not been compensated—the councils that run their leisure services at arm’s length. I raised this with the Minister’s predecessor back in July, and the response I got was that the Government

“are very serious about tackling it.”—[Official Report, 9 July 2020; Vol. 678, c. 1224.]

Since then, because Sheffield has lost over £10 million, which it has not been compensated for, from its leisure centres’ loss of income, we have written as Sheffield MPs to the Secretary of State twice—once in August and once in September, the second with the local leisure clubs—and we have not had a response. Could the Minister therefore update the House on what is happening in general on this issue, and will he agree to meet Sheffield MPs to discuss this issue, which really affects our city and its finances?

[Luke Hall]

I thank the Chair of the Select Committee for his question. We recognise the vital role leisure centre facilities play in keeping our communities safe and protecting mental health. We are working closely with the Department for Digital, Culture, Media and Sport on a further package of support for leisure centres. I am happy to meet the hon. Gentleman and other Sheffield MPs to discuss the matter.

Town and Country Planning

Clive Betts Excerpts

Wednesday 30th September 2020 Commons Chamber

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

The planning system is there so that individuals and organisations can develop sites and buildings appropriately. It is also there to protect the community from inappropriate development. Permitted development rights confer rights on some individuals but take away rights from others to have their say on developments. They take away community rights to object and to have an application turned down. That is a very important and serious issue that we all ought to be addressing.

I want to talk about space standards. Shortly after the Government produced their independent review of conversions under permitted development, to which my hon. Friend the Member for Weaver Vale (Mike Amesbury) drew attention, I asked the Prime Minister at Prime Minister’s questions whether it was reasonable that flats of 16 square meters were allowed to be built, which was 1 square metre larger than the footprint of his car. Clearly, it is not a reasonable size for properties. The Prime Minister’s response to my question, which was welcome, was that the Government will

“give people the space they need to live and grow in the homes that we will build.”—[Official Report, 22 July 2020; Vol. 678, c. 2149.]

Given that response, I wrote to the Housing Minister on behalf of the Select Committee on 4 August to ask what he was doing to put the Prime Minister’s commitment into effect. I have not had a reply to that letter. I thought the Minister had either forgotten about it or was waiting to reveal a significant change of policy. It appears that it is the latter. At least on that issue, we now have some recognition that local authorities can take into account the issue of space standards, along with the right to light and the impact on the wider environment from permitted development applications. That is welcome, because properties of 16 square metres or even smaller are nonsensical and not fit in the modern age for anyone to live in.

In terms of section 106, this is a serious matter. If the Government are seriously going to allow more development without 106 commitments, that will simply mean we have fewer affordable rented homes built, because the reality today is that the majority of affordable rented homes come through 106 commitments. That will have a significant impact on communities up and down the country. Why are the Government excluding permitted development from that obligation? I have not seen any justification for that. That is what happens, and it is important, so we ought to take account of it.

The Select Committee produced a report in 2019 on the future of the high street, “High streets and town centres in 2030”, which we are going to update in the light of the covid situation. We looked at permitted development. There are some odd properties that had been for retail use and can be converted for residential use perfectly reasonably, and those should be encouraged and helped. That can be done through the planning system now, if the development is appropriate. The problem is that some of our high streets and town and city centres need more radical reconstruction. They need to be redeveloped significantly and cleared. That is why we called for improved compulsory purchase order powers for councils in our report. However, we can find in a couple of years’ time that the local plan proposing the clearance of a derelict and underused retail area is made more difficult to construct and implement, because it seeks to get a CPO and demolish derelict retail properties that have just been made into residential homes. Trying to put together rights to convert—and properly convert—in the light of wider local planning situations simply is not taken account of.

Our 2019 report therefore said:

“The Government should suspend any further extension of PDRs, pending an evaluation of their impact on the high street.”

Other organisations have gone further. The Town and Country Planning Association, the Royal Town Planning Institute, the Royal Institution of Chartered Surveyors, the Royal Institute of British Architects, and the Chartered Institute of Housing have all called for an impact assessment of the PDRs that have been allowed and changed over the last few years and those proposed for the future. Indeed, the Select Committee first called for an impact assessment back in 2012. If the Secretary of State and the Minister believe there are just benefits and no disbenefits from expanding PDR, why will they not commit now to do a full impact assessment of the changes made previously and the changes proposed now?

[Several hon. Members rose—]

--- Later in debate ---

[Tim Farron (Westmorland and Lonsdale) (LD)]

This set of SIs is an answer to a massively important question about how we build more homes that are fit for communities, but the answer is blindingly obviously the wrong one. There is no evidence that planning logjams such as those to which the SIs are meant to be a solution are the problem. Some 40% of homes with planning permission over the past 10 years have not been built.

We need to look instead at some of the other reasons we are not building the houses that we need. It is about, for example, the lack of funding for local authorities—the lack of understanding that we need to directly intervene through council housing and social rented housing to provide the homes that we need. It is also about the fact that the price of land is so utterly prohibitive. It would be much more sensible in this time of rapid and urgent legislation to tackle the Land Compensation Act 1961 and reduce the value of land as a whole so that we get more houses built that are affordable.

The relaxation of permitted development rights has, as we heard from the hon. Member for Weaver Vale (Mike Amesbury), already reduced quality.   The Government’s own commission reported that seven out of 10 buildings built under the existing rights lacked adequate light and ventilation, and were, as the hon. Gentleman said, creating the slums of tomorrow.

That was not always the way the Conservative party approached social rented housing, by the way. Harold Macmillan, when housing Minister, did tremendous work. He was the one behind the Parker Morris standard: really good quality council houses, with lots of good space around them. Council houses can be good houses, and that is what they need to be. [Interruption.] If I have got something wrong there, I will give way.

[Mr Betts]

Macmillan homes, built after the Bevan homes in the 1950s, were actually built to smaller space standards. I know that because I was actually brought up in one.

[Tim Farron]

I am delighted to take the correction. And there was me praising a Conservative! What Macmillan did do was build numbers, and the estates of the ’50s were certainly better than the estates of the ’60s, but I do indeed stand corrected.

The biggest concern I think many of us will have is the undermining of democracy: communities having what will be done to them dictated to them, without them having the ability to contradict or to say otherwise. If you are somebody who represents two national parks, the lakes and the dales, and the wonderful communities within them—Grange, Kendal and others—you will be particularly worried about what that means. We are not nimbys, by the way.

End of Eviction Moratorium

Clive Betts Excerpts

Wednesday 23rd September 2020 Commons Chamber

[Mr Speaker]

Sarah Dines is not here, so I call Clive Betts, Chair of the Housing, Communities and Local Government Committee.

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

I have two simple asks of the Minister. First, does he recognise that there will be people in dire financial hardship who struggle and cannot pay their rent? I heard what he said about help for discretionary housing payments. Will he continue to monitor that, and if local authorities say they do not have sufficient to help people in real need, will he look at expanding the amount of money?



Secondly, with regard to the issue of discretion, will the Minister confirm that, as long as landlords have talked to their tenants and presented their financial information to the courts, when applying for a section 21 notice or possession on ground 8, of rent arrears, the courts have no discretion at all to reject those applications? Will he further consider those points, do what the Housing, Communities and Local Government Committee has asked and strengthen the pre-action protocol to give the courts more discretion?

[Christopher Pincher]

We always listen with great care to the Chairman of the Select Committee. I can confirm that we will keep all our arrangements, including our financial provisions, under review as the situation develops; it probably has some time to go before things begin to get better. He mentions section 21. He knows that the Government are committed to repealing section 21 in our renters’ reform Bill, and we will do that at the appropriate time, when there is a sensible and stable economic and social terrain on which to do it.

The hon. Gentleman will know that the courts do have discretion to prioritise the cases before them. He will also know that, if landlords do not provide the right information to the courts in pursuit of their section 21 application, the courts have the discretion to adjourn the case and push it to the end of the queue. I am quite sure that Sir Terence Etherton and Mr Justice Knowles will look carefully at landlords who fail to comply with their duties. Our approach has always been to be fair—fair to those who have lost out as a result of the epidemic, and also fair to landlords, particularly smaller landlords, who need their incomes.

Rented Homes: End of Evictions Ban

Clive Betts Excerpts

Wednesday 22nd July 2020 Commons Chamber

[Christopher Pincher]

I am obliged to my hon. Friend for his question. As I said, we will bring forward the renters’ reform Act, which will abolish section 21 of the Housing Act 1988, in due course, when we have stable terrain on which to do so. That will improve tenants’ rights. We will also ensure that there is provision for a lifetime deposit scheme in that Bill. As I have described from my discussions with the Master of the Rolls, the courts have set out strict procedures that landlords will have to follow if they want to claim repossession of their properties. That is the right and balanced course, and I commend it.

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

In the end, as I am sure the Minister will agree, we all want to get to a position where no tenant is evicted because of covid-related matters. I recognise that the Government have made efforts, through the statutory instrument and the guidance, to toughen up the pre-action protocol, but what happens if a landlord comes to the court with all the information about a tenant’s circumstances but still wants to go for a section 21 eviction—they do not have to give any reasons—or for a ground 8 eviction, where simply rent arrears will do? If all the information is given to the court, does the court have any discretion to refuse the eviction request?

[Christopher Pincher]

I am obliged to the Chairman of the Select Committee for that. First, the landlord will have to bring all the information that is required before the court. The courts want to sit in order that a duty solicitor will be present, but other interlocutors may be present to mediate, even at that late stage, between the landlord and the tenant to ensure that the right outcome can be achieved. Under the section 21 rules of the 1988 Act, the courts do not have discretion in that particular circumstance, but I am sure that in those cases where egregious rent arrears predate the covid emergency, where there is domestic abuse or where there is antisocial behaviour, we want to see the landlord have their right to bring forward their repossession case. That is what they are allowed to do under the law.

Oral Answers to Questions

Clive Betts Excerpts

Monday 20th July 2020 Commons Chamber

[Mr Clarke]

I pay enormous tribute to the care workers on Teesside and of course to our local NHS, which we share as Teesside MPs. This has been a constantly evolving and very complex situation, as Governments around the world, including our own, have obviously learned as matters have progressed. We have acted consistently and in good faith throughout. We have worked very hard with the care sector to protect patients. The £600 million infection control fund that we have instigated is designed to ensure that the care sector is safe, with a strong measure of containment against the disease for patients going forward.

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

The Minister may not know this, but on 1 June, following the Prime Minister’s appearance at the Liaison Committee, I wrote to him about local authority involvement in tackling this virus. In particular, I asked him to

“give an assurance that data will be shared fully with all partners…In particular…directors of public health.”

I have not had a response to that letter, but I have heard from Greg Fell, the director of public health in Sheffield, and other directors that they are only getting generalised data—they are not getting, on a daily basis, the names, addresses and NHS numbers of those infected and those they have been in contact with. Does the Minister accept, therefore, that while this information is held by Public Health England, it needs to be passed on to directors of public health, and passed on quickly, and will he give an assurance that that will happen this week?

[Mr Clarke]

Since 24 June, all local authorities have been able to access postcode-level testing data through their director of public health, and that is securely shared by PHE on a weekly basis. I understand that that has been going on pretty much from the moment that it became available. PHE also shares information with local directors of public health as part of the routine investigation of outbreaks and incidents. That includes information on individual cases and their contacts, as required, to support the public health response.

Housing, Communities and Local Government: Departmental Spending

Clive Betts Excerpts

Thursday 9th July 2020 Commons Chamber

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

First, I will look at the covid crisis and how local government has responded to it. I think I speak for every Member of this House when I say that local councils, collectively across the piece, whatever their party, have responded magnificently. We do things virtually these days, so perhaps a virtual round of applause for local councils from Parliament would not go amiss.

What local councils have done is deliver social care; rehouse rough sleepers; work with the voluntary sector to help vulnerable people; administer the business grants scheme that the Government introduced; get the director of public health working at a local level on testing, tracking and tracing; and, of course, keep essential services, such as refuse collection, up and running for our constituents. They have done all that against the background of austerity. Local councils have had bigger cuts to their funding than any other part of the public sector in the past 10 years. The National Audit Office figures show an 80% cut in grants and an almost 30% cut in spending power over that 10-year period. Of course, the councils in the poorest areas have, by and large, had the largest cuts in grant, because they had the largest grants in the first place.

Despite that situation and despite the fact that they have had to try to prioritise social care spending for both adults and children, councils have kept services going. When we look at some of the cuts that they have had to make in other services, we see that it was nearly 50% on housing services, 50% on health and safety, and 20% in five years in real terms in public health grants. Those services—housing, health and safety and public health—are exactly the sorts of services that have been required to deliver in response to covid. None the less, they have stepped up to the mark and done extremely well.

What have the Government done in response? I think that we have had a change of language from Ministers, which is a bit concerning. On 16 March, the Secretary of State said that the Government would do whatever was necessary to support these efforts—very similar words to the ones that were used in relation to the health service.

[Lilian Greenwood (Nottingham South) (Lab)]

Will my hon. Friend give way?

[Mr Betts]

I will give way, but just once I think.

[Lilian Greenwood]

I will be very brief. Did my hon. Friend share my sense of déjà vu when councils were promised “whatever funding is needed”? Nottingham City spent £8 million on fire safety improvement post-Grenfell and it did not receive a single penny from central Government, despite exactly the same sort of comments being made at the time.

[Mr Betts]

That leads into another area. The Select Committee has just produced a report about cladding and other such issues. We have challenged the Government to produce funding through that report, so I am sure that we will take up that issue as well.

The change came when the Secretary of State appeared before the Select Committee. Suddenly, he was saying that they had asked councils to do things, but that they would be fully compensated for the things that they had been asked to do. Then there was a very general list. The Public Accounts Committee and the Select Committee, as well as the Local Government Association, have been trying to get more information on that. There is still a lack of clarity about precisely what will be funded. That is important, and quite different from the national health service, which seems to be given, rightly, “everything that it takes”—the commitment given to local councils.

We have had tranches of money—£2.16 billion then £500 million—given to councils to cover both extra costs and lost revenue, which is just as important for many councils as the extra costs they have incurred. However, the LGA is saying that by the end of June, according to the returns that went to the Ministry, the costs were £4.8 billion against the £3.7 billion received—a gap of £1 billion. The Government said they would give some help with lost income by compensating councils for 75% of the amount after the first 5% of losses, which is welcome, and somehow apportioning the lost revenue from council tax and business rates. There are two questions to ask about this. The Government have already included loss of income in the £3.7 billion compensation, so will the commitment to cover 75% be reduced? I see the Minister shaking his head; it would help if that was explained very clearly indeed.

[Matt Rodda (Reading East) (Lab)]

Will my hon. Friend give way on that point?

[Mr Betts]

Normally I would give way, but Madam Deputy Speaker is looking askance at me, so I think I had better move on.

The second question is can the Government not bring forward a bit sooner the apportionment of losses from council tax and business rates? Waiting until the spending review introduces an extra element of uncertainty.

I have another question about compensation for losses in the leisure sector. Many authorities—about 60, I think—of all political persuasions do not provide leisure services directly; instead, they provide them through arm’s length arrangements. Sheffield does it through Sheffield International Venues and has some magnificent facilities, including Sheffield Arena and Ponds Forge, which is an international-class swimming pool, and lots of community facilities. What we need is an assurance that income losses for councils in that situation will be treated the same as income losses for councils that provide the services directly. That is an important point for many councils up and down the country.

It still feels like local government is on a life support machine, waiting for the next bit of revenue to trickle down from the next ministerial statement, rather than having the certainty that they need to plan. Many councils are now looking at making cuts and emergency budgets and talking openly about section 114 notices. Yes, okay, the Ministry has said, “Come and see us before you issue a 114 notice,” but that is too late. We do not want councils to reach the point where they are thinking about a 114 and planning for it. We want them to have the certainty of getting funding so they are not driven into that position.

This is not just about funding for this year; it is about funding for next year as well. Many councils, including Sheffield Council, have reserves to see them through this year, but using them will just postpone the problem to next year. Also, many councils had plans for efficiency savings, which have been put on hold as managerial expertise is put into dealing with the current crisis. Efficiency measures that have had to be put to one side for the time being are another loss for councils that needs to be recognised properly.

Let us have more certainty that all the costs that local authorities incur in covid-related matters will be covered by the Government. Let us have another discussion with the LGA and consider whether it is fair that councils should have to stand even 25% of income losses. Let us have an assurance that arm’s length arrangements for leisure will be covered. Let us bring forward the commitment on council tax and business rates to before the spending review. Let us not get to the point of discussions about section 114 notices by providing certainty of funding.

Finally, there is the future. What local authorities need is a proper long-term sustainable financial settlement.

The covid crisis offers a watershed, a turning point, an opportunity to change things, but I want to put down five markers for the Government, drawing on the Select Committee’s report in 2019. First, we want at least a multi-year settlement, to give that certainty. The last four-year settlement was welcome. I understand why it has not been repeated in the current crisis, but it is certainly needed.

Secondly, we need a recognition that local authorities need a significant real-terms increase in their funding. The Local Government Association’s calculation of an £8 billion gap, even before covid came along, has to be recognised. Thirdly, if we really are to end austerity, it is not just about funding local councils so they do not have to make more cuts; it is about giving them the money to restore many of the essential services they have had to cut.

Fourthly, we have to devolve to councils the power not merely to spend but to raise resources in the first place. If we do that, however, we must recognise that some councils are less able to raise resources than others, so if we devolve more spending arrangements to councils, we will need a fall-back position—a central fund for councils to deal with the equalisation problem.

Finally, let us have a proper, cross-party, long-term funding agreement for social care. The two Select Committees proposed a solution with a social care premium three years ago. Let us reactivate that. Giving councils that direct source of funding for social care will also release funding for other essential services. I say to the Minister: think of MPs here today arguing for extra funding as allies in the battle with the Treasury to get the money that councils need to fight the covid crisis, but to fight it in a way that does not produce extra cuts to essential council services already devastated by 10 years of austerity.

[Madam Deputy Speaker (Dame Rosie Winterton)]

We will start with a time limit of four minutes.

--- Later in debate ---

[Mr Betts]

I thank the Minister for his comments, although I still think there are issues to be worked through. My hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier), the Chair of the PAC, raised a point about clarity. We still need that clarity from the Government. I would still like it on the record, too, that the £3.7 billion will not be reduced by the commitment to cover 75% of income losses. That needs to be clear. [Interruption.] The Minister is nodding, which is very helpful.

Finally, I want to pick up on the shared prosperity fund. No area should get less than it gets now, but no area should get less than it would have got under the new arrangements that would have come into place if we had remained in the EU. That is a very important point for South Yorkshire, and I hope that the Minister will consider it.

Question deferred (Standing Order No. 54).