Local Government Finance Bill (Third sitting)

David Mackintosh Excerpts

Thursday 2nd February 2017 Public Bill Committees

[Mr Thomas]

My hon. Friend makes a good point. I hope that the Minister is beginning slowly to get the concern of hon. Members, reflecting the concerns of local council leaders and councillors, about how the redistribution arrangements will work in practice.

I will end this point with one last example, which may be particularly interesting to one member of the Committee. That is the comparison between the 10th most deprived council, Tower Hamlets, and South Northamptonshire Council, the 10th least deprived.

[David Mackintosh (Northampton South) (Con)]

rose—

[Mr Thomas]

I will give way in a moment. Tower Hamlets had an actual revenue spending power of £342.93 million in 2011. That is projected to drop to £272.39 million in 2019. That is a £70 million drop in spending power, or 25.9%. Compare that with South Northamptonshire Council, which I understand is quite close to the hon. Gentleman’s constituency, so I will happily give way to him in a second.

That council had an income of £10.8 million revenue spending power in 2011. That is projected to drop to £9.9 million by 2019. That is a drop of under £1 million in actual revenue spending power; a drop of 9.19%. I would not want to understate the significance of that for local services, of course, but the comparison with Tower Hamlets is of a 25.9% drop as opposed to a 9.19% drop. That is not fair and, if the current redistribution arrangements continue exactly as they are, I suspect that the Tower Hamlets, South Northamptonshire example will continue to be grossly distorted.

[David Mackintosh]

I am grateful that the hon. Gentleman recognises that the Secretary of State for Environment, Food and Rural Affairs, my right hon. Friend the Member for South Northamptonshire (Andrea Leadsom), is not on the Committee. As a former leader of Northampton Borough Council, who has worked very closely with South Northamptonshire Council, I ask the hon. Gentleman whether he recognises that this measure is supported by lots of local authorities.

[Mr Thomas]

As I have previously alluded to, I recognise that there are many, many councils up and down the land that are desperate to see Whitehall, especially under the current incumbents, draw back from trying to influence what they do at local level. Of course, there will be commitment and support for the principle of 100% business rate devolution. I do not know whether the hon. Gentleman is welcome at South Northamptonshire Council, although I suspect he is. If he were to sit down and talk to the treasurer in detail, he might find that the treasurer acknowledges that there is a genuine and serious concern about how redistribution will work in practice.

Therefore, there is a real concern, given what has happened over the past six years, while the Conservative party has been in power, about the impact on revenue spending power and the redistribution that appears to have happened away from the poorest areas of the country, relatively speaking, to the richer areas. That is of profound concern for many councils.