Local Government Finance Settlement

Edward Leigh Excerpts

Thursday 15th December 2016 Commons Chamber

[Sajid Javid]

As the right hon. Gentleman will know, any funding provided to a local authority is raised through taxes, either locally or, when that funding is in the form of grants, nationally. He used the word “unfair” about this funding, but he should be aware—I know he has experience in this area—that when we allocate billions of funding from the better care fund, we take into account the council tax raising power of each area. That is the basis used, and it is the fairest way to do it. We have given councils flexibility through the precept, and we have enhanced that flexibility today so that councils are in a better position to meet local needs. That is also a sensible and fair policy. Where councils have more demand for services locally, they should be given the power to deal with that.

[Sir Edward Leigh (Gainsborough) (Con)]

I appreciate the appalling pressure that the Secretary of State is under on adult social care, but may I press him further on the new homes bonus? This is an important point. The bonus is vital in industrial towns such as Gainsborough to promoting difficult developments on brownfield sites. What worries me about his proposal is that if a council such as West Lindsey does not meet the 0.4% target, but allows developments that go against community plans in suburban villages, where it is easy to develop, it may lose its new homes bonus. Furthermore, he said: “To encourage more effective planning, we will also consider withholding payments for homes that are built following an appeal.” This is centralism; it goes against localism. I urge him to think again. Councils should determine such appeals on their merit, not on the basis of central Government diktat.

[Sajid Javid]

I assure my hon. Friend that the new homes bonus will stay in place. The reforms that we have announced today were consulted on; I think the consultation began in December 2015. It is important to make sure that the incentives for local authorities to promote house building remain, not least to deal with some of the local pressure for more homes in their area. He mentioned the national baseline figure of 0.4%, which councils must be above. He may be reassured to know that that is based on historical numbers, and that the figure for the country last year was 0.94%, so most local authorities will still be able to benefit from the new homes bonus. I listened carefully to what he said about the possible change in relation to appeals, which we will consider in the consultation.