Council Tax: Government’s Proposed Increase
Debate between Gary Sambrook and Robert Jenrick(3 years, 10 months ago)
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Robert Jenrick
Yes, I am happy to withdraw it, Mr Speaker.
I will come on to the remarks of the LGA in a few minutes, if I may, but the hon. Gentleman cannot have it both ways: he cannot say that he is unhappy that we have imposed a cap that provides limited flexibility for local councils to decide of their own volition whether to increase council tax or not, and that he wants the cap lifted altogether so councils can increase it without limit, which seems to be the consensus among his own local government leaders.
Perhaps the hon. Gentleman could check in with his own council in Croydon, a council that in its consultation response to the Department on last year’s finance settlement said:
“we are disappointed that the ability to increase locally determined Council Tax has been reduced and that”
it
“can…only be increased by 2%”—
directly contradicting the hon. Gentleman.
How are these councils actually performing? Croydon is a council that has found itself in £1.5 billion of debt, the only council to go bust in 2020, following the collapse of its housebuilding company, Brick by Brick, which may not have proved to be very good at building, but did prove to be extremely good at owing people a lot of money. The problem is that Labour in local government today is a catalogue of failure, dysfunction and waste.
In Nottingham, the party opposite blew £38 million on a failed energy company and made 230 of its employees redundant over Skype, before rewarding themselves with a backdated pay rise. Robin Hood Energy, they described it. Well, Robin Hood stole from the rich, but Labour’s Robin Hood just stole from everyone.
Up in Durham, the council, at the height of the pandemic, approved a new 3,500 square feet roof terrace on its £50 million county hall. Merton Council reportedly set up a building company with a £2 million investment, only not to deliver a single home. The council leader said it was designed to make money, but he had built in—I kid you not—jumping off points. It turns out that there was no parachute for local residents. Labour Warrington has debts of least £1.6 billion. After Bristol City Council’s socialist energy company went bust, Warrington’s own version, Together Energy, decided it would be a good idea to buy it and then, of course, got into financial difficulties itself. Hackney Council planted thousands of trees, only for them to die due to neglect—literally, Labour dead wood.
Even the Labour Local Government Front Bench keeps up the tradition, inexplicably taking two shadow Secretaries of State to do the job of one actual one. The shadow Housing Secretary freely admits to reporters that she has no policies. The shadow Local Government Secretary reportedly rebuked a colleague in the shadow Cabinet for trying to develop some. From what we have heard today, perhaps it would have been better if he had taken his own advice. His first attempt after nine months has fallen apart at the slightest interrogation. Labour councils themselves want to raise taxes locally at or above the flexibility we are proposing. Labour and Liberal Democrat councils consistently have higher council taxes than Conservative councils. Labour councils consistently underperform Conservative councils. Whether it is Croydon or Nottingham, they are consistently letting down their local residents.
Gary Sambrook
May I add to the Secretary of State’s list? In Birmingham, the city council originally budgeted £2 million to move a bus depot. That escalated to £16 million, which local people are going to have to pay, all to achieve a move down the road of only 300 metres. Is that not just a perfect example of Labour incompetence in local government?
Robert Jenrick
There are many examples I could cite from Birmingham City Council, but I do not think time allows me to do that.
Let us contrast this Government’s approach to protecting the interests of local tax payers with that of Labour. In one year alone, the last Labour Administration oversaw an increase in council tax by a staggering 12.9%. In comparison, as we have said, since 2010 this Government have implemented five years of council tax freezes, under which the great majority of councils did not increase council tax at all. In retail price index terms, council tax is lower than it was in 2010. We have introduced legislation to end crude and universal top-down capping, ensuring significant council tax increases can be implemented only through a referendum, giving local tax payers a right to veto excessive tax increases.
Across the country, Conservatives charge the lowest taxes. We see this on the ground wherever we look. In the Leader of the Opposition’s constituency, in Labour-run Camden, council tax is three times as high as in neighbouring Conservative-run Westminster. As I am sure the hon. Member for Croydon North (Steve Reed) can testify, residents in Labour Merton and Lambeth pay almost twice the council tax of residents living just one or two roads away in Wandsworth. The Mayor of London has presided over a rise in council tax every year he was elected. To put that in perspective, when the Prime Minister was Mayor, he reduced the amount of council tax he charged Londoners by almost 11% during his tenure. In his last year alone, band D households in the 32 London boroughs saw their Greater London Authority council tax charges fall by 6.4%. Across the country, Conservative Mayors, whether Andy Street in the west midlands or Ben Houchen in Teesside, are continuing that tradition: low on taxes; high on leadership and delivery.
The provisional local finance settlement, which I announced to the House on 17 December, set out our proposals to increase the core spending power available to councils by 4.5%, a significant and real-terms increase. That comes on top of a 4.5% real-terms increase this year—a settlement the Labour party considered so good that, for the first time in living memory, it did not even oppose it. In total, we expect core spending power for English councils to increase from £49 billion this year to £51.2 billion next year, in line with last year’s increases and recognising the resources that councils need to meet extraordinary pressures while maintaining the essential services they provide.
The measures I proposed will provide an additional £1 billion of funding for adult and children’s social care. We have also confirmed that we intend to roll forward last year’s £1.4 billion of social care grant and continue the 2020-21 improved better care funding at £2.1 billion. We are considering responses to the settlement consultation and will return to the House to set out the final funding package for local government in the very near future.
The shadow Secretary of State has suggested to the House today that this Government have not delivered on our commitment to communities during the pandemic. This past year has seen the largest ever injection of in-year cash to the local government sector. Taken together, we have provided over £36 billion of support to and through local government in response to the pandemic. To put that in context, in 2019-20 the entire council tax take for the whole of England was £31.6 billion—less than we have provided in year to and through local councils this year alone. Local authorities have received £8 billion in direct funding, with a further £3 billion extra already announced for 2021-22, and we forecast adding an additional £1.2 billion to that from schemes to compensate for lost council income from sales, fees and charges.
That takes the total additional funding provided to local authorities to over £12 billion, £2 billion more than the sum the Local Government Association called for at the start of the pandemic—the sum the shadow Secretary of State himself estimated to be the cost to councils of covid at the time. We know today that we have provided £1 billion more than local government has self-reported to my Department as covid-related costs throughout that period—£1 billion more than even councils have told us they have spent and need. Let us be clear that when the Prime Minister, the Chancellor and I promised to support local councils and the communities that rely on them, we meant that promise, and we have delivered on that promise.
Since the start of the pandemic, we have mobilised our welfare system like never before, with generous income support schemes, mortgage holidays, support for renters, a £500 million local authority hardship fund, a £170 million covid winter grant scheme and much-needed help with utilities. To support local economies, we have provided £12 billion in grants to thousands of businesses the length and breadth of the country, and a business rates holiday worth around £10 billion to local retail, hospitality and leisure sectors. We have operated a major reimbursement scheme for lost council income, recovering billions of pounds from car parks, leisure centres, theatres and tourist attractions—money that will go to help councils move forward and recover.
That is not even to mention £4.6 billion of un-ring-fenced grant support to councils, £1 billion through the infection control fund, £1 billion through the contain outbreak management grant and £300 million via the test and trace service support grant. I could go on and on: 5 million food boxes delivered; 2 million shielded people protected through councils; and, of course, 33,000 rough sleepers brought in off the streets under the world-class Everyone In programme, and given the chance to rebuild their lives. That is central Government and local government working together through a unique pandemic to support millions of people across the country.
Local government has been—and remains—at the forefront of our response to covid-19. This Government are proud to stand shoulder to shoulder with local government in its hour of greatest need: with the officers, the teachers, the refuse collectors, the care workers, and the environmental health officers enforcing our regulations. For all that they have done, we salute them and thank them on behalf of our communities and our country. We owe them the stability, certainty and flexibility to plan for a brighter future ahead, and that is exactly what we have done, what we will do and what we will always do for them.
Our communities have never needed good council leadership more than they do today. Whether it is in Croydon or in Nottingham, across the country the reputation of too many Labour councils is, frankly, rotten. We take no lectures from the Labour party, which presided over eye-watering increases in council tax throughout its time in office, and whose economic mismanagement in local government has been laid painfully bare for all to see. The reports of those councils—Croydon and Nottingham—spell it out: mismanagement; waste; poor public services; and, yes, higher council taxes. There is a toxic legacy of debt and dysfunction, not just for today but for future generations. And where, frankly, was the shadow Secretary of State? Where was his denunciation of Croydon and Nottingham? He was silent. He was invisible. His famous Twitter account was as uncharacteristically quiet as that of Donald Trump—no leadership when the country needed it.
While we have reduced council tax in real terms under our watch, Labour has increased it time and again. While we have been clear that we have a plan to protect local councils and that we care about local council taxpayers, Labour has perfected the art of saying nothing at all. Frankly, council taxpayers across the country deserve better than this absurd and hypocritical debate from the Labour party, and they will have the opportunity to say so in May.
Oral Answers to Questions
Debate between Gary Sambrook and Robert Jenrick(4 years, 1 month ago)
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Robert Jenrick
Alongside other charities, places of worship are able to apply to the £200 million coronavirus community support fund, which has helped organisations providing essential services for vulnerable people affected by the current crisis.
Gary Sambrook (Birmingham, Northfield) (Con)
Gary Sambrook (Birmingham, Northfield) (Con)
Robert Jenrick
I will. I would like to see further investment in estates regeneration of the kind that my hon. Friend describes, and he will know that my hon. Friend the Chancellor recently announced £2 billion for the green homes grants to improve homes across the country.
Local Government Finance (England)
Debate between Gary Sambrook and Robert Jenrick(4 years, 9 months ago)
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Robert Jenrick
That is not the view of the LGA. After the Labour party issued a press release suggesting something along those lines, the LGA gave the clarification that it is impossible to speculate because we have not published the figures; we have not published our consultation. So with great respect to the hon. Gentleman, he will have to wait until—[Interruption.] Well, it was the Labour group on the LGA. I am not going to base my views on the press releases of the LGA’s Labour politicians; I am going to base them on the reality of what we intend to bring forward in future.
On the serious point that the hon. Gentleman raises, we will be consulting in the spring, and that will address issues important issues such as that. I hope that he, Birmingham City Council and others who take an interest in these matters will participate in that consultation. We will of course listen to his views as we bring forward a better settlement that attempts to work for all parts of the country. The settlement that we are voting on today is a good settlement for Birmingham. It provides a 6.4% increase in funding, or £27 million additional funding, for social care.
Gary Sambrook (Birmingham, Northfield) (Con)
Does my right hon. Friend agree that the problem in Birmingham is that the Labour administration simply cannot control a budget or deliver services properly? For instance, it spent £15 million on resolving the bin dispute, we have a budget for a bus depot that has gone from £2 million to £15 million, and £100 million for all three phases of the Paradise development was spent in the first phase. The problem is that Labour councillors cannot manage a budget.
Robert Jenrick
What a refreshing change it is to have my hon. Friend in the House representing Birmingham in the way he does. He is absolutely right that Birmingham City Council has a lamentable record of delivering public services. It cannot even manage the bins in Birmingham. That is why we were forced to bring independent non-executive directors into the council to monitor its performance. I want to see it improved in the years ahead, and I am sure that he will be holding it to account very robustly in this House.
Let me turn to the broader agenda that we will be pursuing in this Parliament. A new approach to funding is an important moment for local government, but this is just the beginning of our ambitions for local democracy. I want to work with councils on the overriding mission of this Government, which is to level up all parts of the country. That means, at every level of government, from Whitehall to town halls, delivering on the priorities of the British people. It means building on the success of the devolution revolution that we pursued in the last Parliament with our regional Mayors, who already cover one third of the population of England and 50% of the population of the north.
I want us to secure more devolution deals like the ones raised by the hon. Member for Harrow West (Gareth Thomas). We have already made progress since the general election in Sheffield. That deal is now, I hope, unlocked, and we will see the Mayor there assuming the full powers as soon as possible. We have also made progress with other important parts of the country, including Leeds and West Yorkshire—I sincerely hope that those deals will proceed at pace—and we are opening discussions with several other areas. Some seek the powers and responsibilities of the proven mayoral model to emulate the impact of great Mayors such as Andy Street and Ben Houchen. Others seek the greater ability to plan and to deliver strategically that comes with a combined authority or a unitary authority. We will support, encourage and incentivise each of those reforms in any part of the country that shares our determination to move forward.