Local Government Finance

Debate between Grant Shapps and Gavin Williamson

Wednesday 8th February 2012 Commons Chamber

[Grant Shapps]

I draw the hon. Gentleman’s attention to research that I think is in the Library, showing that the largest decreases in formula grant in the past year, 2011-12, were in the south-east. The decreases were generally smaller for the most deprived areas and larger for less deprived ones. He can look that research up for himself, along with an interesting recent report by the Joseph Rowntree Foundation, which stated that local authorities were protecting the most vulnerable and making sensible decisions about services.

The picture that the hon. Gentleman paints is inaccurate and ignores the central fact that if we do not take measures to reduce our deficit, we will end up in trouble. Given that local authorities spend a quarter of all Government money, if we do not reduce our deficit they will end up bust. It seems incredible that we have not so far heard a single intervention from an Opposition Member to explain how the Opposition would deal with the reductions that are certainly required but that they never want to face.

Meanwhile, the Localism Act 2011 has put new powers in the hands of local taxpayers. They now have the right to call local referendums if excessive council tax increases are proposed. If any authority decides to increase its council tax by more than a certain level, which we are separately inviting the House to approve, it will need the say-so of its local electorate, which is absolutely right. In most cases in which a council wants to increase council tax by more than 3.5%, local people will have the chance to vote. Let the people decide—that is what localism is all about.

[Gavin Williamson (South Staffordshire) (Con)]

In my area, Tory-run South Staffordshire council is keeping the council tax increase at 0%, and so is Staffordshire county council. The situation is not the same with many neighbouring Labour-run local authorities. Does my right hon. Friend agree that it comes down to political will? Some councils want low council tax, and others do not care about their constituents.

[Grant Shapps]

My hon. Friend is absolutely right to point out that where there is a will, there is a way. Where there is transparency, the sharing of services and smarter procurement, there is a way. Not a single authority is suffering a reduction of more than 8.8%, and the average is 3.3%. There is no reason for them to be increasing council tax.