Budget Resolutions and Economic Situation

Debate between Greg Clark and Baroness Keeley

Monday 21st March 2016 Commons Chamber

[Greg Clark]

As the right hon. Gentleman knows, provision was made in the local government financial settlement and the spending review to allocate up to £3.5 billion for adult social care by the end of the Parliament. The directors of social services and the Local Government Association actually asked for £2.9 billion, so our provision went beyond that. We also need to bring together the treatment of our elderly members of society so that councils and the NHS can, between them, look after those people well. After all, those requiring health care and social care are often the very same people. I know that, as a former Minister in the Department of Health, the right hon. Gentleman will favour that. Part of the devolution deals that we are pursuing will do that. We are seeing it happening in Manchester, and I hope that he will follow that with interest.

[Barbara Keeley (Worsley and Eccles South) (Lab)]

Will the Minister give way?

[Greg Clark]

I am going to make some progress, as I have said.

This Budget announces a number of new devolution deals establishing combined authorities for the West of England, Greater Lincolnshire and East Anglia, and there are more to come soon. Far from erasing local diversity, the deals make the most of it—for example, by bringing together shire, unitary and district authorities to work together for the common interests of their area. The Budget announces further transfers of power to the Liverpool city region and to Greater Manchester. This shows that establishing a combined authority, with the accountability of a directly elected Mayor, is just the beginning: a democratic basis for the ongoing devolution of power.

Growth deals are another front for the advance of localism. Through the business-led local enterprise partnerships, we are devolving control over the £12 billion local growth fund. The Budget explains how we will allocate the latest tranches of the fund. It will be done on a truly competitive basis to encourage ambition, innovation and the productive use of taxpayers’ money. I am also delighted to see the announcement of new city deals in Wales and Scotland. Specifically, the conclusion of a deal with the Cardiff capital region and the opening of negotiations with Edinburgh and south-east Scotland are important steps forward.

From north to south and from east to west, devolution is transforming our nation. In 2010, the UK was one of the most centralised countries in the free world. There were no combined authorities, and only one big city mayor. Nearly 80% of local government expenditure was centrally controlled. By 2020, there will be combined authorities across the country, and at least eight big city mayors. Local authorities will keep 100% of the income that they collect. This Budget describes and accelerates a process of profound change involving the revival and rebalancing of our economy, the rebuilding of our national infrastructure and the redistribution of power from the few to the many. I commend it to the House.

Local Government Finance (England)

Debate between Greg Clark and Baroness Keeley

Wednesday 10th February 2016 Commons Chamber

[Barbara Keeley (Worsley and Eccles South) (Lab)]

Will the Secretary of State give way?

[Greg Clark]

I will not give way.

More elderly people living in our communities is a good thing—they are our parents and grandparents, and it is an advance that they are living longer than anyone thought possible—but we need to pay for their care needs. It is no reflection on the efficiency of a council if care costs increase because the number of older people is increasing in their communities.

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[Barbara Keeley]

Will the Secretary of State give way?

[Greg Clark]

I will not give way.

A 2% precept is the equivalent of an annual £23 increase in the average bill for a band D property. That money can be used only for social care, and council tax bills are required to be transparent about the purpose for which the money is raised.

By the end of this Parliament, local government will retain all the business rates it raises. It is a huge transformation from a world in which, just three years ago, every penny that councils collected from local businesses had to be handed over straight to the Treasury. That meant that councils were dependent on the central Government grant. At the start of the last Parliament, nearly 80% of council expenditure was in the form of a grant from central Government. By 2020, all local government spending will be raised by local government. Councils and local people will reap the benefits of reviving economic growth, just as central Government and the country will benefit from the rising prosperity that the Government’s policies are fostering. With services financed locally, councils are even more accountable to their electorates, rather than to Ministers in Whitehall. Even as a Minister in Whitehall, I say that this is how it should be.

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[Andrew Gwynne]

Will the Secretary of State give way?

[Barbara Keeley]

Will the Secretary of State give way?

[Greg Clark]

The hon. Gentleman and the hon. Lady should be patient. I have given way to their hon. Friend, and I am going to make some progress.

That point was made repeatedly during the consultation by councils from all across the country and under the leadership of all political parties. That is why I will conduct a fundamental review of the needs-based formula to govern the change to 100% business rates retention, which I have described. It is not only the changing needs of different areas that need to be recognised, but the differing costs of providing services to residents depending on the area a council serves. As my hon. Friend the Member for Tiverton and Honiton (Neil Parish) was saying, the rural services delivery grant, which recognises the extra costs encountered by rural authorities in delivering services, is bringing £15.5 million into such councils this year. This settlement increases the grant more than fivefold to £80.5 million, which will ensure that there is no deterioration in Government funding for rural areas, when compared with urban areas, for the year of this statutory settlement.

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[Greg Clark]

I am going to make some progress, but I will give way to the Chairman of the Communities and Local Government Committee in a few moments.

Another important provision of the settlement is the continuation of the new homes bonus. It had not been guaranteed that the existing scheme would continue through the spending review period. I believe that the bonus has been a valuable source of funding for councils and a spur to much-needed house building, so I am very happy that the scheme will continue, subject to the changes on which I am consulting.

The settlement provides flexibility for councils with a record of keeping costs low by permitting a de minimis £5 a year council tax increase without requiring the cost of a referendum. We will consult on plans to permit well-run planning departments to increase their fees by, at most, the rate of inflation, as long as such income is used to decrease the existing cross-subsidy of the planning function by other council tax payers. Importantly, the settlement makes it clear that as revenue support grant declines, no council will have to make a contribution to other councils in either 2017-18 or 2018-19—something that was considered to be unfair in the provisional settlement by certain respondents.

Let me say a few words about the reductions in revenue support grant over the spending review period. As I have said, we are moving from one world to another; from a world in which the Government grant accounted for nearly 80% of local government expenditure in 2010 to one in which, by 2020, only 5% of local government spending power will come from the revenue support grant. In the same period, with the implementation of 100% business rates retention, the proportion of council spending power from local sources—council tax and business rates—will grow.

The reason for the change is not just financial. A council that is almost entirely dependent on central Government will, consciously or unconsciously, end up looking to central Government to be told what to do. Of course, since time immemorial, Governments have attached strings to the money they give out. My excellent predecessor, my right hon. Friend the Member for Brentwood and Ongar (Sir Eric Pickles), abolished 4,700 targets, measures and indicators to which every council in the country had to subjugate itself to obtain revenue to provide services for its residents.

That is no way for the proud towns, cities, counties and districts of this country to be governed. Places, many with a history as long and distinctive as our country itself, should not be reduced to complying meekly with Whitehall’s presumptuous demands. That is why a shift to funding from the people and businesses that councils exist to represent and serve, rather than all eyes being fixed on London, is so vital.

Our councils have been the strongest campaigners for this long overdue change, but in the consultation period that followed the statement on the provisional settlement, councils and colleagues made the compelling case that the transition to this new world needs to be sensibly managed and that the first two years of the settlement would pose particular challenges.

[Barbara Keeley]

rose—

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[Barbara Keeley]

Indeed; Tory Trafford. I was a councillor in Trafford, by the way, and I have to tell the Secretary of State that the council leader is not called Stephen Anstee; he is called Sean Anstee. The right hon. Gentleman has referred to him twice this week as Stephen—

[Greg Clark]

rose—

Cities and Local Government Devolution Bill [Lords]

Debate between Greg Clark and Baroness Keeley

Wednesday 14th October 2015 Commons Chamber

[Barbara Keeley]

rose—

[Greg Clark]

I will give way to my hon. Friend and then to the hon. Lady, but after that I must make some progress.

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[Greg Clark]

In view of the proposed violence of my hon. Friend’s enthusiasm, I am glad that he is sitting over there rather than closer to me. He was my friend and mentor in local government, and we did a lot together on the basis of our knowledge, as councillors, of our local area. I think that is very much reflected in what we are doing now. For all the discussions we will have, today, in Committee and on Report, this is, for all of us, a big opportunity to do what many of our predecessors sometimes hoped but failed to do: give capable leaders across the country the ability to make a difference to their communities. It is right that my hon. Friend pays tribute to the potential of local leaders.

[Barbara Keeley]

I hope the Secretary of State will not regret giving way, because I am going to intrude on the somewhat rosy view he is developing about Greater Manchester. There was a sense of shock there about the health devolution and the imposition of an elected mayor. Manchester is not a city; the unit we are talking about is 10 separate places. I represent Salford and I have been a councillor in Trafford, and I know that feelings run high about that imposition. The real concern is about health and the role of MPs once this health devolution goes ahead. The British Medical Association is very concerned that doctors were not consulted before that decision, and neither were MPs in Greater Manchester. We find ourselves too far outside the loop, and there are real concerns about the role of an MP in expressing their constituents’ concerns on health matters in the future. This is not at all clear.

[Greg Clark]

I am grateful for the hon. Lady’s intervention. All I would say is that the proposals on health devolution came from the Greater Manchester authorities—they were not proposed by the Government—and reflected their feeling that their local knowledge and experience could make a material difference in improving health outcomes for people in Manchester. This is important. Of course, the national health service will always continue to be accountable through the Health Secretary, the Prime Minister and Ministers to Members here, and I encourage all authorities and Members to take the opportunity to work together and not only scrutinise but influence these arrangements. I hope they will do that.

Living Standards

Debate between Greg Clark and Baroness Keeley

Wednesday 4th September 2013 Commons Chamber

[Greg Clark]

Those increases hit people in two ways: they hit the people who paid the duty when they filled up their tanks and they hit small businesses who employed people. It was a disastrous policy, which is why we scrapped it.

We will shortly have the joint lowest corporation tax in the G20. Last year, Britain was the biggest destination in Europe for inward investment. That competitiveness is creating jobs—jobs that give people incomes. Since 2010, 1.3 million jobs have been created in the private sector. More people are working in Britain than ever before and we have the lowest proportion of workless households for 17 years. There have been more net new private sector jobs in the past three years than there were in the previous 10 years under the Labour party.

People’s living standards are higher if they are in work, but I also want people to be able to earn higher wages. The only way to achieve that is to improve the levels of education and skills in the workforce. That is why the reforms of my right hon. Friend the Secretary of State for Education are so vital. It is why we need rigour in the exam system. It is why his announcement this week that we must ensure that people leave school qualified and skilled in all ways, but especially in maths and English, is so important. It is why the 86% increase in new apprenticeship starts between 2009-10 and 2011-12 is so important.

[Barbara Keeley (Worsley and Eccles South) (Lab)]

I would not want to waste the opportunity, with the Secretary of State for Education in his place, to raise again the cost of living issue of school uniforms, which the Prime Minister ignored earlier as though there were no issue to consider. In Manchester, one of the new academy secondary schools is charging £300 for a boy’s uniform. Families are really struggling, as I mentioned to the Prime Minister, although he did not seem to take the point on board. That cost is pushing a lot of families into debt and payday loans. The Financial Secretary talked about families struggling to get by, and this month some families are struggling to get by because they have had to shell out £300 to send their children back to school. What does the Secretary of State for Education have to say about that?

[Greg Clark]

I suggest that the hon. Lady turn up to Education questions if she wants to question the Secretary of State, but since her question refers to the cost of living, I hope she would not want the policies on such matters for every school in the country to be set from the Department for Education. It would be an interesting statement from the Labour party if it did want that. My experience of good schools in my constituency that have a uniform code, which parents welcome, is that they typically have schemes and mechanisms to help people obtain uniforms if they find themselves in financial difficulties.

Getting good jobs requires investment in skills and education for those in work. For those who are retired, incomes have been helped by the biggest ever increase in the state pension.

Oral Answers to Questions

Debate between Greg Clark and Baroness Keeley

Monday 4th April 2011 Commons Chamber

[Greg Clark]

I completely agree with my hon. Friend, although there is one council that has failed to publish its spending over £500: Nottingham city council. The right hon. Member for Don Valley (Caroline Flint) squirmed and wriggled rather than urge the council to publish those details. I hope that she will take the opportunity today to say that it should publish them.

[Barbara Keeley (Worsley and Eccles South) (Lab)]

Well, here we have Ministers again castigating local councils for cuts affecting voluntary organisations, but the Cabinet Office is cutting grants to many volunteering organisations, Government cuts to legal aid funding will have a serious impact on Citizens Advice and the VAT rise and loss of gift aid transitional relief will cost the sector £250 million. Does the Minister not see just how hypocritical that stance is toward local authorities? When will the Government get their act together on supporting the voluntary sector?

[Greg Clark]

Of course, the hon. Lady never saw a piece of spending that she did not like. The hypocrisy is to complain about the inevitable consequences of the previous Government’s overspending. As she has the opportunity, perhaps she will just nod and agree that no council—for example, a Labour council looking to her for leadership—should cut disproportionately. It is a time for leadership from the Opposition Front-Bench team. If they want to hang around like ghouls, wailing and moaning from the sidelines, they can do so, but they should take a lead and give a message to Labour councils.

Localism Bill

Debate between Greg Clark and Baroness Keeley

Monday 17th January 2011 Commons Chamber

[Greg Clark]

The Bill was drafted deliberately to express that. This is a community right to challenge to allow community organisations to do something that Labour, during 13 years in government, failed to do, which is to let them have the chance to deliver services.

Let me refer to some of the speeches made by right hon. and hon. Members. My hon. Friend the Member for Mole Valley (Sir Paul Beresford) brought his considerable experience in local government to bear. My right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes), my hon. Friends the Members for Carlisle (John Stevenson), for Cleethorpes (Martin Vickers), for Crawley (Henry Smith), for Peterborough (Mr Jackson), for Filton and Bradley Stoke (Jack Lopresti), for Milton Keynes South (Iain Stewart), for Morecambe and Lunesdale (David Morris), for Ealing Central and Acton (Angie Bray), and for Oxford West and Abingdon (Nicola Blackwood), and the hon. Members for Birmingham, Ladywood (Shabana Mahmood) and for Sheffield South East (Mr Betts), the Chair of the Communities and Local Government Committee, made passionate speeches about local government. They should not be concerned about the Secretary of State’s powers. The key power is the general power of competence. We thought very carefully about whether it was right to set out pages and pages of restrictions in the Bill on that general power of competence. We concluded that the better thing—the more empowering thing—was to change completely the default, so that the powers that a local authority wants to take should be available to it, and it should not have to go through pages of guidance on the Bill. We think that that is the right approach. I look forward to the scrutiny from the Select Committee, but that is the approach that we took.

One of the other powers states that if a council is in danger of becoming insolvent, it is reasonable for the Secretary of State to suspend the requirement to have a referendum for a council tax increase to cover that. Therefore, the Committee, when it scrutinises the Bill, will find that it is content with that.

[Barbara Keeley]

rose—

[Greg Clark]

There is no time, I am afraid.

Let me address the argument, which was depressingly common on the Opposition Benches, that communities are not capable of taking up such rights. What a bleak and miserable picture of communities the Opposition have. I believe in local government; indeed, I am a fan of it. The track record of local government in recent years certainly bears comparison with the track record of central Government, at least under the previous Administration, so it is absolutely right that we should give local government these powers and trust it. Of course we should give help to the most vulnerable communities to ensure that they can take advantage of the powers, just as everyone else can. However, the argument that people in local communities are so mean-minded that they will exercise their powers only in a way that Opposition Members have described as nimbyish, or that people who love their communities, and want to bring up their children and see them prosper in their areas are not capable of having the interests of their communities at heart is a bleak reflection on the Opposition’s world view. It is not a view that we share.

The Bill will put our politics on a different course. It will bring an end to the history of using power to take more power. It will give power to councils, power to communities, power to voluntary groups and power to the people, in the knowledge that the more powerful the people are, the stronger our society is.

Question put, That the amendment be made.

Oral Answers to Questions

Debate between Greg Clark and Baroness Keeley

Thursday 21st October 2010 Commons Chamber

[Greg Clark]

The right hon. Gentleman and I agree, I think, that it is highly desirable that we should transfer power from the centre to local communities, and that involves councils, too. I do not expect them to pull up the drawbridge in the town hall when we decentralise power and resources to them. I look to councils to increase their contacts with the voluntary sector as part of the decentralisation initiative, which affects everyone.

[Barbara Keeley (Worsley and Eccles South) (Lab)]

There are

“real fears that spending cuts will impact adversely on the capacity of the charitable and not-for-profit sector. Far from taking on more… it may be able to do rather less.”

That comment on the big society was from the Chartered Institute of Public Finance and Accountancy and the Society of Local Authority Chief Executives. Can the Minister tell the House just how he expects expansion in a sector that will suffer loss of grants and support—as we have heard, it is already happening—due to the 28% budget cuts over the next four years that this Government have forced on to local councils?

[Greg Clark]

May I welcome the hon. Lady to the Dispatch Box? She has long experience in local government, which I know takes these issues very seriously. One thing that councils and central Government have had the chance to do in the past is to hold on to power and to avoid bringing in the voluntary sector as of right. I think we need to change that. The hon. Lady will see that, in the localism Bill, we are going to entrench rights for community groups to take over some of the services of local authorities if they can demonstrate that they can have a more effective outcome. Rights, I think, rather than discretion, is the best source of guarantees for the sector.