Local Government Finance

Iain Wright Excerpts

Thursday 17th December 2015 Commons Chamber

[Greg Clark]

I entirely agree with my hon. Friend. When councils charge for services, the general principle should be cost recovery and no more. I would expect councils then to become more efficient and to pass on their efficiency savings to their residents, as they ought to do.

[Mr Iain Wright (Hartlepool) (Lab)]

Hartlepool Borough Council’s grant has been reduced by 40% over the past five years. That equates to a cut in spending power of £313 per Hartlepool resident, which is twice the national average. In addition, the council has lost—this year, and in recurring years—£3.9 million from the business rates of the nuclear power station, which previously equated to a quarter of all business rates collected in the town. The council had no say, no power and no influence in regard to that decision, which makes a mockery of the Secretary of State’s claim in his statement that retaining 100% of business rates would “forge the necessary link between local business success and local civic success.”

Given the real threats to the provision of local services, and the somewhat distinctive nature of the local economy and the business rates base, will the Secretary of State acknowledge that Hartlepool faces a real problem, and will he agree to meet me and discuss ways of mitigating the massive pressure on the council’s budgets?

[Greg Clark]

Of course I recognise that in particular instances—such as the nuclear power station that the hon. Gentleman mentioned—there is a very specific impact, and I shall be happy to meet him to discuss that. However, as Chairman of the Business, Innovation and Skills Committee, he will know that businesses have long called for a closer connection between councils and the businesses in their areas. The 100% retention of business rates will create an unbreakable link between the success of businesses and councils, and I would expect the hon. Gentleman to welcome that in his capacity as Chairman of the Committee.