Business Rates (North-East)

Debate between Iain Wright and Lord Stunell

Tuesday 25th October 2011 Westminster Hall

[The Parliamentary Under-Secretary of State for Communities and Local Government (Andrew Stunell)]

It is a pleasure to serve under your chairmanship, Mr Amess. I congratulate the hon. Member for Sunderland Central (Julie Elliott) on securing the debate. I think that this is the second time that she and I have found ourselves discussing matters of importance to the north-east in this Chamber. The proposed reforms are important, not just for local authorities in the north-east but, as some Members have noted, for areas throughout the country. There are implications beyond the north-east.

I thought that there was general agreement and consensus that this country has the most centralised and complex local government finance system in the world, with the possible exception of Malta, which has a much simpler governance structure in any case. In all my time in local government—I served on three different local authorities in the north-west of England—I never liked the decisions of any Government on local government finance. I have seen a series of disastrous mistakes, resulting in more power and responsibility being taken away from local authorities and their being subjected to choices—sometimes arbitrary and, clearly on many occasions, not taking account of local services—made in Westminster and Whitehall.

[Mr Iain Wright]

Will the Minister give way?

--- Later in debate ---

[Andrew Stunell]

I will give way to the hon. Gentleman, who is a former Communities and Local Government Minister and one of those who has delivered so many arbitrary decisions to people like me.

[Mr Wright]

I am grateful to the Minister, who is my successor at the Department for Communities and Local Government. Does he think that, with tariffs, top-ups, resets and redistribution, the system that he has to implement will be less complex than the current system?

[Andrew Stunell]

Yes, most certainly. It will be transparent. I think that the hon. Gentleman, for whom I have a great deal of respect, knows that the formula system, which was made even more convoluted during his period in office, has clearly passed its sell-by date. It is impenetrable, even to chief finance officers of local authorities, not to mention voters on the street.

In the time remaining, I will explain some of our proposed scheme’s features and talk about the consultation process. The aim of the proposals is to change the dynamic from a centrally controlled system to a locally controlled system. That is the purpose of the reform.

Cleveland Fire Authority

Debate between Iain Wright and Lord Stunell

Friday 11th February 2011 Commons Chamber

[The Parliamentary Under-Secretary of State for Communities and Local Government (Andrew Stunell)]

I congratulate the hon. Member for Hartlepool (Mr Wright) on securing the debate. Listening to his speech, I thought that we had done a completely unexpected job swap. I hope I will be able to give him some of the reassurances he seeks.

The Government have made a clear commitment to ensuring that the effectiveness of front-line services is protected, but deficit reduction is the No. 1 priority. We are borrowing £400 million a day, or £150 billion this year. Deficit reduction has to be the top priority.

In that context, we gave the fire and rescue service some protection in the recent settlement.

[Mr Iain Wright]

I apologise for intervening so soon. Is the Minister seriously suggesting that deficit reduction takes precedence over fire protection and safety?

[Andrew Stunell]

Of course it does not. As I said, we gave the fire and rescue service some protection in the recent settlement. Single-purpose fire and rescue authorities will see a reduction in revenue spending power, taking into account grants from central Government and council tax, of 2.2% in 2011-12 and only 0.5% in 2012-13. It is clear that fire and rescue services will need to increase efficiency and deliver reform. However, we have not ignored their special circumstances. I believe that it is a fair settlement for the fire service in what are undoubtedly very challenging times for the public services in general.

We have back-loaded cuts to fire and rescue services to the last two years of the four-year spending review period. That will give fire and rescue authorities the time they need to make the necessary changes without affecting the quality and breadth of the services that they provide. However, there will still be tough choices to be made and I appreciate that Cleveland is not excluded from that. However, we believe that significant savings can be found by fire and rescue services, including through staffing arrangements, sickness management, recruitment freezes, shared services and back-office functions. Other things will be relevant to individual authorities.

The 2011-13 formula grant settlement for Cleveland fire authority was part of what was debated and approved by Parliament on Wednesday. Cleveland's representations were taken into account by the Secretary of State along with all other representations.

On Cleveland's settlement, the reduction in formula grant is 9.5% in 2011-12 and 3.4% in 2012-13, but it is important to consider the other funding that Cleveland receives. All told, the fire and rescue authority will see an overall reduction in spending power of 5.6% in 2011-12 and 2.2% in 2012-13.

The authority has been protected. The hon. Gentleman’s points about deprivation and risk have been taken into account. I want to set out how that has been done and the effect of that on Cleveland.

We have struck a balance in the distribution system, protecting fire and rescue authorities from the largest reductions and allowing a settlement that is closely aligned to needs. Nine other single-purpose fire authorities are experiencing the same size percentage reduction as Cleveland. However, I want the hon. Gentleman clearly to understand that Cleveland has received the largest amount of grant per head among all fire and rescue authorities—£36 per head in 2011-12. I asked officials what would be a comparable authority in terms of size and complexity of risk. They suggested that Cheshire would be such an authority; it has many high-risk sites along the Mersey valley and is approximately of equivalent size. Cheshire’s amount of grant per head is £18, half the amount per head allocated to fire and rescue services in Cleveland. I therefore hope the hon. Gentleman understands that the formula reflects factors such as deprivation, population density and the presence of high-risk sites. Thus, Cleveland receives greater funding because it has a large number of control of major accident hazards—or COMAH—sites, a low council tax base and problems of deprivation and unemployment, to which the hon. Gentleman drew attention. I want to take this opportunity to assure him that central Government are continuing their investment in Cleveland’s fire and rescue services.

Nationally, capital grant funding for the fire service has increased from £45 million to £70 million in the coming year. That is in recognition of the need for fire and rescue authorities to maintain their investment in capital assets, and it provides the potential for making efficiency savings at a time when resource budgets are under greater pressure.

[Mr Wright]

I am grateful to the Minister for mentioning capital. My understanding is that Cleveland fire authority’s private finance initiative bid has been rejected, with no suitable replacement being put in place. Will the Minister advise me on how the authority can best put itself forward for capital schemes, in order to provide efficiencies in the long run?

[Andrew Stunell]

I will do that shortly, if I may. First, let me put it on the record that in 2011-12 Cleveland will benefit from £1,012,000 in capital grant funding, which represents a funding increase of about 40% on the previous year. The capital allocation to Cleveland will be increased, therefore. We are currently considering a number of options for distributing future years capital funding, and we will consult on the best way to focus capital funding in order to drive efficiencies and reform, which I hope was the point the hon. Gentleman was making.

The hon. Gentleman rightly drew my attention to the private finance initiative. There is a North East Fire and Rescue Authorities—NEFRA—2 PFI project, of which Cleveland is the lead fire authority. That was a pipeline project for which funding has been discontinued. We recognise that there are concerns about that. The Department is working with the NEFRA 2 authorities to consider possible funding alternatives over the spending review period. A Department for Communities and Local Government finance committee will shortly meet to review the funding options for this project, and we hope to have a decision shortly.

The hon. Gentleman referred to a major incident in the Cleveland fire authority area and to the pressures it had put on resources. That is why there is a national resilience programme. I suspect the hon. Gentleman has more background knowledge of that than I have, and he will know that the Government currently make payments to Cleveland and other fire and rescue authorities in recognition of the costs additional to the cost of meeting their local responsibilities, in order to maintain their “new dimension” equipment and the use of the Firelink radio system. Next year, we will pay Cleveland a grant of just over £100,000 in respect of Firelink and some £69,000 in respect of “new dimension” equipment. We need to develop future funding arrangements to make sure national resilience is maintained, but in the meantime we will continue to fund the good work that is being done.

There are a number of major risks within Cleveland and, as with all fire and rescue authorities, Cleveland can rely on the availability of national resilience assets in planning and responding to a significant incident in its area. The hon. Gentleman did not specifically mention the fire control project, but Cleveland is the lead authority on that, and I want to assure him that the Department is open for consultation responses until 8 April this year. I am sure that Cleveland, as the lead authority, will be working with partners to come forward with proposals for alternatives, now that the fire control project has ended.

The way in which the resources available to Cleveland are used is a local matter to be determined by individual authorities, and it is not appropriate for me to comment on them, but I shall discuss one aspect that the hon. Gentleman mentioned, which relates to fire safety. I understand that in the past five years Cleveland has had 16 fire deaths, with an average of three a year. Obviously that is three a year too many, but the level is low compared with the rest of England and I am sure that the good work that the fire and rescue service has been doing has been a major contributor to that. When it decides its spending pattern over the next two years and during the comprehensive spending review period, I hope that it will very much have in mind the fact that its good work through the Fire Kills campaign and other programmes provides both it and the Government with value for money. I hope that it will continue to prioritise that work.

It has been suggested to me that I need not take as long in responding to this debate as I did on the earlier one, so I shall conclude by saying that although I cannot speculate on funding beyond 2012-13 for Cleveland or for anywhere else, it is clear that the fire and rescue service will be required to deliver increased efficiency and reform. It will be for individual fire and rescue authorities to plan and decide how to do that.

I wish to assure the hon. Gentleman that the coalition Government remain completely committed to ensuring that our vital public services are properly funded and properly run, and that they deliver a safe environment for all our citizens.

Question put and agreed to.

Oral Answers to Questions

Debate between Iain Wright and Lord Stunell

Thursday 21st October 2010 Commons Chamber

[Andrew Stunell]

Absolutely. My right hon. Friend the Secretary of State has had some stern words to say about local authorities that do not take the hint and has called on those earning high salaries in the public sector to take a voluntary pay cut.

[Mr Iain Wright (Hartlepool) (Lab)]

2. What recent discussions his Department has had with representatives of voluntary organisations providing housing services for local authorities on the potential effects on that sector of future local government funding plans.