Local Government Funding

Debate between Iain Wright and Philip Davies

Wednesday 3rd February 2016 Westminster Hall

[Mr Iain Wright (Hartlepool) (Lab)]

As my hon. Friend the Member for Leicester West (Liz Kendall) has mentioned, areas of deprivation have suffered more in cuts to council funding than more prosperous areas. Inner London boroughs, metropolitan areas and councils in the north have seen disproportionately harsh cuts. Hartlepool Borough Council’s grant has been reduced by 40% since 2010, and, as per the 2010 index of multiple deprivation, Hartlepool is the 24th most deprived local authority out of 354 areas in Britain. I see the consequences of austerity and deprivation every day.

For Hartlepool Borough Council’s budget over the five years to 2015-16, there has been a cut in spending power of £313 per person, the highest of any local authority in the north-east, which is itself the region with the highest cuts to council funding. In December, it was announced that the local authority would lose a further £2.1 million in Government grant in 2016-17, on top of an anticipated £2.8 million. How does the Minister think that areas such as Hartlepool can have such levels of unfair cuts? Why has he moved the funding formula away from a needs-based approach for the provision of local government services?

My second point relates to business rates and the unusual, if not unique, position of Hartlepool and the nuclear power station. Hartlepool is the second smallest unitary authority in the country, although there is nothing wrong with being small. About £33 million comes from council tax generated locally. Business rates are a bigger provider of local government finance, with a total rateable value of nearly £100 million. The nuclear power station in my constituency provides about a third of that entire business rate income, at just over £33 million. So the business rates bill equates almost identically to the council tax revenue.

The unique position of Hartlepool is two-fold. First, there is nowhere else in the country that has such a large payer of business rates proportionate to the rest of the business rate base. Secondly, the nuclear power station has often quick and unexpected shutdowns for health and safety purposes, with a consequent loss of business rates that cannot be collected, and the council has no ability to manage or plan for that. In addition, there has been a revised valuation of business rates, which means that the power station pays less—£3.9 million this year and every year in perpetuity. To put that in context, to make up this shortfall of income, there would need to be an increase in council tax of about 11%, or the construction of 2,700 properties paying band D council tax: the equivalent of increasing the size of the town by 12%. That is simply not going to happen.

The Secretary of State was kind enough to meet with me, the leader and the chief executive of Hartlepool Borough Council to discuss this matter. Will the Minister continue to look at this so that Hartlepool residents do not suffer?

[Philip Davies (in the Chair)]

Just to confirm, the Front-Bench spokesmen are not subject to the same time limits, but I want to get to the Minister before 10 minutes to 4, to give him time to answer the points raised and also for the hon. Member for Leicester West to briefly sum up.

Apprenticeships and Skills (Public Procurement Contracts) Bill

Debate between Iain Wright and Philip Davies

Friday 1st November 2013 Commons Chamber

[Philip Davies]

I wonder why Labour Front Benchers have so little faith in employers that they feel that they cannot be trusted to advertise in a jobcentre, and must be mandated to do so by the Labour party. The hon. Gentleman talks of value for money, and says that we should look at the bigger picture rather than seeing things simply in terms of pounds, shillings and pence. Can he explain what was the great benefit to the country of his Government’s leaving it with an annual deficit of £150 billion?

[Mr Wright]

Oh dear me. I think that the Bill describes exactly what we need to do in order to secure the country’s economic success. When those in government—centrally or locally—spend money, they should look to the long term, and ensure that they can provide the skills and training opportunities that are needed for the future by giving young people a chance. I believe that that is central to what we need to be doing.

I fully support what my hon. Friend the Member for Denton and Reddish is trying to do, and I hope that the Minister does as well.