Local Government Funding: North-East
Debate between Ian Mearns and Marcus JonesWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
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Mr Marcus Jones
There are MPs from my party who represent very wealthy areas and others who represent less well-off areas. I say to the hon. Member for North Durham (Mr Jones) that not all of our Members are from Surrey; my party would not have been able to win a general election based on a cohort of MPs from Surrey. MPs in my party come from a wide swathe of the country. The transitional grant was based not on where MPs come from but purely on the response to the local government settlement. It is intended purely to mitigate the most significant changes in funding for the authorities that had the greatest proportion of loss from the revenue support grant.
Ian Mearns
Does the Minister accept that even though the revenue support grant is due to be withdrawn completely, in the meantime the Government have written out any concept of addressing need? Local authorities such as mine in the north-east of England do not have the capacity to raise taxes locally because many of the properties in our area are in the lower bands, so the band D national median is meaningless.
Mr Marcus Jones
That is why generally, as I said, the areas that have been referred to in the debate that are receiving transitional grant had a higher reduction in revenue support grant than areas such as that represented by the hon. Gentleman. He and a number of his colleagues have taken a dim view of the north-east in relation to its ability to move forward as an economy and create business rate revenue and additional council tax.
To take the constituency of the hon. Member for Hartlepool (Mr Wright), for example, thanks to the business rate retention scheme during 2014-15 there was a 14.6% increase in revenue. To pick up on a point he made, we will move to full business rate retention in 2020, but before that there will be a consultation on how we deal with redistribution. We understand and accept that in some places significantly more business rates are collected than in others.
The approach we have taken in this historic settlement is aimed at supporting those areas with the greatest pressures and providing councils with the certainty they need as we move towards a system of greater devolution. The settlement allocates funding on the basis of the core resources available to local authorities, taking into account councils’ business rates and council tax as well as their revenue support grant. It ensures that councils that deliver the same set of services will receive the same changes in core funding for those services.