Shared Prosperity Fund

Jim McMahon Excerpts

Tuesday 14th May 2019 Westminster Hall

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Sir David. I congratulate my hon. Friend the Member for Barnsley Central (Dan Jarvis) on securing this important and timely debate.

We heard from the Chair of the Housing, Communities and Local Government Committee, my hon. Friend the Member for Sheffield South East (Mr Betts), who expressed real frustration at the lack of a consultation. We expected that before Christmas but it is still not here. We heard from my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders), who restated a position that I firmly believe in: we should use this opportunity to reset and recast how that fund can be used. He spoke about the importance of town centres and how people feel about the future direction of their town, and the ability to include people in a more active way on decisions that affect their lives.

My hon. Friend the Member for Leigh (Jo Platt) said that far too often power is held away from local people. With the best will in the world, decisions made about what is right for local areas are for nothing if local people are not involved and feel that they have no agency or control over the future direction of the place where they live. My hon. Friend the Member for Ogmore (Chris Elmore) talked about the importance of targeting the fund on the basis of need, and the importance of respecting our devolved nations. They cannot be bypassed—they have to be front and centre in whatever new settlement comes forward. My hon. Friend the Member for Sheffield Central (Paul Blomfield) said how much regional inequalities have increased since 2010 because of successive decisions made by the current Government.

Finally, my hon. Friend the Member for Aberavon (Stephen Kinnock) spoke about the perception that this is not just about money, but is a power grab by Government to retain as much power as they can centrally and not distribute it anywhere. I congratulate him on his work on this issue in the all-party parliamentary group for post-Brexit funding for nations, regions and local areas, which holds the Government to account and works in partnership to try to create a new way forward that provides an alternative.

The importance of EU structural funds has been set out in the debate, but it is worth highlighting again the importance of the £17.2 billion of investment directed at some of the most significant regions that have not shared the capital’s booming fortunes. The EU regional development fund has focused £655 million on supporting small and medium-sized enterprises. It has supported research and innovation with £342 million and invested £197 million towards a low-carbon economy. The EU social fund tackles head-on the barriers preventing people in towns such as mine from accessing the labour market and decent, well-paid and secure jobs. Almost £1 billion has been spent on developing an inclusive labour market, with more than £333 million further to develop new skills that are vital for accessing jobs and vital for the future of our economy.

There are very real concerns about the Government’s intent in this agenda. We have heard not just concerns about the places that people represent, but a significant amount of distrust in the background motives of the Government. There is little wonder why: we have seen nearly a decade of austerity targeted at the most deprived communities, where vital public services have been taken away from areas that could least afford it and that have seen the biggest cuts. The evidence tells us that the Government are not in the game of sticking up for the most deprived communities—the very people we represent in this place. Left to their own devices, what would the Government do with the opportunity to recast the fund, and what might that mean for the communities we represent?

The same is true of education funding, skills funding and further education funding, all of which are under chronic pressure. The same continues to be true of UK capital investment spend, where our regions are held back by a failure to invest in growth. We have seen that on transport investment and housing investment; across almost every line of central Government, capital investment favours the capital of the UK. What about our regions? If we want the UK to be the best that it can be, every one of our regions must be the best that it can be—not just the cities and city regions, but our towns.

There is real fear that what might follow is a competitive process that pitches one area against the next, with rules dictated by a centralising Government who do not want to give power away and have always neglected our towns and our most deprived communities. We might see that the rules are doubly stacked up against getting the money to the very communities and people who ought to be beneficiaries.

Today, the Minister can put some meat on the bones. He can explain why there has been a significant delay in the consultation. He can outline what a future fund might look like: how will local people have agency and be involved? How will we make sure that our towns benefit as much as our cities do? How can we make sure that this is not a pot of money in isolation, but a wholly different approach to how Government spend their money—not just favouring the capital and doing it the easiest way possible, but making sure that every part of the UK gets the money that it needs?

Why has this taken so long? We are nearly three years in from the EU referendum. Had we left on 29 March, we would have been six weeks out of the European Union, but there is not even a programme in place for spending the money that should go to our regions post Brexit. The Government might have been saved by a temporary relief, but at some point they will have to put pen to paper and set out exactly what they have in mind, and make sure that local people are included. I hope that the Minister takes from this debate the fact that there is a great deal of interest, and that the MPs who have spoken are not going away. They will come back if answers do not come forward.

--- Later in debate ---

[Jake Berry]

If Members give me the opportunity to say when, I may try to provide an answer. One of the points we heard was that we must respect the devolution settlement across our United Kingdom. For me, as the Minister with responsibility for the northern powerhouse and devolution, that means respecting the devolution settlements that this Government have brought forward, by which I mean mayoral devolution in England, which now covers 48% of the north of England.

[Jim McMahon]

I understand why the Minister does not want to go down the cul-de-sac of the Barnett formula, but can he confirm that no region will be worse off than it is under the current programme?

[Jake Berry]

As the hon. Gentleman knows and I was just about to say, the quantum of the UK shared prosperity fund will be determined as part of the comprehensive spending review. That is the appropriate time for the Government to make commitments of the sort he seeks. However, he and the hon. Member for Aberavon (Stephen Kinnock) are correct that the Government must come forward with their consultation—I am clear that this must happen—before the comprehensive spending review to enable areas to contribute to that consultation.

We have not been sitting on our hands, as people who have listened to the debate may think. We have already engaged with more than 500 stakeholders. We have had 25 official-level engagements across the country, including with our counterparts in the devolved Administrations. In addition, in my role as Minister for the northern powerhouse, I have engaged with mayors. I have talked to them specifically about how we can work together to provide evidence to the consultation that demonstrates that, as so many people have said, the impetus for investment of the UK shared prosperity fund should come from our regions rather than being directed out of Whitehall.

Having listened to contributions to the debate, I think everyone believes that it would be nice if that happened. The point is that by working with our metro Mayors, our local enterprise partnerships and authorities across England—that is certainly my role as English Minister for local growth—to create the evidence base, we can move beyond thinking that it would be nice to proving that it is how we will get the biggest return on investment. There is work ongoing in my Department, in advance of the consultation, to ensure that that hugely important argument is made, and won, when my dear chums in the Treasury are making decisions about how the money should be distributed following the consultation. I hope that answers some of the questions that Members asked. My response to the main question is that the consultation will start very shortly.

Let me move on to some of the specific points that were made. On public transport investment, Members may not have seen the most up-to-date figures, which are available on the Treasury website. They show that transport capital expenditure is higher per capita in the north of England than in London. People often talk about total capital expenditure across the north of England versus London. There are some parts of the north of England where very few people live, so it is much more realistic to talk about capital expenditure per capita, and it is higher per capita in the north of England.

Many colleagues talked about the weakness of Green Book calculations for making investment decisions, which I think is acknowledged across the House. That is why the Government came forward with a rebalancing formula in the industrial strategy. That formula looks at areas that are less developed, depending on how we define that, and at factoring future growth into Green Book calculations. Changes have been made recently to ensure that community benefit is also included in such calculations.

My hon. Friend the Member for Newton Abbot (Anne Marie Morris) commented on the ring-fencing of coastal money. By the end of the current spending period, the Government will have invested £200 million directly in coastal communities through our coastal communities fund, which is about driving prosperity on our coasts. The UK shared prosperity fund must not be viewed on its own as the only support the Government give to drive regional growth. We have contributed £53 million to part of the exciting growth deal in the highlands and islands, which has resulted in things such as the north coast 500 route, which I hope to visit this summer, prospering.

Non-Domestic Rating (Preparation for Digital Services) Bill

Jim McMahon Excerpts

2nd reading: House of Commons & Money resolution: House of Commons & Programme motion: House of Commons
Monday 13th May 2019 Commons Chamber

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

I will not put the House through a rendition of “Happy birthday”—[Hon. Members: “Shame!”] But many happy returns.

Perhaps this is a missed opportunity. It is a shame, really, that the Bill is so narrow, because we have a good five hours where we could have talked about the real threats our businesses face, the dangers to our high streets and the many representations made on this issue. Nevertheless, this Bill is progress. Following the falling of the Local Government Finance Bill when the general election was called, we encouraged the Government to come forward with non-controversial elements of that Bill. Clause 14 was not controversial, so I am glad to see it in this Bill.

Local councils are on the frontline of government, delivering services that people rely on and which both support and enrich our communities on a day-to-day basis. Labour welcomes the modernisation of tax collection and the move to online payment and account facilities. However, the proposal to develop an online payment system led by HMRC, as set out in the Bill, does raise some questions.

Madam Deputy Speaker, I refer you to my entry in the Register of Members’ Financial Interests as a vice-president of the Local Government Association, the body that represents councils, which are the billing authorities responsible for the collection of business rates. It, like me, wants confirmation that the move to develop an online payment collection facility will not change the fundamental and historical role of local councils as billing authorities with the legal responsibility for the collection of business rates. In the design of this new bridging system, to what extent have the Government sought input and representation from local government? Local government has significant experience in designing systems and processes, and it is important to draw on that to make the best of this proposal.

As the Government are investing in digital services, do they intend to streamline this online facility with the check, challenge and appeal process already in place? That would make it easier for businesses to have an end-to-end business rate system in place, marrying in one system the payment mechanism with the ability to check and appeal business rates. What payment mechanism will be in place to transfer funds to local authorities, especially in rate retention pilots? Who will be responsible for the collection of rates, and who will underwrite funds lost through non-collection?

The most critical issue is the wider sustainability of business rates and their role in funding local public services and encouraging local economies to thrive. Local government has already seen severe cuts after nine years of brutal and devastating Tory austerity.

[Mr Jim Cunningham]

One of the reasons that there is a reaction from businesses regarding the level of business rates is that while central Government should have been responsible for funding certain services, they have shoved that on to local authorities, which have had to put that through business rates, just like the police and fire authorities’ precepts.

[Jim McMahon]

It is a matter of fact that the Government are moving towards the self-financing of local government. That is fine if a local authority can generate money through business rates and council tax in its local economy, but if, for whatever reason—usually for historical reasons—it is not able to do that, the Government do not care if councils sink or swim. That is no way to fund adult social care or children’s safeguarding services, or to make sure the homeless get the support they need either. Quite frankly, it shows a callous disregard for the role of central Government in making sure that every area gets its fair share of funding. That is a critical point.

[Mr Cunningham]

Anybody who has any experience of local government—my hon. Friend does, as do I and many others in here—knows that three or four years down the road, though they hint at looking again at business rates, Ministers will come along and tell everybody in local government, “You’re profligate, you’re spending too much, so we’ll cap you.” As I am sure he will remember, we have had all this before.

[Jim McMahon]

The hallmark of local government across parties—this is not a party point—is that people roll up their sleeves and get on with it. They do not complain; instead, they find solutions to the difficult challenges facing the community, but that is made much harder when central Government are disconnected.

Successive Secretaries of State have failed to champion local government, which is why I welcome our shadow Secretary of State having that local government background and experience and really believing in it. I hope he will be Secretary of State in the future, leading on this from the Government Benches. It is critical that the Secretary of State should not batter local government all the time. It needs a champion to celebrate what goes on in every community and, regardless of party affiliation, to fly the flag for what has been proven to be the most efficient arm of government—they are our champions, and we should thank them for all the work they do.

By 2025, there will be a funding gap in local government of £8 billion, and by 2020 local authorities will have faced core funding cuts at the hands of central Government of nearly £16 billion since 2010. That means that councils will have lost 60p for every £1 the Government previously provided to cover local public services. Next year, 168 councils will receive no funding whatever from central Government to meet the cost of rising demand for local public services.

What impact will that have? We can talk about the big numbers, and £16 billion is a huge number and has had a huge impact, but this is really about people and communities—the streets where people live, the communities that bind people together and make places decent places to live. The cuts have had a dramatic impact on government services. Youth centres have closed; libraries have reduced their hours, and hundreds have closed altogether; and meanwhile, social care is on the verge of collapse. Warning after warning has been issued, but the Government, particularly the Treasury, have not come to the table. As a result, our councils are having to make difficult and unwelcome decisions about where to make efficiency savings, and that is hampering their ability to prioritise social good above all else.

Moving to an online payment system administered by HMRC, but with links through to local billing authorities, raises a more fundamental point about taxation on business overall. Currently, many believe it operates in a silo and that the approach to business taxation is very disjointed. While our town centres and high streets are going to the wall, the online giants are making record profits and ensuring that as much as possible is sent offshore. The Government should use this opportunity not just to introduce a digital payment system, but to undertake a more fundamental review of business taxation overall to ensure that tax is generated where the wealth is created and that our town centres and communities are properly supported. We look forward to scrutinising the Bill properly and to hearing answers to the questions posed.

Draft Buckinghamshire (Structural Changes) Order 2019

Jim McMahon Excerpts

Tuesday 7th May 2019 General Committees

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

It is a pleasure to serve under your chairship, Ms McDonagh. We have debated the issue previously, so I will not go into a lot of detail, other than to say that we are nearing the end of the process. We need to bear in mind, as I said at the start, that this is about people, place and community. When the new organisation comes into force, we need to make sure that, in its desire to re-establish its new identity, it does not ride roughshod over the historic community identities that people hold dear. The towns and villages where they live are what really matter to them.

We also cannot ignore the crisis that councils face with the future sustainability of the financial settlement. It does not matter whether it is an urban or a rural authority or one going headlong into a reorganisation. The truth is that there is not enough money in the system to fund the growing demand for adult social care, children’s services and other preventive services. We need to see an answer to that in the fair funding review that is taking place. Nobody in this room should believe that by simply reorganising local government we can solve the funding crisis that means older people are not getting the care they need, young people potentially are at risk, and the very fabric of our neighbourhoods or the community services that many people rely on are being taken away incrementally because of austerity. I accept that this is happening in isolation, but the Government need to come forward with a fair funding review and demonstrate that they have thought through the real pressures that councils will face. Of course, the bigger the council, the bigger the risk to the local community if the funding is not accurate and properly assessed.

The other thing that the Government have not addressed—this was particularly the case in the previous Committee on this topic, but I suppose they will say that this is for the local authorities concerned—is that there is still worry that several different councils are being brought together, all with different systems and processes, different ways of handling data and even different IT systems that will not necessarily talk to each other. It is important that the transition is managed in an appropriate timeframe, so that services do not fall over. We might think, “Well, what can go wrong?”, but even reporting fly-tipping on a local website requires a number of different components and IT systems to get the job from A to B and the fly-tipping removed. We might think that is something and nothing, but it is important to ensure that such community services are looked after. I will leave my comments there, in order to make way for Members with local interests.

District Council Finances

Jim McMahon Excerpts

Wednesday 1st May 2019 Westminster Hall

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Mr Gapes. I congratulate the hon. Member for Rugby (Mark Pawsey) on securing this debate, although its importance is not reflected in the number of speakers. Nevertheless, that does not mean that the work done by district councillors across England is not critical and life changing to millions of people. I place on the record my thanks to our councillors of every colour, and I wish every candidate success, in different degrees, in tomorrow’s local elections.

The vibrancy of local democracy is what communities are all about. Most of us have come into politics through local government, because we are passionate about the places we live in and the power of positive politics to make a difference. District councils reflect that in a special and unique way because of how grounded they are in the local population. They are important also because they are the primary deliverer of neighbourhood services. I think about what makes an area somewhere decent to live; it is those neighbourhood services that make life worth living—a decent park, good quality countryside, clean and safe environments, and access to cultural facilities such as libraries. They all make up the fabric of our local communities.

There are tensions between districts and councils, but generally they work well together and, between them, provide good quality services for our communities. Like every council in England, they are under huge financial pressure. It is a bit simplistic to look at a spreadsheet, which we do whenever there is a local government finance debate, and to dismiss the cash cuts to district councils as being quite small. Their budgets, however, are much smaller. The percentage loss, particularly across critical neighbourhood services, has been profound in many district council areas. Rugby has experienced a real-terms cut of 47% to cultural services for recreational sport, open spaces and tourism. People feel the impact of austerity even at a district level.

That brings me to the fair funding review. We can all argue about how we have ended up here—we do that on a regular basis. The challenge, which is similar to that for adult social care and children’s services, is that most of the issues should not be party political. They are not political—they are about the delivery of public services in local communities. Regardless of the places we represent and live, we all want good quality public services to be available to everyone.

Political parties need to unite on some of the issues—local government does that anyway—and find long-term, sustainable solutions to how we fund local public services. We have a fair funding review today, but who knows when a general election will be called? A change of national Government matters almost more to local councils than to any other part of government, central or local, because it has a direct implication for how they are financed.

Every Government have always moved money around to favour the areas where they have strong representation. When there was a Labour Government, my locality had enough money to fund public services. It was never quite enough because we always wanted to go further and do more, particularly on housing and the local economy. Then, we had a change of Government and there was a shift. There is a good chance that when the cycle comes back around, the reverse will happen. That is not the way to fund sustainable public services. It does not give credit to our public servants who work for local authorities and it is not fair on the local councillors who have to deal with that cycle of spending turmoil. It is not right for the taxpaying public, either.

On cross-party consensus, the Local Government Association—I declare an interest as a vice-president—carried out an independent review of local government funding a number of years ago. It looked at the then current state and at what type of future structure could provide sustainability and value for taxpayer money. We need to look at some of those ideas.

[Mark Pawsey]

I am listening carefully to the hon. Gentleman, who seems to be making a pretty strong case for local authorities becoming self-sufficient. Is that what he is arguing?

[Jim McMahon]

I understand the calls for that, but I stop short of it, or anywhere near it, because the ability to fund local government public services is so heavily dependent on property taxation, which causes huge geographical inequalities across the country. We want a funding formula and structure where funding follows need. If we give local authorities financial independence there will be significant winners but also significant losers. My strong view is that council tax places a disproportionate burden on local taxpayers in terms of overall taxation. It has been expected to fund too many local public services while the central Government grant is being reduced. Business rates are near breaking point. Those taxes serve a very important purpose, but they also have significant limitations.

Whether it is a district or unitary council, the connection between the tax people pay and the neighbourhood universal services they receive is very healthy for democracy and transparency in governance. I am not sure whether the same is true of social care and children’s services, which in general benefit a smaller number of the local population. Those services are targeted, not universal, and have no relationship to local property values in 1991 or the business rate base that has been built up over hundreds of years. At some point there will have to be a separation of the two, for a purer connection between the council tax that people pay locally and the neighbourhood universal services they receive in return. There should be a properly assessed fair funding formula to ensure that funding goes where older people need care, children need social services, and homes need to be built to resolve homelessness. If we were to do that, it would be a start.

The LGA’s independent review also recommended that there ought to be an independent body to assess the total requirement across England. It would not, of course, set the Treasury’s Budget, but it would make recommendations to the Treasury about the total sum local government needs for the requirements placed on it by central Government. If the recommended sum was £1, the Government might decide to provide 90p of funding and distribute that according to an independently assessed fair funding formula.

Another suggestion, which has huge merit, is that we should establish local public accounts committees. Our councillors see on a daily basis where money is spent in their areas by a range of Departments, in a way that almost no other elected representative does. That provides important insight into how money could be used to better effect. Establishing a local public accounts committee would effectively allow a local authority to hold the ring on all the public sector spending in its area—to ensure that there is no duplication, that any gaps are identified and filled, and that people can work more collaboratively for better public services. Our councillors have proved, and all the evidence shows, that they are best placed to deliver public sector efficiency. They are rooted in the community, they know how to deliver public services, and their insight would help the whole of Government.

To be honest, however, even after all that, there is still not enough money in the system. We know that there will be a funding gap of more than £3 billion by the coming financial year, and by 2024-25 that gap will have increased to £8 billion. The truth is that people are living longer and need care. We know that if we do not give them care in their homes, we will put pressure on the acute sector and the NHS. We also know that children need safeguarding. We can have good processes and screening in place, but ultimately we have to provide protection for young people. The threats are increasingly complex, particularly with the growth of online social media and so on, and councils need the capacity to deal with that. Many are struggling under the weight of those two pressures.

Will the Government meet us halfway and agree to take some of the politics out of local government spending, for the benefit of all of local government? Will they be radical in challenging the Treasury to cough up for once and provide the money that is needed to fund local public services? Will they show leadership and stop pitting council against council? This is not about urban areas and rural areas, or counties, shires and unitaries; this is about local people and local public services, and every man, woman and child in England deserves decent public services.

--- Later in debate ---

[Rishi Sunak]

My right hon. and learned Friend makes an excellent point about an issue on which he has represented his constituents many times in this place. Just last week I responded to my hon. Friend the Member for Mole Valley (Sir Paul Beresford) in an Adjournment debate on this topic, and I highlighted that exact issue. Enforcement is important, as a recent consultation picked up.

Although this area is not my specific responsibility, the Secretary of State is considering, and I think has already committed to, making more funds available later this year—£1.3 million, I believe—to district councils through the planning delivery fund to tackle this exact issue, and I know that my colleagues in the Home Office are considering greater powers for the police and other bodies to enforce in the first place. I hope my right hon. and learned Friend knows that the Government take seriously the inconvenience and distress caused to settled communities through illegal and unauthorised encampments, and that we are committed to making improvements.

It is important that parks and green spaces are well funded. That is why the Government launched the £1 million pocket parks fund in 2016, which led to the creation of more than 80 new green spaces for local communities to enjoy. That fund had a phase 2 earlier this year, with almost 200 new pocket parks created. Districts are again are playing the lead role in that work.

[Jim McMahon]

The Minister needs to demonstrate some balance and reflect that there have been real-terms cuts in open space funding of 41% and in sports and recreation of over 70%. If the Government are committed to parks, open spaces and a quality environment, what will they do to replace the funding cut so far?

[Rishi Sunak]

Funding for all green spaces and such services is not ring-fenced by central Government. It would not be right for me, sitting in Whitehall as a Minister, to dictate to every single local authority how it should prioritise its resources between social care, homelessness, parks and planning enforcement. Every area will have different priorities, and it is right that local authorities make those decisions. The Government recently unveiled a range of initiatives around parks—not just the pocket parks programme but an additional several million pounds of funding for the renovation and upkeep of parks or children’s playgrounds that have fallen into disrepair. We have established the Parks Action Group to bring people from the industry together, and we funded the Heritage Lottery Fund and the National Trust with money for their accelerator to innovate new parks models. Indeed, we are also developing a new apprenticeship standard for 21st-century parks managers. On parks and green spaces the Government are firmly on the front foot, supporting local areas to ensure that their green spaces are there for their communities.

To the hon. Gentleman’s broader point, I would be the first to acknowledge that all local authorities, whether district, upper tier or unitary, have faced difficult times over the past years. They deserve enormous tribute for the fantastic job they have done in ensuring high-quality public services and public satisfaction in what they are doing at a time of constrained finances. That is thanks to their innovation and creativity, as was put so well by my hon. Friend the Member for Rugby. We all know why we were in that situation: when the Government came into office in 2010, we were left with a £100 billion deficit, and savings had to be made across government. Again, I pay tribute to those in local government for playing a starring role in helping to bring our public finances back to a sustainable position.

Housing was mentioned by many speakers. Building the homes that our communities need is another great challenge of our time, and the Government have placed trust in districts to help solve it. One key recommendation in the report was the removal of the housing revenue account borrowing cap. That was the No. 1 request from districts, and I am pleased that the Government have responded to that, which has unleashed the potential for districts to get on and build the homes we need. Similarly, the Government listened to district council calls for continuity and stability on the new homes bonus and responded by committing an additional £20 million to maintain the baseline this year, ensuring that district councils will receive more than £300 million in new homes bonus payments in 2019-20. Through all these measures, we are making every effort to create a housing market that works for everyone, and in doing so creating a country that works for everyone.

The hon. Member for Stroud mentioned uncertainty, and I acknowledge that issue. We are at the end of a spending review period, so naturally there will be some uncertainty as one set of programmes comes to an end and we wait for the spending review for certainty about what will replace them. The Government recognise the role that incentivising districts and authorities more generally to build houses has played in helping to get the number of new homes up to its highest in more than a decade. There were more than 220,000 last year, and I am sure that at this moment my hon. Friend the Minister for Housing is considering how best we can continue to incentivise local authorities in the new spending review. I am always committed to providing certainty as early as possible for councils of all stripes so that they can make the long-term plans that we have heard are so important.

It is worth dwelling for a minute on housing. I visited the constituency of my hon. Friend the Member for Rugby to see the fantastic work of his local council, replacing old high-rise blocks and improving the stock of houses for social rent. As my hon. Friend said, the council deserves credit for being on the front foot, forward thinking and keen to get on and provide the homes that our young people, and indeed all our communities, need.

I thank my hon. Friend for calling the debate on this vital issue. On my list of seven things, the one I have not touched on is freedom and flexibility. Perhaps this goes to the heart of the tension between the Government and the Opposition on how much to trust local government to get on with it. I am firmly and instinctively a localist. I want to be able to give and devolve powers down to the lowest possible level. It is good for our democracy and for our civic society if decisions are taken closer to the people they affect. I will be arguing where I can during the spending review process for greater freedoms and flexibilities for all local authorities. Indeed, at every meeting and engagement I go to, I ask local councillors, whether they are from parish or town councils all the way up to big metropolitan devolved mayoral administrations, for the ideas they have that I can debate, kick around with the team and put into the mix when we come to the spending review.

[Jim McMahon]

rose—

[Sir Oliver Heald]

rose—

[Rishi Sunak]

I will first take an intervention from the hon. Member for Oldham West and Royton.

[Jim McMahon]

It is part of the nature of this place that we can be mischievous at times, but let us not be under any illusion: this tension is not caused by trust in local government. We all respect the role that councillors play and we trust them to know what is best for their area. Fundamentally, this is about the sustainability of local council finance and the historical local tax bases that inform an entirely devolved financial model. That is the only tension—this is not about trust; it is about financial sustainability.

[Rishi Sunak]

I thank the hon. Gentleman, and I will now take an intervention from my right hon. and learned Friend.

[Rishi Sunak]

I firmly agree with my right hon. and learned Friend. Planning and housing can be contentious in local areas, but one way to relieve that tension is to ensure that local communities feel that they are shaping the developments taking place around them. I saw that when I visited my right hon. and learned Friend’s constituency, and his point is well made.

The hon. Member for Oldham West and Royton asked the Government to be radical. They have been radical by introducing neighbourhood planning. They have devolved planning power to local communities, often at parish or town level, so that that community can create its own neighbourhood plan, supported financially by incentive payments over the last few years. That plan is then given significant and strong legal weight in the planning process, which puts local communities, at a small level, in control of their destinies on the ground. That is central Government sitting here in Whitehall, being radical, and trusting and empowering local communities to construct the housing that they need and think appropriate for their areas.

I can debate this issue with the hon. Gentleman, but we must recognise that there are two sides to this coin. If one argues for more freedom, flexibility and trust in local government, one must also believe that local governments are able to shape their own destinies. It is no good saying that local governments are not able to sustain themselves and require constant handouts from central Government, yet also saying that they should be empowered to do everything they want. If central Government are shovelling money around the system, national politicians will always rightly be in charge of that system of redistribution. The more that money is raised locally, the more that local government will have the right to say, “Let us do things the way we want. You do not have the right to dictate to us what we do because you do not provide us with our funds.” There will of course be differences in the abilities of different areas to raise funds, and there will always be some element of redistribution, but local areas cannot be considered completely static entities with no ability to be creative, dynamic and improve their financial sustainability.

[Jim McMahon]

If the Minister is arguing in favour of growing the local tax base, we are entirely in agreement. If local authorities can demonstrate that through their actions they have grown the local economy, and therefore the local tax base, we should discuss how they benefit from that success. That is not the same, however, as the historical inherited tax base that many local authorities rely on for their funding, which includes the housing stock and business rate base. We need to separate out the two things. We need fair funding to ensure that public services are properly and sustainably funded, and a proper incentive for local authorities to grow the local economy and tax base.

[Rishi Sunak]

I am pleased to say that that is exactly what the Government are doing. The fair funding review is a blank sheet of paper on which we can consider the relative needs of local areas. It is bottom up, and driven analytically and empirically by the evidence, so that we figure out the right element of need for each local area, and then add a system of redistribution to ensure that funding gets to the right place. I am pleased the hon. Gentleman supports the incentive mechanism. An argument I hear a lot—I think I have also heard it from him, so I am glad if I misheard it previously—is when councils say that they have no ability to grow and will therefore need more handouts. I would take issue with that. Yes, the starting bases may be different, but that does not mean that areas cannot look creatively and entrepreneurially at how to create growth and generate resources for their local community. I believe in growth and driving prosperity locally, because I think that is the only sustainable way to pay for public services. Whether money comes from national or local government, it will come only if the economy is growing and generating tax revenue, and that is why I am keen to focus the conversation on driving economic growth.

This has been an excellent debate, and I was glad to hear all the contributions on the importance of district councils. Funding is important, and the big point is the elimination of the negative revenue support grant—I am not entirely sure that the hon. Member for Oldham West and Royton supported that when we unveiled it in the local government finance process. That is worth almost £153 million to the local government sector. District councils were big beneficiaries of the Government ensuring their commitment that the business rates baseline would not change over that period. I am glad that the Government were able to meet that big ask, which benefited 140 shire districts.

We all agree about the vital role of our district councils, their connection with communities and proximity to those affected by their decisions, and the importance of those decisions in ensuring that communities enjoy stronger local economies and better lives. It is my pleasure to represent district councils for the Government. I pay tribute to everything they do, and will continue to champion them for as long as I have this role.

Housing

Jim McMahon Excerpts

Tuesday 9th April 2019 Commons Chamber

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

I congratulate the Minister on staying in post for as long as he has, which I should say is quite unusual for Conservative Housing Ministers. What, however, can he say to Greater Manchester, which has apparently been told that the Government are withdrawing their offer of £68 million to remediate brownfield sites?

[Kit Malthouse]

As the hon. Gentleman knows, we are in ongoing discussions with Manchester about its housing ambition, but one of the frustrations in that conversation is the unwillingness of the Mayor of Manchester to take responsibility for housing figures in that city. As I say, if he is willing to be ambitious, we would be willing to support him as well.

[Jim McMahon]

On that point, will the Minister give way?

[Kit Malthouse]

No.

In addition to our affordable homes guarantee scheme, which gives £3 billion of guaranteed support, making it cheaper and easier for housing associations to raise funds and get building, we are increasing supply as the means to make the most of the space we already have, including land that has already been built on. With that in mind, the planning proposals and consultations announced in the autumn statement aim to give people more flexibility to build upwards on existing buildings and in converting commercial properties. This is a positive step that ensures we conserve precious land, accelerate supply and help to revive our high streets.

We are also looking at how we can close the gap between planning permissions and homes built, and we will be taking action on the back of the review by my right hon. Friend the Member for West Dorset (Sir Oliver Letwin) to do just that.

Oral Answers to Questions

Jim McMahon Excerpts

Monday 8th April 2019 Commons Chamber

[James Brokenshire]

I commend Kettering Borough Council for the work it is doing, and indeed Conservative councils up and down this country. It is worth highlighting that, on average, Labour councils in England impose bigger council tax increases than Conservative councils, reminding us that you always end up paying more under Labour.

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

Council tax has increased by a whopping 18% over the past five years, hitting families on lower incomes the hardest, taking 8% of their income compared with just 2% for higher earners. As people are asked to pay more and more for less and less, they will quite rightly look at the likes of Google with its £1.5 billion tax gap—which, by the way, is roughly the equivalent of what the current council tax increase will generate. Whose side are this Government on—hard-working families or the very, very few?

[James Brokenshire]

The Government are on the side of hard-working families. I remind the hon. Gentleman that under the last Labour Government band D council tax more than doubled. It is also worth highlighting that council tax in England is down 6% in real terms since the last Labour Government.

Local Government Funding

Jim McMahon Excerpts

Wednesday 27th March 2019 Westminster Hall

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Mrs Main. I declare an interest as a vice-president of the Local Government Association. I thank my hon. Friend the Member for Colne Valley (Thelma Walker) for securing an interesting debate. I would say that the debate had been inspiring, but it has not; it has been quite depressing to hear about the human consequences and the community cost of austerity.

We were told that austerity was over, and that there would be a reset—a bright new tomorrow. That has proven to be a lie. When the Chancellor was called to open his cheque book, no money came to local government. That is because there has been a determined attempt not just to take the money away, but to completely reshape how local public services are funded. For someone who lives in a wealthy area where property prices are high and the business rate base is strong, that is great, because it will be possible to fund reasonable public services. I am afraid, however, that people who live in areas with historically low house prices and business rate bases will be denied basic public services—the civic infrastructure that makes a country a decent place to live.

Those may be the 1.2 million older people who would have had care in 2010 but no longer receive it today. They may be the children who are denied a good start in life because of cuts to Sure Start centres or the youth service in their area. They may just be people who live in areas where crime has gone through the roof, not simply because our police service has been cut, although it has, but because support has been completely taken away. Crime reduction budgets in England have been cut by 61%, safety services by 76% and CCTV by 35%. Hundreds of youth centres have been closed, and the Government scratch their head and wonder why knife crime has gone through the roof. They wonder why probation is falling over, even though money has been taken away and the failed privatisation model let so many people down.

It is about more than just funding, although that is important; it is about a Government who want to wash their hands of local public services and local communities. That is shameful for a number of reasons, not least because of the cries for a new settlement during the EU referendum. Not many people were talking about the European Union as a political entity. People were saying, “I am fed up with this being my lot. I am fed up with looking at my community and seeing all the times that things are taken away. I am fed up with having to look backwards to yesterday, when there were decent jobs. For my children and grandchildren, even more than for me, I am more fearful for the future than ever before.”

When the Government had the opportunity to reinvest into local public services, they did the opposite—they turned their back on the very communities that needed that investment and support. It is criminal to allow that responsibility to fall by the wayside. We cannot continue to have an £8 billion public service deficit for local councils. It will be on this Minister’s watch that an older person dies because they did not get the care that they needed in their own home. It will be on this Minister’s watch that a child is neglected because there is no funding for children’s services to support them. It will be on this Minister’s watch that someone dies in a doorway because money is not going to support homelessness in our communities. No Minister wants that to be their record. Who comes into this place to make the country worse, rather than better?

There is an opportunity, because we know that the Treasury is sitting on many billions of pounds of tax surplus. Something like £14 billion was collected at the end of January, over and above what was spent on public services. There is money in the system, but it is being stubbornly held back rather than being released to fund public good.

I will finish on this point: if the Government want to build a better Britain, they have to base it on a strong local public service foundation. If we do not do so, when we look to our communities and councils to start to rebuild, they will simply say, “We haven’t got the resources or the capacity to do that.” We will miss an opportunity for another generation. No more excuses, no more rehearsing the financial crash and no more pulling out the old top lines from Tory HQ. Today is the day for answers.

--- Later in debate ---

[Rishi Sunak]

I acknowledged right at the beginning of my speech the difficult financial climate that local government has suffered over the last few years. I am not trying to pretend it has not—I acknowledge that. The point is that the Government are absolutely listening and responding. A billion pounds more is almost a 3% rise in funding. That is more than the economy is growing by, and it is more than inflation.

[Sir Christopher Chope in the Chair]

[Jim McMahon]

The Minister is correct that councils have £1 billion more to spend on public services today than they did this time last year, but that is because of the pressure that has been applied to council tax payers. People are paying more and more council tax for less and less in the way of public services. By the way, the data shows that, in England, there have been cuts of £4.5 billion to neighbourhood services and £3.5 billion in real terms to transport services. That is the cost in the community—the £1 billion goes nowhere near covering that. Surely he knows that.

[Rishi Sunak]

It is nice that we are now talking about whether the increase in funding is enough. I am glad we have moved the debate on. It is also good to hear Labour Members talking about the importance of council tax. We believe in keeping people’s council tax bills down. They will be 6% lower in real terms this year than they were when this Government came into office, and they have risen slower than under the last Labour Government, when they increased at an annual rate of almost 6%. This Government are committed to keeping council tax bills low, and it is important that we are mindful of that.

Many points were made, and I want to try to address as many as I can in the time available. I would like to do so through the framework with which I look at local government, given the sheer range of things it does. Local councils do three important things: support the most vulnerable in our society, drive economic growth in their areas and build strong communities. I believe very much that this Government are backing them in doing all three of those vital tasks.

First, as we heard, local government helps the most vulnerable in our society. Local authorities are the first to reach out those who fall on hard times, and I am delighted that our recent settlement provides them with increased funding to do exactly that. Councils have told this Government that the most acute pressure they face is in adult and children’s social care, so in the recent settlement and Budget, the Government responded with an additional £650 million for adult and children’s social care this year. That includes £240 million to ease winter pressures and the flexibility to split the remainder between adult and children’s services as local preferences dictate.

We also champion authorities that put innovation at the heart of service delivery. We heard a lot about money, but the outcomes that that money delivers are just as important. We should be focused not just on what goes in but on what comes out. The Government will focus relentlessly on ensuring that taxpayers’ hard-earned money is well spent.

On children’s care, about which we heard a lot, a recent National Audit Office report noted the enormous variation in performance and cost among local authorities. That is nothing to do with the political colour of those authorities; it is just down to differences in leadership and management practice. That is why it is important that the Government are backing practices in Leeds, Hertfordshire and North Yorkshire with an £84 million fund, and taking their models, which deliver higher-quality outcomes at lower cost, across the country.

The hon. Members for Colne Valley and for Stockton North (Alex Cunningham)—and indeed the hon. Member for Croydon North (Mr Reed), who is no longer in his place—rightly mentioned the importance of early intervention, in which I strongly believe. I have been a relentless champion of the troubled families programme since I have had this job. He is not here anymore, but the hon. Member for Croydon North will have seen the Secretary of State make a very significant speech last week about the progress of that programme and how it is transforming children’s lives on the ground, getting people into work and keeping people out of the criminal justice system.

Knife crime is also important. That is why a £10 million extension was recently made to the troubled families programme, specifically to support families against youth crime. That funding is now benefiting 21 areas that bid into the programme to tackle that vital issue. The hon. Gentleman talked about funding running out. That is because we are at the end of a spending review period. Of course, in the spending review, I and the Government will be batting very hard for a successor programme to the troubled families programme. The Secretary of State committed to that last week, and I wholeheartedly support it.

I am also passionate about technology, which has the potential to be transformative. I recently launched an innovation fund to help councils embrace the digital revolution. Technology helps deliver services better on the ground and find ways to save money. Together with the LGA, we are developing a tool to help councils to benchmark, analyse and drive their performance. I believe there are considerable opportunities across local government to improve lives, save money and transform services, and we will pursue them all relentlessly.

The second thing local authorities do is drive economic growth, ensuring that every part of our country can prosper. Ultimately, that is the only sustainable way to fund the public services that we have heard so much about and we all care passionately about, and it is the only way to improve living standards in our communities. There may well be fundamentally different points of view on that. The Government believe that, rather than being funded by central Government handouts, local authorities should be empowered and rewarded for their entrepreneurship. Indeed, even Labour Members expressed different points of view about the degree of autonomy local government should have to raise its own money and about over-reliance on things such as business rates—the single largest way for local areas around the world to raise income. It is all very well saying we want more local autonomy, but we must understand what that means in practice.

Our business rates retention scheme does exactly that, putting power in the hands of local authorities to reap the benefits of their hard work. This year, on top of the £46 billion I mentioned, local authorities will retain an additional £2.4 billion of business rates growth. The 15 new business rates retention pilots across the nation, from Northumberland to Southampton, demonstrate this Government’s commitment to backing councils’ ambitions for their local economies.

--- Later in debate ---

[Rishi Sunak]

No, I will finish my point. Where the Government do have a role to play is in ensuring that the tax system is in line with modern practice. When it comes to business rates retail relief, which gives retailers a third off their business rates bill for the next two years, is the latest in a long line of measures that mean there will be £13 billion of business rates reductions by the end of this Parliament. That means a third of all businesses will pay no business rates.

[Jim McMahon]

That is a fair point, but the Minister will recognise that that is nowhere near enough. Because of the threshold that is in place, a local Marks and Spencer would not benefit from the type of relief that is being offered. He must accept that, unless we deal with international taxation and business taxation in the round rather than just having business rates coupled to local government spending, it will never be fair, and we will still be in a situation in which a cleaner or a server in Starbucks pays more tax than Starbucks itself. How can that be sustainable?

[Rishi Sunak]

The idea that this Government are not doing that is an old chestnut. This Government have brought forward more ways to clamp down on international tax than any previous Government and £14 billion extra has been collected. This Government put in place the first diverted profits tax and at the last Budget announced a digital services tax, which we will put in place in line with international peers.

[Jim McMahon]

Will the hon. Member give way?

[Rishi Sunak]

I am conscious of time, so I will make progress. If those peers do not act, then we will act unilaterally. The Government are addressing the point.

I agree with the hon. Member for York Central that high streets are important. That was also mentioned by the hon. Member for Stockton North, who talked about his high street, which I know as it is near my constituency. This Government understand the importance of high streets in creating living, breathing communities. That is why a £675 million high streets transformation fund was announced at the last Budget for all local authorities. I encourage Members to talk to their local authorities and bid for the fund. It is there to fund transformational projects that revitalise high streets and comes on top of the Treasury business rate reductions. The Government are agreeing with and backing local authorities to ensure that high streets remain the beating, vibrant hearts of communities. We are in agreement and there is financial support, through tax reductions and this fund, to support high streets. However, shopping habits are changing and retailers, high streets and planning authorities have to adapt. Business rates are only one part of the answer.

The last thing to touch on is building strong communities. We have talked about high streets and other points. Ultimately, local authorities are making people more proud of the places where they live, partly by building houses that people want to call home, whether through the new home bonus or through the lifting of the housing revenue account borrowing cap. Again, the Government are responding to what local government has asked for and delivering it for them.

Draft Non-Domestic Rating (Rates Retention and Levy and Safety Net) (Amendment) and (Levy Account: Basis of Distribution) Regulations 2019

Jim McMahon Excerpts

Monday 18th March 2019 General Committees

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Sir Henry. This is a very important issue. Although the regulations appear to be very technical, they are fundamentally about how we pay for local public services, and to what degree local areas raise their tax locally, retain it and then spend it in their locality, as opposed to returning it to central Government and then having it redistributed in a different way. The issues are important, and will materially affect the financial bases of the local authorities concerned.

The issues that the Labour party has with this set of proposals reflect our concerns about previous proposals. First, we are concerned about capacity within the Department. The National Audit Office report of March 2017 reported a reduction of nearly 40% in staffing capacity in the directorate responsible for delivering the programme; there was a 39.6% reduction in staff. We are also concerned about the viability of individual schemes where local authorities have to hold more in reserves pending the outcome of appeals. In 2017, that amounted to £2.8 billion. We are concerned about how much local authorities are being asked to keep in reserves pending appeals, when the national framework for business rates is decided by central Government, not local government.

However, we have a more fundamental problem with the direction in which the Government are taking local finance more broadly. The proposal is almost saying: “It’s survival of the fittest. If you can raise the money locally, you can retain it and spend it on public services. The measures by which you can raise it are usually outside of your control, such as your historical house price base, and your historical employment, industrial and commercial land supply base. If you can raise it through those measures, then good. If you can’t, you won’t be able to afford to fund basic public services in your area.” We see that with the reduction—indeed, now the almost entire removal—of revenue support grant.

With the shift towards business rate retention, what we are seeing is not new money or free money. Rather, there is a deal: things that are currently funded through central Government grants—for instance, the public health grant and the like—are being taken away and the money made up for, almost pound for pound, by business rate retention. The choice of areas is quite telling, because the effect on central Government coffers is broadly neutral. The amount being taken away in grants provided under the current scheme is broadly in line with the retention amounts being kept locally through the new powers. The question is: what happens when we talk to local authorities where there is a greater imbalance between the amount received through current grant funding and what they would receive under a move towards retention?

We share many of the concerns raised by the National Audit Office in its March 2017 report, on both capacity and the amount of money that councils are being expected to keep in reserves. The Government should step up and hold a more fundamental review of how councils are funded that goes beyond business rates and the fair funding review that is currently taking place. We have massive concerns about the removal of deprivation as a measure of funding need in a locality, as we know that it drives a lot of need in an area.

We do not support the Government’s proposed move towards a “survival of the fittest”, “sink or swim” settlement, but we recognise that they have been in discussions with Labour-controlled authorities and combined authorities. On that basis, we will not seek to divide the Committee. However, we are getting to the end of the road. I fear that some councils will really struggle to make ends meet, and not just those where the control of the council is questionable, as we have seen in some Conservative-controlled councils. The demand for services massively outstrips the amount of money that the council has for those services. The Government need to find a more sustainable solution to funding—not just taking it from the needy and giving it to the less needy. We need more money for our basic public services.

Draft Greater Manchester Combined Authority (Functions and Amendment) Order 2019

Jim McMahon Excerpts

Tuesday 5th March 2019 General Committees

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Mr Evans. I do not intend to exceed the Minister’s brief introduction. We recognise that the Government acted very quickly in bringing the statutory instrument to the House following the request from Greater Manchester. That is acknowledged and appreciated. We do not intend to divide the Committee.

Question put and agreed to.

Greater Manchester Spatial Framework

Jim McMahon Excerpts

Thursday 21st February 2019 Westminster Hall

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Mr Stringer.

I thank my Greater Manchester neighbour, the hon. Member for Hazel Grove (Mr Wragg), for securing this very important debate. It is a debate that has attracted a lot of attention and emotion, certainly within Oldham West and Royton, and I want to explore some of the issues involved. I also place on the record my thanks to the shadow Minister, my hon. Friend the Member for Denton and Reddish (Andrew Gwynne), for allowing me to speak from the Back Benches.

I absolutely support the development of a spatial framework for Greater Manchester. We are a growing city region, we are a thriving city region and we are—in my opinion—the best place in the UK to live, and it is important that we plan ahead and make sure that we are fit for purpose in providing employment land, housing land, recreation and quality of life; but how we do that is critical, and I shall point out a number of ways in which we have not quite got the balance right.

We need to start at the beginning, and the beginning is that the Government have imposed a housing target on Greater Manchester that does not hold up to scrutiny. Greater Manchester does not need the housing numbers that the Government are imposing on it when, as has been outlined already, the latest population estimates show that we need far fewer homes than have been proposed. Today the Government could commit to using the latest population data and save us a lot of aggravation, a lot of grief and a lot of really high emotion, where people are losing valuable green-belt land unnecessarily. Why is there such emotion? For that reason, but also because there is in many of our communities a range of brownfield sites—sites that are dirty; former industrial sites—that the community would love to see redeveloped.

However, all of us present in Westminster Hall know that those brownfield sites will not be the ones to be developed if the developers are holding the ring on this issue. The spatial framework does not provide for the sequencing of land development, to enable us to have a genuine “brownfield first” policy whereby sites that commanded community support were developed, obviating the need to use the green belt.

[Andrew Gwynne]

My hon. Friend makes a really important point, because this issue is about more than the sequencing of the disposal of sites for development; it is also about market economics, or supply and demand. If there is an oversupply of green-belt land that does not meet the real housing need of the conurbation, is it not the case that in 25 years’ time our successors might be debating in this place the next version of the Greater Manchester spatial framework, speaking with regret about the missed opportunity whereby we had lost green-belt land but those brownfield sites were still brownfield?

[Jim McMahon]

That is absolutely the point, and it will be echoed by thousands of people in Greater Manchester who are not happy with the current settlement.

In my constituency, we had a programme called housing market renewal. The idea was that areas of the housing market that were underperforming would be transformed through modernisation, demolition and rebuilding, to create urban environments where people were proud to live—not houses that were simply built to service the industrial revolution but houses that were fit for the future, too. In 2010, when the coalition Government came to power, that scheme was cancelled overnight. That left many streets in my constituency with their windows boarded up. Actually, many of those houses eventually had the boards taken off and are now in the hands of private landlords, who are making an unreasonable amount of money from housing benefit, so that people can live in what I still consider to be substandard accommodation.

The principle of a brownfield fund is really important. Not only is green-belt land more advantageous to build on, but green-belt sites are often the sites that are commercially viable to build on. The problem with many brownfield sites is that mediation—such as taking out any services that might have been there for a different road layout, removing contamination, and removing a lot of very expensive material to landfill—costs a lot of money. In areas such as Oldham, where some of the house prices are depressed—that is certainly the case in Oldham town—it is just not possible to reconcile the high development costs with the end-sale value of those properties. So there must be Government intervention to bridge that gap. None of that is proposed as part of this new settlement for the community, so, as has already been stated, we will have a situation where green-belt land is taken because it is developable and viable and it will make a profit for the developer but, for a range of reasons, brownfield sites will be left as eyesores.

Many sites in active use in my constituency are waste transfer sites—abattoirs or former haulage yards, for example. They are currently earmarked for employment use, because that is their current use, but they are in predominantly residential areas, so the road layout does not service large-vehicle movements. The community would love those sites to be re-categorised for residential development, but that is not allowed under this process, because there is a requirement that sites be practically deliverable within the life of the plan. Of course, if the current landowner has no immediate intention of developing that land, it cannot be included because it has no reasonable prospect of being delivered.

We all know that demand for sites for employment use is changing rapidly. Oldham used to have 300 mills. Those that remain are now self-storage. People always said, “We’re always going to need storage, so there’s always going to be a role for Oldham’s mills,” until, of course, we built high-bay warehousing out of town on the green belt because distribution companies wanted more than mills with five floors, in which it is more expensive to move goods around. That shift in demand should be taken into account.

Local areas should be allowed more flexibility to re-categorise and transform dirty industrial sites into new residential sites. That is not the case at the moment, due to the requirement for there to be a reasonable prospect of a site’s being brought into use within the life of the plan. That does not enable local areas to lead from the front and say to landowners, “We have a better vision for our community than a waste transfer site.” [Interruption.] I am being heckled by the Minister. That is fine—I am quite used to being heckled—but it would be great if he provided a substantive answer to some of these fundamental questions.

Why have an inflated target for housing and population when the latest data says we do not need that target? Why not allow the creation of a proper brownfield fund, so that we have the cash in place to redevelop the land that people want to see redeveloped? What about infrastructure? In Greater Manchester, we have lost more than 1 million miles of bus journeys since 2010.

[The Minister for Housing (Kit Malthouse)]

I want to clarify something. The hon. Gentleman said there was an inflated housing target. On a number of occasions in the main Chamber and in Westminster Hall, I have heard his Front-Bench team make serious promises about the number of houses they will build, which is not dissimilar to the number that we are aiming to build. I just wonder whether he still pledges to hit that target, and if so, where he thinks those houses will go, if not in large conurbations such as Manchester.

[Jim McMahon]

I am speaking as a constituency MP rather than as a member of the Front-Bench team, but it is a fact that housing units in urban areas—in town centres and the immediate surrounding areas—are denser than houses of the type that are built on the green belt. If we had a brownfield fund in Oldham, we would see a renaissance of town centre living, with more apartments and town houses built. Of course, we would get more units on land in the town centre than on the green belt, where we generally see larger family housing built and, obviously, we get fewer per acre.

[Kit Malthouse]

I am grateful to the hon. Gentleman for providing that clarification. Just for clarity, he is saying that he is concerned not about the number of houses that are built but about where they are built in his constituency, and that he would like to see higher-density housing on brownfield sites. I agree with that aspiration. I hope he recognises that that is perfectly within the capability of the local authority and the Mayor in Manchester to decide through their plan process. If he would like to meet representatives of Homes England to talk about the marginal viability funding that we can and do provide for trickier sites that require remediation or other action to make them viable, I would be more than happy to facilitate that.

[Graham Stringer (in the Chair)]

Order. I remind hon. Members that interventions should be short and to the point, and that Members should speak when they have the Floor, not from a sedentary position.

[Jim McMahon]

I accept the Minister’s energy on this issue, and I welcome the opportunity to sit down for a meeting. However, the question will be whether he can show me the money. We can have as many conversations over a cup of tea as we like, but it will not get a brick laid in Oldham. We need to see cash, to redevelop the sites that we are talking about and for vital public service infrastructure.

A problem in Oldham is that our schools are oversubscribed; we have an expansion programme in our primary sector and we are looking for sites for new secondary schools to deal with the growth in the number of children who need educating. No facility is being offered by the Government to meet that demand, nor on transport links—we have lost a million miles of bus routes in Greater Manchester. GP practices are overwhelmed. The local A&E has missed its targets constantly because of the number of people waiting on trolleys for four to 12 hours. We cannot build houses without accepting that public infrastructure is needed to service them.

Housing need will be particular to each area; it will be different in Oldham from that in Stockport, Trafford or anywhere else. The real issue for the Government ought to be how much public money is spent on housing benefit payments, given to private landlords for housing that does not meet the decent homes standard. It is a scandal. Billions of pounds are spent every year, including in my town, on renting substandard terraced housing built to service mill workers that has no resale value as such. These houses can be picked up at auction for about £40,000, but landlords charge £500 a month rent to tenants, many of whom will be in receipt of housing benefit. It costs us taxpayers more to pay for that substandard accommodation than to build new social housing or to help people to get on the housing ladder.

We keep hearing that austerity is still in place, and that it is still difficult to find resources. Surely that gives us a bigger responsibility to make sure that money spent in the system is spent to the best effect. The experience in Oldham is that it is not. Too many people live in overcrowded accommodation that does not meet the decent homes standard. We could use that money better. That goes beyond Homes England’s land viability fund. Homes England will say that funding will bridge the gap if homes built on derelict sites have lower-end resale values. However, what if there are streets and streets of terraced housing that are not of the standard required to meet the challenges of the future and to provide people with a decent place to live? We need an urban renewal programme of significant money, geographically anchored, to transform the housing markets in those areas.

The other point I would make is on the community’s feeling in the process. Any situation like this, in which we talk about changing where people live, will be emotive. Many people who live in my constituency, including myself, are dislocated, relocated or newly established former Mancunians. We moved to Oldham, the gateway to the Pennines, because we wanted a different type of lifestyle; we did not want to live in the urban streets of Manchester. By the way, many Manchester properties that we lived in, including the one that I grew up in, have been demolished as part of clearance programmes. Many estates in Royton, for instance, were developed in the ’60s and ’70s, when there was an urban clearance programme in Manchester. People made an active decision to move from the streets of Manchester and to a better lifestyle, with a bigger house with a garden, and fields that they could take their dogs for walks on and where children could play. The idea that that is being taken away—in a process that I am afraid lacks transparency at some points—does not sit well with local people. I will explain what I mean by that.

The original call for sites in 2016 meant that landowners and developers could put forward the sites that they wanted to be considered for development. In that process, I would expect—I have made these representations within Greater Manchester—there to have been a record, a scoring mechanism and a proper assessment of those sites to determine which then went into the 2016 consultation. I cannot see what assessment was used for some of those sites that have been put forward, and why some had been recommended by developers but not proposed within the plan. I am afraid we are seeing the same thing again.

There is a new site that is massively problematic for my constituents around Thornham Old Road in Royton. That was not part of the original 2016 consultation. It has now found its way into the revised plan. During the consultation, Redrow, the developer, sent letters to the surrounding properties because it apparently wanted to buy one of the houses to knock it down and use the site as an access road. That was before the consultation had even finished, yet we wonder why local people do not have confidence in the system’s being fair, transparent and properly assessed.

It feels like we are being hit from all sides. We are being hit by a Government who are imposing a target that leaders locally are saying is inflated and does not present the latest population data. That means that those leaders are forced to go into the green belt when they would prefer not to. The process is being far too developer-led, not community-led. Not one area in my constituency has a neighbourhood plan developed by the community, where they get to design what their community development will be in future, so they feel as though it is being done from the top down.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

Why don’t you do it, then?

[Jim McMahon]

Because the resources needed to produce a plan are significant. Like me, the Minister knows that since 2010, capacity in planning authorities has been massively swiped to one side by Government austerity. Councils are struggling to deal with day-to-day planning applications, let alone a voluntary neighbourhood plan process that is hugely time-consuming.

[Mr Wragg]

The hon. Gentleman raises an important point on neighbourhood plans that I neglected in my remarks. We need to be clear about how the GMSF will take account of those neighbourhood plans. I have three such plans at various stages in my constituency. We need clarity on how they will integrate with the overall GMSF.

[Liz McInnes (Heywood and Middleton) (Lab)]

You were being heckled before.

[Jim McMahon]

I have been heckled by the Minister and the Parliamentary Private Secretary, the hon. Member for Thirsk and Malton (Kevin Hollinrake)—I hope the officials do not join in, or it will get a bit out of hand. We were promised after the original consultation that there would be no loss of green-belt land, and we were promised a radical rewrite. I accept completely that Greater Manchester has to comply with the requirements placed on it. I do not hold any Greater Manchester politician responsible for the housing target passed to them, but it cannot be a radical rewrite when for my constituency there are 450 more units than were in the original plan.

I briefly wanted to talk about some of the land issues that we have. In August, we will be reflecting on 200 years since the Peterloo massacre, where working people demanded the right to vote. Many in my constituency as it stands today did not return home. They were killed at Peterloo. One of the contributing factors to Peterloo—this is, I accept, a local history point—was that the Rochdale magistrate had been given word that the rebels or radicals had practised military manoeuvres in their hundreds at Tandle Hill in Royton. Word got to the Rochdale magistrate, and they sent word to Manchester. That definitely contributed to the feeling that there would be a riot and civil disobedience that could not be controlled.

[Graham Stringer (in the Chair)]

Order. May I ask the hon. Gentleman to quickly come back to the spatial strategy?

[Jim McMahon]

What I am saying is relevant, because the marching ground at Tandle Hill was eventually planted out with a beechwood to stop people marching there. It is now Tandle Hill country park, which is adjacent to the site proposed for development at Royton. These are important historical sites. The country park is also where the Tandle Hill war memorial is placed. Given the topography of Tandle Hill, it is no surprise that it is on a hill. When someone is stood at the memorial, they are looking down at the sites proposed for development. The development would change the character and nature of what I consider to be a very special part of the Borough of Oldham. It is a place where people can come together, where there is more to life than just work, and where people can enjoy the countryside. That is very important.

It was an issue that the north of the Oldham borough was taking a disproportionate share of redevelopment when the south of the borough had none. We made recommendations that there should be a more fundamental review to make sure that each area took its share of development. In consequence, hugely problematic new sites have been added in the Bardsley and Medlock Vale area of Oldham.

By and large, the community would find a way to reconcile with some of those sites—for instance, a former landfill site that lends itself to development—but because different processes have not been brought together, former public open space is being redeveloped for housing at the same time as new sites are being proposed that take away the green belt around that community. Not only have people lost their immediate urban open space to development, but they are likely to lose the field at the back of their estate too, which further cuts them off.

I do not want a devolution of blame or targets that does not meet with what local people want; I want the Government to genuinely give local people the freedom and ability to decide the future of their communities. It is not enough to say, “We are doing that with the Greater Manchester spatial framework”, because the people who are being forced to make the decisions have been hamstrung by Government-imposed targets. The Government know that and they can do something about it.

I am proud of my local authority. The leadership of Oldham Council is working hard to set a new vision for our town, to give our town direction, and to give us hope and optimism when, to be honest, the Government have walked away from our town. The council wants to use the spatial framework to frame that vision, but it is being forced to go into areas that it would rather not go into, as is the Mayor of Greater Manchester, who has been clear about that.

Let us use the debate as an opportunity, not to restate what we already know—it feels as if that is how the Minister is beginning to line up—but to genuinely reflect on the contributions that have been made and try to seek compromise. If Parliament and the Government learned how to compromise a little more, our politics would be in a better place.

--- Later in debate ---

[The Minister for Housing (Kit Malthouse)]

I will attempt to comply, Mr Stringer. It is a great pleasure to appear under your wise and steady hand for the first time. I apologise for my agitation during the debate, but I am eager for houses to be built across our great land for a generation that is crying out for them.

I congratulate my hon. Friend the Member for Hazel Grove (Mr Wragg) on securing the debate and on recognising the importance of the plan-making functions of local authorities and the importance of Greater Manchester, which is a place I know well, having been brought up at the far end of the M62 in Liverpool. I look forward to celebrating the relationship between our cities on Sunday afternoon, when the greatest football team of all time will play Manchester United.

Ten local planning authorities make up the Greater Manchester area, which is a key element of the northern powerhouse. The Government fully recognise how vital joint working between those authorities is to the success of Greater Manchester. The northern powerhouse is about boosting the economy by investing in skills, innovation, transport and culture, as well as devolving significant powers and budgets directly to elected Mayors.

In that spirit, the Government have placed faith in the people of Greater Manchester and their elected representatives to shape their own future. We have backed that up through the devolution of a wide range of powers under the leadership of an elected Mayor. It is the Mayor’s role to work collaboratively across Greater Manchester, and across the political parties, to provide the leadership and coherent vision required. Of course, local MPs should play an important role in the development of his plan.

The Government have also set out a national planning policy in the national planning policy framework, which we revised last year. That sets the overall framework for planning nationally. Local authorities need to bring forward plans for their local areas that respond to the particular nature, challenges and opportunities in their areas, some of which have been outlined by hon. Members.

Our starting position is that we trust local planning authorities, or groups of local planning authorities, as in Greater Manchester and many other parts of the country, to work together to produce plans that reflect the spirit of co-operation and joint working that we want to see. As a matter of law, plans are subject to a range of engagement and consultation with communities and other organisations. That consultation is a vital element of the plan-making process.

Plans are then subject to rigorous examination by independent planning inspectors, who are appointed by the Planning Inspectorate. The planning inspector or, in some cases, a panel of planning inspectors, assesses plans against the national planning policy framework and any other material planning considerations before coming to their conclusions. Ultimately, planning inspectors make recommendations about the soundness of the plan. Paragraph 35 of the NPPF sets out four tests of soundness that plans must pass, namely that they are positively prepared, justified, effective and consistent with national policy.

I am sure that hon. Members will understand that I cannot comment on the content or merits of the draft Greater Manchester spatial framework, as that could be seen to prejudice the Secretary of State’s position later in the planning process. I am aware that the draft spatial framework is out for public consultation until 18 March. I encourage anyone with views about it to respond to the consultation and take an active role in its development, as several hon. Members have. Knowing the tireless work that all hon. Members present, particularly my hon. Friend the Member for Hazel Grove, put into representing the interests of their constituents locally, I am confident that they will take on such a role.

[Jim McMahon]

The development of the spatial framework and the housing target were determined in this place and passed on to Greater Manchester to resolve. We agree with the spatial framework and the need to plan ahead, but there has to be a compromise. One Malthouse compromise has already died a death, so let us redo it for the Greater Manchester spatial framework.

[Kit Malthouse]

The original compromise lives on—

[Jim McMahon]

Malthouse 2!

[Kit Malthouse]

Watch this space. I will come on to housing numbers, but I just want to finish this.

The plan-making process means that there will be a further round of consultation before the plan is submitted for examination by a planning inspector. I understand that that is likely to take place in summer 2019. Anyone with views about the document should make them known at that stage and, given that the timing is not yet fixed, those interested should remain in contact with the Greater Manchester authorities, as I know that all hon. Members and their residents will. The Government fully recognise the need to plan for and build more homes. We are committed to delivering 300,000 additional homes every year by the mid-2020s, and every part of the country has a role to play in reaching that target.

To some specifics, on the green belt, it would be wrong to think that this was just a numbers game. Clearly, the Government are committed to protecting the areas that communities value, including the green belt. The NPPF was revised last year and maintains strong protections for the green belt. It sets a very high bar for alterations to green-belt boundaries, and although a local authority—or even a collection of them, as in this case—can use the plan to secure necessary alterations to its green belt, that is only in exceptional circumstances.

The Government do not list those exceptional circumstances, which could vary greatly. Instead, it is for local plan makers and the Planning Inspectorate examination to check that any change is justified. At this stage, it is worth pointing out that there is obviously a difference between green belt and greenfield. In some cases, I think that hon. Members might be confusing the two terms—one is in regulatory protection, the other is not. Fundamentally, it is for local authorities and local decision makers to provide the evidence base whether for variation of the green-belt boundary or for possible mitigation changes to the boundary by creation of space elsewhere.

It is still the case that the green belt overall in the country is bigger today than it was in 1997. We have taken particular steps to protect it. I also point out that in the NPPF that came out in July 2018, we put greater emphasis on seeking to develop brownfield land, especially within the green belt, as a priority.

A number of Members have mentioned the importance of the environment. As I hope everyone knows, we are in the middle of a consultation on the notion of biodiversity net gain in our housing and general development across the country, and that will conclude later in the year. It is absolutely right that in all we do we should seek to make the environment as much of a priority as we possibly can, and to accommodate and make space for nature.

Several Members mentioned the need for infrastructure. Plans are also about securing the necessary infrastructure to support development. It is essential to identify the type, scale and timing of the infrastructure required in any area, and that applies to smaller-scale infrastructure such as doctors’ surgeries or children’s playgrounds, right up to new hospitals, waterworks or rail connections. By identifying what is needed and where, the planning system can help to deliver the required infrastructure, either directly through tools such as section 106 agreements or the community infrastructure levy, or indirectly by signalling to utility companies or Government agencies such as the Highways Agency that certain items are required. Those agencies and companies can then build things in their own investment plans.

As I am sure hon. Members are aware, the Government also provide a number of opportunities for local authorities to bid for funding to assist with infrastructure. We have a £5.5 billion housing infrastructure fund, which can be used to bring forward housing sites and to release land for housing in a number of ways, including large infrastructure projects such as the multimillion-pound funding package for Carlisle that we announced last week, which put in a bid.

I am sure that the hon. Member for Oldham West and Royton (Jim McMahon) is aware that Oldham has submitted a bid to the housing infrastructure fund for marginal viability funding, which is designed to overcome exactly the sort of problems that he raised in his speech with difficult or marginally viable sites that might require work or some Government assistance to get them under way. We and Homes England are working with his local authority to solve some of the problems that he mentioned.

The hon. Member for Oldham West and Royton also mentioned neighbourhood plans. They have been incredibly popular across the country. About 13 million people now live under a neighbourhood planning system. We have provided £26 million of capacity support for neighbourhood plans, and I recognise that it takes a lot of commitment from local people to take control of planning in their local area. If the hon. Gentleman is having difficulties with neighbourhood plans, I will be more than happy to look at whether we can offer some kind of support because, however long I am in this job, I am keen to see neighbourhood planning established as a way for local people to take control of planning, so that they feel much less like its victims and more its master, particularly when it comes to design.

One area that we have made great play of in policy over the past few months is design. Where new homes are permitted, it is essential that we ensure that they are well designed. That is why we have established the Building Better, Building Beautiful Commission, chaired by Sir Roger Scruton. We held an important design conference in Birmingham just last week. We have also appointed a chief architect to work at the heart of Government to champion the important role that good design plays. I highlight the fact that the revised NPPF states that permission should be refused for poor design, especially when it fails to take the opportunities available for improving the character and quality of an area.

As has been said, many residents’ objections to new developments tend to stem from the feeling that the new development will detract from the quality of the area. If we can get design right, if we make space for beauty, if we build the conservation areas of the future and communities that work coherently, people will, we hope, start to welcome new development in their area as something that will enhance it and make it more sustainable.

Finally, I want to raise the issue of numbers. All hon. Members mentioned numbers. We are very keen to see a lot of houses built in this country—many millions, perhaps—over the decades to come, because we believe that there is huge pent-up demand. We have set a target of 300,000 homes a year by the mid-2020s, and I have heard nobody politically say that that is not a good and ambitious target for us to hit. The question is where those homes should go.

We have attempted to put in a standardised system to assess local housing need across the whole country on a formula basis. The hon. Member for Oldham West and Royton is right to say that the ONS was tasked with producing the first projections, or the basis of the data for projections, of local housing need. Unfortunately, the numbers that the ONS produced created some very anomalous results across the country. For example, in relation to the city of Cambridge, one of the strongest-growing regions in the country and where there is enormous ambition, the 2016 forecast was that there was zero housing need in Cambridge. Other cities’ anomalous results caused alarm. As a result, we took the decision to step back and restore the 2014 numbers, and then consult further on a more coherent system going forward—one that could be generally agreed across the country. We really did not think that, on the basis of those anomalous results, it was a good time for people to take their foot off the accelerator, given that we all accept the strong need for housing, and that both major political parties have made ambitious promises about their housing targets.

I should clarify what the local housing need target is. It is exactly that—a target. It is a baseline from which a local authority can work to effectively establish the number of homes that it needs in its area. In the examination of any plan, a local inspector will look at the plan and accept properly evidenced and assessed variations from that target. If, for example, there are constraints such as an area of outstanding natural beauty, green belt or whatever it might be, and people can justify a lower number, an inspector should accept that. That said, if local authorities are ambitious for their area and want to address the legitimate housing needs of young people—many now have to live at home, with their parents and grandparents, into their 30s and 40s, even in the great cities of the north—they can go ahead of those targets if they wish. That, combined with the duty that now exists in the planning system to co-operate with neighbouring local authorities, means, we hope, that each area can arrive at a figure for provable, established local housing need, which has been assessed by an inspector, from a baseline that across the country will produce a target, we hope, of 300,000 homes.

[Jim McMahon]

I think, from what I have heard from the Minister—I must double-check this—that we may be making progress. Is the Minister saying that if Greater Manchester, on a proper evidence base, which could include more recent ONS population growth projections, comes forward with a lower housing target, the Government would be open to that?

[Kit Malthouse]

I am more than happy to write to the hon. Gentleman to set out the precise way in which the target should be taken into account. There has been a lot of misunderstanding, resulting in the notion that this is a mandated number that local authorities have to hit. We recognise that within the United Kingdom there are lots of variables to be taken into account. If a local authority falls largely within a national park, there are obviously significant constraints on its ability to produce housing. The planning system must be flexible enough to accommodate that.

At the same time, however, I urge all Members to bear it in mind that we have an urgent national mission to build homes. All parties, when in government over the past two or three decades, have failed to build enough houses to accommodate the next generation. As a result, we have seen falls in home ownership, rises in density, and a homelessness problem, and we need to address that situation. Much of it is about supply, and most of that supply will necessarily be built in the great cities of the north and across the whole of the country because, frankly, as the right hon. Gentleman said, they are great places to live; I speak as a former resident of one of them.