Local Government Responsibilities: Public Services
Jim McMahon Excerpts(4 years, 7 months ago)
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Jim McMahon (Oldham West and Royton) (Lab/Co-op)
This is a very important debate at a very important time, and I thank my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley) for her introduction in opening it. I also thank the Minister for the spirit in which he conducted the response. For Members across the House, a lot is going on at the moment: tensions are heightened and people are fearful in our communities, and we have all received an increasing volume of correspondence from people desperate to find out what happens next, what this means, and how they can get help and support. It is telling therefore that so many Members have stayed for this debate just to put on record our appreciation for the time given to this important issue.
In particular, I want to reference the Select Committee—and my hon. Friend the Member for Dulwich and West Norwood (Helen Hayes) in particular, previously a distinguished member of it—for the work it has done on a number of reviews. On almost every issue and in every policy area, a consistent theme came out, which was that the Government did not have a grasp of the scale of the impact of the decisions they were making on the communities affected by those decisions. Whether it was housing, planning, local government finance, adult social care, children’s services or homelessness—you name it—every review had that strand going right through it.
It is absolutely right to point out that a decade of cuts has taken its toll. Critically—and let us be honest, this issue has transcended different Governments—the absence of a proper assessment of the responsibilities placed on councils, which would then allow an informed assessment of the cost of delivering those responsibilities, is a glaring omission that we need to put right. It is staggering that we are carrying out a fair funding review without having reviewing the responsibilities. That cannot be a real, balanced assessment of the costs of view of delivering services.
Of course, the debate naturally goes on to social care workers and the genuine concern about the type of protection that they will get. This is a constant frustration. We all love the NHS: it is part of who we are as a nation. The NHS gives us help when we need it most, when we are at our most desperate; it brings new life into the world, and we all celebrate that; and it supports us when our loved ones are reaching the end of their time, and right in the middle of that experience, too. It is a frustration for local government, though, that social care is always placed in second or even third place behind the NHS. I just do not understand it: surely if someone is giving care in a hospital environment, they have the same value as if they were giving care in somebody’s home environment. The skill and compassion that person needs, along with their dedication to public service, are critical requirements.
Let us look at what it feels like to be an adult social care worker. First, they are often not treated with respect by the person employing them. We have only recently made progress on 15-minute visits, pay for travel time, not deducting uniform costs and all those types of issues, but even now many are paid the minimum wage or just above it, and that is not even enough to live on. It starts at the beginning: we say that we value care as an industry because it is so important to our society, but the apprenticeship levy rate for care is the lowest possible rate that can be paid for that skill and training provision, at £3,000 a year. A fencing installer who takes on an apprentice can attract £12,000 a year, but that adult social care worker on an apprenticeship attracts only £3,000 a year. There is a real question mark about how we value care as a career. Let us be honest: we have got away with it for too long. As a society and as a nation, we are not paying people a fair wage for their responsibilities and the importance of the job that they do. That just has to change. It will have a price tag, but we should really value the work that they do.
Christian Matheson (City of Chester) (Lab)
In the NHS and social care so many of these employees are taken for granted. Their skills in dealing with people—patients, clients, or whatever we call them—is taken for granted. The sector is to a large extent running on the good will of its employees.
Jim McMahon
That is absolutely the case, but it is also running on high levels of vacancies—there are 120,000 vacancies in adult social care. We are highly vulnerable to staff in that industry becoming ill and going into self-isolation, which is why the question of the protection and support they are given becomes so important. It is absolutely about making sure that, first and foremost, they are considered in the same way as hospital staff. Making sure that they get the proper protective equipment that they need is critical, not just to protect the patients who are being dealt with and the receivers of adult social care, but for the individuals who are placing themselves in a very risky situation, going into people’s homes without knowing who that person has been in contact with, but doing it anyway because they believe in the care they are offering.
My hon. Friend the Member for Poplar and Limehouse (Apsana Begum) made a really important point that went beyond adult social care: the fabric of our society has changed as a result of the cuts. The 70% reduction in youth services has almost certainly had an impact on knife crime, on county lines, and on whether people feel they have a stake in the future.
Helen Hayes
My hon. Friend is making an excellent speech. Does he agree that in this time of crisis central Government support for local government is urgently needed in respect of protection of our young people, who may be even more vulnerable to violence as a consequence of the lack of support systems, of activities and of the people who are normally are responsible for keeping them safe day-to-day?
Jim McMahon
That is absolutely true, and it is also true that many lives are lost, in terms of potential, through the criminalisation of young people who are effectively groomed into criminality by those in positions of power or authority in the community who attract them in and entice them. We need to do far more to make clear to young people across the country that there is a real alternative when it comes to leading a fulfilled life. Until then, we will never break the cycle of young people being caught in crime unnecessarily.
This goes right to the heart of the “cradle to the grave” approach to public service. We cannot ignore the impact on Sure Start centres, which were about investing in young people and giving them a taste of what opportunity was from the time when they were young and receiving that type of care. Taking it away has had a massive impact, and that is before we get on to primary school budgets and special educational needs. Young people are just not receiving the tailored support that they need.
However, today is also about thanking councils for the work that they do. Regardless of party affiliation, I want to place on record our thanks for the work that councillors do. They come into public service from their community because they really want to make a difference. Hearing from some of the councillors and ex-councillors who are now in this place about the passion and connection that they still feel, as I do, is very inspiring. We must also thank our council officers.
After 10 years of austerity, councils have experienced a very stressful period in trying to reconcile delivering balanced budgets to remain within the law with managing the huge demand for adult social care, children’s services and services for the homeless. People believe they pay council tax for the very neighbourhood services that are being taken away because councils cannot afford to make ends meet and provide those services. Councils are placed in a horrible position. They are trying to keep their heads above water, and providing targeted support for people who really need it, but at the same time the public are holding them to account for the real cuts that have been made locally. I do not think that that is a fair burden for central Government to place on local government.
That brings me to council tax, which is a hugely regressive tax. It has increased by a third, and what was hidden in the Budget papers was, within the lifetime of that Budget, an £8 billion increase in council tax income for the Treasury. The Government are not coming to the table and giving councils sufficient funds to deal with the demands of adult social care and children’s services in particular. What they are saying is “It is the survival of the fittest. If you can raise money through council tax or business rate retention, good luck, but if you cannot, I am afraid that you can no longer rely on central Government to step in and provide that partnership solution.”
That is just not a fair way of doing things. How can it be right that today, in England—and we have an English problem, because of the nature of how the country is governed—adult social care and people’s ability to access the care that they need will soon be determined by the house values in their area in 1991? How can it be right that they will be based on historic industrial and commercial land values and the business rate take in that area, when the council has very little control over that base? With every revaluation, we see many regions being devalued, and London and the south-east increasing in value. That will be the model, the baseline, of public service funding in the future.
I mentioned the survival of the fittest, but the fittest are not that fit. Local government still faces a £6 billion funding gap between now and 2025. There will still be people in the most affluent parts of the country who are living in absolute destitution and not getting the support that they need because councils do not have the necessary funds.
Matt Western
My hon. Friend is making an excellent speech. Having been a councillor myself, I can echo his comments. The difficulty for our local authorities is that in the absence of the central Government grant, they are having to be more inventive and creative in respect of how they bring in revenue streams. What we have found in the last couple of weeks and what is forecast is that certain revenue streams will be cut off, and councils will become more and more desperate to continue what few services they can maintain. When the car parking charges and the revenue streams for the local civic centre are not coming in, they will be under even more pressure than they were before. Does he agree that the local authorities need to understand urgently how the £500 million that the Chancellor mentioned will be distributed—and distributed fairly?
Jim McMahon
I think that is right. When councils have to look elsewhere for funding, a risk naturally comes with that. The National Audit Office produced a report on this and the Government share these concerns. The Public Works Loan Board interest rate was doubled overnight by the Government, because they are concerned about the exposure that councils face in buying assets as investments. The NAO expressed the same concern. In a two-year period, councils have been buying investment portfolio assets of £6 billion. Why? Because they are desperate to see income from other places, but this is office accommodation and in retail, sometimes not even in the area that the council is responsible for. The Government response is to double the Public Works Loan Board rate instead of addressing the fundamental reason why councils have to look elsewhere for funding, which feels illogical. We have to make sure that the base funding for councils is absolutely where it needs to be.
We are coming to the greatest test of local government, public service and society that any of us have seen in our lifetime. It will test us all. It will test the fabric of society and test public services to breaking point, at a time when they are built on extremely weak foundations. I am genuinely fearful for how we can continue this in a sustained period. For a short time, they will make it work. They will roll their sleeves up and work together. They will create a partnership at a local level and find a way through it, but the Government know full well that this is not a crisis that will last weeks or even months. A sustained response will be required and the Government will have to make sure that they give local government the funding that they need to provide the critical response. We also need to manage public expectation.
Siobhain McDonagh (Mitcham and Morden) (Lab)
Is my hon. Friend aware that only today, local government has received a directive from central Government to provide street sleepers—homeless people on the streets—with self-contained accommodation? Great idea, but where are they going to find it?
Jim McMahon
It is also the case, as I hope most Members know, that solving homelessness is not just about providing a roof. That is a critical part of it, but it is about how the ecosystem of public service works to make sure that the alcohol and drug addiction services, mental health support and physical health support are in place. We need to make sure that this is not just about giving someone a set of keys for a property—by the way, if that was possible, why did we not do it before this crisis? —but making sure that the wider support is in place.
The Government need to be honest about the scale of the challenge that public services will face. I still believe that at this moment, the public of this country do not understand the scale of what may face us all and particularly the impact that it will have on public services, and not just for the workforce. We need to remember, when we talk about public services and the community over here, that public servants are the community. They live and work in the communities where we all do. If people are off work because they have to self-isolate, are ill or have caring responsibilities, that will have a direct impact on the local government workforce. Many will have partners working in the private sector, as well as the public sector, and they may well face redundancies and hours being cut in the family. They will go through the same financial stresses and strains, and there will be an impact on family life in the same way. The Government need to be honest about what that means for day-to-day public services, and what the public can expect when we really have to pull through to make sure that we can keep the most urgent critical care going in this country.
The Chancellor said that money will be made available, but we see a drip feed of those announcements in a way that is not helpful for local government. The public health settlement for next year was released only yesterday, 14 days before the end of the financial year. Local councils were not even able to plan ahead about what that meant. We cannot have that when it comes to a crisis of this scale.
I have always believed that our local government is the first line of defence and the frontline in delivering public services. I have always believed that they are the glue that holds our community together, that they are the leaders of place and that they can stir us to a better future. We have seen that in the way that they bring communities together, invest in their local economies and deliver decent public services. What we will demand of those people in the coming weeks and months will test us all, and it will test their resolve. It will not be good enough just to say, “Thank you for all that you do,” without addressing the fact that, for 10 years, they have had to shoulder a disproportionate burden of austerity. Surely, now is the time to say to those people, “We will right the wrong of making you take on that burden of austerity. You were not the bankers, you did not create the financial crisis, and it was wrong to place you in a position where you had to bear a disproportionate burden.” We need to put that right today.
We need not just money for the current crisis but sustained funding so we can rebuild public services, invest in our frontline and do more than just give those people one word. By the time we get through this, they will not be just the frontline that we respect; they will be seen for the heroes that they are.
Christopher Pincher
I am grateful to the hon. Lady for her further intervention. I know and understand the point she is making, and we have already made funds available to local authorities. The Chancellor, in his Budget speech, made clear the support we want to give. He made further announcements yesterday and, if she is prepared to bear with the Government a little longer, I suspect further announcements will be made as the situation evolves.
As the Under-Secretary of State made clear in his opening statement, this funding is in addition to extending SSP and a range of other measures by the Department for Work and Pensions.
Jim McMahon
Local authority base budgets are based on an assessment of council tax collection rates. If people are made redundant or if they move on to statutory sick pay, they will clearly not be able to afford their rent, let alone their council tax. We expect councils to withhold any enforcement action, because that is the right, moral thing to do, but surely the Government will provide compensation to protect the base income of those councils, and surely they must now consider whether people should have the protection of a council tax holiday, too.
Christopher Pincher
I am grateful to the hon. Gentleman for his intervention. As the Chancellor made clear, we will do whatever is necessary to stand behind our public services, our local authorities and our volunteers to get through this crisis. More announcements will be made in this fast-moving situation, so I ask him to bear with the Government in that regard.
As hon. Members will also be aware, yesterday, my Department announced £3.2 million in initial emergency funding to help rough sleepers or those at risk of rough sleeping to self-isolate to prevent the spread of this virus. The Under-Secretary of State, the homelessness Minister, made that point in his opening remarks; I just wanted to reiterate it to ensure that colleagues who have come into the Chamber more recently have heard it.
A number of Members from across the House raised the question of whether the Government have provided sufficient funding. The first point I would make—I have made it already—is that this situation is changing every day. The Government are responding at pace to the evolving challenges and working closely with the Local Government Association and other local authority representatives to understand the effects of covid-19 on the delivery of statutory services, including social care. The second point is to stress that the announcements that we have made so far, including those from the Chancellor last night, do not signal the end of the Government’s response; they signal its beginning. We stand ready to do more and we will go further as necessary.
A number of colleagues raised the question of our social care workforce, including those who care for the elderly and vulnerable in care homes and in their own homes. Building on our existing strong local relationships, the NHS and local authorities are working with care providers to make sure that people receive the specialised care and support they need during this outbreak. Councils will map out all care and support plans to prioritise people who are at the highest risk and will contact all registered providers in their local area to facilitate plans for mutual aid, and they will do this at pace.
Draft Buckinghamshire (Structural Changes) (Supplementary Provision and Amendment) Order 2020
Jim McMahon Excerpts(4 years, 7 months ago)
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Jim McMahon (Oldham West and Royton) (Lab/Co-op)
I appreciate that the Minister has a number of more pressing issues to deal with at the moment, so I do not intend to speak other than to confirm that the Opposition do not intend to divide the Committee on this issue.
The Chair
Right. Well, this has been a very long and difficult debate.
Question put and agreed to.
Local Government Finance (England)
Jim McMahon Excerpts(4 years, 8 months ago)
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Jim McMahon (Oldham West and Royton) (Lab/Co-op)
First, may I congratulate the hon. Member for Cities of London and Westminster (Nickie Aiken) on what I thought was a really thoughtful maiden speech? It is quite telling when councillors come into this place. The experience and insight they bring, regardless of party affiliation, means that we are actually at one when it comes to the need for reform of local government. I very much welcome her contribution on that point.
I thank my hon. Friend the Member for Sheffield South East (Mr Betts), who is the Chair of the Select Committee, for the contribution he made and the insight he brings to this debate. He made it very clear, from information from the IFS, that we have now seen a 20% reduction in spending power since 2010. He asked the question that we all ask: if austerity is over, what does that mean in practice? Does it mean just that the funding cuts stop today, or does it mean that we will begin to rebuild what has been taken from many of our local communities since 2010?
My hon. Friend also laid out a statistic that was new to me—I was surprised by this, but perhaps I should not be so surprised—which is that 2.4 million cases have been linked to food contamination. No doubt a reduction in the number of our public health officials has played a part in that, but in England we are behind. In Wales, a takeaway has to display its food hygiene ratings on the door of the premises, as it does on online ordering platforms, in a way that a takeaway in England does not have to do. In addition to the need to rebuild our public health functions, we need to move forward and make sure we have mandatory food hygiene ratings so that people can make an informed choice about where they buy food.
As always, my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy) gave a real insight into the impact of cuts and austerity on her community. There are a staggering 848 looked-after children—almost doubling since 2010—with council services left at crisis point. There is a real tension: the Government have of course reduced the central grant and council tax is going up all the time, but the very councillors who are working to protect their community and their council often face the most criticism from local people for the very difficult decisions they have to make. That is a very difficult task for many.
My hon. Friend the Member for Harrow West (Gareth Thomas), as always, gave a London insight, painting a picture that we are not always used to hearing about in this place. We very much hear the story that London is thriving and the rest of England is really struggling, but we see real pockets of deprivation in this great capital that should shame us all. We are seeing every local authority really struggling to make ends meet and demand for services really going through the roof.
My hon. Friend also made the case, and I absolutely support this, for saying that we cannot believe that devolution in London has finished. The problem with devolution in England is that we look to London, and we discount it for the rest of England, believing that the job here is done, and it absolutely is not. If we look at devolution in our major cities around the world—New York, Tokyo and other places—we see real fiscal devolution and real law-making powers devolved to a local level, in a way that leaves London in the shadows. When we talk about levelling up, there is a need not just to talk about redistributing finance and capital investment, but about the powers needed across all our major towns and cities in this country to make sure that every community has the right to determine their own future.
My right hon. Friend the Member for North Durham (Mr Jones) was absolutely blunt in his assessment. It was interesting to hear the exchange across the Chamber on parts of that, but we can understand why tempers are so frayed on this fraught issue. How can it be right that 40% of a council’s budget—£232 million—has been taken away from local public services. In the midst of all that, when my right hon. Friend raises those issues and the impact on his community and reflects on the local authority’s difficulty in trying to balance the books, we have people who for reasons of cynical political game playing decide to make the local council the target, instead of laying the blame where it thoroughly deserves to be, which is of course with the Government who are pushing through those cuts.
My hon. Friend the Member for Enfield North (Feryal Clark), a councillor for 14 years, is also adding real quality to this place. We need more councillors coming here—maybe it should be a prerequisite of coming to this place, as perhaps then we would have a better quality of debate. The figure of £800 per person cut from that local authority is absolutely eye-watering. Although we bat around the numbers, as they are important, what this really means is that those essential services that make a place a decent place to live have been affected: the community centre is not open any longer; the library is now closed; the Sure Start centre that gave young kids the real start in life that they need is no longer there. A startling report today says that life expectancy is going backwards for women and is stalling for men. How can that be right? We are seeing a decrease that this country has not seen for 120 years. Why? It is because of the lost decade of Tory austerity. That cannot be right.
May I just place on record, as my boss my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) did, a tribute to the right hon. Member for Rossendale and Darwen (Jake Berry) for the work he did as the Northern Powerhouse Minister? One thing that I enjoyed about the right hon. Gentleman was that he knew how to take a good rebuttal, and the exchanges that we had were fun and in good spirit and were a good challenge. He worked hard behind the scenes to try to make progress on devolution, and I hope that continues.
My final point is that we cannot afford to continue this pressure on council tax. We all know that council tax is out of date, and maybe next April, when council tax revaluations turn 30, we can have a big party and crack open the sausage rolls, the prawn cocktails could come out and maybe a bit of fizzy orange, or perhaps we should look back and recognise that there has been a collective failure on council tax revaluation and the need to modernise. Governments duck this because it is not popular, but we now have a system that is very unfair.
How can it be right that over the last five years we have seen council tax increase by a third in England? That is not right. What would happen if income tax was increased by a third in the same period? What would happen if national insurance was increased by a third in the same period? What would happen if VAT was increased by a third in the same period? What would happen if fuel duty was increased by a third in the same period? And, God forbid, what would happen if beer duty was increased by a third in the same period? There would be a riot in the Strangers’ Bar as we speak. But of course there is not a riot over the council tax increase. Why? Because we can defer blame down to local councils, but it is just not good enough. Today we see that low-income families have 8% of their household income taken for council tax while that figure is only 1% for higher earners. That cannot be right. It is hugely regressive and it is getting worse with every year that passes.
If the Government really want to address this, it requires maturity. It requires a forward view and it requires a clear strategy that has to be more progressive and up to date, and must reflect geographical variations. It must also recognise that council tax has its limitations. Of course property tax is very important, but it cannot take the burden of adult social care and children’s services, and it cannot be right that our ability to receive adult social care in older age is determined by a house value 29 years ago, any more than whether a child gets the care that they need to protect them from harm is determined by the same measure.
We need to grow up on this; we need to tackle it, and we need a solution that puts councils in the right place for the long term.
Mr Betts
I agree with my hon. Friend. We need a separate funding stream for adult social care, as the two Select Committees recommended in the last Parliament. Also, my Select Committee recommended a review of council tax very much along the lines that the hon. Member for Cities of London and Westminster (Nickie Aiken) recommended, but the Government just dismissed it in their response and said they were not minded to do a review of any kind. Does my hon. Friend agree that that is disappointing?
Jim McMahon
It is disappointing, but is inevitable in a way, because there would be winners and losers—and, let’s be honest, the winners would be the poorest who have less agency to mount a campaign and the losers would be the wealthiest, the people with agency who can mount a campaign in objection to it, and the major right-wing newspapers will also mount a campaign against it. It will be called the garden tax, the conservatory tax, the porch tax, or the driveway tax, but it will never be a tax that is actually deemed to be fair. But that is what this country needs; it cannot be right in England that we carry on with such an unfair tax system.
If the Government want to be mature—if they want to look long-term, if they genuinely want to take the politics out of this, which is probably what is needed—I am sure our side would be looking to contribute to that, but if they want to wilfully ignore the impact on low-income families and on many local authorities now not able to fund decent local services, I am afraid they can expect strong opposition on this side.
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Luke Hall)
I thank Members from across the House for their contributions to the debate. Everybody here represents a constituency and a community that they are passionate about. We have heard many examples of public servants working hard to give back to the communities we represent. I know that many Members are proud of the services that local government provides, and I hope that this evening will be a chance for us all to back those words up with action. That means backing this settlement, which will give councils up and down the country the certainty they want and need. That is what today’s debate is about.
This is the best settlement for a decade. It puts a game-changing £2.9 billion back into the sector overall. It focuses on the priority area of social care, in which we are providing unprecedented investment. That means putting £1 billion of new funding into a social care grant, as well as continuing to provide the £410 million we invested last year and maintaining funding going into the improved better care fund. At the same time, we are allowing local authorities responsible for adult social care to raise council tax by an additional 2% above the core referendum principle to meet rising demand. That means the Government are making almost £6 billion available next year across adult and children’s social care, which is a measure of our commitment to the most vulnerable in our society. Outside of social care, we are giving local authorities stability for the year ahead by maintaining all grants from 2019-20, while increasing core funding in line with inflation. Today, the Secretary of State announced a £40 million boost to the sector from the business rates levy account.
We are proud that our settlement delivers on all those fronts, while keeping council tax low and giving people the final say on their monthly bills and the services they want to see delivered. The council tax referendum principles we have put forward today are expected to result in the lowest average increase in council tax since 2016, protecting taxpayers from unaffordable and unwarranted hikes to their monthly bills. This is a great package of support for local government and one that starts to deliver on the promise to level up services across the country.
It is not just through the settlement that we are investing in local services to deliver on this agenda. We have pledged £3.6 billion to level up 100 communities across the country through the towns fund; committed £250 million in funding for vital infrastructure that will unlock over 20,000 homes; created a £500 million youth investment fund to pay for top-quality facilities for young people; and pledged a crucial £2 billion to back-fill potholes and make our roads safer. That is what this Government are delivering—a new programme of investment and renewal in our infrastructure and our public services.
A number of Members from across the House raised adult social care. The hon. Member for Sheffield South East (Mr Betts), the Chair of the Housing, Communities and Local Government Committee, raised a number of important points. We were grateful for his comments about the Select Committee’s willingness to work with us in the months ahead to develop a cross-party solution.
My hon. Friend the Member for Waveney (Peter Aldous) talked about the pressures on social care. We are acutely aware of the significant pressures councils face in the delivery of adult social care. We are hearing about that personally from councillors and council leaders up and down the country. The settlement put before the House today is a clear indication that the Government have not just heard those concerns but are acting decisively on them. For the coming financial year, we have given authorities access to almost £6 billion of dedicated funding. That includes £1 billion of grant funding for adult and children’s social care, on top of continuing existing social care grants.
The grant funding should not be viewed in isolation, however. As all Members know, councils pay for services in their area through locally raised revenue. That is why we have proposed a 2% adult social care precept, enabling councils to raise a further £500 million. That recognises the vital role that social care plays in supporting the most vulnerable people in society, while helping local authorities to meet the challenges posed by rising demand and pressures. In addition, the NHS’s contribution to the better care fund, which aims to increase health and social care integration, will increase by 3.4% in real terms, in line with the additional investment in the NHS in 2020-21.
The hon. Member for Kingston upon Hull West and Hessle (Emma Hardy) talked about the pressures on children’s social care and the need to work together on the new funding formula for local government. We can give her the commitment that we will work across the House on those issues. We will shortly start to release some of the figures to working groups, including council leaders. I am very happy to meet her and her neighbouring MPs to discuss the implementation of the formula to make sure that we do our best by the 848 children she spoke so passionately about. We announced the £1 billion for next year for adults and children, which can be decided according to local need, ensuring that councils under the most acute pressure receive additional funding and support.
Of course, the best way to improve outcomes for children is to remove the need for them to enter the care sector in the first place, which is why we have committed to a further year of funding for the troubled families programme. We are clear that that essential programme continues to provide intensive support for some of the most vulnerable families in our society. One of the Government’s first announcements was to confirm the £165 million to extend the programme for an extra year, so that more families can get access to early practical and co-ordinated help to transform lives for the better. This will provide intensive support for some of the most vulnerable families and place the programme on a stable footing for the future.
Anyone who has worked with the families and key workers on the troubled families programme will be aware of the incredible relationship that some of those key workers build with the families in helping them to turn their lives around. In the last five years, over 300,000 families have reported real improvements since joining the programme and around 28,000 people have moved off welfare and into work as a result of it. The multimillion-pound funding that we are providing will enable local authorities across the country to achieve even more in the year to come by helping up to 92,000 additional families.
One of the Government’s first announcements after being returned in December was to confirm the £263 million for local authorities to prevent and relieve homelessness in their areas through the Homelessness Reduction Act 2017 and this Department’s flexible homelessness support grant.
We had an absolutely incredible maiden speech from my hon. Friend the Member for Cities of London and Westminster (Nickie Aiken). She started by praising her predecessor, Mark Field, for the work that he did—I join her in that—and told her story about how she was the first woman to represent the seat. She is clearly going to do an incredible job. She outlined the incredible historical, cultural, economic and heritage contribution of her seat and the incredible work of the City Bridge Trust, and she talked hugely passionately about the work that she has already been involved in on rough sleeping. It is already clear from my meetings with her and her contribution in the House today that she will be hot on this topic and on holding us to account as we look to end rough sleeping for good by the end of this Parliament. She also talked passionately about local government finance reforms. I know that we will be working closely with her to develop the review of relative needs and resources in the weeks and months to come.
On rough sleeping, of course it is unacceptable that anybody should be sleeping on the streets in modern Britain. That is why we have brought forward our commitment to end rough sleeping for good by the end of this Parliament from the previous commitment of 2027, and why we have committed £437 million next year to tackle homelessness and rough sleeping—an 18% increase on last year. Our rough sleeping initiative is working, with a 32% reduction in rough sleeping compared with what it would have been had the initiative not been in place, and a 19% direct reduction, but we know how much more there is to do. That is why we are investing £112 million in the rough sleeping initiative in the year to come to continue giving people the support that they need. That will fund over 6,000 beds and 2,500 staff to support some of the most vulnerable people to move off the streets for good.
The right hon. Member for North Durham (Mr Jones) made the pun of the day in talking about the bottoms-up approach to rate relief on public toilets. The Non-Domestic Rating (Public Lavatories) Bill would have enabled this, but the Bill fell when Parliament was dissolved. We will of course consider reintroducing the measure in due course and keep him updated on that.
Jim McMahon
This point has been made at the Dispatch Box before, but a number of important, non-controversial Bills fell when the election was called. If the Government want to work cross-party on bringing those non-controversial Bills forward, we will be happy to support them.
Luke Hall
Of course we are very happy to do that. We will be bringing the Bill forward at the earliest possible opportunity, and we are happy to continue to have those discussions.
Members also touched on the importance of supporting rural communities in the settlement. The rural services delivery grant, at £81 million this coming year is, again, the highest paid out to date. We completely understand the importance of supporting rural communities, which is why in the review of relative need and resources we have proposed the crucial area cost adjustment, which will include an adjustment for the additional service costs associated with sparsity, isolation and market size. All those factors will be accounted for in a robust manner.
As positive as this settlement is, we are well aware that it does not solve all the complex challenges that councils face or relieve all the financial burdens they are shouldering, but it will help local government to address the pressures that have arisen over time, and it will give us the chance to look at the system again and make long-lasting, far-reaching reforms that will better serve communities up and down the country. Next year, we will deliver those far-reaching reforms: we will publish our devolution White Paper and set out our plans to unleash the potential of every region and to further level up opportunity; we will hold cross-party talks on social care to get this crucial issue right once and for all; we will implement the fair funding review to find a fairer, more up-to-date, more transparent and simpler way of sharing out taxpayers’ money; we will review the future of business rates, involving local government and colleagues in the House every step of the way; and we will look again at how we incentivise councils to build the homes we need.
Alongside all of this, there will be the spending review, at which we will settle the resources for local government. We intend to return to a multi-year settlement process. There will be different opinions about the way forward on all these matters, but this new and reinvigorated Government will be bolder than ever with our reforms. Deciding the future direction for local government finance will be a collaborative effort, which is why we will shortly consult on projects such as the fair funding review. We are determined to work across party lines to fix the social care challenges we have heard so much about today from Members across the House. I look forward to working with Members, many of whom spoke with eloquence and passion about the importance of solving this matter in a bipartisan spirit, to find a way forward.
That said, today is not about the fair funding review, the future of business rates or the new homes bonus; it is about giving councils the confidence and stability they need to plan for the year ahead. Today we are voting on next year’s package. I hope that every Member who wants to see local government access this game-changing £2.9 billion; every Member who wants to see this 4.4% real-terms increase in core spending power and £1 billion of new funding for social care; and every Member who wants to give local authorities the certainty and stability they need will vote for the motions tonight.
Question put and agreed to.
Resolved,
That the Local Government Finance Report (England) for 2020–21 (HC 68), which was laid before this House on 6 February, be approved.
Local Government Finance (England)
Resolved,
That the Report on Referendums Relating to Council Tax Increases (Alternative Notional Amounts) (England) 2020–21 (HC 69), which was laid before this House on 6 February, be approved.—(David T. C. Davies.)
Resolved,
That the Report on Referendums Relating to Council Tax Increases (Principles) (England) Report 2020–21 (HC 70), which was laid before this House on 6 February, be approved.—(David T. C. Davies.)
Oral Answers to Questions
Jim McMahon Excerpts(4 years, 8 months ago)
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Mr Clarke
We have introduced a number of measures to address the number of empty shops on high streets, including our Open Doors pilot project, which matches landlords of empty properties with community groups, and a proposed private register for empty commercial properties. We are also cutting the business rates bills of small retailers by 50% from this April for properties with a rateable value of below £51,000. That is an increase from the one third that we have delivered in the current financial year.
Jim McMahon (Oldham West and Royton) (Lab/Co-op)
Today, the Manchester Evening News reports on the findings of the Marmot review, which are truly shocking. It says that life expectancy has fallen for women and stalled for men, the likes of which we have not witnessed for 120 years in England. The richest men now live nine and a half years longer than the poorest and the equivalent figure for women is 7.7 years. The north needs not just a rebalancing of capital, but an investment in human capital. How can any levelling up address the austerity-led crisis so that the poorest do not see a decade stolen from their lives?
Mr Clarke
The hon. Gentleman raises a really important point. Clearly, the process of levelling up is not restricted to that of economic infrastructure; it is also absolutely about making sure that the life chances of individuals are realised to the full. That means, for example, making sure that our skills policy works, and the Government are committed to delivering a new national skills fund—we will announce more about that as part of the Budget process. It also means that it is really important that we get the process of skills devolution right, and we are keen to make sure that we work with strong local mayoral leaders to make sure that they deliver those budgets in a way that makes a real difference. This is clearly a long-term challenge. We need to make sure that we get the right devolution models in place so that such things as the towns fund and the future high streets fund are complemented by comparable work on life chances.
Draft Northamptonshire (Structural Changes) Order 2019
Jim McMahon Excerpts(4 years, 8 months ago)
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Jim McMahon (Oldham West and Royton) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Mr Gray.
None of this is new. We have been anticipating a conclusion and, in some ways, I welcome the fact that we are now beginning to get to the end. At least the local authorities that will be created there can begin to rebuild public services in their area. As time has gone by, without doubt public services in those areas have been affected.
We ought not to forget why we are here in the first place: the financial crisis that was created in Northamptonshire and led to commissioners going into the council. We are now at the end of the process, but it meant that spending on all but non-essential services stopped completely on two separate occasions. To help fund the gap, £17 million of capital was given, which effectively involved a fire sale of the assets owned by the county council. The reason for that was pretty self-evident. A lot of the neighbourhood services, regulatory services, public protection services and housing, which are delivered by the boroughs in metropolitan areas such as London, have been squeezed to help fund adult social care and children’s services. In a two-tier area, the county bears the pressure of adult social care and children’s services without the ability to squeeze the neighbourhood services that are being decimated elsewhere around the country.
There were particular problems in two-tier areas. The order will not resolve those structural problems, and neither will the fair funding review. The truth is that there is not enough money in the system to fund adult social care. That is relevant, because the funding base was why we have ended up with the reorganisation that we are now discussing and reaching a conclusion on. The fair funding review will mean that money is just being shifted around the system.
The Chair
Order. The hon. Gentleman must stick to the statutory instrument that we are currently considering.
Jim McMahon
The Government will need to be able to convince not just the Opposition, but the residents of the two new unitary authorities, that there is enough money in the system to fund services. What is the point of reorganisation if it does not deal with the crisis that led to it in the first place?
I make this call whenever we discuss reorganisation, particularly in two-tier areas where there is not entire agreement among the component local authorities. When a new authority is created, there is sometimes a danger that, in order to assert its own identity, it almost tries to erase the identity of all that went before it. We need to make it clear that the people who administer public services in an area do not make the identity of the place. It is important that the historical identities of local communities are respected through the reorganisation, and that councillors keep an eye on that throughout the transition period.
I place on the record for Hansard my thanks to Councillor Tom Beattie, the leader of Corby District Council, for the fantastic work that he has done. I hope that one day Labour will control those two unitary councils, but I think that we are some way away from that. Councillor Beattie’s sterling work in steering Corby District Council over a number of years has not gone unnoticed, and I place on the record that he is one of our best in local government.
It has been a very turbulent time for councillors, public officials and the people who work for the local authorities concerned. Although there is not entire agreement among local councils that this is the right move, it will at least settle the matter. Hopefully they can rebuild and move on.
Planning System: Gypsies and Travellers
Jim McMahon Excerpts(4 years, 9 months ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Jim McMahon (Oldham West and Royton) (Lab/Co-op)
I congratulate the hon. Member for Kettering (Mr Hollobone) on securing the debate. We may have had some idea about the nature of the debate. Unfortunately, when it comes to the Gypsy and Traveller community, the prejudices that we have heard are all too common, and they are as old as time itself. I would have expected, though, that in the Parliament that makes the laws of the land, the debate would be based far more on fact and evidence, and far less on anecdote and local constituency casework. I fully accept that there is always a need to provide balance in debates and to be honest about some of the pressures.
I congratulate my hon. Friends the Members for Hammersmith (Andy Slaughter), for Stretford and Urmston (Kate Green) and for Coventry South (Zarah Sultana) on their contributions to rebalance the nature of the debate. I felt that I was in a different debate when we talked about a community that expects special treatment, that takes out but does not want to pay in, and that is ruining our country. It could have been a debate on Amazon or Facebook, but it was not; it was a debate about people—human beings; members of our community who deserve respect and empathy.
What is it like to be a member of the travelling community, travelling around to secure work, providing for their family and living a lifestyle that they choose for themselves? Some people do not believe that the lifestyle is legitimate. We have heard before, “Why live in a caravan if you can live in bricks and mortar?” It is as if the way we choose to live our lives is the way that everybody ought to live their lives, because our way is perfect and others’ are de facto imperfect.
There are legitimate issues that we should be honest about and debate, but those issues come from injustice, not a community that is not willing to play its part. That is where we should start. Let us have the debate about educational attainment, but let us talk about how an education system should reflect a lifestyle that requires more flexible education that follows and supports the child throughout their educational life. Let us talk about housing and provision.
Andrew Selous
I am intrigued about how flexible education could follow a Traveller child around the country. Could the hon. Member expand a bit on how that might work?
Jim McMahon
We are not here to design an education system, but there could be a system similar to an education passport, in which the child’s curriculum follows them throughout the journeys they take around the country. That would at least be a start. Part of the issue is that education authorities do not talk to one another when children move from one school to another. The education experience that child might have had in one primary or secondary school is not necessarily carried on to the next. That is a big gap.
On land supply, when we talk about illegal sites, nobody supports breaches of planning law. The planning law is there for a reason, but we have to address the underlying causes. If I look at the terraced houses in Oldham and I see overcrowding, I do not blame the tenants; I look at housing supply and affordability. I see people being ripped off, paying massive amounts in private rent, but who want a decent social house that is affordable, safe and clean for their children. It is the same for the Traveller community. They want clean, safe and well-maintained sites, but all too often local authorities do not step up to their responsibilities. I say that as an advocate for local government and a standard bearer.
Too many authorities do not take responsibility. The nature of that presents in different ways, with a very different impact in a mainly urban area from in a rural area. Unfortunately, many urban authorities view the Traveller community as a problem that must be tolerated, rather than a legitimate community that should be supported. All too often the sites chosen as Traveller sites will be near the waste transfer site or the industrial estate, in the back of nowhere that we can ignore, hoping that the settled community does not kick up an objection. That is no way to treat people. What other community would we treat in that way?
We can call out bad behaviour. I get as frustrated as anybody else when a Traveller community comes in and commercial waste is left behind, but I can drive down a road in Oldham and see exactly the same from a tradesperson who does not want to pay the charges at the local tip, and who therefore leaves waste at the end of a lane or at the edge of a playing field. I do not say that the whole community of that person should be evicted as a result of the actions of an individual. That is where this debate goes wrong. We talk about anecdotes and the worst excesses of an individual member of a community, as if somehow that is the reputation of the whole. I might expect that on Facebook or an internet site, where people get angry and wind each other up, but I would not expect it in Parliament. We are here to make laws that are meant to be about rights, responsibility, balance and evidence.
Whatever we do, we need a proper joined-up strategy that covers health and wellbeing, housing, education, employment and the very real issue of the gap in life expectancy and the unacceptable levels of male suicide.
Andrew Selous
I tried to be as fair and balanced as I could in my contribution. If the hon. Member came to my constituency, he would meet many decent, tolerant constituents who would have harrowing tales to tell him about what they have experienced. That is not anecdote; it is fact, and it has gone on for well over a decade. That has to be reflected in this debate as well.
Jim McMahon
It is for the Government and local councils to be supportive and to facilitate good community relations. They do not do that when the planning, education and housing systems are stacked up to make the people we are talking about part of the problem, not the solution. The reason there are illegal encampments is that often not enough authorised sites are provided. Even so, 88% of the travelling community are on authorised sites, whether local authority or privately owned. We do not talk about that; we talk about the unauthorised ones, as if that is somehow representative of a whole community. It is not.
Those in positions of power and leadership have a responsibility to build bridges, not walls, and to bring people together. They must use the levers of government, whether about regulation, tax or spend, to make sure that we create a long-term solution. We will be having this debate in another 10 years. If the Government put in place even harsher laws, which the police will not even implement because they recognise the reality on the ground, that will not solve the problem at all. We need positive solutions, looking at communities as human beings and recognising that people have the right to live the life they ought to lead, whether as a Traveller or in a settled community.
Perhaps some cross-party support is needed. If the Government want to look at the issue from a human being’s perspective, I am sure that they will find useful participants in that conversation on this side of the House. If the Government do not want to do that, but instead build walls and further the division, they can expect very firm opposition.
Sir George Howarth (in the Chair)
Before I call the Minister, may I remind him that he should leave a little time for Mr Hollobone to make his final remarks?
Oral Answers to Questions
Jim McMahon Excerpts(4 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Jake Berry
The planning White Paper will come out after the conclusion of the debate on the Queen’s Speech, and, looking at how CPO works in our town centres and other parts of the country will be part of the consultation. On the specific issue that the hon. Gentleman raises, it would seem to me a crying shame if this issue could not be dealt with, as we head towards the rugby league world cup. If he would like to come to see me, I will certainly make it my job to do so.
Jim McMahon (Oldham West and Royton) (Lab/Co-op)
Mr Speaker, it was a pleasure to see your journey down here with Patrick the cat and Boris the parrot a couple of days ago—a preening, repetitive, attention-seeking Boris; I am sure he will fit in quite well here.
Our high streets and town centres are in crisis, with more shops closing than opening. The Government keep falling way below what is needed to take real action that will make a difference. When will they take real action to address the fundamental weakness of our business taxation system to give our high streets and town centres a fighting chance? As a practical suggestion, why not look at enterprise-type zones for our town centres with incentives to make sure that they have a future?
Jake Berry
In terms of practical action, the £3.6 billion towns fund seems to be a good place to start. When we add to that the £13 billion that we are saving for businesses in business rates, we are certainly making some progress, but I will go away and look at the hon. Gentleman’s suggestion about high street enterprise zones.
Deaths of Homeless People
Jim McMahon Excerpts(5 years, 1 month ago)
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Luke Hall
I thank the hon. Gentleman for raising that question. Part of the rough sleeping strategy and rough sleeping initiative is about delivering both the 2,600 new bed spaces next year and the 750 staff to provide support in tackling the sort of issues he is talking about.
Jim McMahon (Oldham West and Royton) (Lab/Co-op)
If every seat, aisle and step in this Chamber was full, we still could not fit in every person who has died in the streets in this country, and that is actively at the door of the Government. We have had the cuts to housing and support services, particularly drug and alcohol services, and those chickens are coming home to roost. This cannot be fixed with the Housing Minister changing every few months, and by coming and making excuses. We need proper action and proper funding, and the Government need to take responsibility for the impact of welfare reform.
Luke Hall
The hon. Gentleman should bear in mind the £1.2 billion that is going in to provide homelessness support through the rough sleeping strategy. He makes an extremely valid point; there is no shying away from a hugely difficult set of statistics, and we should all pause for thought. He paints a vivid image. It is right to point to the fact that we are continuing to invest in our health services, with £30 million made available from NHS England for rough sleeping over the next five years, and £2 million in health funding to test these community-based models of provision, but he is right: there is no shying away from and no complacency about the fact that this is an extremely difficult issue affecting our whole society. We will strain every sinew to make this happen.
Non-Domestic Rating (Lists) Bill
Jim McMahon ExcerptsMonday 22nd July 2019
(5 years, 3 months ago)
Commons ChamberRead Full debate Non-Domestic Rating (Lists) Bill 2017-19 View all Non-Domestic Rating (Lists) Bill 2017-19 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 25 June 2019 - (25 Jun 2019)
Jim McMahon (Oldham West and Royton) (Lab/Co-op)
The Bill came around very quickly from Second Reading to Committee and then to Third Reading, which just shows that, when Parliament decides to do something, it can do it. Perhaps that is because we are light on business and there is time to debate and discuss these issues. I know that this is a geek interest—I take pride in being a geek and in liking data, numbers and finance, and this is an important matter. We cannot achieve the Government’s ambitions if we do not have a solid financial foundation. Business rates, although boring for many people, are actually a very important part of that. I also wish to echo the thanks to the Clerks for supporting the passage of the Bill. As always, they acted with absolute professionalism and ensured its smooth passage.
The purpose of the Bill has already been outlined, which is that it creates a three-year cycle and brings forward the revaluation period by one year. None the less, issues were raised on Second Reading and in Committee. I am slightly fearful that the Minister will be whisked away to another Department very shortly, and that we will lose his consistency and thoughtfulness. It matters not only that we pass the legislation in this place, but that we manage the transitional arrangements and the impact that naturally follows. We need to see what transitional arrangements will be in place. We need to ensure not only that the valuation office has capacity and is encouraged to deal with the backlog of 60,000 appeals going back to 2010, but that it has the people to deal with a new revaluation in the appeals process that will come. We need to make sure that the transitional arrangements are there, so that those who are adversely affected are able to manage that transition.
As part of the wider review, we need to ensure that we are clocking the geographical shift in valuations that takes place with every revaluation, because if we are going to move to 50%, 75% or 100% retention, that will naturally have an impact on the financial stability of local authorities that are part of those schemes. If, after every revaluation, we see a transition to the values of London and the south-east, that will not help build the northern powerhouse, which is a shared ambition for everyone who cares about the whole of the UK benefiting from the country moving forward.
We also need a more fundamental review of local government finance. I really feel sorry for local government Ministers. It is not right that the Treasury often has a closed mind to their funding issues, that they are told to deal with the envelope of money that they have, and that they are always last in the queue, behind the NHS, the police service and other more pressing Departments. The truth is that, if we do not get this right, older people will not get the care they need, younger people will be put at risk, and, critically for democracy, people will question why they are paying more and more council tax for less and less of the neighbourhood services that everybody enjoys universally. We on the Labour Benches will be holding our own review.
I thank the Minister for his approach this Bill, and I look forward to scrutinising it through the transitional arrangements as we approach the revaluation.
Question put and agreed to.
Bill accordingly read the Third time and passed.
Non-Domestic Rating (Lists) Bill (First sitting)
Jim McMahon ExcerptsTuesday 25th June 2019
(5 years, 4 months ago)
Public Bill CommitteesRead Full debate Non-Domestic Rating (Lists) Bill 2017-19 View all Non-Domestic Rating (Lists) Bill 2017-19 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 25 June 2019 - (25 Jun 2019)
Jim McMahon (Oldham West and Royton) (Lab/Co-op)
Q
Dominic Curran: An extremely adverse impact. The business rates level has risen 50% since its inception in 1990. It has risen by 10p in the pound, from 40p to just over 50p, in the last decade alone, at a time when there is, as you well know, an enormous retail transformation happening on the high street. That prohibitive level of business rates is hindering our members’ ability to invest in their stores and in the retail experience for the future that we hear so much about and that our members want to be a part of.
Jim McMahon
Q
Dominic Curran: Yes. We have put in a submission to the Treasury Committee, which, as you will know, is holding an inquiry on the impact of business rates at the moment. Fundamentally, we think the system is broken. It needs reform. Our overarching call is for a wide-ranging, fundamental reform of the entire suite of business taxation. The problem is that, in the past, there have been reviews just of the business rate system in isolation. Given its links to local government finance, and the wider impact of how different taxes affect the ways in which businesses operate—online and offline—we need a much more wide-ranging review.
That said, we recognise that that is quite a big, long-term ask, so we have called for some immediate reforms—most importantly and immediately, a freeze in the multiplier, and then a way of using the forecast increased revenue from corporation tax to offset business rates revenue, so that we can begin to, essentially, treat all business taxes with one coherent tax system, and use one element to help another element. An online tax, which is often prayed in aid, is not the best idea. If it is an online tax on goods, it would effectively be levied 100% on the retail sector. Retail pays 25% of business rates, so if you were to use the online tax to recycle the revenue from that to help retailers, they would essentially be paying 100% of the tax and getting 25% of the benefit.
The Chair
May I just interrupt for a moment? Questions and answers need to be within the scope of the Bill, which is specifically about the timing of bills and business rates, and we should try to constrain ourselves to that very narrow basis and avoid talking about wider issues. Was there a supplementary within scope, Mr McMahon?
Jim McMahon
Q
Dominic Curran: I think—
The Chair
Again, I do not mean to be difficult, but I am advised that consumer warehousing is not strictly within the scope of the Bill, which is on the timing. Do you want to make a comment within the scope of the Bill?
Dominic Curran: I would only say that I think that all business properties should be valued every three years, as the Bill suggests.
Jim McMahon
Q
Martin McTague: I can certainly answer that. There is widespread concern about the lack of capacity in the VOA. It is bizarre that the solution seems to be that you impose a six-month cap on appeals. That is effectively saying, “It’s so difficult to get these appeals through the process that we are going to cap the time required to do it.” Yet the information is not available to the business rate payer to be able to challenge things easily. The point that you made at the beginning—that the VOA is fundamentally under-resourced to deal with this change—needs to be addressed quickly.
Edward Woodall: I agree with Martin. The feedback I get from my members is that there is a lack of capacity at the VOA to allow them to engage meaningfully in the process and talk to individuals. There is also a challenge, which we will probably come to, about the structure of the process it has developed—check, challenge, appeal—and people’s ability to interact with that, which is causing difficulties.
Dominic Curran: Absolutely. Our members are enormously frustrated with the VOA on a day-to-day basis. The appeal system is clogged up at best. It needs better resourcing. There certainly should not be a cap on appeals, in terms of the time length. But more frequent revaluations would, to an extent, reduce the need for appeals, because valuations would be less out of date, although they would probably still be somewhat out of date.
Rishi Sunak
Q
Dominic Curran: The argument is strongest if we were to move to a system of annual revaluations. With an annual revaluation, it almost would not be worth appealing a valuation that you thought was wrong, because it would change in a year’s time anyway. The other effect would be that the valuation probably would not be so wrong, because your annual changes would be on a much smoother line—looking at it on a graph—whereas if we revalue every seven years, as we have, you get quite a steep change. Obviously, somewhere between seven years and one year, the line gets smoother and smoother. It is a question of judgment which number we pick. Using that logic, three years should have fewer appeals than five or seven, but one year should have fewer than three. We will see how good the VOA is at dealing with three-yearly revaluations.
The Chair
Thank you. Who will be the first Member to ask a question? I call Jim McMahon.
Jim McMahon
Q
Annie Gascoyne: I am happy to go first. It is an issue that the VOA has struggled with the number of appeals in the past. There would be a challenge with VOA capacity if we moved to annual revaluations, which is what businesses would like to see in the longer term, because it would mean that the revaluations were more in sync with the economic cycle and what businesses are able to pay. However, we think that the three-year revaluations are a good stopgap, and are something that the VOA should have the capacity to deal with. That said, there have been issues with the check, challenge, appeal system and the VOA’s IT systems, which were implemented too quickly without due thought to some of the more complex business relationships when it comes to property.
The VOA has some work to do to look at modernising its IT infrastructure, perhaps taking lessons learned from how making tax digital for VAT was implemented. We should see whether there are ways that the VOA can streamline the process so that, in the longer term, instead of three-yearly revaluations, which is what we are talking about today, we can move towards annual valuations, and potentially in the future self-assessment, which would simplify the process for everyone in the long term.
Councillor Watts: Thanks for the question, Jim. We have significant worries about the VOA’s capacity. Clearly, if we are going to give it more work, which this Bill does, it will need to be properly resourced. It is worth adding, even at this early stage, that this is not just about the VOA’s capacity to do extra work in the future. There is a very significant backlog of work stored up at the VOA and the appeals tribunal. It is a sad fact that there is more than £2.5 billion tied up in council reserves that could be spent on public services. That is currently being kept back to guard against the risk of appeals from the 2010 revaluation. Clearly, if that money is to be freed up to be used on public services, as we all want, we need to crack through the backlog of appeals rapidly, and we must recognise that more regular revaluations will lead to more work in the future. We think that more resource is needed at the VOA so it can get through what is already a pretty big mountain of work, and there will be more work if the Bill passes.
Adrian Blaylock: I agree with my colleague from the LGA. He is right that the VOA is struggling with its capacity, in terms of the backlog of appeals from the 2010 list. I do not think we have yet seen the impact of the 2017 list and the switch to the check, challenge, appeal system. Moving to three-yearly revaluations will certainly have an impact on the VOA’s resources, which has an impact on local government because of the provisions it has to set aside for loss on appeals. It is really important that the VOA is resourced sufficiently under the new CCA system to deal with the revaluations and the appeals, or whatever we want to call them, coming out of the more frequent revaluation.
Jim McMahon
Q
Adrian Blaylock: It depends where we go in terms of rates retention. The consultation that happened in December and the switch to the alternative model for rates retention give local authorities certainty, in terms of a guaranteed baseline funding level, regardless of what a revaluation does. If we go down that route, I do not think it will be an issue, but you are right that, if you look at the impact of any revaluation, there are winners and losers in the different regions across the country. It is important that there is a rebalance of funding across local government so that no single authority is overly adversely affected. The safety net built into the current rates retention system seems to be working adequately for 50% retention. It probably needs to be reviewed as part of the move to 75%, and ultimately—hopefully—100%. I guess that will have to be part of the consultations about how we move to that sort of system.
Councillor Watts: I agree with that. There is a wider point, which I will stray into only briefly because it is not precisely the topic of the Bill. The risk we face on business rates is that we represent a council area that has seen a very rapid rise in valuations, which has put enormous pressure on many of our small and medium-sized businesses, and we are seeing holes in our high street for the first time in a while as a result of rapid increases in rates and rents. There is a disparity between the amount being paid locally and the amount being received locally, which at some point stops adding up for people. There is a challenge relating to the wider business rates system. Some areas are seeing very rapid rises in the value of property. Most businesses do not own the property they operate from, and therefore do not feel the benefit of the rise in its capital value; they just get a high rent bill as well as a high rates bill.
Jim McMahon
I recognise from the outset that this is slightly expanding the scope, but I will try to be disciplined about it. Do your members have a view about the treatment of plant and machinery in the revaluation?
The Chair
I think we cannot go there, given the timeframe. You were right to give a warning. Do you have another question that is in scope? Stephen Morgan, you have one.
Graham P. Jones (Hyndburn) (Lab)
Q
Adrian Blaylock: Nothing obvious occurs. There are a lot of unknowns about rates retention—we are talking about whether we carry on with a similar model to what we use now, just with the 75%, or whether we go for the alternative model, which was favoured in the December consultation—and what local government needs is certainty of funding, and understanding of when and how the money will come. So I do not think that the Bill particularly causes any issues, but it would be nice to get some early indication of where we are going with rates retention and how that will change.
Councillor Watts: I do not think there are any in-principle reasons why the Bill creates problems for business rates retention.
Annie Gascoyne: I agree.
Jim McMahon
Q
Annie Gascoyne: You mean beyond business rates? We would see a fundamental reform of business rates as being high on our priority list—
The Chair
May I just intervene? Sorry to interrupt. To be in scope, a question has to be about timing, so do you want to rephrase that question to be about the timing of change? Otherwise it is not in scope.
Jim McMahon
Q
Councillor Watts: We are, yes. In effect, our request is that we would welcome further conversations with the Government about getting a date. We understand the arguments for shifting it, because it is quite a long time and 30 September is quite early in the process. However, for one year out of three when that impacts on the potential local government announcement, we would like to understand more about how the Government would like to co-ordinate between this announcement in December and the local government spending announcement having to be earlier than it, because that is a change in precedent. We cannot push the local government spending announcement each year beyond 31 December—it is already too late where it is, given that local budget setting for any authority of size is effectively always concluded before the spending settlement on the basis of guesswork, then tweaked when the settlement is announced in the House.
The Chair
As there are no further questions, I thank all members of the panel for their evidence. I invite the Government Whip to move the adjournment.
Ordered, That further consideration be now adjourned. —(Jeremy Quin.)