Local Government Finance Bill

Debate between John Healey and Mike Hancock

Tuesday 31st January 2012 Commons Chamber

[John Healey]

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

I rise to support the amendments and new clause in the names of my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford) and my hon. Friends the Members for Sheffield South East (Mr Betts) and for Warrington North (Helen Jones). The problem, which my right hon. Friend the Member for Greenwich and Woolwich hits on directly in his amendment 79, is that council tax reduction schemes will be undermined from the start by the 10% funding cut and the constraints that the Government are putting in place to compensate for the problem that it will create.

Throughout the part of the Bill dealing with council tax, we consistently see hallmarks of the scheme that run contrary to the Government’s declared aims. It shows a lack of true localism and a transfer of considerable financial risk from central Government to local government, which promises to have a severe impact on support for many current recipients of council tax benefit. The Bill also sets out an unrealistically and unfeasibly tight time scale.

The Secretary of State is more sophisticated than the image and manner that he often cultivates would suggest, but his politics on this matter are brutal and brutish. In my view, the intention is simply to transfer to local authorities the financial risk of the increasing cost of support for council tax costs. The Government want to get local authorities to take the blame for the cuts being imposed by central Government.

Financial risk is crucial for any local authority when it considers the future. Authorities are being asked to take on the new risk without the flexibility to allow them to discharge the responsibilities that they are taking on fairly, effectively or appropriately for their area. Whether the 10% cut leads to pressure on councils’ funding, pressure for them to find cash from other sources or greater cuts for those who are not protected will depend on how the cut is distributed across local authorities, local decisions on the design of the scheme, the make-up of the population within an authority’s area, the proportion of people who are protected by central Government and the degree to which the move from a council tax benefit to a council tax discount encourages take-up among people who are already entitled to support but do not claim it.

Central Government would not make this move if it affected themselves. As my hon. Friend the Member for Warrington North said, they are transferring what is currently annually managed expenditure—the current costs of the council tax benefit scheme are driven by factors that are not under the control of councils—to funding that is covered by the local government departmental expenditure limit. That will put an unrealistic and unfair funding noose around the neck of local government, because the year one base level will involve a 10% cut. My fear is that what could and should be a good move for local government and the people it serves—a locally designed council tax support scheme—is damaged and discredited before it starts by the design of the scheme.

[Mr Mike Hancock]

May I say how nice it is to see you in the Chair, Mr Crausby?

I wish to raise my concern about the fact that we are approaching 7 o’clock and will hardly get halfway down the selection list. The time available is totally inadequate. Goodness knows what the Government were thinking about, giving us just three days in Committee. It is an absolute travesty. I only hope that they will give us at least one whole day, and possibly two, on Report to allow debate on many of the matters that have not been discussed in Committee.

If the House is to do justice to the Bill, we should at least get a chance to discuss some of the very important amendments that have been tabled. I see them not as wrecking amendments but as helpful, creative amendments that would show the Government the strength of feeling in the House. Legitimate concerns have been raised from both sides of the House on this group of amendments alone, and if I were the Minister leading the Bill I would like to give the House more time to discuss them properly. If we are not careful, we will end up with a dog’s dinner, which cannot be right or fair to local authorities.

The most important issue in this group of amendments is raised in new clause 11, with which I agree entirely. It gets to the very essence of what the Committee has discussed on previous days. It is about the stability and sustainability of local government and its ability to stay clearly focused on its task. Support for new clause 11 is essential to give local authorities a fair chance of implementing the scheme.

The Government have expressed no clear and positive view about what they can do to help local authorities. I ask Ministers what is wrong with new clause 11 if they believe in fairness and in giving local authorities a proper opportunity to get the scheme right. Who will benefit if it is got wrong? No one, least of all the people who claim benefits. Most of the blame will fall on local authorities, and once again we are going down the well trodden path whereby the Government decide to disrobe themselves of their responsibilities and pass them off to local government, but forget to put the resources in place to help things happen.

I do not suppose that at the end of this debate the Minister will dish out to Members a scheme that has already been concocted, so that they can take it back to their local authorities and say, “This is the scheme we want you to use. We’ve paid for it, we’ve got it in place, and all you’ve got to do is tweak it a little. It’s tried and tested, and we’re prepared to give it to you.” That is not going to happen, is it?