Local Government Finance

Debate between Kevin Hollinrake and Anna Soubry

Wednesday 22nd February 2017 Commons Chamber

[Kevin Hollinrake]

I represent a constituency in north Yorkshire, an area with eight local authorities. There are eight chief executives, eight economic development officers, and eight directors of finance. That cannot be right; we need to remove tiers of bureaucracy and reduce costs in order to maximise the use of our resources.

[Anna Soubry]

I could not agree more. My hon. Friend makes a compelling point.

Broxtowe Borough Council has done a terrific job, and I pay credit to the previous authority, run by Labour and the Lib Dems, which started the sharing of back-office functions. Obviously I take the firm view that the new Conservative-run council is even better—[Hon. Members: “Hear, hear!”] I genuinely believe that it is, notwithstanding the unfortunate position that it now finds itself in. I shall address that point in a moment; my speech will not be all roses, as you can imagine, Mr Deputy Speaker. We are here to represent all our constituents, and we are also here to represent our hard-working councillors.

Broxtowe Borough Council—now Conservative run—has continued much of the good work on sharing back- office functions, but as my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) says, there is only so much that such councils can do. Broxtowe continues to carry out such functions, but we are now going across borders and sharing functions with Erewash and, increasingly, with Rushcliffe. I have already told the leader of our borough council, Councillor Richard Jackson, that I am slightly worried about that. He shares my view that we should move to a unitary arrangement. That is brave of him, as the leader of a borough council—he is also on the county council—but Conservatives are increasingly being brave and considering whether going unitary would be better. If they are to make that advance, however, they will have to work even more with other authorities in the county rather than crossing the border into Derbyshire. So Broxtowe Borough Council is sharing back office duties, but as my hon. Friend said, there is only so much that it can do. Let us look at planning. No disrespect to all my great planning officers, but in reality we need one unitary authority to deal with important planning matters.

I shall turn now to the difficulties that Broxtowe undoubtedly faces. Because of the settlement, Broxtowe Borough Council will lose around £380,000 in 2017-18, and a total of £1.18 million over the next three years. That equates to an increase in council tax of about 5%. We must bear in mind that one of the reasons why the Conservatives came into power in 2015 was our promise not to increase council tax. Broxtowe does not want to put up council tax but it faces a big drop in its income in the coming years. The council, and Councillor Richard Jackson, are agitated even more by the short notice that has been given of the settlement. He told me that the administration had

“hardly any time to plan for the reductions that will be needed”.

It has had only a few weeks in which to balance next year’s budget.

It is tough to say this, but the reality is that all our local authorities are increasingly finding themselves in financial difficulty. They have a desire to deliver excellent services, but the amount of money available to them—notwithstanding the good work that so many of them have done to reduce their costs—is putting a strain on their ability to deliver the first-class services that they are determined to deliver. I make this plea on behalf of Broxtowe Borough Council. It has accepted this cut, which will be difficult—the Secretary of State was good enough to arrange a meeting with representatives of the council, and we are grateful for that—but enough is enough. Really, these must be the last such cuts to good local authorities such as Broxtowe.

I want to turn now to business rates. Having had the pleasure of working with the Secretary of State for 12 months and more, I have absolutely no doubt that he understands the needs, the pressures and indeed the joys of running a small business. He gets that—of course he does—and I am proud that we did so much in our time together to improve the lot of small businesses. However, I have big concerns about business rates. Now is not the time to go into all that, but in my view, it is a bad system. It is inherently unfair. No matter how much money a business makes—or, indeed, loses—it still has to pay its rates, and that is absolutely wrong. A business could occupy a certain space and have only a couple of people working in it, but it could be making millions of pounds in profits because it provides an online service. However, that very same space could be a shop on one of our great high streets, which are frankly struggling. We all want our high streets to thrive. The shop might employ three or four people and have a much smaller turnover, but its rates will be exactly the same as those of the multimillion-pound business in the same space. I am sorry, but that is not fair. As I said, now is not the time to discuss this, but I think the Government get the issue. The trick is to find an alternative that still raises the same amount of money, which I accept is difficult.