Local Government Finance
Debate between Lee Dillon and Jim McMahon(2 weeks, 3 days ago)
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Jim McMahon
That work is demonstrated by the Department being able to remove the best value notice. We know that Middlesbrough is not at the end of the improvement journey, and the council itself would say that, but the characteristics of strong civic leadership are clearly on display. I appreciate that it is a lot easier to praise a council from the Dispatch Box.
When we consider funding for councils to deliver vital services, we must also consider the taxpayer. We are committed to keeping taxes on working people as low as possible. At the same time, we understand the immense pressure that councils are under, which is why we will strike a balance in maintaining the previous Government’s policy of a 5% referendum principle threshold, which includes a 3% core principle and a 2% principle for the adult social care precept. We all know that councillors, mayors, police and crime commissioners and councils will take into account the impact of increases on households, and it is right that they do so. For the vast majority of councils, those principles and the additional £5 billion in funding that we have announced will be sufficient to support them in setting their budgets. However, we know that some councils are in difficult positions, as we have heard today. For some, unique local decisions have had an impact on their financial stability. For others, over a decade of mounting pressures has finally caught up with them, and whatever they do, that is the reality. We are determined to work together to find a way through that, including by considering requests for additional council tax flexibility and requests from councils seeking exceptional financial support.
Mr Lee Dillon (Newbury) (LD)
My own council, West Berkshire, a small unitary authority, now has only 2% of its net revenue budget in reserves, and has written to the Government seeking £16 million of exceptional financial support. I urge the Minister to stand with West Berkshire council and to grant that support, so it can continue to deliver those important services.
Jim McMahon
The hon. Gentleman has my commitment that we will review the submission that we have had in good faith and in the spirit of partnership. We recognise that the councils that have made exceptional financial support applications have done so at the end of a process, not at the start, and that they need the Government to work with them. We will confirm exact allocations later, local authority by local authority, but I take on board what the hon. Gentleman says.
The financial legacy left by the last Government has led to a record number of councils asking for additional council tax increases. The ability to request additional increases already existed, but there is a need to balance them with the impact on local taxpayers. On that basis, we have taken a stricter approach than the previous Government. That means avoiding excessively high increases and agreeing to rises only where councils have comparatively low levels of existing council tax.
Having carefully considered requests, we have agreed to modest increases in six local authorities: Windsor and Maidenhead, Birmingham, Bradford, Newham, Somerset and Trafford councils. However, our strict approach means that we have not been able to agree to all the requests that we have had and that not all requests have been met in full. Taxpayers in those areas are still expected to pay less than the average amount of council tax, compared with similar councils, because of the approach that we have taken. We have been clear that all councils should take whatever steps are necessary to protect their most vulnerable residents from the impact of additional increases.
At national level, even with those increases, the overall increase in council tax is not expected to exceed that of last year. Without the additional £5 billion provided in the Budget and the settlement, there is no doubt that that would not have been possible. In a way, that displays the new relationship, because, unlike the previous Government, we will not impoverish councils or parade them around to be shamed. Instead, we will work with them to put them back on their feet financially. We will fix the broken local audit system and the unacceptable backlog that we inherited; move from a failing, dispersed approach towards a focused, proportionate local audit office that offers value for money; and improve transparency, accountability and confidence in how hard-earned taxpayer money is being spent.
However, we all know that there is no quick fix. The legacy that we have been left is nothing short of scandalous, but this settlement marks a turning point. It will back local government with the long-term funding and certainty that it needs to fix the foundations, based on a new partnership with central Government. Through reform, fairer funding and better stewardship, we will ensure that the sector is fit, legal and decent, so it can stand on its feet as a strong, functioning arm of the state. The settlement will provide more money for local government, especially in areas of greatest need, such as social care, and more investment in the things that matter to local communities, from support for our high streets and town centres to mending potholes and boosting local planning departments, adding up to public services that we can all begin to rely on once again.
Stronger communities will support a stronger economy, with higher growth, delivering higher living standards for working people that will be felt in every part of the country. Driven by a devolution revolution, we will deliver the greatest transfer of power from Whitehall to our communities in a generation. Finally, we will put politics back into the service of working people. Our plan for change has local government at its heart and I commend it to the House.
Local Government Reorganisation
Debate between Lee Dillon and Jim McMahon(1 month, 1 week ago)
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Jim McMahon
That is a very important point, and I pay tribute to MPs in Suffolk and Norfolk for the work that they have done in making the case for greater devolution of powers. I also pay tribute to county and district councils for the cross-party political leadership that they have shown in pursuit of devolution. Members will know that the original agreement for both Norfolk and Suffolk was not one to which the Government could agree, for a number of reasons that have been identified. However, the commitment from leaders in the area to finding a way through is appreciated and valued, and we will honour that in the next steps.
We absolutely believe that in large parts of the country—I see it in Exeter, Lincoln, Ipswich and Norwich—we have important economic anchors in cities that previously have not had a seat at the devolution table because they have been district councils. We have to deal with that as we go forward.
Mr Lee Dillon (Newbury) (LD)
Will the Minister update the House on the capacity in his Department to manage these reorganisations? He spoke about the deadline having passed, and having received expressions of interest. How many can his Department manage at any one time? What will be the determining factor in which ones are chosen to progress now?
Jim McMahon
The Department stands ready to support local areas, both on devolution and on local government reorganisation, and will make sure that there is a genuine partnership when it comes to ensuring that capacity. We will not just rely on local areas to find it; we will work together on that.
We will have to present the information the hon. Member refers to on another date, not today. Until we know what the final programme is, we will not know what is required to deliver it. There is no arbitrary upper limit. Nevertheless, we need to be realistic that there is a high bar on devolution and reorganisation, and we can only allow forward plans that have a credible proposal for devolution. If plans are less developed when it comes to devolution, then even if other parts of them are compelling, and do things that we would want to see come about, politically, I am afraid that cannot stand. They have to be credible plans that ultimately lead to fulfilling the ambition for devolution, and that will be the priority.
Provisional Local Government Finance Settlement
Debate between Lee Dillon and Jim McMahon(2 months ago)
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Mr Lee Dillon (Newbury) (LD)
I refer Members to my entry in the Register of Members’ Financial Interests: I am a member of West Berkshire council. Last Christmas, I was the leader of that council, and I can honestly say to the Minister that I would much rather receive in my inbox the settlement proposed by the Government than what I received from the Conservative Government.
In his statement, the Minister talked about fixing the foundations. I welcome the £3.7 billion for social care, but does he agree that, with councils spending up to two thirds on their budgets on adult and children’s social care, social care needs full-scale reform if we are to fix the foundations? Will he support the Liberal Democrats’ calls for a commission to undertake that piece of work?
Jim McMahon
To be honest, although I absolutely agree that we need reform, I believe the urgency is today. Think about the number of older people who would have been entitled to adult social care in 2010 who now do not even get support from the local authority, because eligibility has changed in so many areas. There is a crisis, and that crisis is not just being felt in the homes of all the people who have given to this country and deserve better; it is being felt in the acute sector and in the health service, where we are paying far more at the back end because community preventative services are not in place. We are working with the Cabinet Office and the Treasury to say, “Let’s learn as we go” on some of this, in terms of innovation and pilots where we can invest to save—invest in those community preventative services up front, to try to better reduce demand. Of course, it is about money, but in the end it is about the service we provide. I appreciate the hon. Gentleman’s comments about the settlement in the round.
English Devolution
Debate between Lee Dillon and Jim McMahon(2 months ago)
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Jim McMahon
The assumption is that elections in counties will take place as planned, unless authorities actively approach us to say that they want reorganisation discussions and have proposals that they can work up. In those circumstances, we will take the view that elections to an authority that will not exist should be postponed so that an election for a shadow authority can follow. On Derbyshire, we need to be careful: the Government’s role is to invite and to receive, not to draw the maps, which is for local authorities to do. As my role is quasi-judicial and I will need to take a view on potentially competing proposals, I cannot comment on what individual counties may or may not look like.
Mr Lee Dillon (Newbury) (LD)
Councils are clearly on their knees, and I welcome multi-year funding settlements and changes in the grant programme, but will the Minister confirm that the Government will support devolution so that not a penny of councils’ budgets is spent on it and they can focus on frontline services? In his statement, the Minister said that councils could
“take their time to decide on the course they wish to follow”,
but went on to say that the Government would
“legislate…to create strategic authorities”
where they felt that was necessary. How does the Minister square those two sentences?
Jim McMahon
This is about partnership, about tone and about how we can work together. Because there has been a fair amount of talk in the sector about reorganisation and devolution, even before the White Paper a number of authorities had approached the Government saying that they wanted to have a conversation about local government reorganisation and/or devolution. We have had to respond that we cannot have a hundred hares running all over the place without a transparent plan and timescale that can be understood so that people can make a judgment about whether this option is right for their area or not. What we will have is a proposal to double-run a devolution priority programme alongside a local government reorganisation, with a key point where those two pieces of work must come together for joint decision making. That will at least mean that every authority knows what stage it has reached, and can make a choice: is it at the right point in the process to opt in, or will it need more time?
The point about the backstop is very important. As I have said, there is no map that we are intending to impose anywhere. Let us suppose that within a region we have an agreement to compile every county bar one, and we reach the end of the current Parliament. In that event, I think it legitimate to say, “Well, there is nowhere else to go.” It is fairly self-explanatory that there will be a fundamental strategic authority in that area, and that is the type of process that we are considering. We are not considering redrawing the map of England and imposing this in one fell swoop. It is about partnership and working with local areas, and so far those conversations have been very fruitful.