Local Government: Provisional Finance Settlement

Lord Bates Excerpts

Wednesday 19th December 2012 Lords Chamber

[Baroness Hanham]

My Lords, let us start with the reserves. The Government have a very firm position on this. They recognise that local authorities need reserves; indeed, in the current economic situation, they may have to call on reserves to help them deal with some of their finances. However, there are local authorities that are sitting on enormous unallocated reserves, and those are the ones that the Secretary of State believes ought to be challenged. Where local authorities are sitting on vast sums, they should be looking at how best they can use them to support their expenditure.

Regarding the cost of appeals, within the business rate retention scheme an allowance will be made for appeals that are already in the pipeline. Those that will come subsequently are a different matter and they will have to be dealt with at that time. The 10% reduction in council tax benefit is there to help with efficiency; to ensure that local authorities administer this in the best way that they possibly can; and to ensure that any system they set up can, if necessary, be supported by other reductions within their council tax budgets.

[Lord Bates]

My Lords, I welcome the Statement by my noble friend and the fact that it places a great emphasis on getting the housing building market going. Has my noble friend seen the statistics produced by the National House-Building Council in the past week, which suggest that new housing starts in the north-east of England, for example, are at 3,048 for the first nine months of this year? This represents an increase of 25% on the same period last year, and an increase of some 47% on the same period in 2009. Will this not funnel through the new homes bonus programme to provide important additional revenue streams to councils in the north-east? In the past few days, the House Builders Federation has said that planning applications and planning permission granted for new homes have increased by 36% on the previous quarter. For further clarification, has my noble friend’s estimate of the £650 million that will be provided through the new homes bonus next year taken account of that welcome news?

[Baroness Hanham]

My Lords, I thank my noble friend for pointing out good news relating to the housing figures. We have been very aware—everybody else in the House will be aware—that a lot of the economy needs a boost and much of that boost will come from housing and housing construction. I am very pleased about the figures in the north-east, which is perhaps one area in the country where we particularly need to see new housing—not only to ensure that there is housing but because it will stimulate the economy even more in that part of the world.

The new homes bonus is part of the funding stream. It is not ring-fenced but it does relate to the number of houses that are being built and so would add to local authorities’ revenue. If the number of planning permissions has increased in the north-east as well, that is good, as there has been a lot of criticism that planning permissions are somewhat slow in being granted. Therefore, I thank my noble friend for those points.