Local Government: Finance Settlement

Lord Bishop of Liverpool Excerpts

Wednesday 23rd January 2013 Lords Chamber

Asked by

[The Lord Bishop of Liverpool]

To ask Her Majesty’s Government what steps they are taking to ensure that financial settlements for local government funding are fair.

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)]

My Lords, the Government have proposed a fair settlement for 2013-14 and 2014-15. Each local authority’s baseline funding level and the calculation of its tariff and top-up are based on figures that take account of the different needs of each area. The settlement allows local government to keep nearly £11 billion of business rates and keep the growth on that share of business rates, providing a direct financial incentive for councils to deliver growth.

[The Lord Bishop of Liverpool]

My Lords, I thank the Minister for her Answer, and I assure her that my Question arises out of very genuine pastoral concern. Can the Government not think again in the interests of greater fairness and make more allowance for the highest levels of deprivation in both rural and urban areas? For example, in Liverpool there is to be a 52% cut in services over four years, which will directly impact upon services to mentally ill children, vulnerable families and the elderly housebound.

[Baroness Hanham]

My Lords, I know that the right reverend Prelate is very involved in the discussions that are taking place about settlements and the various levels of deprivation. I believe he held a conference last week that addressed this important subject.

However, the methodology that has been used and is set out in the formula funding document, which has been out to consultation several times, takes account of deprivation and the high cost of providing services in areas that have high deprivation, where local authorities have a low ability to raise funding. Such authorities will receive more funding than authorities with a low cost of providing services and a high ability to raise funding locally.