Local Government Finance

Lord McKenzie of Luton Excerpts

Thursday 17th December 2015 Lords Chamber

[Baroness Williams of Trafford]

I thank my noble friend for, as always, his very sensible words. I said in my previous answer that I wish that when I had been a local authority leader I had had some sort of certainty as we lurched from year to year with local government settlements. I thank him for making the observation that the certainty is welcome. It also encourages councils to look at their reserve position. By their nature, reserves are for one-off, planned spending and are never intended to prop up revenue spending. However, if you know what your four-year position is, you can use reserves for one-off measures.

My noble friend talked about the reduction in RSG and—I presume by inference—the changeover to business rates. The Government will be consulting widely on that. I hope to see people like my noble friend coming to discuss with my department how some of the anomalous situations that might arise, particularly with an older population, can be dealt with through this process.

I take his point about devolution, but he will not be surprised to hear that, as a former Greater Manchester councillor, I do not perhaps share so much of his pessimism about it.

[Lord McKenzie of Luton (Lab)]

My Lords, the Minister will be aware that in April next year we have the introduction of the single-tier state pension and with it the end of contracting out. In Budget 2013 it was recognised that, from April next year, that would garner the Government an extra £5 billion a year. It was said at that time that those funds would be used to help fund the costs of the lifetime care cap, which was to be set at £72,000 and introduced in April 2016. That of course has been deferred, so what is happening to those resources if they are not going to be applied to that?

[Baroness Williams of Trafford]

I always know that when the noble Lord stands up he may ask a difficult question that I may struggle to answer. Could I please return to him in writing, as I quite frequently do?