Local Government Finance

Lord Tope Excerpts

Thursday 17th December 2015 Lords Chamber

[Baroness Williams of Trafford]

I hope I do not have to write too frequently and that the words I write give her some comfort. To reiterate—and I think I possibly did this last year—the 10% of local authorities in the most deprived decile frequently get more spending power than the 10% in the top decile. At the moment, it is about 24% more. However, I understand the noble Baroness’s point about the changes and how we will ensure that vulnerable people are protected. I am sure I can give her comfort in the letter that I will write to her. We do not want to see the most vulnerable people in our society suffer in any way—quite the opposite.

[Lord Tope (LD)]

My Lords, I declare my interest as a vice-president of the Local Government Association. The Statement comments that by 2020 councils will be 100% funded by council tax, business rates and other local revenues, but it says nothing about the centrally imposed council tax referendum threshold. Surely it must be a logical extension from 100% local funding that there is no need for such a centrally imposed threshold, something else that local government of all parties has campaigned for for years. The LGA also referred to what it calls the “cost-shunting carousel”, whereby local government has imposed upon it large numbers of obligations and responsibilities, either from legislation or other impositions such as the national living wage. It calculated that that totalled £6.3 billion. Will central government at least try to agree with the LGA a list of what those obligations are and try to see whether they can get an agreed figure, rather than as at present, when it all happens, in effect, by stealth?

[Baroness Williams of Trafford]

My Lords, the move towards business rate retention of 100% is in itself a freedom for local authorities not having to rely on the Secretary of State to tell them what they are going to get or not get. If I was a local authority leader, I would thoroughly welcome that, particularly where local authorities are innovative. As to whether the 2% cap will be in place when we are at the point of 100% business rate retention, as far as I know as I stand here now it will be, but I cannot speak for five years hence. In terms of local government obligations, when new burdens are brought in there is generally an assessment of those and that is taken into account.