Council Tax: Government’s Proposed Increase

Debate between Luke Hall and Sara Britcliffe

Monday 25th January 2021 Commons Chamber

[The Minister for Regional Growth and Local Government (Luke Hall)]

I appreciate that this has been a contentious debate, but may I start by expressing my huge appreciation for the incredible work that councils across the country have been doing to help lead the response to the pandemic? They have been at the frontline of the response in areas such as social care, testing and ensuring public safety, and they have continued to do an outstanding job in delivering the day-to-day services that we all rely on so much, including waste collection, highways maintenance, park management and so much more. May I also join my hon. Friend the Member for St Austell and Newquay (Steve Double) in praising parish and town councils, which have worked so hard over the course of this year to deliver their services?

Unfortunately, what we have heard today is an Opposition who completely misunderstand some of the basic rules of local government finance. The premise of their argument seems to be that the Government are somehow forcing councils to increase council tax by failing to provide adequate support in response to the pandemic. However, if we step back and look at the basic facts, we will see that nothing could be further from the truth.

If Members look at councils’ self-reported figures to our Department, which project that cost pressures for covid total £6.9 billion, and compare that with the £8 billion that we have already provided to councils since March, they will see that we have provided them with £1 billion more than they are spending in response to this pandemic. On top of that, we have provided a business rates holiday worth about £10 billion to retail, hospitality and leisure industries. We have also given councils over £17 billion to provide grants to thousands of businesses across the country, and we have seen some incredible work from councils in getting those grants directly to affected businesses. We have also introduced a sales, fees and charges scheme, supported leisure centres and supported councils with local tax losses. Councils will continue to receive funding through the contain outbreak management fund, to tackle the spread of the virus. That is worth over £225 million a month. We are backing local government all the way with the necessary funding now and into the future.

[Sara Britcliffe (Hyndburn) (Con)]

Does my hon. Friend agree that it is welcome that today Hyndburn Borough Council received an extra £492,000 to help with the community response? Does he also agree that it is important that our residents get the bang for their buck and that the basics get done, such as streets being cleaned, bins emptied and empty buildings on our high streets restored to their former glory?

[Luke Hall]

My hon. Friend is absolutely right that councils should be delivering efficient services with the settlement that they have received from this Government.

If we look at the provisional settlement that the Secretary of State published on 17 December, we see a 4.5% cash-terms increase in core spending power—a real-terms increase for the next financial year. We have also committed at least £3 billion of additional help to councils for next year. That includes the extension of the sales, fees and charges guarantee scheme, which we know has been a lifeline to so many councils during this pandemic. Our commitment to support councils is stronger than ever, and we will ensure that they have the resources they need to deliver first-class public services.

May I thank Members from both sides of the House for their contributions to this debate? I appreciate that it has been hotly contested and contentions, but some important points have been raised. I was surprised, however, to see numerous Opposition Members stand up and say how much they disagreed with the Government’s proposal, given that so many of their councils have not even bothered to respond to our consultation. The hon. Member for West Ham (Ms Brown) said how much she and her council disagreed with it, but Labour-run Newham Council has not responded to our consultation on council tax. The hon. Member for Slough (Mr Dhesi) told us how strongly he and his council feel about this issue, but it has not responded to our consultation, either. Perhaps that is because it welcomes fully the 3.9% increase in core spending power that it will receive next year. The hon. Member for Westmorland and Lonsdale (Tim Farron) told us how much he and his local Lib Dem council did not support it, but it has also not bothered to respond to the consultation. It is typical of a Lib Dem administration that it stands up, shouts from the sidelines and fails to do the necessary work.