Education Funding for 18-year-olds

Debate between Marcus Jones and Peter Aldous

Tuesday 28th January 2014 Westminster Hall

[Peter Aldous]

I am grateful to my hon. Friend for raising that matter. I will indeed join him in asking the Minister to reconsider the funding reduction.

Finally, it should be pointed out that larger colleges with larger budgets are better placed to handle reductions in funding; they may have more room to manoeuvre and put in place their own mitigating measures. Lowestoft college and Lowestoft sixth-form college are relatively small. Although they are performing extremely well in challenging circumstances, they are not as well placed as larger establishments to withstand the impact of such income reductions.

[Mr Marcus Jones (Nuneaton) (Con)]

I will try to be brief. My hon. Friend is quite correct that there will be a significant funding impact for many sixth-form colleges and further education providers. Could another impact be that such institutions, including for example the excellent King Edward VI college in Nuneaton and North Warwickshire and Hinckley college, are disincentivised from taking students at age 18?

[Peter Aldous]

My hon. Friend raises an interesting point. It is one of a number of issues that I do not believe the impact assessment addressed.

It should also be noted that the late announcement of the decision has made it difficult for colleges to make contingency arrangements. I am grateful to the Minister for listening. For the reasons that I have outlined, I believe that the measure hits Lowestoft particularly hard. As I look around the Chamber, I realise that there are numerous such communities all over the country. In Lowestoft, we have two colleges that are playing a vital role in difficult circumstances, raising educational standards and providing young people with the skills that they need to take up a variety of opportunities. The two colleges need the resources to carry on with that excellent work, and the proposal both handicaps them and penalises 18-year-olds living in Lowestoft, where there are no school sixth-form colleges for them to attend.

Business Rates

Debate between Marcus Jones and Peter Aldous

Tuesday 30th October 2012 Westminster Hall

[Peter Aldous]

I am grateful to my hon. Friend for raising that important issue. I was not going to raise it myself, but I take account of what he says. The tax on empty properties was introduced under the previous Government. I was still practising then, and there were concerns at that time. I have seen a number of units—they may not have been in the best condition, but they were available, often with a low rental value—demolished by landowners and landlords. Reducing the supply of accommodation can lead to an increase in rents for small businesses that are just getting started.

[Mr Marcus Jones]

On that subject, does my hon. Friend agree that empty property business rates are also an impediment to developers and investors who wish to invest in new build in our town centres, as they may not be able to fill them with tenants straight away? The measures introduced by the previous Labour Government are leading to a situation that is stifling investment in our town centres, rather than encouraging it.

[Peter Aldous]

Yes, I agree. Investing in major town centre refurbishment schemes is expensive and challenging. Such schemes take a long time—often a number of property cycles. We therefore need to provide every incentive and encouragement for investors and developers to invest in town centres; otherwise, they take the easy option of going for out-of-town locations, which exacerbates the vicious circle of draining life and vitality out of the town centre.

I take note of the Valuation Office Agency’s research, which shows that 800,000 premises will see a real-terms rise in rates, while only 300,000 will see their bills fall. Having said that, I am also mindful of the views of Gerald Eve, which I think is recognised as the leading private practice firm in the specialist field of rates. It disputes the VOA’s contention and has carried out its own research, which reaches a different conclusion. We also need to bear in mind that at the time of the current valuation, April 2008, the market was at its peak. There is concern that postponing the review will lead to retailers facing incorrect and historical values for far longer than they should.

My hon. Friend the Member for Rochdale mentioned the backlog of appeals. One reason for postponing the revaluation is to address, and not add to, the backlog. We need to take urgent action to clear the backlog, and I would be interested to hear from the Minister on what proposals there may be. I hasten to add that I have no continuing involvement with any private sector firms, but we need to consider whether this is something that the private sector can do.

Let me turn to the annual increase in business rates. We need to review the mechanism by which that takes place—the increase in line with the retail prices index every September. If, next April, we keep to this September’s 2.6% rate, business rates will have gone up in the past three years by a compound rate of interest of 13.33%. That will mean that £500 million is added to the retail sector’s rates bill. At a time when council tax is frozen, Britain’s shopkeepers are carrying too heavy a burden on their shoulders.

I should like to mention three issues in closing. First, I hope that the Government, as soon as they are able, publish the data on which they have based their decision for postponement. We need to scrutinise this and have a consultation to look at it more closely. Secondly, we need to review the RPI link. Property is a declining proportion of the total economy, yet we are taking more out of it. I do not think that the golden goose has many more eggs left to lay. Thirdly, we need to look closely at the formula by which business rates are calculated. In particular, does the formula accurately reflect the rental value of out-of-town shop and retail park units? In the high street and town centre, people have to pay for a council car park, whereas car parking for out-of-town retailers is right on their doorstep and free. That is a real draw for shoppers, but it is not accurately reflected in the rates formula. I am grateful to hon. Members for listening to me.