Non-Domestic Rating (Multipliers and Private Schools) Bill (Second sitting)

Debate between Martin Wrigley and Michelle Welsh

Committee stage
Wednesday 11th December 2024 Public Bill Committees

[Martin Wrigley]

Q Reforming business rates is very welcome. We always like that—they are not a particularly good tax—but I fear the measure is making them more complicated.

Forgive me if it is a naive question, but I do not see anywhere in the Bill, other than it starting in April 2026, any commitment to forward notice of changes or the forward ability to see changes. One presumes they come once a year in the Budget, but I am not sure it is actually mandated that that is the case. Is there a mechanism in the Bill that prevents future Governments from changing these rates more frequently, or is there anything that we can put in it that gives local authorities sufficient time to implement such things?

You say that the provisional settlement is due next week. I say once again, as a former council leader, that that is very late. You are forgiven—it is the first year, so there are extenuating circumstances—but councils need time to set their budgets, set their systems and do all that. I am looking for lead times, implementation times and guarantees of multiple years’ rates for consistency.

Jim McMahon: That is precisely why we have phased the approach. The permanent relief will come in at 40% in 2026-27, but we have included a transition period. That will continue the £110,000 cap, but it will bring in the 40% relief. The relief will be out the door immediately, but it will give time for a number of things in the system to catch up, the revaluation being a very important part of that.

This is a part of the wider issue of local funding. There are measures in the Bill that will see additional business rate funding to councils, because some of that is retained business rates in the system. We are going a long way and, without getting ahead of next week’s provisional settlement, it is a good settlement. There is £4 billion to £5 billion of new, clean money going into local government for all the issues that you as a former council leader will know are the absolute pressure points: social care, children’s services and temporary accommodation. All those issues are being addressed through the Budget and the provisional settlement. Importantly, deprivation is being brought back as a key indicator of demand in driving many of those services in local communities.

We are going a long way towards that, and we are making sure that councils are given the certainty and capacity. We accept that the settlement this year is coming down to the wire, and it would have been nice to get it sooner, but getting it right is important. Our intention is, as we move further, to go to multi-year settlements so that councils have long-term stability and that certainty is built into the business rate system.

[Michelle Welsh]

Q Can the Minister set out the scheme that the Government are proposing to ensure that schools that principally deliver education for pupils with special educational needs will not face any additional burdens?

Jim McMahon: That is entirely the point, although perhaps it did not come out in the evidence sessions. A lot of the debate can be quite polarised—whether you are for or against private schools and the rest of it. When I was on the other side of the table, I was clear that I wanted to pull away from that and say, “Well, let’s just have a conversation based on the evidence.” What the evidence says is that there has been provision to ensure that those schools that are mainly or wholly for pupils with special educational needs will not be affected by these measures at all. Why? It is because we recognise that, within the wider school ecosystem, that provision is important in many communities and that many local authorities will support it. That is being provided in the Bill.

In the end, though, I would say that we need to rebuild mainstream provision. We all have constituents at their wits’ end because, after 14 years, mainstream provision has been allowed to erode to such a point that, in some places, it barely exists. We need to rebuild it, and the investment through the autumn statement begins that rebuilding work. It will take time. There is no button to press that resets 14 years in six months, but in terms of a statement of intent, £1 billion through the local government finance settlement for SEND provision is the start of that rebuilding process.