Local Government Finance Settlement 2024-25
Michael Gove Excerpts(9 months, 3 weeks ago)
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The Secretary of State for Levelling Up, Housing and Communities (Michael Gove)
Today, I set out the final local government finance settlement for 2024-25. This makes available up to £64.7 billion for local authorities in England, an increase in core spending power of up to £4.5 billion, or 7.5% in cash terms, an above-inflation increase, on 2023-24.
The final settlement follows the consultation on the provisional settlement, which closed on 15 January. Having considered the responses, listened to councils, and received representations from colleagues, on 24 January I announced additional measures for local authorities worth £600 million. This included £500 million of new funding for councils with responsibility for adult and children’s social care, distributed through the social care grant. By making progress on the Government’s plan to halve inflation, grow the economy and reduce debt, we now can provide this extra funding to councils to continue to deliver vital services for their communities. Further details on the exceptional provision of this funding will be set out at the upcoming Budget.
Today I am laying before the House: the “Local Government Finance Report (England) 2024-25”; the “Referendums Relating to Council Tax Increases (Principles) (England) Report 2024-25”; and the “Referendums Relating to Council Tax Increases (Alternative Notional Amounts) (England) Report 2024-2025”. Together, these form the final local government finance settlement for 2024-25.
We received 267 responses to the provisional 2024-25 local government finance settlement consultation, and I am grateful to everyone who took the time to respond. Following the consultation and engagement process on the provisional settlement, we have made the following changes, which ensures a balanced settlement for the sector.
Social care
I am confirming an additional £500 million for social care services, as announced on 24 January. This will be allocated through the social care grant, which is ringfenced for adult and children’s social care. Together with the additional funding proposed at the provisional settlement, local authorities can therefore make use of a total of £8.7 billion in grant funding for social care through the 2024-25 settlement, including £1.5 billion in additional grant compared to 2023-24. This is made up of:
£5 billion through the social care grant, a £1.2 billion increase on 2023-24, including £500 million additional funding as announced on 24 January;
£1.1 billion through the market sustainability and improvement fund, a £123 million increase on 2023-24;
£500 million through the discharge fund, a £200 million increase to the local authority component on 2023-24; and
£2.1 billion through the improved better care fund.
While being mindful of pressures in adult social care, where possible councils should use the uplift to the social care grant to invest in areas that help place children’s social care services on a sustainable financial footing. This includes investment in expanding family help and targeted early intervention, expanding kinship care, and boosting the number of foster carers. The Government are committed to delivering substantive reform to children’s social care. That is why in 2023 we published our strategy for reform, “Stable Homes, Built on Love”, and over these next two years we will lay the foundations for wide-reaching reform across the whole system. The strategy is backed by £200 million of additional investment in the current spending review period, so that we can begin making progress immediately.
Council tax
The Government are committed to continuing to protect local taxpayers from excessive council tax increases. This settlement confirms our intention for referendum principles of up to 3% for core council tax and up to 2% for the adult social care precept in 2024-25. These provisions are not a cap, nor do they force councils to set taxes at the threshold level. When taking decisions on council tax levels, I expect all councillors, Mayors, police and crime commissioners and local councils to take into consideration the pressures many households are facing and the need to control unnecessary and wasteful expenditure. In Wales, the Welsh Labour Government have refused to introduce any referendum protection for council tax payers, leading to soaring council tax. Indeed, under the last Labour Government in England, council tax bills more than doubled.
The Government’s view continues to be that councils that have taken decisions to get themselves in the most severe financial failure should continue to take all reasonable local steps to support recovery including additional council tax increases. Therefore, for the 2024-25 settlement, in consideration of the significant financial failure of Thurrock Council, Slough Borough Council and Woking Borough Council, bespoke council tax referendum principles will apply. For Thurrock Council, Slough Borough Council and Woking Borough Council, a council tax referendum principle of 10% will apply—for Thurrock and Slough, this comprises 2% for expenditure on adult social care, and 8% for other expenditure.
Birmingham City Council has requested flexibility to increase council tax bills by an additional 5%. The Government have expressed ongoing concern about the significant financial mismanagement at the council and have launched a five-year intervention to tackle its serious financial and governance problems. It is disappointing that Birmingham City taxpayers are having to foot the bill for the council’s poor governance and decision making. While the Government will not oppose this request given the seriousness of the circumstances, any decision to increase council tax is solely one for Birmingham City Council, which should have taken into account the pressures that people in Birmingham are currently facing on living costs. The Government are of course conscious of the effect on local taxpayers, particularly those on low incomes, of having to foot part of the bill for these councils’ very significant failings. We have been clear to each of the councils that in implementing any additional increases, they should take steps to mitigate the impact on those least able to pay.
Funding guarantee
I am confirming that, having listened to the requests of local government during the consultation period, and in acknowledgment of the pressures facing all tiers of local government, we are increasing the funding guarantee from 3% to 4%. This means every council in England will receive at least 4% more core spending power, in cash terms, than they did last year, before they have taken any local decisions on council tax.
Rural services delivery grant
I am also confirming that, in response to the consultation feedback and in recognition of the specific challenges and difficulties local councils can face serving rural, sparse populations, we are increasing the rural services delivery grant by £15 million in 2024-25. This is an increase of over 15%, making available a total of £110 million next year. This is the largest cash increase in the rural services delivery grant since 2018-19 and the second successive year of above inflation increases.
Services grant and islands
At the provisional settlement, we announced that the services grant would reduce to £77 million in 2024-25. The Government have noted the concerns raised in the consultation about the proposed reduction, and the calls for clarity on how the reduction has been reallocated within the settlement.
As announced on 24 January, the Government have responded with a funding package worth £600 million for local government, including £500 million of additional funding for social care. The Government’s full response to the consultation has been published today and provides more detail on how the reduction in the services grant has been used to uplift other settlement grants. These decisions have been taken to ensure a balanced settlement for all authorities that reflects our assessment of need.
The Government also intend to bring the final total of the services grant to £87 million—£10 million more than the value consulted on at the provisional settlement. This uplift includes an additional £3 million for the Isle of Wight and £0.15 million for the Isles of Scilly in recognition of the circumstances facing island authorities.
Measures outside of the local government finance settlement
Having listened to authorities which continue to face sustained increases to their internal drainage board levies, we are again providing exceptional funding of £3 million in addition to the settlement to support those experiencing the biggest pressures. We will confirm the distribution of this funding in the coming months when data on projected levy spend becomes available. We will work with the Department for Environment, Food and Rural Affairs to explore options to implement a long-term solution.
Every authority in England also stands to benefit from increased growth in business rates income, which has generated a surplus in the business rates levy account in 2023-24. I can confirm that £100 million will be returned to the sector on a one-off basis, to be distributed based on each local authority’s 2013-14 settlement funding assessment. I am also announcing today that we will compensate local authorities for the green plant and machinery business rates exemption via grant on a continuing basis until the business rates retention system is reset.
On 19 December 2023, my Department launched a consultation seeking views on options relating to capital flexibilities and borrowing. The aim of this exercise was to explore options for allowing councils greater financial flexibilities to make savings and better manage their own budgets overall. We want to ensure every penny of taxpayer money is well spent and we are considering carefully what proportionate safeguards are needed alongside these measures. This consultation closed on 31 January 2024. I am grateful to all those who took the time to provide views. The Government intend to publish a full response to this consultation in the spring.
Efficiency and reform
I would like to emphasise that this additional funding needs to be used by local authorities to deliver the frontline services on which our communities rely. It should not be put aside for later use, nor spent wastefully. We will therefore continue to monitor the level of local authority reserves. The Government note that while local authority reserves are falling, they remain significantly higher than prior to the pandemic. We continue to encourage local authorities to consider, where possible, the use of their reserves to maintain services in the face of these pressures.
As part of our efforts to return the sector to sustainability in the future, we are also asking local authorities to develop and share productivity plans. These plans will set out how local authorities will improve service performance and reduce wasteful expenditure, for example on consultants or discredited equality, diversity and inclusion programmes. Government will monitor these plans, and funding settlements in future will be informed by performance against these plans.
My Department will work with the local government sector on the approach to producing these plans. The plans should be short and draw on work councils have already done, identifying ways to unlock productivity improvements and setting out the key implementation milestones. Plans should be published by July 2024 before the House rises for the summer recess. They must be agreed by council leaders and members and published on local authority websites, together with updates on progress.
We expect them to cover four main areas:
1) transformation of services to make better use of resources;
2) opportunities to take advantage of advances in technology and make better use of data to inform decision making and service design;
3) ways to reduce wasteful spend within systems, including specific consideration of expenditure on consultants and discredited staff equality, diversity and inclusion programmes—this does not include programmes designed to promote integration and civic pride, and counter extremism; and
4) barriers preventing activity that Government can help to reduce or remove.
Alongside this, we will establish a new productivity review panel, made up of sector experts including the Office for Local Government and the Local Government Association.
The Government are grateful to all those who provided views on the proposal to use levers in local government finance settlements beyond 2024-25 to disincentivise the “four day working week” or equivalent arrangements of part-time work for full-time pay. The Government continue to believe that this reduces the potential capacity to deliver services by up to 20%, and as a result does not deliver value. We will consider responses to this question carefully as part of continuing policy development to deter local government from operating these practices, with any changes at future settlements subject to further consultation.
We are committed to improving the local government finance system beyond this settlement in the next Parliament and the Minister for Local Government—the Under-Secretary of State for Levelling Up, Housing and Communities, my hon. Friend the Member for North Dorset (Simon Hoare)—will be engaging with the sector over the coming months.
Conclusion
This settlement, and the changes we have made to address concerns raised through the consultation, will provide local authorities with the tools to support their local communities, continue to reform their services for the long-term, and help communities prepare for the future.
This written ministerial statement covers England only. The Barnett formula will apply to this funding in the usual way.
[HCWS241]
Local Government Finance
Michael Gove Excerpts(10 months ago)
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The Secretary of State for Levelling Up, Housing and Communities (Michael Gove)
Today, the Government have announced additional measures for local authorities, worth £600 million. This includes £500 million of new funding for councils with responsibility for adult and children’s social care, distributed through the social care grant. Further details on the exceptional provision of this funding will be set out at the upcoming Budget.
Taking into account this new funding, local government in England will see an increase in core spending power of up to £4.5 billion next year, or 7.5% in cash terms—an above-inflation increase—rising from £60.2 billion in 2023-24 to up to £64.7 billion in 2024-25.
By making progress on the Government’s plan to halve inflation, grow the economy and reduce debt, we now can provide this extra funding to councils to continue to provide vital services for their communities.
Introduction
On 18 December, I published a consultation on the provisional 2024-25 local government finance settlement. This consultation’s proposals made available over £64 billion to local authorities, an increase in core spending power of almost £4 billion, or 6.5% in cash terms on 2023-24.
The consultation ran until 15 January 2024 and we received 267 responses. Alongside this, the Under-Secretary of State for Levelling Up, Housing and Communities, my hon. Friend the Member for North Dorset (Simon Hoare), engaged extensively with colleagues across the House, meeting over 90 MPs and local government leaders to understand their views. I am grateful to all who responded.
We know that councils have faced cost pressures as a result of high inflation. That is why the Prime Minister has prioritised halving it—it is important that we stick to the plan. The Government have also listened to the sector and to the issues raised by Members of the House. For this reason, I am today announcing a wide-ranging package of support for local government.
First and foremost, I am pleased to announce an additional £500 million of funding for local government to deliver social care. This is further to the £1 billion in additional funding announced at the autumn statement 2022 and in July 2023. It will enable councils to continue to provide crucial social care services for their local communities, particularly for children.
Moreover, at the final settlement, I will set out plans to:
increase the funding guarantee to 4%, ensuring that all authorities see a minimum increase in core spending power of 4%, before local decisions on council tax—a key ask of district councils. Local authorities should of course be mindful of cost of living pressures when taking any decisions relating to council tax;
support rural councils by increasing the rural service delivery grant;
provide support to authorities experiencing significant difficulties because of internal
drainage board levies; and
provide additional funding for the Isle of Wight and the Isles of Scilly, in recognition of their unique circumstances.
These measures mean the local government finance settlement for 2024-25 will make available over £64.7 billion, an increase of 7.5% in cash terms on 2023-24. Representatives of all tiers for local government have expressed support for these measures, which will provide critical support across the sector to deliver services.
Social care
The Government recognise that pressures on social care, including for children, have increased significantly. In February 2023 the Government published their strategy for children’s social care reform. After listening to the sector’s consultation responses, and to make sure that councils can continue to deliver these services while we build the evidence for reform, I have today announced an additional £500 million of funding for local government. This will be allocated through the social care grant, which is ringfenced for adult and children’s social care. Where possible, councils should invest in areas that help place children’s social care services on a sustainable financial footing, while being mindful of the level of adult social care provision. This includes investment in expanding family help and targeted early intervention, expanding kinship care, and boosting the number of foster carers. This increase in funding will be reflected in the local authority allocations published at the final local government finance settlement.
This funding, in turn, will reduce pressures on other areas of children’s services, such as home to school transport, where we recognise there has been a significant increase in pressures for special educational needs and disability services.
Funding guarantee
We know that the whole sector is facing pressures, and we need to support all tiers of government to provide the services on which our communities rely. We have listened to the asks of the sector during the consultation period and, as part of this commitment, we are increasing the funding guarantee. This means councils will see their core spending power increase by a minimum of 4% before they have taken any local decisions on council tax. This is an increase from the 3% funding guarantee that we had proposed in the provisional settlement.
Rural services delivery grant
The Government have listened to the sector’s consultation responses and recognise the specific challenges and difficulties that local councils can face in serving dispersed populations in rural areas. I am therefore announcing my intention to provide a significant increase in funding delivered through the rural services delivery grant. I am announcing a £15 million increase to the grant in 2024-25. This is an increase of over 15%, making available a total of £110 million next year. This is the largest cash increase in the rural services delivery grant since 2018-19, and the second successive year of above-inflation increases.
Internal drainage boards
Last year we provided one-off funding to local authorities struggling with internal drainage board levies. We have listened to authorities that continue to face sustained increases in these levies. We will again provide £3 million outside of the settlement to support those experiencing the biggest pressures. We will work with the sector and the Department for the Environment, Food and Rural Affairs to implement a long-term solution.
Islands
In recognition of the unique circumstances facing our island authorities, and their physical separation from the mainland, we will be increasing funding to the Isle of Wight and the Isles of Scilly.
We will set out full details at the final settlement.
Working with the sector on efficiency
I would like to emphasise that this money, alongside all funding announced at the provisional settlement, should be used by local authorities to deliver the frontline services on which our communities rely, rather than put aside for later use. We will therefore continue to monitor the level of local authority reserves.
Looking ahead, we know that there is work to be done between national and local government to improve productivity in local government, as part of our efforts to return the sector to sustainability in the future. While the new funding announced today is an important part of these efforts, alongside ongoing work in adult and children’s social care, we can go further. That is why today we are asking local authorities to produce productivity plans setting out how they will improve service performance and reduce wasteful expenditure to ensure every area is making best use of taxpayers’ money. I encourage local authorities to consider whether expenditure on discredited equality, diversity and inclusion programmes meets this objective.
The Department for Levelling Up, Housing and Communities will be establishing an expert panel to advise the Government on financial sustainability in the sector, which will include the Office for Local Government and the Local Government Association. The panel will review local authority productivity plans and advise the Government on best practice in this area. The Government will monitor these plans and use them to inform funding settlements in future years. Our aim is for local authorities to produce these plans by the summer recess, and we will design a process for local authorities that will enable them to do so. We will provide more information on these requirements for local authorities at the final settlement.
With regard to part-time work for full-time pay arrangements—the so called four-day working week—the Government continue to believe that this reduces the potential capacity to deliver services by up to 20% and, as a result, does not deliver value. The Government have already taken steps to deter the sector from operating these practices, consulted on the use of financial levers at future settlements, and will legislate if necessary.
Conclusion
These proposals will provide councils with the support they need, ensuring stability and delivering additional resources for the most acute pressures. We will also hold the sector to account and help maximise local authorities’ efficiency and value for money.
Alongside the measures announced today, the Government continue to protect local taxpayers from excessive council tax increases through the proposed package of referendum principles, including the 3% core council tax principle and the 2% adult social care precept. It is for individual local authorities to determine whether to use the flexibilities detailed above, taking into consideration the pressures many households are facing.
We are committed to improving the local government finance system beyond this settlement in the next Parliament, and the Minister for Local Government will be engaging with the sector on this over the coming months.
The final local government finance settlement will be published in full early next month, and the statutory reports that comprise the settlement will be subject to debate in the House of Commons shortly after.
This written ministerial statement covers England only. The Barnett formula will apply to this funding in the usual way.
[HCWS206]
Oral Answers to Questions
Michael Gove Excerpts(10 months ago)
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Samantha Dixon (City of Chester) (Lab)
The Secretary of State for Levelling Up, Housing and Communities (Michael Gove)
Our £11.5 billion affordable homes programme will deliver thousands of affordable homes for rent and to buy right across the country. The levelling-up White Paper also committed us to increasing the supply of social rented homes, and a large number of the new homes delivered through our affordable homes programme will be for social rent.
Samantha Dixon
Local authorities have been stripped of resources for the past 14 years, and even Conservative Members agree with that. Does the Secretary of State recognise that local authorities and housing associations need certainty and stability over time, so that they have the confidence and security to invest in affordable social and council housing stock, rather than the Conservatives’ last-minute, unplanned changes that wreak chaos and instability?
Michael Gove
I certainly agree that housing associations do fantastic work in providing homes for social rent as well as shared ownership homes, and we work in partnership with them. We are aware of the many pressures they are under. The hon. Lady says that they need certainty and stability, but that is why it would be so damaging if there were a Labour Government with their £28 billion black hole, which would mean either more borrowing or tax increases, and higher interest rates for those aspiring to get on the housing ladder. That is why we should stick with the plan rather than going back to square one.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
In my constituency of Suffolk Coastal, Flagship is selling houses to second-home owners. That is a scandal. It tries to suggest that it is because it cannot repair them economically, but it is not offering them, first of all, to the local council. There are restrictions and covenants that could be put in place if these were council houses, but they are not; they are housing association homes. I would love to meet my right hon. Friend to discuss this matter further to make sure that the housing that was originally given to the housing associations stays for local people.
Michael Gove
I am grateful to my right hon. Friend for raising that issue. She represents one of the most beautiful constituencies in the United Kingdom and does so with great skill. It is because it is such a beautiful constituency that demand for housing is so high. The proportion of second homes in her constituency does create challenges for local people, which I would be more than happy to discuss with her at her convenience.
Mike Amesbury (Weaver Vale) (Lab)
Rather than levying fines of £2,500 on the most vulnerable people sleeping rough, as is proposed in the Criminal Justice Bill, will the Minister commit to building a new generation of social housing? The current levels are pitiful and are an embarrassment, are they not, Secretary of State?
Michael Gove
No, absolutely not. Our record on building social homes is significantly better than that of the last Labour Government. It is under our Administration that local authorities have been given the chance to take 100% of the receipts from right to buy and to reinvest them in social housing. It is this Government, spending £11.5 billion through the affordable homes programme, who are capable of delivering social homes. As we are talking of billions of pounds, the £28 billion black hole in the shadow Minister’s budget would devastate our housing market.
Mark Eastwood (Dewsbury) (Con)
Ian Byrne (Liverpool, West Derby) (Lab)
The Secretary of State for Levelling Up, Housing and Communities (Michael Gove)
Earlier this month we launched the consultation on Awaab’s law, which insists upon time limits for repairs in the social rented sector. In the shaping of this law and many other initiatives and interventions to help people in social housing, the example of Tony Lloyd, the late Member for Rochdale, is in all our minds and hearts. Awaab was one of his constituents, and Tony Lloyd could not have been kinder or more supportive of the efforts of my Department and others to see justice for Awaab’s family.
Ian Byrne
The household support fund has supported 330,000 households in Liverpool since its introduction. The focus needs to shift from crisis support to prevention but in the short term the demand for local welfare is rising. Like many other councils, Liverpool City Council says the household support fund will need to continue beyond March 2024 to keep residents well supported to stay in and enter work and prevent an escalating crisis, reducing pressure on public services including local authorities. What representations has the Minister made to the Treasury and the Department for Work and Pensions to ensure the continuation of the fund after March?
Michael Gove
The hon. Gentleman is absolutely right: the fund has helped many communities in need, particularly in Liverpool. He and other Liverpool MPs have been assiduous in making the case for its continuation and I have passed that on to colleagues.
Dr Luke Evans (Bosworth) (Con)
Justin Madders (Ellesmere Port and Neston) (Lab)
First, Mr Speaker, may I echo the comments made by the Secretary of State in relation to the late Tony Lloyd, who will be greatly missed in all parts of the House?
As we have heard from the shadow Secretary of State, the whole country has been levelled down since 2010 at an average rate of £10,200 per person. That is a damning indictment of this Government, but with about 1,300 projects funded by the future high streets fund, the towns deals and levelling-up funds, that decline should, in theory, not have happened. How many of those projects have now been completed and what evidence does the Department have that those projects have contributed to reducing regional inequalities?
Michael Gove
The evidence of the reduction in regional inequalities is perhaps most marked in Teesside and the Tees valley where the Conservative Mayor Ben Houchen has been responsible for overseeing an economic renaissance, renewed foreign direct investment, and improvements in public health and education. The message is clear: if we want levelling up to work, we need to elect Conservative mayors in May.
Alexander Stafford (Rother Valley) (Con)
Clive Efford (Eltham) (Lab)
Michael Gove
We always stand ready to work with local authorities of whatever stripe or colour to ensure the delivery of new homes. As the hon. Member knows, London is the region of the United Kingdom that has performed worst against its housing targets. Principally, that is down to the Mayor, not to individual local authorities, so I look forward to talking to him about what more we can do together.
Andrew Jones (Harrogate and Knaresborough) (Con)
Dan Carden (Liverpool, Walton) (Lab)
Michael Gove
I appreciate the advocacy of Liverpool MPs on behalf of those in temporary accommodation, and I appreciate the scale and nature of the problem. I have been working with the Mayor of Liverpool city region and others to look at a strategic futures advisory panel report that we believe will unlock not just additional housing, but additional investment in Liverpool and the Liverpool city region. I look forward to discussing that with the hon. Member and, indeed, the new leader of Liverpool City Council.
Paul Howell (Sedgefield) (Con)
Over the weekend, the Express ran a story about Ferryhill in my Sedgefield constituency being a dumping ground for rapists and paedophiles. My constituents believe that has been driven by housing groups advertising in the south to people that they have houses in places such as Ferryhill where no checks are required. Can the Minister meet me to discuss how we can stop the degeneration of places such as Ferryhill?
Rachel Hopkins (Luton South) (Lab)
I refer the House to my entry in the Register of Members’ Financial Interests. Today, more than 40 of the Government’s own MPs have written to the Prime Minister with their concern about the financial situation facing councils and the need for emergency funding. The Local Government Association says that there is likely to be a £4 billion funding gap over the next two years. If there are to be these council shortfalls and many people will not see the essential services they rely on, what will the Secretary of State do to ensure that people still have access to the vital services they so desperately need?
Michael Gove
I think that of the 40 MPs who wrote that letter, one was the hon. Member for Cambridge (Daniel Zeichner) and one was the hon. Member for Somerton and Frome (Sarah Dyke), so I look forward to their joining our ranks as part of the swelling tide of Conservative support that I see across the country. On the specifics of the hon. Member’s point, we have been listening carefully to colleagues in local government and will respond in due course.
Andy Carter (Warrington South) (Con)
Local council tax payers in Warrington quite rightly expect high levels of governance and transparency when councillors are using public money to invest in commercial businesses, which carries a high level of risk. Does the Minister agree that the decision by Labour-run Warrington Borough Council to reduce the number of opposition councillors on its audit committee flies in the face of good governance and that questions need to be asked about how it is managing its £1.8 billion debt?
Janet Daby (Lewisham East) (Lab)
Does the Secretary of State think it is acceptable that leaseholders of Lee Court in my constituency should be without heating and hot water, as well as experiencing multiple problems in the communal area? If he does not think that is acceptable, how and when will he strengthen the Leasehold and Freehold Reform Bill to stop these injustices from happening?
Michael Gove
I absolutely accept that, and I believe that I wrote recently to Lewisham council to draw attention to its responsibilities in the area.
Peter Gibson (Darlington) (Con)
On Metro Mayors, may I draw my right hon. Friend’s attention to the decision of Ben Houchen to deliver the £250 million Darlington northern link road using Network North funds? Does he agree that that is a fantastic example of Ben delivering for Darlington and the Tees Valley?
Michael Gove
It is just another example of Ben Houchen as Metro Mayor using all the powers at his disposal and the resources released by this Conservative Government to ensure that, at last, Teesside and the Tees Valley gets the investment it needed. One reason he attracts so much criticism from the Labour party is that he is a Tory who delivers for Teesside in a way that no one has ever delivered before.
Jim Shannon (Strangford) (DUP)
Will the Minister commit to further levelling-up funding for the devolved institutions for local sports clubs across Northern Ireland, instead of funding Casement Park to the detriment of every other sport looking for funding in Northern Ireland, so that all traditions and all sides of the community can benefit from the funding?
Michael Gove
I take the hon. Gentleman’s point seriously. It is important that we support grassroots sport and other civil society organisations in Northern Ireland. We are working hard to try to ensure that we can do that with our partners in a restored Executive. In the meantime, I should say that I am grateful to Ulster rugby for ending its relationship with Kingspan, which means that we can unlock additional funding for grassroots rugby across Northern Ireland.
Jonathan Gullis (Stoke-on-Trent North) (Con)
While I am deeply disappointed that Stoke-on-Trent Labour refuses to make the necessary terms and conditions changes to help save Stoke-on-Trent City Council funding, there is a united view across the political divide in Stoke-on-Trent that the legacy in children’s social care is causing huge financial strain on the local authority. Will the Secretary of State do everything he can to work with Councillor Jane Ashworth to ensure that that gap is funded and those children—the most vulnerable in our society—are protected?
Michael Gove
Absolutely. I hope that the House will note that my hon. Friend, who fights incredibly hard for his principles and for Stoke-on-Trent, is taking a typically statesmanlike approach in putting his constituents first. Come the next general election, people should remember that he is someone whose big heart reflects their good values.
Andrew Selous (South West Bedfordshire) (Con)
Road safety is put at risk by roads that are not adopted, because speed limits cannot be enforced and often they do not get gritted. There are serious worries that people will get injured. What more can the Department do to ensure that key service roads on big, new housing estates get adopted more quickly?
Michael Gove
My hon. Friend is absolutely right. We need to ensure that developers live up to their responsibilities to provide appropriate infrastructure. It has been the case that a number of fleecehold—for want of a better word—developments have unadopted roads, where children are at risk.
Economic Activity of Public Bodies (Overseas Matters) Bill
Michael Gove ExcerptsWednesday 10th January 2024
(10 months, 2 weeks ago)
Commons ChamberRead Full debate Economic Activity of Public Bodies (Overseas Matters) Bill 2022-23 View all Economic Activity of Public Bodies (Overseas Matters) Bill 2022-23 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 25 October 2023 - (25 Oct 2023)
The Secretary of State for Levelling Up, Housing and Communities (Michael Gove)
I beg to move, That the Bill be now read the Third time.
I am grateful for the opportunity to move the Third Reading of this Bill. As the House will know, this Bill was introduced before the King’s Speech, in the last parliamentary Session; it is a carry-over Bill. I begin by thanking all those who took part in the consideration of this Bill on Second Reading, in Committee and on Report.
Inevitably, following on from its introduction, debate around the Bill has occurred in the dark shadow of the events of 7 October and the continuing conflict in Israel and Gaza. That is why I want to stress, as I sought to do on Report, my gratitude for the thoughtful way in which every Member of this House has contributed to debate on this Bill. While there is, I know, a difference of opinion about the appropriateness of the measures we are bringing forward, everyone in this House is committed to ensuring that we act against antisemitism, everyone in this House is committed to ensuring that we can see a peaceful solution to the conflict in the middle east, and everyone in this House is committed to a two-state solution as the means by which we can bring peace to that troubled region.
The Bill upholds a principle that was originally outlined in our 2019 general election manifesto. During the course of consideration of the Bill we have heard from a number of organisations, both in Committee and in broader public debate about the Bill, all affirming its timeliness and importance in dealing with the continuing and growing threat of antisemitism, and upholding the importance of making sure that the UK Government speak with one voice, in a united way, on behalf of all of us, on foreign policy, as a reserved matter for the Government.
In that context, it is important to deal with one or two entirely understandable and legitimate concerns that have been raised about the interplay between the Bill itself and UK Government foreign policy. I know some particular concerns have been raised about clause 3(7). I assure colleagues that the clause does not contravene in any way our foreign policy or inhibit in any way the UK Government’s taking action if we believe there is activity in the Occupied Palestinian Territories that requires to be called out.
We continue to raise, as the Foreign Secretary has recently, issues of illegal settler activity, and Lord Cameron has been clear with the Israeli Government that the UK Government are in profound disagreement with some of those actions and some of that activity. I will come on to that in just a second. I should say that the clause does not prevent the Government establishing sanctions or using travel bans against those who have been linked to blatant human right abuses. It is simply the aim of this legislation to prevent public bodies from adopting their own foreign policy, as such decisions should ultimately be the remit of the Government and this House.
Several hon. Members rose—
Michael Gove
I know, given the nature of the debate on this Bill, that a number of colleagues would like to intervene; I will try to answer questions briefly, because I know a number of colleagues would like to take part in the debate.
Richard Fuller (North East Bedfordshire) (Con)
Hypotheticals are not always helpful, but I beg my right hon. Friend’s indulgence in this hypothetical on that particular point about the interaction between clause 3(7) and UK foreign policy. UK foreign policy is clear that illegal Israeli settlements in the occupied territories are against international law. This Bill would provide that, if a pension fund were given an investment policy for expanding, say, an infrastructure fund proposal in the occupied territories, it would have no moral basis for refusing to invest, although that investment would be expanding Israeli policies contrary to UK foreign policy. Can the Secretary of State explain how to unpack that so that what he has just said is what I believe is true?
Michael Gove
It is specifically the case that public bodies, including the local government pension scheme and local authorities, should not be taking decisions that conflict with UK Government foreign policy, and we are absolutely clear that it would conflict with UK Government foreign policy if they were to engage in freelance activity of that kind. However, it is perfectly open to any representative, including any elected representative, to express their personal disapproval of the activities of the Israeli Government or any organisation that operates within the settlements.
Richard Burgon (Leeds East) (Lab)
I have been listening carefully to what the Secretary of State is saying on that point, but last year, the Government stated:
“The UK has a clear position on Israeli settlements in the Occupied Palestinian Territories: they are illegal under international law”.—[Official Report, 23 March 2023; Vol. 730, c. 412.]
To speak plainly, is not the Secretary of State ashamed that, through this clampdown on the democratic right to boycott, his Government are restricting the rights of those who want to take peaceful action against violations of international law, and are in effect siding with those breaking international law?
Michael Gove
With respect to the hon. Gentleman, who has taken a close personal interest in the conflict—I appreciate the sincerity with which he raises that point—absolutely not. There is a clear intention in the Bill, which is to deal specifically with the boycott, divestment and sanctions campaign and its attempts to use the legitimacy of local government and other intermediate institutions to undermine the UK Government’s foreign policy. The UK Government, of whichever colour, must speak with one voice on behalf of the whole United Kingdom when it comes to foreign policy matters. As I am sure the hon. Gentleman will agree, the Minister of State, Foreign, Commonwealth and Development Office, my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell), and the Foreign Secretary have, from this Dispatch Box and in the other place, been clear with the Israeli Government when they think that it is appropriate to criticise their actions and indeed those of individuals operating within the settlements, but there is an important distinction to be drawn between criticism of the Israeli Government, criticism of the acts of particular individuals and the nature of the BDS campaign itself.
I am grateful to Opposition Front Benchers—although we have our disagreements—and to Labour Friends of Israel for making it clear that the BDS movement itself is explicitly and regrettably antisemitic. It deliberately sets out to argue that the state of Israel as a home for the Jewish people should not exist.
Tom Hunt (Ipswich) (Con)
I agree with the comments that the Secretary of State has just made. Israel is pretty much the only country that is targeted in this way despite the fact there are a number of appalling regimes around the world. On local authorities, does he agree that a lot of councillors should focus on their core job of running local services instead of virtue-signalling and clumsily weighing in on complex international issues?
Michael Gove
Not for the first time, I entirely agree with my hon. Friend. He summed up in that intervention two of the critical points in the Bill. First, local government has many important functions. Intervening in foreign policy in a way that can exacerbate community tensions is emphatically not one of them. Secondly, there has been a unique focus on the state of Israel. Of course, there are criticisms that can and should be mounted against the state of Israel, its Government and their activities. However, the BDS campaign singles out Israel for special treatment. We have not seen attempts by local government to criticise, for example, the actions of Bashar al-Assad in Syria or a variety of other regimes that have been targeting innocent Muslim lives.
Again, one point that was made clearly by the now sadly departed former Chief Rabbi, Lord Sacks, was that antisemitism is a virus that mutates over time. In the past, it was directed towards Judaism as a faith. Then it mutated to be directed towards the Jewish people through direct racism. Now antisemitism finds an expression through an attempt to deny the Jewish people the same right of self-determination and the same right to a homeland that we extend to all peoples.
Support for the Bill from Jewish organisations in this country—the Jewish Leadership Council, the Board of Deputies of British Jews and so on—has been clear, but perhaps the most telling are the words of the Community Security Trust, which is there to physically protect Jewish people and communities. The CST is scrupulous in not offering any commentary on matters in Israel and the middle east or on foreign policy—it eschews doing so because it recognises the diversity of views within the Jewish community on some of those questions—but it has said that BDS
“has a chilling impact on Jews, a modern reminder of anti-Jewish boycotts. It also serves to legitimise the shunning of Jews from ‘decent’ society. And having been shunned…that’s a half way house to all manner of more abusive and physical outcomes.”
When we have seen a 537% increase in antisemitic incidents, I think it important to bear those words in mind.
Stephen Crabb (Preseli Pembrokeshire) (Con)
My right hon. Friend is making some extremely important points about the nature of the BDS movement. Is it not the case that, as he says, there have been very few examples of councils looking to use the levers available to them to protest against other international issues? Is that not because the whole BDS movement—in fact, the label “BDS”—has been entirely constructed as a weapon against the state of Israel? When we look at the origins of the movement, we see, unfortunately, that it is riddled from top to bottom with antisemitism.
Michael Gove
I am afraid that my right hon. Friend is absolutely correct. Again, to be more than fair, many prominent Labour voices have made precisely that point: the BDS campaign, those who created it and those who run it are very clear that they are singling out Israel. They want to see an end to Israel as a Jewish state.
I am very conscious of the fact that a number of right hon. and hon. Members wish to contribute to the debate. I also want to emphasise again that a horror and revulsion of antisemitism and prejudice of all kinds is shared across this House, as is a determination to see peace in the middle east. We have rehearsed the arguments, with great contributions in Committee and on Report, and I believe that this Bill is a targeted and proportionate approach to dealing with a unique evil. I hope that we will be able to support the Bill, but as I say, dissenting voices in this House must always be heard with respect. With that, I commend the Bill to the House.
Several hon. Members rose—
Michael Gove
Thank you very much, Mr Deputy Speaker. I would like to thank everyone who has spoken on Third Reading, including my hon. Friend the Member for Penistone and Stocksbridge (Miriam Cates), who was articulating the vital importance of recognising where antisemitism begins and where it ends. I also wish to thank those who spoke powerfully from a personal point of view: my right hon. Friend the Member for Chipping Barnet (Theresa Villiers), who has only recently returned from Israel, of which she has been such a strong friend and supporter, and the hon. Member for Oxford West and Abingdon (Layla Moran). Our heart goes out to not only her family, but all those suffering in Gaza at the moment.
I wish briefly to address one misconception, which is that this Bill acts as an effective restraint—a gagging clause—on free speech. The hon. Member for Hammersmith (Andy Slaughter) talked of faith groups being silenced and so on. As the explanatory notes make clear, individuals are in no way prohibited from expressing their view, however disagreeable we might find it, on the conflict in Israel and Gaza, or from expressing a view, which I would abhor, that the state of Israel should not exist. What is clear is that only public authorities, not individuals, are governed by this Bill. The hon. Member for Warwick and Leamington (Matt Western) rightly drew attention to the importance of freedom of speech, not least on campus and with academic freedom at its heart. I can reassure him, and he can be reassured, that whatever other misgivings he has about this Bill, it is not a direct assault on the principle of free speech. It is simply, clearly and tightly drawn in order to ensure that public bodies, public authorities, cannot abuse the position that has been vested in them as corporate bodies to more broadly undermine the foreign policy of the UK or, particularly in this case, as has been pointed out by a number of hon. Members and indeed by the Opposition Front-Bench team, to give succour to an explicitly antisemitic campaign. Again, I stress there will be different opinions across the House about the best way of securing Israel and of securing freedom for the Palestinians. The fact that debates are so intense in this House reflects the care and passion that so many Members bring to that debate.
However, the Bill is explicitly about making sure that citizens in the United Kingdom, who have been targeted by explicitly antisemitic campaigns, get the protection for which the organisations that stand up for them have been asking. In the spirit of the Community Security Trust, the Board of Deputies of British Jews and the Jewish Leadership Council, I hope that as many Members as possible—
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
On that point, will the Secretary of State give way?
Michael Gove
I will not as I have only seconds left. I hope that as many Members as possible will feel that they can support the legislation.
Social Housing Quality
Michael Gove Excerpts(10 months, 2 weeks ago)
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The Secretary of State for Levelling Up, Housing and Communities (Michael Gove)
On 21 December 2020, just days after his second birthday, Awaab Ishak died having suffered a severe respiratory condition. The coroner’s inquest, in November 2022, concluded that his death had been caused by mould in his social home in Rochdale. His parents had repeatedly raised concerns with their landlord about the poor state of the one-bedroom flat. Others, including health professionals, also raised the alarm on their behalf. Not only were these requests for help ignored but the family was blamed for causing the lethally dangerous conditions in which they were forced to live. Social landlords like Rochdale Boroughwide Housing are not altruistic amateurs but professional organisations providing a service; it is their responsibility to meet basic repair requirements to keep residents safe in their homes.
In order to enforce this responsibility, and to ensure that no other family suffers such a tragic bereavement owing to a landlord’s failure to address health and safety risks, the Government introduced Awaab’s law as part of the Social Housing (Regulation) Act 2023. This landmark legislation, which entered the statute book on 20 July last year, will improve the quality of social housing accommodation and redress the balance between social landlord and tenant, giving residents a stronger voice.
Today, I am pleased to announce that the Government have launched our consultation on how Awaab’s law should operate in practice, including the specific requirements it will place on social landlords. For the first time, landlords will have to meet regulatory requirements on how quickly they must act to address hazards such as damp and mould in their tenants’ homes. The new requirements will form part of all social housing tenancy agreements, so that landlords who fail to fulfil their duties and miss timescales for repairs can be held to account by law.
The proposed requirements, which have been drawn up with the support of Awaab Ishak’s family, include:
exacting timescales for investigations and repair works when hazards in social homes are reported;
robust recording by social landlords of actions taken in response to hazards, and the issuing of written summaries of investigation findings to residents;
and the offering of suitable alternative temporary accommodation in circumstances where it is unsafe for residents to remain in a property.
Following the consultation, we will introduce secondary legislation as soon as possible to bring Awaab’s law into force.
I wish to pay tribute to Awaab’s parents, Faisal Abudullah and Aisha Amin, for their courageous and tireless campaign for justice, not only for their son but all residents of social housing. It was my honour to introduce Awaab’s law in their son’s name. I would also like to put on record my thanks to the Manchester Evening News and Shelter for supporting this cause, and to the 177,820 members of the public who supported the family’s petition.
Finally, while Awaab’s law is at the heart of the Government mission to improve the quality of social housing, this is just one part of the biggest Government reforms to social housing in a decade. Since 2010, there has been a steady improvement in the quality of social housing with a reduction in the proportion of non-decent social rented homes from 20% in 2010 to 10% in 2021. We are committed to taking further action on a number of other fronts, including consulting on a new minimum energy efficiency standard for the social rented sector; consulting on a competence and conduct standard for social housing staff, including professional qualification requirements for senior housing managers and executives; publishing the Government response to our consultation on new electrical safety requirements for the social rented sector; and we have also consulted on new directions to the regulator of social housing relating to the provision of information on tenants’ rights and complaints. This Government continue to be committed to naming and shaming social housing providers who have failed their residents and breached regulatory standards, including Camden Council’s fire safety failures across thousands of their homes. Collectively, these measures support our ambition to halve the number of non-decent rented homes by 2030, drive up standards across the social rented sector and rebalance the relationship between landlord and resident.
[HCWS174]
Long-term Plan for Housing: Next Stage
Michael Gove Excerpts(11 months, 1 week ago)
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The Secretary of State for Levelling Up, Housing and Communities (Michael Gove)
This Government are committed to building more homes, more quickly, more beautifully and more sustainably. The best way to deliver is through a reformed planning system. Today we lay out our plan for reform. It is only through up-to-date local plans that local authorities can deliver for communities, protect the land and assets that matter most, and create the conditions for more homes to be delivered. Having plans in place unlocks land for homes, hospitals and GP centres, schools, power grid connections and more—laying foundations for the country’s economic growth and the levelling up of communities for decades to come.
Too many local authorities have no up-to-date plan, too many take too long to get their plan in place and too many plans do not deliver as they should. Even when plans are in place, too many local authorities take too long to determine applications, too many reject proposals that are in line with their policies and officers’ recommendations, and too many fail to ensure a proper pipeline of housing delivery.
Where plans are not in place, or not working effectively, communities are unprotected from speculative development. Houses still get built, but too often in inappropriate locations, too slowly and without the right infrastructure or community assets in place.
That serves no one well. Communities do not have control. Developers do not have certainty. Homes for the next generation do not get built at the rate, or in the locations, we need.
This Government have a coherent, holistic, long-term reform programme to ensure the planning system at last delivers as it should.
Today’s update to the national planning policy framework (NPPF) addresses the concerns expressed by local elected representatives about weaknesses in the planning system that led to frustrations about the nature of development. It provides clearer protection for the green belt, clarity on how future housing supply should be assessed in plans, certainty on the responsibility of urban authorities to play their full part in meeting housing need, and protections for the character of precious neighbourhoods, safeguarding the gentle density of suburbs and ensuring family homes are there for the next generation.
These changes meet the clearly expressed, and wholly understandable, wishes of elected politicians of all parties to deliver for their communities. Taken alongside other changes in the Levelling-up and Regeneration Act 2023, they entrench the importance of beauty in new development, facilitate the delivery of improved infrastructure, respect the democratic voice of local communities, secure enhancements to our natural environment and deliver quality new neighbourhoods.
With these changes secure, there is now an added responsibility on local government to deliver. The reasons sometimes cited for resisting new development and expediting its delivery have been clearly addressed. So I am setting new expectations for faster delivery, strengthening accountability so poor performers can be better identified, taking further steps to enforce effective delivery of new housing where local authorities have failed most egregiously, and putting other, failing, local authorities on notice of my intention to intervene if performance does not improve significantly.
With this higher level of expectation comes additional resource. We need excellent planners, well funded and well supported, to deliver the many more beautiful new homes we need. Planning is a noble profession and its role in making our communities work for every citizen is vital. That work has not always been recognised and respected as it should be. So I will provide funds to support and reward planners in local government and dedicate the very best in central Government to work with them to deliver.
Our approach to planning is of a piece with the broader approach my Department has taken to local government. We have listened sensitively to elected representatives and given them more of the powers and freedom they have requested. But with that greater freedom comes greater accountability. Where failure occurs, we intervene more quickly and decisively. Where failure risks compromising the national interest, we intervene more comprehensively. We will provide additional resource to support vital professional leaders on the frontline. We will champion their good practice, not least through our new watchdog, the Office for Local Government, but we will also demand that all aspire to reach the standard of the best.
With both the Levelling-up and Regeneration Act and the new NPPF now in place, alongside the additional resources for planning departments I am announcing today, our planning reforms will accelerate the delivery of new homes. We are on track to deliver 1 million homes this Parliament, in line with our manifesto commitment. Our reforms will also strengthen our ability to meet our target of 300,000 additional homes a year. The next generation need those homes built. Future generations need to know the developments we build for them will be beautiful and will endure, and they want the natural environment enhanced to match a better built environment. That is what we will deliver.
National Planning Policy Framework
The NPPF is the backbone of the planning system—it sets the framework within which local authorities, the Planning Inspectorate and applicants to the system must operate. Plans must take the framework into account, and it is a material consideration for decisions. This makes it fundamental to the delivery of new housing in the right places, while also protecting and enhancing the things we care most about: our environment, heritage assets, our high streets and beyond.
In December 2022, I launched a consultation on changes to the NPPF. We received 26,000 responses and have considered them carefully. In summary, the new NPPF will: facilitate flexibility for local authorities in relation to local housing need; clarify a local lock on any changes to green-belt boundaries; safeguard local plans from densities that would be wholly out of character; free local authorities with up-to-date local plans from annual updates to their five-year housing land supply; limit the practice of housing need being exported to neighbouring authorities without mutual agreement; bolster protections from speculative development for neighbourhoods that develop their own plans; support self-build, custom-build and community-led housing; and cement the role of beauty and place making in the planning system.
There is now no excuse for local authorities not rapidly adopting ambitious plans. The more plans adopted quickly, the more homes delivered quickly—and we have created the right incentives for rapid plan adoption.
The updated NPPF published today contains and should be referred to for the policy changes described in this statement. The full suite of changes are detailed in the Government’s consultation response, but the principal changes are set out here.
The Purpose of Planning
The opening chapters of the NPPF have been updated to provide clarity on a core purpose of the planning system: planning for homes and other development that our communities need. It is also clear that having up-to-date plans in place is a priority in meeting this objective. All the following changes in the framework reflect this fundamental purpose and priority.
Local Housing Need
The standard method for assessing local housing need ensures that plan making is informed by an unconstrained assessment of the number of homes needed, in a way that addresses projected household growth and affordability pressures, alongside an efficient process for establishing housing requirement figures in local plans.
These figures have, however, sometimes been difficult to achieve in some areas and blind to the exceptional characteristics of a local community. That is why the new NPPF makes it clear that the outcome of the standard method is an advisory starting point in plan making for establishing the housing requirements for an area. Some local authorities may wish to deliver more homes. Where a local authority considers the number unachievable, it must provide robust evidence for that judgment. The revised NPPF provides clarity on what may constitute such exceptional circumstances for using an alternative method to assess housing need, including the particular demographic characteristics of an area, which could include those that may result from the unique nature of islands. Any assessment will be subject to examination as usual.
The Government also considered allowing authorities to take account of past “over-delivery” when preparing new plans. Having considered responses to the consultation, which raised questions over needing to also consider “under-delivery” and the risk of double counting homes via the standard method, we are not proceeding with this change at this time.
Green Belt
This Government are committed to protecting the green belt. Planning policy already includes strong protections to safeguard green belt for future generations. The green belt is vital for preventing urban sprawl and encroachment on valued countryside. England’s cities are already less dense than those of most of our European neighbours. That is environmentally wasteful and economically inefficient. We seek to support the gentle densification of urban areas in preference to the erosion of green-belt land. That is why the Government are ensuring it is clear that there is generally no requirement on local authorities to review or alter green-belt boundaries if this would be the only way to meet housing need. Where a relevant local planning authority chooses to conduct a review, existing national policy will continue to expect that green-belt boundaries are only altered where exceptional circumstances are fully evidenced and justified, and this should only be through the preparation or updating of plans.
The Government are making no changes to the rules that govern what can and cannot be built on land that is green belt, but we are clarifying in guidance where brownfield development in the green belt can occur provided the openness of green belt is not harmed. I understand that the Opposition have advocated this as if it would be a new approach, suggesting a misunderstanding of existing policy, which the Government are therefore happy to make even clearer in practice guidance.
Character
This Government believe in heritage, beauty and community. It is important that the character of an existing area is respected by new development, particularly in the historic suburbs of our great towns and cities. The new NPPF therefore recognises that there may be situations where significant uplifts in residential densities would be inappropriate as they would be wholly out of character with the existing area, and that this may in turn affect how much development can be planned for in the area concerned. This will apply where there is a design code that is adopted or will be adopted as part of the local plan.
Exporting Housing Need
The standard method was amended in 2020 to include an uplift in need for the 20 most populated English cities and urban centres. This urban uplift supports the Government’s objectives, as outlined above, to make the best use of previously developed land and locate more homes in our larger towns and cities, where development can help to reduce the need to travel and contribute to productivity, regeneration and levelling up. The updated NPPF now makes it clear that this uplift should be accommodated within those cities and urban centres concerned rather than exported to surrounding areas—except where there is a voluntary cross-boundary agreement to do so, or where this would conflict with other policies in the NPPF. This complements the repeal of the duty to co-operate through the Levelling-up and Regeneration Act, which will shortly come into effect.
Five-year Housing Land Supply
Up-to-date local plans ensure local communities are in control of where and what development happens in their area. They are key to getting more homes built in the right places. Where such plans are in place, the Government are committed to protecting local authorities from unwarranted speculative development.
The Government consider an up-to-date plan to be a plan that is less than five years old, and which contained a deliverable five-year supply of land at the conclusion of its examination. All planning authorities are required to maintain a five-year supply of land to ensure homes and wider developments are built in the right places. However, authorities have previously been required to update this supply annually in a process that was burdensome and provided too many opportunities for speculative development.
We are now changing this and removing the requirement for planning authorities that have done the right thing and put an up-to-date plan in place to update annually their five-year supply of land. This change provides these authorities with additional protection from the presumption in favour of sustainable development. I am also fully removing the 5% and 10% buffers that could be applied to an authority’s housing land supply. A transitional arrangement will ensure that decision making on live applications is not affected, avoiding disruption to applications in the system.
We are also rewarding local authorities at an advanced stage of plan making. Some local authorities have paused plan making in recent months. That is not good policy, it lets communities down, and we have warned of the consequences. Local plans at examination, regulation 18 or regulation 19 stage with a policy map and proposed allocations towards meeting housing need only have to demonstrate a four-year housing land supply—as opposed to a five-year supply—for a period of two years for decision-making purposes. That protection is not afforded those who have dragged their feet.
Tough measures will bite where local authorities do not have an up-to-date local plan. They will be required to update their supply annually, and if they fail to do so, they will be subject to the presumption in favour of sustainable development. Local authorities will have a clearer incentive than ever to get plans in place. Without them, authorities will not be able to control development as their community might wish. There are clear consequences to failing to get a plan in place that delivers a pipeline of new housing.
Another way in which consequences are applied in the planning system is through the housing delivery test. This test is an assessment of an authority’s previous three years of housing delivery, and where there has been under-delivery, consequences follow. Today I am making some changes to these consequences. The 20% buffer an authority needs to add to its housing land supply where housing delivery falls below 85% of its requirement will now only apply to those authorities that do not have an up-to-date plan in place.
All authorities will, however, continue to be subject to the other consequences: producing an action plan identifying the reasons for under-delivery and the measures the authority will take to correct it where delivery falls below 95%; and becoming subject to the presumption in favour of sustainable development where delivery falls below 75%.
In summary, we want to make life easier for those authorities who are doing the right thing, getting their plans in place and delivering housing, but also ensure that authorities that continue to fail their communities on housing delivery are held to account.
When it comes to calculating a five-year housing land supply, the Government are clear that we want to bring the position on past over-supply in line with that of past under-supply. We have amended the NPPF to formalise existing planning practice guidance on this topic and will in due course update this guidance to bring the over-supply position in line with under-supply. We will also give further consideration to the proposal to take permissions granted by a local authority into account in the application of the housing delivery test, in particular the operational challenges with doing so identified in the consultation.
Neighbourhood Plans
The poor performance of local planning authorities will lead to consequences. But local communities that have worked hard to put neighbourhood plans in place should not be penalised for the failure of their council to ensure an up-to-date local plan. The new NPPF therefore protects neighbourhood plans from speculative development from two to five years, where those plans allocate at least one housing site.
Community-Led Housing and Self and Custom Build
The best councils know that driving faster housing delivery requires supporting diversity in the number and type of builders. Councils that support small and medium-sized enterprises in the housing market, and enable custom and self-build homes, drive the necessary increase in supply and better ensure the right homes are provided in the right places. The updated NPPF now emphasises the importance of community-led housing development, including by introducing an exception site policy for community-led housing development. Our policy changes also ensure that local authorities should seek opportunities to support small sites to come forward for community-led housing, and self-build and custom-build housing. They also encourage “permission in principle” alongside other routes to permission, such as local development orders, to remove barriers for smaller and medium site builders in the planning system.
The Government will also encourage the delivery of older people’s housing, including retirement housing, housing with care, and care homes, by requiring these to be specifically considered in establishing need.
The Role of Beauty
Building beautifully and refusing ugliness has been central to the Government’s planning reforms, as the right aesthetic form makes development more likely to be welcomed by the community. From today, the NPPF goes further to cement the role of beauty and place making in the planning system by expressly using the word “beautiful” in relation to “well-designed places”. It also now requires greater “visual clarity” on design requirements set out in planning conditions to provide certainty for those implementing planning permissions, and supports gentle density through mansard roof development where appropriate.
Environment and Energy
The new NPPF also strengthens protections for agricultural land, by being clear that consideration should be given to the availability of agricultural land for food production in development decisions, and supports the Government’s energy security strategy by giving significant weight to the importance of energy efficiency in the adaptation of existing buildings, while protecting heritage. These amendments will not impose any costs on home or building owners.
Wider Reforms Beyond the NPPF
In addition to those policies we have now updated in the NPPF, in December 2022 I set out ambitions for other housing policies in relation to short-term lets regulations and the character of developers, noting the importance of these issues to communities.
On the character of developers, I also set out concerns about examples of how the planning system is undermined by irresponsible developers and landowners who persistently ignore planning rules and fail to deliver legal commitments to the community. I consulted to explore whether an applicant’s past behaviour should be taken into account in decision making, either through making irresponsible behaviour a material consideration or allowing local planning authorities to decline applications from applicants with a bad track record. Both options would require primary legislation and therefore are beyond the scope of this NPPF update. I welcome views expressed in the consultation and will consider these carefully in further policy development. To address the concerns and frustrations expressed by communities about breaches of planning control more immediately, I am now implementing the planning enforcement package in the Levelling-up and Regeneration Act. This includes extending the time limits to take enforcement action, increasing maximum fines and reducing loopholes to appeal against enforcement action.
Finally, I am committed to tackling slow build-out rates, recognising that that remains a major concern. I will do so through a consultation on measures to improve build-out rates once the Competition and Markets Authority has published its final report as part of its housebuilding market study in 2024.
Planning Performance
With the updated NPPF now reforming the planning system to take account of the concerns and hopes expressed by locally elected representatives of all parties, it is now up to those who make it work—local authorities, the Planning Inspectorate and statutory consultees—to expedite delivery.
My expectations are simple: planning decisions must be taken on time and should be robust in their reasoning, and all authorities must have an up-to-date local plan. After a period of review and reform, local authorities now have certainty, and with that certainty I now expect a higher level of performance.
As I said in a letter to all local authorities in September, that means: development should proceed on sites that are allocated in an adopted local plan with full input from the local community unless there are strong reasons why it cannot; councils should be open and pragmatic in agreeing changes to developments where conditions mean that the original plan may no longer be viable, rather than losing the development wholesale or seeing development mothballed; and better use should be made of small pockets of brownfield land by being more permissive, so more homes can be built more quickly, where and how it makes sense, giving more confidence and certainty to SME builders.
Today I am going further still, taking steps to improve planning performance on four fronts.
Greater Transparency
Being transparent about data improves understanding of relative good and poor performance, and sparks action. That is why we will publish a new local authority performance dashboard in 2024.
As part of that reporting, we will expose the way in which some local authorities drag their feet. We will strip out the use of extension of time agreements, which currently mask poor performance. While I recognise that there will be instances where such agreements are necessary, I am concerned by the increase in their use—in particular for non-major applications, where the figure has jumped from 9% during the two years to March 2016 to 38% during the two years to March 2022. I therefore intend to consult on constraining their use, including banning them for householder applications, limiting when in the process they can apply, and prohibiting repeat agreements.
Additional Financial Support
In recognition that we are expecting better performance from local authorities, we are providing additional resource to help meet those expectations through a range of new funding streams.
First, as of 6 December, planning fees have increased by 35% for major applications and 25% for other applications. Local authorities are obliged to spend these fees on planning services, and I am clear there should be no decrease in authorities’ spend on planning from their general fund.
Secondly, following the Chancellor’s boost to the planning skills delivery fund at the autumn statement to a total £29 million, 180 local authorities have today been awarded a share of £14.3 million from the first round of funding. This will better enable them to clear their planning application backlogs and invest in the skills needed to deliver the changes set out in the Levelling-up and Regeneration Act.
Thirdly, we are establishing our planning super squad members—the new team of leading planners and specialists whose talents will be used to unblock major developments—with £13.5 million to fund their work.
Fourthly, the autumn statement allocated £5 million to support local development orders. These are a powerful way for local authorities to grant planning permission up-front where development meets pre-determined rules, but have been underused. The Government recognise both the different nature of the process for developing a local development order and the loss of fee income could disincentivise take up, and will therefore use this £5 million to support a small number of authorities with exciting proposals to get such orders in place—and, if successful, look to expand this kind of support more widely.
Fifthly, and demonstrating that we will act to support development where the Opposition seem determined to block it, we are today allocating up to £57 million to the eight successful bids in the first round of the local nutrient mitigation fund. At the same time, we are confirming that the second round will open for bids in January 2024, and providing a further round of nutrient support funding in the form of £100,000 to the lead local authority for large, affected catchments. The Environment Secretary and I are determined to do more in the new year to unblock these stalled homes, while enhancing public access to nature and leaving our environment in a better state than we found it.
Faster Processes
Today we also address wider causes of delay in the planning system, with action on statutory consultees, customised arrangements for major applications, and support to prioritise the work of planning committees.
On statutory consultees, while the statistics suggest that most do respond within the 21-day limit, the use of holding responses is disguising a process that is too slow. The Levelling-up and Regeneration Act makes sure statutory consultees can charge for pre-application advice, which should tackle problems upstream for developers and reduces downstream requests from local authorities.
I am, however, convinced there is more we can do. I am asking Sam Richards to lead a rapid, three-month review into the wider statutory consultee system to understand how best to direct their advice and resources to support speedy and effective decision making. I also expect to see greater discretion and judgement applied by both local authorities and statutory consultees on where advice is sought and where it needs to be offered.
Accelerated planning services, which were confirmed in the autumn statement, will build on the existing model of planning performance agreements, which are struck between local authorities and developers, detailing how an application will be handled and what timescales will apply. While we know these agreements work well in some areas, it is also clear that they are used inconsistently, with many developers finding that the payments charged and the level of service offered vary significantly between authorities.
We will now look to regularise these arrangements, making sure that they are offered across England, that clear milestones have to be agreed, that fees are set at an appropriate level, and that those fees have to be refunded where milestones are missed. Given the complexity and necessary flexibility that comes with such applications, we will work closely with the sector as we design these arrangements before consulting in the new year.
On planning committees, we rightly see elected representatives judge the merits of significant applications, and it is vital that they focus their time on applications that truly merit such scrutiny and arrive at decisions following legitimate reasoning. On this basis, I have asked the Planning Inspectorate to start reporting to the Department about cases where a successful appeal is made against a planning committee decision and the final decision is the same as the original officer’s recommendation. The overturning of a recommendation made by a professional and specialist officer should be rare and infrequent—such that I have reminded the inspectorate that where it cannot find reasonable grounds for the committee having overturned the officer’s recommendation, it should consider awarding costs to the appellant.
I intend to consider what more we can do to support planning officers and the committees they serve to focus on the right applications. This might be about providing more training, or using guidance to share best practice on the tools that can help to prioritise a committee’s time, including the schemes of delegation that authorities adopt to determine which applications get determined by officers and which warrant committee airing.
Direct Action
Where these expectations for the planning system are not met, I will intervene.
I support transferring power to local areas so decisions are taken as close as possible to the areas and people most affected by them. With sharper power, authority and flexibility, however, comes sharper accountability. Where there is failure, and communities are in danger of being let down, the Secretary of State must act.
In this spirit, I am issuing a direction to seven of the worst authorities in terms of plan making, requiring them to publish a plan timetable within 12 weeks of the publication of the new NPPF. Should they fail, I will consider further intervention to ensure a plan is put in place. This does not mean I am not prepared to act elsewhere, and I expect all other authorities to make sure that they have an up-to-date plan timetable in place within the same timeframe, with a copy provided to my Department.
I have also designated two additional authorities for their poor decision-making performance and intend to review the thresholds for designation to make sure we are not letting off the hook authorities that should be doing better. The 2022 housing delivery test results will be published today too, with 20 new authorities becoming liable to the presumption in favour of sustainable development.
Finally, as the results of the housing delivery test show us, action is required in London, where the homes we need are simply not being built and opportunities for urban brownfield regeneration go begging. The average of 38,000 net additional dwellings over the past three years has considerably undershot the Mayor’s own target in the London plan.
I made clear previously that I want to work with the Mayor, and I still do. But it has become evident that changes to the plan itself may be needed if our capital is to get the homes its people need to flourish and thrive. Therefore, I am today asking Christopher Katkowski KC, Councillor James Jamieson, Paul Monaghan and Dr Wei Yang to review the London plan and identify where changes to policy could speed up the delivery of much-needed homes in urban city sites in the heart of the capital.
Reflecting the sincere spirit of partnership that I emphasised in the summer and repeat now, their recommendations will come to me early in the new year and I will share their report with the Mayor of London. But recognising my responsibilities to the citizens of London, and London’s role in driving growth that benefits the whole country, I stand by what I said in July—that if directing changes becomes necessary, I will do so.
Cambridge
Finally, I want to provide an update on the Government’s vision for Cambridge 2040. In July, I outlined plans for a new urban quarter, adjacent to the existing city, with beautiful neo-classical buildings, rich parkland, concert halls and museums providing homes for thousands.
This would be accompanied by further, ambitious development around and in the city to liberate its potential with tens of thousands of new homes.
In the intervening months, Peter Freeman, the chair of the Cambridge Delivery Group, has been developing our vision for the city, in collaboration with a whole host of local leaders and representatives. I am clear that delivering our vision means laying the groundwork for the long term, and that starts now.
We plan to establish a new development corporation for Cambridge, which we will arm with the right leadership and full range of powers necessary to marshal this huge project over the next two decades, regardless of the shifting sands of Westminster.
We recognise that the scale of development we are talking about will require support from across the public and private sectors, to realise our level of ambition.
We must also ensure that we have an approach towards water that reflects the nature of Cambridge’s geography, so today I am also announcing that we will review building regulations in spring next year to allow local planning authorities to introduce tighter water efficiency standards in new homes. In the meantime, in areas of serious water stress, where water scarcity is inhibiting the adoption of local plans or the granting of planning permission for homes, I encourage local planning authorities to work with the Environment Agency and delivery partners to agree standards tighter than the 110 litres per day that is set out in current guidance.
Copies of the updated national planning policy frame-work and associated documents have been placed in the Libraries of both Houses. Following the judgment in the Court of Appeal in the case of Smith v. SSLUHC & Ors, the Government are reverting the definition of Gypsies and Travellers used in the planning policy for Travellers sites to that adopted in 2012, with this change applying from today for plan and decision making. The Government intend to review this area of policy and case law in 2024. The revised definition has been published on gov.uk.
[HCWS161]
Provisional Local Government Finance Settlement 2024-25: England
Michael Gove Excerpts(11 months, 1 week ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Levelling Up, Housing and Communities (Michael Gove)
On 5 December, I published a policy statement outlining proposals for the 2024-25 local government finance settlement to provide early certainty for councils. Today, I have set out the provisional local government finance settlement for 2024-25 and launched our formal consultation on the proposals. This settlement makes available over £64 billion for local authorities in England, an increase of almost £4 billion or 6.5% in cash terms in core spending power on 2023-24. This is a real-terms increase which demonstrates how the Government stand behind councils up and down the country.
Together, the policy statement published on 5 December, and this proposed settlement:
ensures stability by maintaining the funding guarantee introduced last year, to ensure that every council sees at least a 3% increase in core spending power next year before any local decisions on council tax rates; and
makes available an increase of almost £4 billion on 2023-24, of which £2 billion is additional Government funding; £1 billion of this is for children’s and adult social care in 2024-25.
Stability
Now is the time for stability and continuity. Despite recent decreases in the rate of inflation, the Government recognise that pressures still exist for all local authorities. In this proposed settlement, we are maintaining the funding guarantee we introduced at last year’s settlement to ensure stability for all local authorities, to support the vital work all tiers of local government undertake for communities across the country. By maintaining the funding guarantee, the Government are ensuring every local authority in England will see a minimum 3% increase in their core spending power, before taking any local decisions to increase council tax rates.
We are also uplifting core settlement funding, with the revenue support grant increasing by CPI, and local authorities seeing an increase in baseline funding levels (BFLs) and compensation grant as if both business rating multipliers had increased by CPI. We are continuing the approach set out at last year’s settlement for other grants such as the rural services delivery grant and new homes bonus, which we know are important to councils.
The Government note that whilst local authority reserves are falling, they remain significantly higher than prior to the pandemic. We continue to encourage local authorities to consider, where possible, the use of their reserves to maintain services in the face of these pressures.
We will continue to support projects that reduce costs and improve efficiency by extending the flexibility to use capital receipts to fund revenue costs of these projects to March 2030. We will also engage with the sector to explore additional capital flexibility options to enable invest-to-save and transformation initiatives.
The Government announced on 23 November that we are allocating £450 million across two years to a third round of the local authority housing fund, which will help support those in temporary housing need. This funding allows councils to manage homelessness pressures more effectively and makes it easier for vulnerable people to find a permanent home. The Chancellor announced at autumn statement that the local housing allowance will increase to the 30th percentile of market rents from April. This means 1.6 million low-income households will be around £800 a year better off on average in 2024-25.
Social care
The Government recognise that many local authorities are facing social care demand pressures. That is why we announced significant additional funding at the 2022 autumn statement. Together with funding announced in-year, this means £1 billion in additional grant funding for social care compared to 2023-24.
Council tax
The Government manifesto commits to continuing to protect local taxpayers from excessive council tax increases. This is an important local democratic check and balance to avoid the repeat seen under the last Labour Government, when council tax more than doubled. The proposed package of referendum principles strikes a fair balance. Local authorities should of course be mindful of cost-of-living pressures when taking any decisions relating to council tax.
As previously set out, we will allow councils to raise their core council tax by up to 3% without a local referendum, and will allow a further adult social care precept of 2% for all authorities responsible for adult social care services. The council tax referendum provisions are not a cap, nor do they force councils to set taxes at the threshold level. It is for individual local authorities to determine whether to use the flexibilities detailed above, taking into consideration the pressures many households are facing. These actions to protect hard-working people from excessive tax rises are in contrast to the Labour Government in Wales which is planning to hike council tax through a council tax revaluation and higher council tax bands.
The Mayor of London has requested flexibility to levy an additional £20 on band D bills to the Greater London Authority (GLA) precept to provide extra funding for Transport for London (TfL). The Government have expressed ongoing concern about the management of TfL by this Mayor, and it is disappointing that London taxpayers are having to foot the bill for the GLA’s poor governance and decision-making. Whilst the Government will not oppose this request, any decision to increase the precept is solely one for the Mayor, who should take into account the pressures that Londoners are currently facing on living costs and his decision to raise his share of council tax by 9.7% last year.
The exceptional financial support framework is available to provide support where a council has a specific and evidenced concern about its ability to set or maintain a balanced budget, including where there has been local financial failure. Where councils need additional support from the Government, they should take every possible step to minimise the need for that support to be funded by national taxpayers, while also recognising the cost-of-living pressures on families. As part of that process, the Government will consider representations from councils, including on council tax provision.
The Government view continues to be that councils in the most severe financial failure, that are seeking multi-year support from Government, should continue to take all reasonable local steps to support recovery including additional council tax increases. Therefore, for the 2024-25 settlement, in consideration of the significant financial failure of Thurrock Council, Slough Borough Council and Woking Borough Council, the Government propose that bespoke council tax referendum principles should apply. For Thurrock and Slough Borough Council, a core council tax referendum threshold of 8%; and for Woking Borough Council, a council tax referendum principle of 10%. Councils in significant financial failure can make use of any additional flexibilities provided to support their financial recovery and going forward the Government will consider all reasonable steps to protect both national and local taxpayers and ensure councils are acting responsibly.
Part time work for full time pay
We have made it clear that any attempt from a local authority to implement part time work for full time pay—for example, a so called “four-day week” or equivalent arrangements—is contrary to the interests of local taxpayers. This working practice does not represent good value for taxpayers’ money, nor places the sector in a good light with the public. We have included in the consultation our proposals to use financial levers within the settlement to disincentivise councils from operating part time work for full time pay in future settlements. Those councils which are considering or operating such arrangements should not start this practice or stop it immediately.
Conclusion
These proposals will provide councils with the support they need. It ensures stability, delivers additional resources for social care, and maintains balance on council tax.
I welcome representations from all interested parties on the consultation we have launched today. The consultation will run until 15 January. The Minister for Local Government will also be holding engagement sessions for Members of Parliament in the week commencing 8 January 2023.
This written ministerial statement covers England only.
[HCWS148]
Future Homes and Buildings Standards
Michael Gove Excerpts(11 months, 2 weeks ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Levelling Up, Housing and Communities (Michael Gove)
This Government understand that we must act quickly to reduce the carbon emitted by new buildings while delivering the good quality homes that are needed by communities across the country. That is why we are today launching a technical consultation on the future homes and buildings standards.
Set to be introduced in 2025, the new standards will play an important role in delivering on our commitment to reach net zero by 2050. These standards build on the increase in energy efficiency standards for new homes and non-domestic buildings introduced in 2021. The proposed changes would deliver zero-carbon ready new homes and non-domestic buildings, meaning no further work would be necessary to ensure they have zero carbon emissions once the electricity grid has decarbonised. Furthermore, the proposed changes would ensure that new homes have lower bills than typical existing homes, making it cheaper for occupants to heat their homes. The Government are mindful of the additional burdens being placed on, and the viability of, development and welcome views on this as part of the consultation process. The consultation also seeks views on introducing higher energy efficiency standards for new homes created through conversions—material change of use—and asks whether overheating standards, introduced in 2021, should be amended.
Following analysis of consultation responses, we will legislate for the future homes and buildings standards by amending the Building Regulations in 2024.
The consultation will run until 6 March 2024 and the consultation documents can be found online at: https://www.gov.uk/government/consultations/the-future-homes-and-buildings-standards-2023-consultation.
[HCWS119]
Leasehold and Freehold Reform Bill
Michael Gove ExcerptsMonday 11th December 2023
(11 months, 2 weeks ago)
Commons ChamberRead Full debate Leasehold and Freehold Reform Act 2024 View all Leasehold and Freehold Reform Act 2024 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Secretary of State for Levelling Up, Housing and Communities (Michael Gove)
I beg to move, That the Bill be now read a Second time.
Before proceeding to the heart of the Bill, may I offer a few words of thanks to those who have laboured long in this field? We all know that leasehold and freehold legislation has preoccupied the House not just in this Parliament, but in many Parliaments in the past. Indeed, in the 1860s, 1870s and 1880s, much of the House’s time was taken up debating the finer points of such legislation. I was once described as a young man in a hurry. I am now an old man, but I am still in a hurry, in order to make sure that this legislation makes progress and that we liberate leaseholders from many of the unfair practices to which they are still subject.
I will say a bit more about that in a second, but I want first to say a special word of thanks to my predecessors as Secretary of State, who helped to issue the consultations and lay the groundwork for the measures that we are introducing today. I thank my right hon. Friends the Members for Newark (Robert Jenrick) and for Bromsgrove (Sajid Javid), but in particular I thank the late James Brokenshire, who did so much work to get us to this point. Having thanked them, I cannot but thank my hon. Friend the Member for Redditch (Rachel Maclean), who was a brilliant colleague in the Department and did so much of the heavy lifting to ensure that this legislation was ready to be introduced. She has been a brilliant colleague and a great Minister in so many ways. All the good things in the Bill are down to her; anything that is lacking is down to me.
I also thank members of the all-party parliamentary group on leasehold and commonhold reform, who have worked so hard for so long to ensure that the ground could be laid for today’s legislation. I thank the hon. Member for Ellesmere Port and Neston (Justin Madders) for his work and, in particular, his predecessor, the former MP for Poplar and Limehouse, Jim Fitzpatrick. I must thank the Father of the House, my hon. Friend the Member for Worthing West (Sir Peter Bottomley), who has been the single most consistent and bravest voice in standing up for leaseholders. I also thank—even though she is not in the Chamber—the hon. Member for St Albans (Daisy Cooper), who speaks on behalf of the Liberal Democrats and has contributed to the work of the APPG.
The APPG would not have been able to do its work without the Leasehold Knowledge Partnership. In particular, I thank Martin Boyd, who has been hired by the Government to head up our Leasehold Advisory Service, and Sebastian O’Kelly. Both have contributed to helping leaseholders and providing them with the advice and counsel they need to navigate this tangled landscape. I also thank the campaigners, some of whom I had a chance to talk to earlier, who have been indefatigable in making it clear that the law needs to change. I thank, in particular, Katie Kendrick, Cath Williams and Joanne Darbyshire, all of whom have made an impeccable case for change throughout.
What is the problem that we are trying to solve? Basically, it is this: leasehold as a form of tenure is essentially a deal where someone is invited to buy a home and then, instead of becoming a full homeowner, they are treated, or can be treated, as a tenant. It is a fundamentally unfair system and a fundamentally inequitable tenure, because those who buy flats and—increasingly, in recent years—houses, in good faith, paying market rates, assuming and hoping that they would be homeowners in the fullest sense of the word, have found that, rather than being homeowners, they are at the whim of the ultimate owner of the freehold, who is in effect their landlord.
In the past, there were justifications. There were cases and examples where those who held the freehold operated in an enlightened and paternalistic way. For example, the freehold of properties was sometimes held by trade unions or other enlightened organisations that would ensure that the common interests of all those within a particular building were looked after. It is still the case that some landowners and freeholders take their obligations towards leaseholders seriously, ensure that the service charges are levied in an appropriate way, keep the ground rent at an appropriately low level, and ensure that the building is maintained in a good state of repair. However, individual leaseholders should not simply have to rely on the good will and good character of whoever the freeholder is; they need better protection in law, which is what we seek to achieve with the Bill.
Alexander Stafford (Rother Valley) (Con)
Many of the leasehold homes in Rother Valley were built by the National Coal Board to provide homes for miners and their families, with the intention that the ground rent would be peppercorn, but since the closure of the pits many of those freeholds, especially in areas such as Thurcroft, Wales and North Anston, have been sold to private developers who are taking advantage of their leaseholders. For example, in Thurcroft, leaseholders were forced to represent themselves in court when the freeholder tried to raise the ground rent from £10 a year to £2,500 a year, which is absolutely shameful. How can we ensure that freeholders must act reasonably, and not stray too far from the spirit of the original legislation?
Michael Gove
My hon. Friend is absolutely right. The miners’ families and their descendants, whom he represents so well, were originally in homes that the NCB established to ensure that those in the pit villages he represents would have a proper landlord, providing stewardship, care and support, but as he rightly points out, the freehold ownership has subsequently been used not as an obligation towards the leaseholder but as a commodity to be traded. More and more freeholds are in the hands of entities, often based offshore, that regard them as a licence to extort from the leaseholder, rather than as an obligation to be discharged.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
I have raised concerns on behalf of leaseholders in my constituency on many occasions in this House—particularly on the issue of service charges, which the Secretary of State referred to a moment ago, and the lack of transparency around them. I have seen again and again cases where certain information is not provided to leaseholders, where they are not sure that the moneys are being spent on what they have provided funding for, or where it is not clear whether, for example, there has been an adequate tendering process for works, insurance and so on. Can he explain what will be done on that, and whether it will fully extend to England and Wales? What co-operation has he had with the Welsh Government about those provisions?
Michael Gove
It is the case that this Bill covers England and Wales. Obviously the hon. Gentleman is aware that there are slightly different tribunals that operate in each jurisdiction, but it will precisely address the situation he mentioned: it will ensure there is transparency over service charges and, through the appropriate tribunal in each jurisdiction it will become easier on the part of the leaseholder to contest any unfairness.
Several hon. Members rose—
Michael Gove
I just want to make one or two additional points and then I am happy to give way.
Personally, one of the moments where I realised that the system, which is hard to defend in any case, was fundamentally broken was in the aftermath of the Grenfell tragedy. We knew then that it was important that responsibility be taken for remediating buildings that were unsafe. We knew then that individuals and organisations had to take that responsibility on their own shoulders. We knew then that freeholders, if they were true to the spirit of the original legislation, would say, “Yes, we have a responsibility for this building and for all those within it. We have a responsibility to make sure this building is safe. Therefore, we should have a responsibility to pay for the remediation.”
But did we find freeholders queueing up to do that? Absolutely not. They were there ready to extract income at the highest possible rate whenever they could, through ground rents and service charges, but when they were called upon to discharge their responsibility to the leaseholders within those flats, they were absent. They ran away from their responsibilities. That is why I have limited to no patience now with the well-funded lobby groups that stand up for those freeholders and seek to ensure that they can continue to extract money from leaseholders. It seems to me that, at a critical point, the argument that is sometimes made on behalf of those people disappeared because of their negligence and their moral fault.
Mr Kevan Jones (North Durham) (Lab)
The right hon. Gentleman says that traditionally it was flats that were leasehold, but increasingly it was houses, mainly fuelled by the Government’s Help to Buy scheme. In my constituency, Persimmon Homes’s business model was structured around not only selling on the leaseholds, but the tactic of including areas of the estate that traditionally would have been passed over to local authorities as the responsibility of the leaseholders. Would he agree that the Government need to take some responsibility for the tsunami of money they threw at some of those developers, and for turning a blind eye to what they were doing in their business models?
Michael Gove
I take the right hon. Gentleman’s point, but he is conflating two things. Help to Buy can be criticised or defended on its own terms, and I believe it was the right intervention to ensure, in particular, that more first-time buyers could get on to the property market. However, he is also right that leasehold, which as he says was originally a tenure designed for flats, was then extended to houses, and in a way that is difficult to defend. It has expanded over recent years. That is why we are legislating now to ensure that we can stop it. There are two separate arguments that can be had there.
Sir Julian Lewis (New Forest East) (Con)
I particularly look forward to that part of the Secretary of State’s speech when he will tell us whether this will apply to new leaseholds or will be retrospective on those suffering under existing leasehold arrangements. However, there is one step the Government took that has not been helpful to leaseholders, and of which I have personal experience: creating a presumption in favour of developments where the airspace above a block of flats is sold and the freeholder then insists on having one or two more floors built on top. That can cause immense damage to the building, not to mention disruption, and then who gets the bill for paying for the damage? It is transferred from the freeholder to the leaseholders. The Government should think again about that presumption in allowing that sort of ill-considered development.
Michael Gove
My right hon. Friend makes an important point on permitted development rights. On the whole, I am in favour of the extension of permitted development rights, because I want to see an increase in housing supply overall, but it is incumbent on the Government to review how those rights have been operating. He raises one concern, but there are other legitimate concerns about the way permitted development rights, when commercial buildings have been turned into residential, have meant that the quality of those new residential flats has been insufficiently high. I also know that colleagues, not least in London, are concerned about potential future extensions of permitted development rights. There is a responsibility on me and others to review their impact, and that is what we are doing, separate from this particular legislation.
Several hon. Members rose—
Michael Gove
An embarrassment of riches! I will give way to all colleagues currently standing, and then I will try to make progress.
Mark Tami (Alyn and Deeside) (Lab)
I represent an area with a lot of leasehold houses. It is just a cynical money-making scam. Some people own a house but are required to pay an admin charge to change the flooring or have a pet, so it does not feel as if they own it. I can understand the flooring thing if they are in flats, but not if they are in houses. It is just a con.
Stella Creasy (Walthamstow) (Lab/Co-op)
One of the challenges here is the lack of voice for our constituents in trying to address the problems. The Secretary of State says that he cannot defend leasehold. None of us can. It is a feudal process that still denies our constituents a voice over the thing that is most precious to them: their home. If he agrees with that, why will he not agree with us that we should move forward to commonhold, whereby everybody has a voice and a say in their own building?
Michael Gove
I actually agree that commonhold is the ideal form of tenure, but there are certain technical questions about when commonhold can apply, not least if a building also has commercial uses on the lower floors.
Rachael Maskell (York Central) (Lab/Co-op)
When we come to clause 27, will the Secretary of State clarify whether “best value” applies to leaseholders or to freeholders? It certainly seems that leaseholders do not get best value when testing what additionalities and enhancements are put into their schemes.
Munira Wilson (Twickenham) (LD)
The Secretary of State was talking about leasehold houses. I was recently visited by a group of residents from Hampton Wick in my constituency who have been collectively trying to buy the freehold on their houses. They have a very obstructive freeholder and are now resorting to an enfranchisement notice under section 5 of the Leasehold Reform Act 1967, but that requires a valuation from 1965, for which there are no records available, so they are now being obstructed in buying the freehold by that legislative basis. When the Bill introduces a new methodology for calculating the value of enfranchisement, will that old provision be got rid of?
Michael Gove
I believe that it should be, and I encourage the hon. Lady’s constituents—as I am sure she has done—to be in touch with Martin Boyd’s Leasehold Advisory Service to be absolutely clear that they are getting the support they need.
Mr Clive Betts (Sheffield South East) (Lab)
It is a little disappointing that the Secretary of State did not refer to the Levelling Up, Housing and Communities Committee’s report of 2019. The Government, working with the APPG, have followed many of the report’s recommendations, but some of those recommendations —we will come to them later, with your permission, Mr Deputy Speaker—have not been included, so I will make just a couple of points.
The real challenge is, first, that freeholders who will not comply with any legislation, or will try to avoid it, do not reply to letters. I have exchanged information with the Minister for Housing, Planning and Building Safety on how to deal with Coppen Estates and what the penalties will be for non-compliance. Secondly, there are freeholders who seek to move the ownership of a property around in order to avoid the legislation. Why not give existing leaseholders the right of first refusal before any freehold is sold?
Michael Gove
I am very grateful to the hon. Gentleman and his Committee for all their work—it was discourteous of me, when running through the names of those to whom I am grateful, not to mention them. His broader point, about not just the operation of the freehold system but the way in which different aspects of the property market work, is a fair one. The use of opaque overseas entities and special purpose vehicles—the way in which ultimate beneficial ownership can be hidden—are all problems that require to be addressed. The Bill is pretty lengthy and substantial, and deals with many of the issues—I will go on to explain why we have taken the approach that we have—but there are other abuses within the property and land market system that require to be addressed, which we will address, and not just in this Parliament but after we are returned at the next general election.
Mrs Natalie Elphicke (Dover) (Con)
I thank my right hon. Friend for giving way, and for the pragmatic approach that the Government have taken in this very complex area. In my constituency of Dover and Deal, we have a failed development—Sunningdale homes—and a long-standing problem with Persimmon Homes in relation to Sholden. Both situations relate to the lack of adoption by local authorities, and to service charges and other management arrangements. I would be grateful if my right hon. Friend could say more about the way in which those sorts of situations will be helped, and whether there will be any retrospective help for situations that have remained unresolved for many years.
Michael Gove
I am very grateful to my hon. Friend. She and my hon. Friend the Member for North East Bedfordshire (Richard Fuller) have been particularly energetic in pressing me to deal with this issue of leasehold homes—fleecehold estates, as they have become widely known—which is, I believe, precisely the phenomenon that the right hon. Member for North Durham (Mr Jones) was also referring to.
The Bill will ensure that there is a ban on new leasehold homes, but as well as averting that problem in the future, we are attempting to deal with the difficult situation we have all inherited. We will do so by making sure that we squeeze every possible income stream that freeholders currently use, so that in effect, their capacity to put the squeeze on leaseholders ends. That will mean the effective destruction of the leasehold system. Do not take my word for it: as Sebastian O’Kelly of the Leasehold Knowledge Partnership has made clear in his writing,
“The Bill is a full-on assault on leasehold’s income streams”.
First, we have a consultation on ground rents. I cannot pre-empt that consultation, but at its conclusion, we will legislate on the basis of that set of responses in order to ensure that ground rents are reduced, and can only be levied in a justifiable way. As I say, I cannot pre-empt the consultation, but in a way I already have, because I was asked by the Select Committee last week what my favoured approach would be, and I believe that it should be a peppercorn. Of course, if compelling evidence is produced, as a Secretary of State with great civil servants, I will look at it, but my preference is clear, and I suspect that it is the preference of the House as well.
Indeed, it is important to say that that particular squeezing of the freeholder’s income stream goes beyond what the Law Commission recommended. We are really grateful for all of the Law Commission’s work, but it was a little bit cautious in this area; we are deliberately saying no. I know that some people will say, “What about A1P1 rights under the European convention on human rights? You are taking property away from people.” I respect the ECHR, but if it stands in the way of me defending the interests of people in this country who have been exploited by ground-rent massaging, I am determined to legislate on behalf of those people, because their interests matter more than that particular piece of legislation.
Matt Rodda (Reading East) (Lab)
I am grateful to the Secretary of State for the way he is addressing this issue. Can I draw his attention to a particular variant of this practice that exists in my constituency? Between a developer and a local authority, a scheme was allowed whereby residents were—and continue to be—charged for access to public open space on their estate and, indeed, to maintain a neighbouring park that residents across the district can enjoy. That is surely wrong, and I hope he will look into that matter.
Michael Gove
The hon. Gentleman is absolutely right: a number of the people who have built, operated and retain the freehold on these estates levy service charges for all sorts of things that, in my view, are totally inappropriate. That is why the Bill makes clear that service charges have to be issued in a standardised format, so that they can be more easily scrutinised and challenged. It also makes clear that those charges can be challenged in such a way as to ensure that egregious examples, such as the one the hon. Gentleman has mentioned, will end.
Sir Edward Leigh (Gainsborough) (Con)
I am not against what the Secretary of State is trying to do, but philosophically there is a reason why the Conservative party has been the defender of property rights. It is to do with freedom and established rights, so it is nothing to do with the ECHR or anything like that. Before this debate becomes just about bashing landlords, what about the Duchy of Cornwall? There are excellent freeholders that have traditionally maintained properties and done wonderful work in ensuring that properties are well maintained and in looking after their tenants.
Michael Gove
I quite agree with my right hon. Friend. There are good landlords, and the Duchy of Cornwall has been a stand-out example, as have been the Cadogan estate, the Howard de Walden estate and so on—they are responsible landlords, absolutely—but an individual leaseholder should not have to rely on the good will and the grace of His Grace, as it were, to get the protection they need.
There is no stauncher defender of capitalism and property rights than me, but what has happened is that freeholds have become utterly torn away from the warp and weft of the capitalist system as we understand it in this country, and have become tradeable commodities that foreign entities are using to exploit our people who have worked hard and saved to get their own home. So whose side am I on—homeowners who have worked hard and saved up to secure a mortgage, or shadowy foreign entities that are essentially attempting to rip off British citizens? I am on the side of homeowners.
Rachel Maclean (Redditch) (Con)
When the Secretary of State is considering the evidence from the consultation he mentioned, will he adhere to his own adage of “follow the money”, and remember that those people advocating for a higher ground rent probably have a motivation for doing so?
Michael Gove
My hon. Friend is completely right. I will be looking at the responses to the consultation, and I am sure that some of London’s finest legal firms and most eloquent solicitors will be putting in some very thoughtful contributions, but the question will be: who is paying for them and how much are they being paid? To my mind, people can buy silver-tongued eloquence, but what is far more important is actually being on the right side of justice.
Michael Gove
I believe that most of the people in the House are on the right side of justice, especially the hon. Lady.
Marsha De Cordova
On ground rents, shared owners who have staircased their way up to 100% and become leaseholders obviously have a long lease of 999 years, but face the issue of having their ground rents doubled every, say, 20 years. Clearly, that is an unfairness in the system, so will the Secretary of State’s consultation address that point?
Michael Gove
I believe it will. I must now make progress because I know a number of people want to contribute, so I will try to run through the other arguments about why we are taking the approach that we are.
I mentioned service charges, and one other example, to which the Father of the House has of course persistently drawn our attention, of where those who have been managing properties on behalf of the ultimate owners have abused their position is that of insurance commissions. We will be taking steps in the Bill to make sure that insurance charges are transparent and that fair handling fees are brought in. The fact that I can list all these examples just shows hon. Members the way in which freeholders have operated. Many who have got hold of such freeholds have been thinking, “Right, okay, we can jack up the ground rent, great! We can have service charges, keep them opaque and add something. Tell you what—insurance; let’s try to get more out of that.” It is a persistent pattern of behaviour that does require reform.
Another pattern of behaviour is the way that lease extensions and the whole question of enfranchisement have been going. If someone’s lease goes below 80 years and they want to enfranchise themselves, they have to pay what is called marriage value. That is the principle that, by bringing together the ownership of the freehold and the leasehold in one by enfranchising themselves—bringing those two together in a marriage—people are enriching themselves. Again, however, it has been used by freeholders to bilk leaseholders overall, which is why the approach we are taking will in effect eliminate marriage value. It is also why, when we talk about lease extension, instead of people having to extend and extend again generation after generation, we are saying that leases can be extended to 990 years. In effect, as I say, this will make sure that one of the approaches that freeholders have taken to extracting more cash from leaseholders will end.
Sir Stephen Timms (East Ham) (Lab)
I agree with the Secretary of State about the seriousness of the problem of excessive insurance premiums being charged to leaseholders, and I will give an example if I am able to contribute later. Does the Secretary of State agree that the solution requires risk-pooling among insurers? The initiative on that seems to have stalled; can he hold out the prospect of the delay being resolved?
Michael Gove
Broadly on the whole question of insurance, I am due to meet the chair, Baroness Morgan of Cotes, and the chief executive of the Association of British Insurers later this week to address not just that question but some other related questions.
Michael Gove
I won’t at this stage.
I freely admit that this Bill does not go as far as some in the House and elsewhere would like. Strong arguments have been made about how property agents can be better regulated and Lord Best in another place has made arguments that I find incredibly persuasive—so why not legislate for them now? Well, as I mentioned earlier, this Bill has many clauses, deals with technical aspects of property law, requires close scrutiny and is likely to face a lobbying exercise from deep-pocketed interests outside attempting to derail it. Legislating to give effect to Lord Best’s proposals and to set up a new regulator—I am always a wee bit wary about setting up new quangos but on this occasion he makes a good case—would require significant additional legislative time of a kind we simply do not have in the lifetime of this Parliament. There are changes we are making overall in order to deal with some of the abuses for which managing agents are responsible, but there is still some unfinished business. I happily grant that, and there are organisations like FirstPort, which many of us will be familiar with from our work as constituency MPs, that require some gentle direction towards behaving in a better fashion.
Richard Fuller (North East Bedfordshire) (Con)
I am grateful to my right hon. Friend, my hon. Friend the Member for Redditch (Rachel Maclean) and Ministers for bringing the Bill forward. The Secretary of State spoke about leasehold improvements and improving the rights of leaseholders, but he will be aware that part 4 of the Bill looks to protect and improve the rights of families who hold the freehold of their property against the estate management charges about which he is speaking; the Bill does a lot to meet some of the requests of many of my Conservative colleagues on this matter.
One issue that is not addressed in the Bill, however, is the right to manage. In the 2019 response to the 2017 consultation, the Government said they would look at that and introduce legislation. What is the current Government thinking on giving people the right to manage, and therefore to take back control from the estate management companies?
Michael Gove
My hon. Friend makes a good point. I was going to say there are two other areas in particular that we should look at in Committee: the right to manage; and the abuse of forfeiture, which is sometimes used by freeholders to intimidate leaseholders. I am very open to improving the Bill in Committee; we will be improving it ourselves by bringing forward the legislation that will ban new leasehold homes in the future, so I hope we will have a chance to do that.
I mentioned earlier that we have been debating leasehold and freehold in this place for a long time. In the preparation of this Bill, one of the brilliant civil servants in the Department drew to my attention comments made by Harry Levy-Lawson, 1st Viscount Burnham and MP for St Pancras, as it happens, when the Leasehold Enfranchisement Bill 1889 was brought forward by another great reforming Conservative Government under the Marquess of Salisbury.
Michael Gove
Exactly: the Minister is, like me, a great fan of the Marquess.
In that debate the opening remarks of the Minister were:
“We do not claim for this Bill any perfection of draftsmanship, but it is so far complete that if it pass through Parliament, we believe it would be smooth, just and reliable in its working. The principle, however, is now exactly what it has always been, viz., the grant to urban leaseholders, with a substantial interest in their holdings, of the power to purchase the fee simple”—
the ownership—
“on fair and equitable terms.”—[Official Report, 1 May 1889; Vol. 335, c. 889.]
This Bill does so much more. Is it perfect? No, I would not claim for this Bill any perfection of draftsmanship. Is it substantive—does it move the dial, does it change the business model, will it effectively mean that leasehold will become a thing of the past? I believe absolutely it will, and I am fortified in that belief by the strong support for this legislation shown by leasehold campaigners. I commend the Bill to the House.
Angela Rayner
I absolutely agree with my right hon. Friend. The Government have been in government for 13 years. We have had six years of these promises, and he is absolutely right that there is more than one way that the Government could have ensured that leaseholders were not treated in this way. The botched drafting of the Bill means we are still waiting to see a single clause that prohibits a single new leasehold property, whether it is a flat or a house.
It was on 30 January this year that the Secretary of State promised my predecessor, my hon. Friend the Member for Wigan (Lisa Nandy),
“we will maintain our commitment to abolish the feudal system of leasehold. We absolutely will. We will bring forward legislation shortly.”—[Official Report, 30 January 2023; Vol. 727, c. 49.]
In February, he said he aimed in the forthcoming King’s Speech
“to introduce legislation to fundamentally reform the system…to end this feudal form of tenure”.—[Official Report, 20 February 2023; Vol. 728, c. 3.]
In May, the then Housing Minister told this House that
“my Department are working flat out”—[Official Report, 23 May 2023; Vol. 733, c. 214.]
on the legislation. If it has taken them this long with not a word to show for it, can they guarantee that they will put their amendments to the House by 30 January next year—a full 12 months after the Secretary of State’s promise at the Dispatch Box?
We have heard the Secretary of State say that it is perfectly normal to bring forward vast swathes of amendments in Committee—believe me, the Committee will be doing some considerable heavy lifting. Having shadowed him through the final stages of the Levelling-up and Regeneration Bill, I would say that perhaps he does think that making endless last-minute amendments to his own Bills is a normal way of legislating, but the anonymous sources close to the Secretary of State may have let the cat out of the bag about the real reason the Bill is so empty when they briefed the press last month. We know from them what he cannot admit today: the Prime Minister was blocking this Bill from the King’s Speech in the face of lobbying from vested interests opposing the reform. In the chaos of this Government, it was added only at the very last minute. We may have heard many warm words, and the Secretary of State was very theatrical about his ambition for reform, but he is stuck in the daily Tory doom loop in which vested interests always come before the national interest.
The truth is that the time wasting and backtracking all go back to the Prime Minister’s desperate attempt to extend the lease on No. 10 Downing Street. The fact is that even if the Government belatedly fix their leasehold house loophole, flat owners will be left out of the picture, yet 70% of all leasehold properties are flats and there are over 600,000 more owner-occupied leasehold flats than houses in England. Having listened to the Secretary of State, those owners will still be wondering just when the Government will fulfil their pledge to them. As I am sure everyone in the House will agree, property law is, by nature, extremely complex, but we cannot and must not lose sight of the daily impact that these laws have on the lives of millions across our country, including over 5 million owners of leasehold properties in England and Wales. I am sure that most of us in the House know what that means in human terms for our constituents.
For most freehold homeowners, ownership means security and control, yet for far too many leaseholders, the reality of home ownership falls woefully short of the dream they were promised. Too many leaseholders face constant struggles with punitive and ever rising ground rents—rent for a home that they actually own, in exchange for which the freeholder needs to do nothing at all. Leaseholders are locked into expensive agreements and face unjustified administration fees and extortionate charges. Conditions are imposed with little or no consultation. For leaseholders also affected by the building safety crisis, the situation is even worse.
Michael Gove
The right hon. Lady has made it clear from the Dispatch Box that she opposes excessive ground rents. Can she explain why the Labour leader made it clear at the Labour party conference that he would get new houses built by creating “attractive investment products” that had residential ground rents at their heart? How can it possibly be the case that she intends to deal with excessive ground rents, when the leader of the Labour party wanted to fund new development by pursuing precisely that policy? Which is it: against them or for them?
Angela Rayner
I thank the Secretary of State, but he has just used the word “excessive”. If he wants to let me deal with this problem, I am happy to take over and show that I am not just about theatrical performances at the Dispatch Box; I will actually deal with it. He has been given 13 years on the Government Benches and has failed to do that. This Bill still fails to do that, so I would like to see where he will deal with this issue.
Regulation of freeholders has fallen behind that of landlords, leaving leaseholders stripped of the rights enjoyed even by tenants in the private rented sector. Perhaps the Secretary of State can tell us what measures exist that prevent the worst actors in the market from repeatedly ripping off leaseholders in one place after another.
Visiting in Care Homes, Hospitals and Hospices: Government Response to Consultation
Michael Gove Excerpts(11 months, 3 weeks ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Levelling Up, Housing and Communities (Michael Gove)
Today, the Government have published details on the local government finance settlement for the next year, for councils across England. This policy statement comes in advance of the provisional local government finance settlement, and shows the steps this Government are taking to ensure stability of funding for councils.
At this year’s settlement, we are on course to provide an above-inflation increase in funding to the sector. We estimate that the settlement will make available approximately £64 billion to the sector, and expect that councils will see, on average, an above inflation increase in their core spending power next year. In cash terms, this is an increase of around £4 billion for the sector, or over 6%. At this time, we also recognise the need to provide stability to the whole sector, and we are therefore providing a sector-wide funding guarantee. This will be on the same terms as last year, ensuring that all local authorities see a minimum 3% increase in their core spending power before taking any local decisions on council tax levels.
The Government manifesto commits to continuing to protect local taxpayers from excessive council tax increases. This is an important local democratic check and balance to avoid the repeat seen under the last Labour Government when council tax more than doubled. The proposed package of referendum principles strikes a fair balance. Local authorities should of course be mindful of cost-of-living pressures when taking any decisions relating to council tax. As previously set out, we will set the core council tax referendum threshold at 3%, and set the adult social care referendum threshold at 2% for all authorities responsible for adult social care services. The council tax referendum provisions are not a cap, nor do they force councils to set taxes at the threshold level. It is for individual local authorities to determine whether to use the flexibilities detailed above, taking into consideration the pressures many households are facing. These actions are to protect hard-working people from excessive tax rises and are in contrast to the Labour Government in Wales which is planning to hike council tax through a council tax revaluation and higher council tax bands.
The Mayor of London has requested flexibility to levy an additional £20 on Band D bills to the Greater London Authority (GLA) precept to provide extra funding for Transport for London (TfL). The Government has expressed ongoing concern about the management of TfL by this Mayor, and it is disappointing that London taxpayers are having to foot the bill for the GLA’s poor governance and decision-making. Whilst the Government will not oppose this request, any decision to increase the precept is solely one for the Mayor, who should take into account the pressures that Londoners are currently facing on living costs and his decision to raise his share of council tax by 9.7% last year.
In the final year of the current spending review period, now is the time for stability and continuity, and we will therefore not be pursuing any fundamental reforms to the system. The Government is pleased to reconfirm the additional funding that we committed to the sector at last year’s autumn statement. In total we are providing local government with approximately £1 billion in additional grant funding for social care compared to 2023-24. We are also continuing the approach set out at last year’s settlement for other grants such as the rural services delivery grant and new homes bonus, which we know are important to councils.
Despite recent decreases in the rate of inflation, pressures still exist for local authorities. The Government ask authorities to continue to consider how they can use their reserves to maintain services over this and the next financial year, recognising that not all reserves can be reallocated, and that the ability to meet spending pressures from reserves will vary between authorities.
The exceptional financial support framework is available to provide support where a council has a specific and evidenced concern about its ability to set or maintain a balanced budget, including where there has been local financial failure. Where councils need additional support from Government, they should take every possible step to minimise the need for that support to be funded by national taxpayers, while also recognising the cost-of-living pressures on families. As part of that process, the Government will consider representations from councils, including on council tax provision.
We have made it clear that any attempt from a local authority to implement a “four-day week” is contrary to the interests of local taxpayers, and that this working practice does not represent good value for taxpayers’ money, nor places the sector in a good light with the public. We are continuing to work on measures to discourage the use of this practice. Those councils which are considering or operating a four-day working week pattern should stop this practice immediately.
All of the proposals set out in the policy statement will be subject to the usual consultation process within the local government finance settlement. This written ministerial statement covers England only. The policy statement will be deposited in the Libraries of both Houses, and has been published on gov.uk:
https://www.gov.uk/government/publications/local-government-finance-policy-statement-2024-to-2025
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