Local Government Finance (England)

Neil Parish Excerpts

Wednesday 10th February 2016 Commons Chamber

[Greg Clark]

I have been very clear that all councils need to continue to make savings. As I think the hon. Lady will know, the way in which we have conducted the settlements has been fair across the country, as the Institute for Fiscal Studies pointed out. In fact, a council that she knows very well that is close to her area, Sefton Council, said in its response to the consultation:

“The announcement that core spending power will be reduced by only 0.5% between 2015/16 and 2019/20 in cash terms and 6.7% in real terms, is better than we had expected last summer.”

That is from her neighbouring council.

[Neil Parish (Tiverton and Honiton) (Con)]

rose—

[Greg Clark]

I will give way to my hon. Friend and then make some progress.

[Neil Parish]

I welcome a review of the fair share for rural areas. The rural fair share campaign, which has been running for many years, is about making sure that funds keep coming across to help us deal with not only our elderly populations, but the things such as small schools and rubbish collections that cost so much more to provide in rural areas. We need a fair deal. I look forward to the Secretary of State’s keeping up his good work, but we want to see delivery.

[Greg Clark]

My hon. Friend is absolutely right, and we could add to those services school transport, which is particularly costly in rural areas. That is why the underlying formula should catch up with what has happened in many communities. That is overdue.

I will highlight four features of this year’s settlement. First, for decades councils have had to set annual budgets without knowing what resources they can expect 12 months hence. That prevents them from planning long term, and it promotes inefficiency. Because plans and contracts have to be short term, councils miss out on the economies that would be possible if they could take a longer view. For the first time in the history of local government, the settlement gives indicative figures for the next four years to any council that shows that it can translate such certainty into efficiency savings.