Local Government Finance Bill (Second sitting)

Peter Aldous Excerpts

Tuesday 31st January 2017 Public Bill Committees

[Mr Thomas]

Q How would you change the Bill?

Dominic Williams: I do not think it is the Bill that needs changing. Beneath the Bill several technical working groups are going through the detail of what needs to be funded and how it should be funded. We are impressed by the way in which the Local Government Association and DCLG are working together on that. We think that it is being done in a grown-up manner and we hope that the outcome of it will be a sensible settlement that is workable.

[Peter Aldous (Waveney) (Con)]

Q Mr Thomas has asked the question that I was going to ask. None of you, to a larger or lesser extent, have given the Bill the glowing endorsement that perhaps the Government and Minister were hoping for. What other provisions would you look to put in the Bill to address those concerns? Mr Nolan said that not everywhere is silicon valley. What are we going to do to help those areas that are not silicon valley?

Sean Nolan: I genuinely think this is very challenging. Points were made earlier about economic growth. Actually, some of that growth is not necessarily what you would see in a rates valuation. Some of the micro-industries and broadband developments—that kind of thing—do not reflect well in a technical exercise called retention of business rates. That is my first point. Secondly, and I am deliberate with my language, I do think it is a long-term opportunity, but the inherent tensions I have described are real—whether you have or have not, the management of risk and the management of incentives—and this system has to somehow incorporate that.

On the opportunity side, and I say this as CIPFA—I endorse what has been said about how well the LGA and DCLG have worked together—no one wanted too much absolutely nailed down in the Bill, to give a chance for additional scrutiny—

[Mr Thomas]

Development.

Sean Nolan: Development, sorry. However, looking at the opportunities, a lot depends on how the additional quantum is divvied up and how that transfer of responsibilities comes through. I think that is the opportunity set, to be honest. It deals with two bits. One is about unfunded pressures. Government have a choice there, do they not? They can look at the additional quantum to the extent that it can be part of that solution. Okay, there is a question—the Treasury will never be interested—but they have a choice. The second bit is, within that transfer of responsibilities, what is the opportunity for genuinely giving every part of the country access to agendas that they can better influence—work and skills—rather than it just becoming a technical accountancy exercise of swapping over other existing grants for the quantum? I am trying to deal with the positives, but we all need to recognise that this will end up funding local government and not just economic development, so it has to manage those inherent tensions in a grown-up way.

--- Later in debate ---

[The Chair]

The last very brief question goes to Mr Aldous.

[Peter Aldous]

Q I have two questions, one directed to the private sector and one to the public sector. Mr Spence averred that this form of business taxation would be different from anywhere else in the world. At this time when we need to be looking outwards, does he think that that gives us a cutting edge for the country’s businesses? My other question is to Ms Miller and Mr Nolan. Just looking at the central list and how that is to be governed, I have in mind power stations. If you have an existing power station and it is decommissioned, you are going to be facing a lot of costs. If you have a new power station—

[The Chair]

Witnesses, there is just one minute left.

Christian Spence: I will return very briefly to Mr Aldous’s first question. The challenge for the UK system is that we have inherited a system where commercial property rates are significantly higher than those of our international competitors. We understand that that cannot be changed overnight but, within a wider global strategy of Britain wanting to seek greater international competition, we firmly believe—our members would back us heavily—that we should look at the overall levy raised by business rates.

Sean Nolan: The second question plays into the heart of how you judge the stability of the system. It is a proper question to the Minister and his officials down the line: in that scenario, how would it work? I would contend that a really important test is what I call stress testing—not just whether this works on day one, but a series of scenarios over time. Would this survive stress testing?