Local Government Finance Bill (Fifth sitting)

Peter Aldous Excerpts

Tuesday 7th February 2017 Public Bill Committees

If the Minister is not worried about the example of Warwickshire and why MPs representing that area should have the chance to debate the local government finance settlement or the principles of allocation statement in the new world of 100% business rates devolution, let us take the example of Waveney District Council. That council is set to lose some £2.53 million in revenue support grant between 2015-16 and 2019-20. It has gained just £370,000 under business rates devolution. We had some discussion last week about the constraints on Waveney District Council as a coastal authority facing an obvious natural barrier to economic growth. It is probably not expecting to see a huge increase in business rates income when 100% of business rates are fully devolved as a result of the Minister’s pronouncements. Waveney may have contributed to the big consultation, but we have not had a chance to see the response—the hon. Member for Waveney may be able to tell us during our proceedings. We know that Waveney District Council is losing significant sums in revenue support grant from the council and we know it will be expecting new responsibilities to be devolved to it as part of the fiscally neutral requirement of this package, but we expect that the increase in business rates income will not make up for that shortfall. Understandably, Waveney District Council is worried about that.

[Peter Aldous (Waveney) (Con)]

I am grateful for the hon. Gentleman’s care and attention to my constituency. Does he agree that business rates retention needs to go hand in hand with a review of core spending and the needs assessment? The Minister has already provided that assurance.

[Mr Thomas]

Of course it needs to go hand in hand with the needs assessment. Not only that, it needs to go hand in hand with the fair funding review. It would be lovely to know what the needs assessment will be for each council and what the fair funding review will mean for each council, but the brutal truth is that we do not know. I suggest the hon. Gentleman looks at one of the last amendments on the amendment paper to be considered on Tuesday 21 February, which deals with commencement of the Bill. We should wait for the full picture before we allow the Bill to come into force.

We do not know what that needs assessment will be or what that fair funding review will look like for Waveney. We would know more if the Minister and his officials had got around to publishing the 400-plus responses to last year’s consultation document, which may include a contribution from Waveney District Council. However, he has not published the responses, so we do not know what the council thinks of it. All we know from the papers we have seen from Waveney District Council is that it is extremely concerned about the financial position it faces. In its report on the budget and council tax for 2016-17 on 24 February 2016—it was looking ahead—it said there is

“potential to create an extremely serious financial position for the Council, with genuine issues regarding the Council’s financial viability and ability to set a balanced budget”.

The council is worried about its very serious financial position, its financial viability and its ability to set a balanced budget as early as 2018-19. It said that reductions to revenue support grant

“are now much larger and faster than previously forecast”.

Revealingly, it added that

“the Council is not well placed to generate additional localised funding from council tax and business rates–there is very limited potential for growth in the medium term to offset these huge reductions”

in revenue support grant and new homes bonus.

In the new Jerusalem of the hon. Member for North Swindon, everything will be all right in his constituency, but we know from those at the sharp end in Waveney that the situation will be much tougher. The hon. Member for Waveney does a very good job fighting for his constituents—not that a Labour Member of Parliament would not do it ever better, but in the meantime he does a good job. I gently suggest that he might relish the ongoing opportunity to question Ministers on the Floor of the House, either on the fact that a local government finance settlement and report is still to be approved by the House of Commons, or that a principles of allocation statement—the device that Ministers want in the new world—is yet to be approved by the House. He can challenge the Minister or the Secretary of State to think about the problem facing his constituents.

[Peter Aldous]

rose—

[Mr Jones]

rose—

--- Later in debate ---

[Peter Aldous]

I thank the hon. Gentleman for his caring contribution. He very much supports the need for a radical reform of the fair funding formula to address the concerns of councils such as Waveney.