Local Government Finance (England)

Richard Holden Excerpts

Monday 24th February 2020 Commons Chamber

[Mr Richard Holden (North West Durham) (Con)]

With a 7.1% increase for County Durham today in the local government finance settlement and a 7.9% increase in police funding, both above the national average, I am delighted that the Opposition are not voting against these measures, especially given that the hon. Member for Denton and Reddish (Andrew Gwynne) wrote a letter to me just a few weeks ago saying that actually we were going to be facing cuts. It looks like quite the opposite is the case. I am looking forward to his letter outlining the increases we will be facing and welcoming the Government’s approach, especially given that Labour-controlled Durham County Council is still spending more than £50 million building a council headquarters on a floodplain, although this is a massively opposed by local people. I would quickly like to declare an interest in respect of the one point I would like to make in this debate.

[Mr Kevan Jones]

Will the hon. Gentleman give way?

[Mr Holden]

I am going to be very quick today. I wish to declare an interest, in that I am co-chair of the all-party group on local democracy. I pay tribute to my hon. Friend the Member for Cities of London and Westminster (Nickie Aiken), who said that she wants the most bottom-up approach possible when it comes to councils. As such, I urge my right hon. Friend the Secretary of State to reintroduce the Bill to exclude public lavatories from business rates. That is exactly what most local councils want. It would save Wolsingham parish council in my constituency £750 a year, and it would save local councils throughout the country more than £8 million a year.

In conclusion, I welcome what I hope is the start of levelling up, from both the Ministry of Housing, Communities and Local Government and from the Home Office in the form of the police settlement. I hope this is the start of things to come.

--- Later in debate ---

[Mr Jones]

That has to be what we want local government to do. The Chairman of the Select Committee, my hon. Friend the Member for Sheffield South East (Mr Betts) said that, too. It is no good deluding people if, locally, more than 60% of the budget has been taken up by two areas. As my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) said, most people do not have any visibility of that. When they pay their council tax, they see their bins emptied and environmental improvements, but if 60-odd per cent. of a council’s budget—I think the figure is higher for some councils—is going on two sectors, that will be difficult to explain to people.

A decision has to be taken about what proposals will be put forward on business rate retention. If it is not, the lack of the clarity that local government needs will create real problems for councils such as Durham County Council. There is an opportunity to grow the business rate. I will explain to the hon. Member for North West Durham (Mr Holden) why Durham County Council decided to downsize its headquarters and move to the centre of the city: to open up an area for investment and create up to 7,000 jobs in order to grow the council tax base. It is doing exactly what the Government want. In addition, it has moved jobs away from County Hall to places such as Crook in his constituency. I do not hear him arguing against moving county jobs to his constituency. Dog-whistle politics is fine, but he needs to look at the facts first.

[Mr Holden]

Will the right hon. Gentleman give way, as he is attacking me directly?

[Mr Jones]

In a minute. If he wants to say that he does not welcome county council jobs to Crook, that is fine; I will have them in Chester-le-Street.

[Mr Holden]

I would be very happy if the county council was just downsizing its current office; what I do not understand is why the Labour-controlled county council is spending £50 million building a brand new centre on a floodplain. Why not just make better use of the current site?

[Mr Jones]

If the hon. Gentleman has been in the current building, he will know that large sections of it are empty.

[Mr Holden]

Exactly!

[Mr Jones]

Wait a minute. It was built in the 1960s, it is full of asbestos and it is very energy-inefficient. If he wants to put capital—public money—into it, fine, but it will not happen, because the money is not there, and what he suggests would cost a lot more than what has been proposed. In addition to that, the council is going to save somewhere in the region of £300,000 a year in running costs. In terms of trying to grow our council tax base in County Durham, that is what the Government want us to do. That is a good, prudent way in which the council is operating. As I say, if the hon. Gentleman is against jobs going to his constituency, please redirect them to mine, because I will have them. [Interruption.] Well, I just ask him to learn his facts. If he wants dog-whistle politics, which he obviously does, then fine, but let us see what is to the benefit—[Interruption.]

[Mr Jones]

I am sorry, Mr Speaker—I never had this problem with the hon. Gentleman’s predecessor.

The Secretary of State referred to the grants on public health. Again, this issue needs to be addressed, because it is a driver of inequalities. In the police precept debate earlier, we talked about mental health and support for the most vulnerable in our community. The Advisory Committee on Resource Allocation came forward with a formula that meant that from April 2020 County Durham would have lost £19 million whereas Surrey would have gained £14 million. I say in a spirit of genuine co-operation with the hon. Member for North West Durham (Mr Holden) that I hope he is going to argue, and lobby his Government, to ensure that this inequality, which has been there for the past 10 years, will not continue.

Let me turn to the new homes bonus, which, again, disadvantages not only Durham but other councils. The top-slicing of the new homes bonus leads to a situation where, again, southern councils are gaining from this allocation and Durham and others are losing. That cannot be fair in any type of system. I therefore look forward to the new, radical approach that has been announced by the Secretary of State in arguing that we will level up these grants and the new formula will recognise need, because if it does genuinely recognise need, then the likes of County Durham will gain through this process. It is not acceptable to say that we can wash away the past 10 years as though they did not happen; they did happen. Without the fundamental question about what we want local government to do and how we want to fund it—

[Mr Holden]

If the right hon. Gentleman wants to talk about a year zero starting last year, I wonder whether he would like to talk about a year zero starting in 2010—as if nothing was a problem then, when this country was borrowing £1 in every £4 it was spending due to the policies he had voted for since 2001.

[Mr Jones]

I do not want to get off the subject, but the hon. Gentleman will have to try better than that, because I was a Member then, and I remember, for example, the investment in Sure Start in County Durham, in my constituency and his constituency. I remember the six new schools, two new hospitals and three new doctors surgeries that were built in my constituency—all that investment. With regard to this nonsense that Labour spent too much, he should look back to just before the crash. What were David Cameron and George Osborne, and their Front Benchers, doing then? They were not just matching our spending—they were calling for more expenditure. So if we were profligate, then they, frankly, were completely reckless. When I was a Defence Minister, if I had followed what they wanted to do then, we would have increased the defence budget by billions. What did they do when they first came in in 2010? They slashed it by 16%. So I shall take no lessons from anyone on the Conservative Benches about Labour spending too much, because the Conservative party at the time was calling for more. I was going to —[Interruption.] I will carry on if those on the Front Bench want me to.

The hon. Member for North West Durham cannot ignore the fact that his party, in coalition and in government, has been in power for 10 years. Decisions being taken now are affecting the lives of his and my constituents, and we must put those right. I am prepared to work with him to argue for more money for Durham County Council and others, but I will not get into the petty dog-whistle politics of his portrayal of Durham County Council.

I genuinely think that there is an opportunity here. If the Government get this right and follow through on a fairer funding formula, they will have my full support, but it must be fairer. There was a time when I was in local government that it was not only a proud achievement for many Labour politicians but it was something that the Conservative party was proud of too.