Tenant Fees Bill (First sitting)

Rishi Sunak Excerpts

Committee Debate: 1st sitting: House of Commons
Tuesday 5th June 2018 Public Bill Committees

[Neil O'Brien]

Q Some have argued for taking it down to four weeks. What would be the effect of that?

David Cox: If we drop it to four weeks—the security deposit is a risk mitigation product, and therefore four weeks is effectively one month. If the tenant leaves without paying the last month’s rent and damages the property, if it is a month, they will either have the money for the lost rent or the money for repairing the property. That is why we have suggested the cap or agree with the cap at six weeks—because it gives the ability for the tenant not to pay the last month’s rent and to damage the property. That is why we have suggested and support six weeks, bearing in mind that, provided everything goes smoothly, the tenant will get that full money back at the end.

Isobel Thomson: I would like to see a permitted payment or an exemption for the situation where a tenant has a pet. Often, agents charge a higher deposit because of having a pet. We would not want to disadvantage people with cats and dogs, would we? That is something that should be looked at.

Adam Hyslop: I agree. The risk from limiting the level of deposit is simply that it limits tenant choice. Some tenants are higher risk than others. Pets are a good example where a landlord might want to take a higher deposit. Another example is that we get quite a lot of people who come from overseas and they are harder to reference. Although you can contact employers, they do not have a UK credit score and things like that. The remedy, without charging that tenant an actual fee, would be to increase the deposit to a reasonable level.

There are things such as rent in advance that can work around that, but frankly, a six-week deposit feels like a reasonable compromise to protect tenant choice on this, rather than foreclosing on some groups.

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

Q May I thank all the panellists for being with us this morning and thank you for engaging with the Department during the course of the formulation of the Bill. I appreciate all the time you have given.

For the record, the Government and I do not have the intention of trying to drive letting agents out of business, as was potentially characterised early on. We very much recognise the valuable role that high quality letting agents play. We have got a great example of one here this morning. This Bill is just about improving the industry to make it work for tenants where there have been abuses of the system and an asymmetry of power. I wish to put on record our thanks for the work many good letting agents do.

In the brief time we have—and in a quick answer to the question—the Bill allows for default fees for things such as a lost key or a late rental payment. Do you think that is a sensible provision to have in the Bill? Also, the Bill allows for payment for changes to the tenancy agreement at the request of the tenant—such as an extra sharer added to the tenancy agreement—capped at the landlord’s reasonable fees for that. Do you think those are sensible? Do you think they should be limited or broadened?

Isobel Thomson: I would say that they are eminently sensible but we just need guidance around how they will operate. I know that civil servants have already started to engage with stakeholders on that.

David Cox: I would support that; I think they are absolutely necessary. I highlighted one example a few moments ago. Under the Bill, they will have to be written into the tenancy agreement so that tenants are aware of them from the outset. Our reading of the Bill is also that anything that is in the tenancy agreement will need to be in the fee schedule, that is displayed prominently in the office and on the website and, under the Bill, on any third-party websites such as Rightmove or Zoopla. I would just query on that one. A lot of agents use Twitter to display their fees; I am not sure how they would get the fees on to the advert in the necessary number of Twitter characters.

We also have to factor in that—

[The Chair]

Order. I am very sorry to interrupt. You have been a very engaging and useful panel and we could have gone on much longer, but I am afraid that under the programming motion, I have to bring the session to an end. Thank you very much for attending this morning.

Examination of Witnesses

Richard Lambert and David Smith gave evidence.

--- Later in debate ---

[The Chair]

We are running short of time. Minister.

[Rishi Sunak]

Q Thank you both for coming today, and thank you for your engagement with the Department on formulating the Bill, which we very much appreciate. I have one quick question about holding deposits. The Bill permits a holding deposit to be taken by a landlord while references and things are being conducted, and allows part of that to be withheld if misleading or false information is provided. Do you agree with that provision? Do you think it provides an appropriate protection for landlords?

Richard Lambert: We believe that the tenant has to have some kind of financial stake in securing the tenancy, so that they do not game the system by putting in offers on a number of properties and then only taking one, whereas the individual landlords will remove the property from the market once they have a firm offer. We would have preferred the situation where the landlord could have charged directly for the reference fee, because we think that is clearer and more transparent. The holding fee is acceptable as far as we are concerned, but we would have preferred something that was much clearer and more transparent to both the landlord and the tenant.

David Smith: The market has tended to move away from holding deposits in the last few years and has simply charged a fixed fee, which ideally should have been linked to referencing, but has occasionally become linked to a random figure made up by the agent. I suspect that what will actually happen is that quite a lot of landlords and agents will not charge holding deposits, particularly in London, and they will simply run it tournament-style: whichever tenant gets there the fastest, with the mostest, will get it.

[Rishi Sunak]

Q Just to clear up something you said before, you talked about ambivalence regarding the deposit—that is, the number of weeks of deposit. To be crystal clear, are you ambivalent about the number of weeks at which the deposit should be capped, or do you agree that six weeks is the right level, or too low, or too high?

Richard Lambert: We would prefer not to have a cap at all. If the Government are determined to bring one in, six weeks is something that we think we can work with. What I was ambivalent about was whether it would mean that people who currently take four weeks as a deposit would automatically move to six. I think that very much depends on the individual, but there is evidence elsewhere in the economy that if you set a limit on what can be charged, the market tends to gravitate towards that limit.

David Smith: We will accept six weeks and will work with it if they put on a cap, but we would prefer to have some scope within the Bill. We have proposed an amendment to the Bill that would allow a slightly higher deposit where there is a particular set of risk factors such as a pet, or someone who is coming from overseas, or someone who can provide no evidence of their income. Otherwise, we feel that landlords just will not rent to those people.

[The Chair]

Thank you very much for coming today. It has been a most interesting session. We could have continued for longer, but I am afraid that the programme order requires me to stop the evidence session now. That brings us to the end of your evidence session today. The Committee will continue to take oral evidence in our next sitting on Thursday at 11.30 am, ahead of beginning the line-by-line consideration of the Bill at 2 pm.

Non-Domestic Rating (Nursery Grounds) Bill

Rishi Sunak Excerpts

2nd reading: House of Commons
Tuesday 5th June 2018 Commons Chamber

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

I beg to move, That the Bill be now read a Second time.

Agriculture is at the heart of our country’s rural life, and, moreover, at the core of our rural economy. It employs over half a million people and supplies almost half of everything we eat and drink in this country. In England alone, the rural economy is worth over £250 billion. We want our country to offer unparalleled business opportunities for an agricultural community that produces some of the finest food and drink in the world. At every stage of the food chain, the UK is creating exceptional food and drink enjoyed around the world, with lucrative opportunities for British exporters, international buyers, and investors. In just 10 years, global demand has grown by nearly a third, with total food and drink exports now exceeding £20 billion.

I am proud to represent a deeply rural and agricultural constituency, home to businesses like Wensleydale Creamery, HECK sausages, Stamfrey Farm yoghurt, and Thornborough Cider—all fantastic rural businesses producing food and drink that competes with the best around the world.

This Government are absolutely committed to supporting sustainable growth in the rural economy. Through the 2014-2020 rural development programme, we are investing almost half a billion pounds in England’s rural businesses. Our support for rural enterprises includes developing farm and horticultural companies. In February, the Government launched a wide-ranging consultation on the future of farming—one that supports farmers once the United Kingdom is outside the European Union. The Government are now analysing views and responses from all stakeholders who contributed. Our ambition is for a more dynamic and self-reliant agricultural industry. Supporting our rural economy and protecting farmers is an essential part of our exit from the European Union. Leaving the EU provides the Government with a unique opportunity to establish new frameworks that support our farmers to grow more, sell more and export more great British food and drink. As we develop this new approach to food, farming and fisheries outside the EU, we will not compromise on our high standards of animal welfare and environmental protection.

The Government are set to continue to commit the same cash total—£3 billion—in funds for farm support until the end of this Parliament. Then the Government will devise a new agri-environment system to be introduced in the following Parliament.

[Mr Jim Cunningham (Coventry South) (Lab)]

One of the big problems with regard to protecting farmers, as I am sure the Minister knows, is getting labour in from the EU and other parts of the world. That is where the big problem might lie after we have come out of the EU.

[Rishi Sunak]

It is not quite my place to comment on future immigration policy, but the hon. Gentleman will know that the new Home Secretary is devising a new immigration system for the UK after Brexit. Of course, ensuring that all businesses, not just in agriculture, have access to the talent and the labour they need will be at the forefront of that new system.

The Government have also said that they will use the structural fund money that comes back to the UK following the EU exit to create a UK shared prosperity fund. The needs and interests of rural businesses have to be addressed as part of any future plans.

We firmly believe that the business rates system plays an important role in supporting agricultural productivity. The agricultural exemption from business rates is a key part of this support. It is a broad-ranging and generous tax measure that ensures that no business rates are paid on agricultural land and properties.

[Sir Greg Knight (East Yorkshire) (Con)]

The Bill itself does not define what a “nursery ground” is, but the explanatory notes, which are not considered by Parliament and are not part of the legislation, do contain a definition of what a “nursery ground” is. Why is this? Would it not be better to put the definition in the Bill, or does it exist in other legislation?

[Rishi Sunak]

My right hon. Friend is right. My understanding is that other legislation has outlined the difference between the two, and I will come on to the Court decision that distinguished the treatment of the two.

It might be helpful, for Members who are not aware, if I explain the distinction. A nursery ground is where small plants or trees are propagated or sown with a view to their being sold on to someone else for growing on to their mature state, for sale to or use by the end consumer, whereas a market garden is where fruit, vegetables, flowers or plants are produced to be sold directly or indirectly to members of the public for consumption.

[Rebecca Pow (Taunton Deane) (Con)]

I have been much involved with the horticultural industry, so I am quite aware of the nursery industry, but I believe that many people are not aware of how significant it is for growing produce for our home market. We could grow it even more after Brexit—indeed, we need to—and the Bill will help a great deal by making these businesses more viable.

[Rishi Sunak]

My hon. Friend is, as ever, an incredible champion for agriculture and the rural community. She is right to highlight not only the current contribution of the fantastic horticultural sector to the UK economy in providing such fantastic food and drink for us to enjoy but the opportunities that will come after Brexit, as we make good on the promise of a global Britain where our food and drink exporters can look out to the world around, where demand is growing exponentially, and take advantage of all those opportunities. Consumers around the world will have the opportunity to benefit from high-quality produce developed in this country and always to high welfare standards, of which I know she is also a champion.

It is worth noting that the exemption from business rates for agricultural land has been in place since 1929. Before that, in the early part of the 20th century and before, agriculture benefited from a partial exemption from rates. For almost 100 years, the Government and Parliament have considered that agriculture should not pay rates. This Government and I trust that this Parliament has no intention for any change of direction in this matter.

It has been assumed until now that all plant nurseries where plants or trees are grown in the initial stages of their life, as I outlined, benefited from that exemption. That had always been the understanding of both rating valuers and practitioners, but in 2015, a Court of Appeal decision showed that the exemption did not apply to plant nurseries in buildings where the buildings were not used in connection directly with agricultural land. That does not reflect Government policy, and neither does it reflect our commitment to supporting sustainable growth in the rural economy.

This legislation will ensure that plant nurseries in buildings will once again benefit from the exemption from business rates for agricultural land and buildings. It will restore fairness for hard-working businesses hit by an unexpected tax burden, and it will enable the Valuation Office Agency to return to its former practice of exempting plant nurseries in buildings and removing plant nurseries that have been assessed from the business rates list. Plant nurseries paying business rates since 2015 will be eligible to apply for a backdated refund of their business rates, which will ensure that these businesses do not continue to suffer as a result of a property tax with an impact on the cost of farming and produce.

[Bob Blackman (Harrow East) (Con)]

My hon. Friend is clearly laying out the Government’s position, but can he clarify one issue that has been raised with me? Garden centres are commercial centres for direct provision to the public, but what will be the position under the new legislation of hybrids—in other words, plant nurseries with a garden centre alongside them that sells their produce directly to the public?

[Rishi Sunak]

I thank my hon. Friend for bringing up a helpful and important point that is worth clarifying. Under current legislation, garden centres are not exempt from paying business rates because they are not treated as agricultural businesses, which I am sure hon. Members will understand. It would be for the Valuation Office Agency to determine the individual facts of the case that he mentioned, but in general, it is perfectly possible for different parts of an entity to be treated in different ways. In the example he gave of a hybrid, where an agricultural business also had a retail operation, the Valuation Office Agency would be able to treat different parts of the business in different ways, and some may benefit from the agricultural exemption. Another example might be a working farm that also happens to have a retail element—for example, a farm shop—that might not benefit from the agricultural exemption, whereas the rest of the farm would. I hope that that clarifies my hon. Friend’s query.

In developing this legislation, we have worked very closely with the National Farmers Union to make sure that the measure meets our shared aim of ensuring that plant nurseries benefit from the agricultural exemption. I want to put on the record my thanks to the NFU for its invaluable insights and expertise, which has helped us to bring this effective legislation to the House. I very much welcome its support for the Bill.

I also want to put on the record my thanks to my hon. Friend the Member for St Austell and Newquay (Steve Double). He deserves enormous credit for highlighting this issue to both my predecessor and others last year, and he has continued to press the case with Ministers and other parts of the Government. I am glad that he will be able to see the fruits of his labour brought to bear today.

To return to the comment made by my hon. Friend the Member for Harrow East (Bob Blackman), the Bill will not otherwise disturb the existing boundary of the agricultural exemption, so uses beyond agricultural operations, such as garden centres, will continue to be subject to the normal business rates process.

[Sir Greg Knight]

Is the Minister in effect saying that all the Bill does is return the law to the same state we all thought it was in before the case of Tunnel Tech v. Reeves?

[Rishi Sunak]

My right hon. Friend is absolutely right: that is what the Bill seeks to do. It is a limited, targeted Bill that restores the practice previously widely accepted and understood by all participants in the rating system and ensures we will return to the state that existed before the Court of Appeal decision.

While I am responding to my right hon. Friend, let me clarify my earlier point. He asked where exactly the definition of nursery grounds can be found. I am reminded that it is precisely defined in case law, rather than in statute. That is where the definitions used over the years have been developed.

To turn to the business rates system in general, the Government are very clearly using the business rates system to create opportunities and to drive growth across the country. The Government have introduced a range of business rates reforms—worth over £10 billion by 2023—that will benefit the wider economy, including many businesses in rural areas. In April 2017, we permanently doubled small business rate relief to 100%, and raised the threshold from £6,000 to £12,000. As a result of these measures, over 600,000 small businesses—occupiers of a third of all properties—now pay no business rates at all. This demonstrates the Government’s clear commitment to supporting small businesses. We understand the impact of business rates in the rural economy in particular, so at the same time the Government also doubled rural rate relief from 50% to 100% for eligible businesses.

[Rebecca Pow]

I have an urban area in Taunton Deane, but I speak as someone whose constituency is particularly rural. There is a view that there is an increasing divide between urban and rural, particularly in the south-west, where we are largely rural. These business rates exemptions are absolutely crucial. Does the Minister agree that this Government are very much indicating that they understand their importance?

[Rishi Sunak]

My hon. Friend is absolutely right. She will know that I also represent a deeply rural constituency. I have seen at first hand the incredible difference that the business rates exemptions make to small rural enterprises, whether they are small business rate relief, rural rate relief or, indeed, some of the measures to support pubs that the Chancellor has announced in the last Budget or two. All of these measures add up to tangible savings for thriving enterprises, which are indeed the lifeblood of rural areas.

My hon. Friend will know, as I do, that rural areas typically do not benefit from large multinational employers. The backbone of rural economies are small and medium-sized enterprises, for which business rates are often a significant cost to bear. Any relief that the Government can give is always warmly welcomed, and it makes an enormous difference to their profitability and future success.

I am pleased to tell my hon. Friend that the Government continue to listen to business. At the spring Budget last year, the Chancellor announced a £435 million package to support rate payers facing the steepest rises in bills following the revaluation. Further answering calls from businesses, the Government brought forward to April this year the switch in the annual indexation of business rates from the retail prices index to the consumer prices index. That represents a cut in business rates every year. Although bringing forward that measure two years earlier than previously planned might sound technical, it is worth £2.3 billion over the next five years.

Furthermore, at last year’s autumn Budget the Chancellor also announced an increase in the frequency of property revaluations from every five years to every three years following the next revaluation. That will ensure that bills more accurately reflect properties’ current rental value and relative changes in rents. The 2018 spring statement announced that the next revaluation would be brought forward to 2021 from 2022, so that businesses can benefit from the change as soon as possible. After that, three-year revaluations will take effect in 2024.

To deliver on that commitment, the Government have already introduced secondary legislation to set the valuation date for the next revaluation on 1 April 2019, allowing the Valuation Office Agency to start preparing for a 2021 revaluation. The Government will introduce primary legislation to change the date of the next revaluation to 2021 in due course. The British Retail Consortium recognised that that was a positive move to improve the fairness of the system, and I look forward to meeting its representatives shortly.

In spite of all that, the Government are not resting on our laurels. We are also reviewing the wider taxation of the digital economy, and the Chancellor has been clear that we need to look more broadly at the overall taxation of the digital economy. The Government are working internationally to ensure that corporate tax rules deliver fairer results for certain digital businesses. We will use the output of those discussions to help inform consideration of the wider business tax system, to ensure that all businesses make a fair contribution to the public finances and that business rates continue to support the stability of local government funding.

[Sir Greg Knight]

I am grateful to the Minister for his generosity in giving way. What would be the position of a business adversely affected by the Court of Appeal decision? Would it be able to claim compensation for any losses suffered?

[Rishi Sunak]

I am happy to tell my right hon. Friend that businesses will absolutely be able to claim back any business rates they have paid from 1 April 2015. In Wales, businesses will be able to claim back to 1 April 2017. It might help Members if I explain the difference between the two dates.

The business rates system in England has relative lists of valuation dates—there is a 2010 list and a 2017 list. When we reach a certain point, it is then impossible to go back and change the list from the beginning. In this case, for any decisions that the Valuation Office Agency made after the spring of 2016, it was only possible to go back and change people’s bills to April 2015. Our understanding is that only a handful of businesses have been caught, and they will be able to use this legislation and subsequent regulations to appeal to the Valuation Office Agency and receive a refund backdated to when they first started paying bills.

[Sir Greg Knight]

Will the Minister clarify something—and if he cannot answer today, will he write to me? In addition to claiming back what has already been paid, will the businesses affected be able to claim costs and any other expenses arising out of the money that they erroneously had to pay?

[Rishi Sunak]

The businesses will not be able to claim costs; the new “check, challenge, appeal” system allows them to make a no-cost filing with the Valuation Office Agency, so there will be no cost to them as they claim back the bills they paid. However, it is important to note that, when they paid, the bills were not paid in error; they reflected the circumstances on the ground at the time.

I said that I would clarify why the date in Wales is different from the date in England. It is purely on the advice of Welsh Government officials. They do not believe that any businesses have been caught up by this in a way that would impact their previous list. In Wales, therefore, any active businesses caught up in this will only have their bills backdated to 2017 at the start of the new and current ratings list. Further retrospective dating is therefore not required.

[Bob Blackman]

My hon. Friend is clearly setting out to answer many of the questions from across the House. Will he clarify the number of businesses caught up in this and the total amount of money involved? I quite understand if he is unable to answer those questions today, but it would be helpful to many colleagues if this could be clarified subsequently in writing.

[Rishi Sunak]

I can answer my hon. Friend’s question now. The Government do not actually know, and are not in a position to know, the tax or business rates circumstances of individual businesses across the country. The VOA is under no obligation to share confidential taxpayer information with the Department. What I can say, based on informal conversations with the sector and the VOA, is that we believe just a handful of businesses impacted by the court ruling have subsequently had their bills changed. That is the working number we are aware of and I hope that provides the clarity he requires.

To return to digital taxation, the paper published at the 2017 autumn Budget sets clear expectations on what the Government hope to achieve on digital taxation: international momentum behind long-term corporate tax reforms and, pending that, the development of interim multilateral digital tax measures.

In conclusion, the Bill delivers on our commitment to support the rural economy and promote this country’s rural life. Moreover, it promotes fairness for hardworking businesses in the agricultural sector. I believe that it has widespread support from the agricultural community and valuers around the country. I very much commend it to the House.

Planning: Local Communities

Rishi Sunak Excerpts

Wednesday 23rd May 2018 Westminster Hall

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

It is a pleasure to serve under your chairmanship, Mr Owen. I congratulate my right hon. Friend the Member for Loughborough (Nicky Morgan) on securing this important debate. I am delighted to respond to the points that she has raised, although I have to gently say that I thank her for the unintended promotion—I am but the Local Government Minister, not the Minister for Housing and Planning. However, I know the Minister for Housing, my hon. Friend the Member for Esher and Walton (Dominic Raab), will be keenly listening, and will hear from me regarding the points that she has raised.

My right hon. Friend for Loughborough raised the key role of communities in the planning system, and the need for local people to believe that being involved is worth while. Community participation is vital to their accepting the development required to meet our housing needs. My right hon. Friend referred to a number of specific planning cases but, as she kindly acknowledged, I am not in a position to comment on the detail or merits of those ongoing planning applications and appeals. However, I will talk more generally about the importance that the Government place on communities when it comes to plan making and planning decisions, and I will address the three areas of concern that she highlighted.

Local plans are prepared in consultation with communities and play a key role in delivering development and the necessary infrastructure in the right places. They provide clarity to communities and developers about where homes should and should not be built, so that development is planned rather than the result of speculative applications. It is crucial that local authorities have up-to-date local plans, produced in consultation with local people. As my right hon. Friend mentioned, her constituents are concerned that some development is placing pressure on existing infrastructure and services in their communities.

Up-to-date plans are an important means of identifying where infrastructure needs to be strengthened, and I am pleased to tell my right hon. Friend that the Government are introducing reforms specifically in that area. Those reforms will mean that developers know exactly what contributions are expected of them and that local communities are clear about the infrastructure that they will get in their area alongside new homes. Two separate consultations—one on developer contribution specifically and a broader one on the NPPF—have just concluded, and both included questions on that topic. The Government will introduce proposals in those areas later in the year, but the point that my right hon. Friend made is spot on: local communities need to know that infrastructure will be there alongside the housing that they are accepting in their area.

More broadly, as my right hon. Friend will know, the Government agree that supporting infrastructure is important. That is why we recently announced a £5 billion housing infrastructure fund, specifically to fund the types of infrastructure she referred to in areas where it can make the difference between a housing development happening or not. I hope that provides some reassurance.

My right hon. Friend pointed out that some authorities, including her own, are deemed not to have a five-year land supply due to land banking and slow rates of delivery. That lack of supply means that plan policies are not considered to be up to date, and applications are assessed against the presumption in favour of sustainable development. Importantly, the presumption in favour of sustainable development does not mean development at all costs. Any adverse impacts of a development will still need to be taken into account. Our housing White Paper acknowledged that the current policy on five-year land supply, although it has been effective in delivering homes, has had some negative consequences, such as those experienced in my right hon. Friend’s constituency.

In response, the Government have proposed some reforms to how land supply is calculated. The draft national planning policy framework offers local authorities the opportunity to have their five-year housing land supply agreed on an annual basis and then fixed for a one-year period, as my hon. Friend the Member for Henley (John Howell) mentioned. The Government believe that that will help to address the situation that my right hon. Friend the Member for Loughborough raised. That ability to fix for one year will reduce the number and complexity of appeals, and provide greater certainty to ordinary residents and to the local authority in their decisions. I hope that she will look at how that works when it is introduced, and then come back to us with her views on how it is working in her local area.

Obviously, in exchange for that new ability, local authorities need to be realistic about meeting their planning needs, and we are addressing that through the NPPF revisions. It seems that my right hon. Friend’s local authority is being forward-looking regarding its housing needs. It is sensible for all local authorities to have a broad range of sites, especially small ones, as my hon. Friend the Member for North Cornwall (Scott Mann) rightly mentioned. That is included in the NPPF, and provides a buffer on the five-year land supply so that areas are not vulnerable to individual sites being built out slowly. That way, they can ensure that individual developers and speculators do not hold an advantage.

My right hon. Friend the Member for Loughborough was right to highlight the very large gap between the number of permissions that have been granted by local authorities across the country and the number of new homes that have been built. The housing White Paper said that a third of all new homes granted planning permission between 2010 and 2015 had not been built out. That was quite a striking statistic, and there was clearly a concern, which my right hon. Friend highlighted, that it is in the interests of speculators and developers to snap up land for housing and then sit back and wait for prices to rise. Clearly, that would not be appropriate. That is why, as she acknowledged, the Government appointed my right hon. Friend the Member for West Dorset (Sir Oliver Letwin) to examine that issue. We will see his initial conclusions shortly, and I know that she, like the Government, will be very interested to hear what he has to say.

[Nicky Morgan]

The Minister is making a very helpful speech, which I shall study with great care. Our right hon. Friend the Member for West Dorset states in his interim report that, once detailed planning permission is granted for large sites, the fundamental driver of build-out rates appears to be the absorption rate. That is the rate at which newly constructed homes can be sold—or, importantly, at which the housebuilder believes they can be sold—successfully into the local market without materially disturbing the market price. I hope that will be at the forefront of the final report and the Government’s response. Housing is needed, and although we are on the side of enterprise, as I am sure the Minister will agree, we must also be on the side of people trying to get homes. It is not just about developers’ profits.

[Rishi Sunak]

My right hon. Friend understands the power of enterprise and makes her point well. I shall ensure that my right hon. Friend the Member for West Dorset is aware of her point. It would be wrong for me to prejudge the final conclusion of his report, but she highlights a point of interest and I am sure that it will be taken into consideration in his deliberations.

I am delighted that we were joined in the debate by my hon. Friend the Member for Henley, who is the Prime Minister’s champion for neighbourhood planning. I attest to his personal ability to galvanise and support local communities as they go through the local neighbourhood planning process, not only in my constituency but up and down the country.

[Scott Mann]

On local democracy, I see the Minister’s Parliamentary Private Secretary, the hon. Member for Morley and Outwood (Andrea Jenkyns), in the Chamber. We were vice-chairs of the all-party parliamentary group for local democracy and firm believers that town and parish councils should be given the ability to allocate within their developments some registered social landlords’ properties, taking them away from the local authority and putting them into the hands of the real decision makers. Will the Minister look at that at a later date?

[Rishi Sunak]

I applaud the work in support of local democracy not only of my fantastic PPS, but of my hon. Friend the Member for North Cornwall. Indeed, it was a pleasure to attend the conference for star councils held by the National Association of Local Councils, which highlights the important work of parish councils. I am happy to look into the matter he raises, but he will forgive me for not giving a specific answer right now.

Through neighbourhood planning, communities may have an even greater say in how their areas are planned and real power to shape the future development of their areas. Neighbourhood planning provides communities with a powerful set of tools to say where developments such as homes, shops and offices should go, what they should look like and what facilities should be provided. I am delighted that more than 2,400 communities have begun to shape the future of their areas. Some 13 million people across England now live in a neighbourhood planning area, and four of those areas, including Barrow upon Soar, are in the constituency of my right hon. Friend the Member for Loughborough. I am grateful for her previous contributions in the House, which have demonstrated her support for community-led planning.

My right hon. Friend asked about support. The Government continue to support groups not just through the valiant efforts of my hon. Friend the Member for Henley, but financially, too—£23 million has been made available for various support programmes, from this year through to 2022. Support is also given through regulation: when a planning application conflicts with a neighbourhood plan that has been brought into force, planning permission should not normally be granted.

We recognised, however, that some neighbourhood plans were being undermined because the local planning authority could not demonstrate the five-year land supply. To remedy that, in December 2016 the Government issued a written ministerial statement to ensure that national planning policies provide additional protection to such communities. The specific change was to protect neighbourhood plans that are less than two years old and that allocate sites for housing, as long as the local planning authority has more than three years of deliverable housing sites. That was the point that my hon. Friend the Member for Henley made. I understand that the local authority of my right hon. Friend the Member for Loughborough has a supply for more than three years, so that protection should be particularly helpful in her case.

[Lee Rowley (North East Derbyshire) (Con)]

In councils such as mine, which have not particularly pushed neighbourhood plans, when a parish council does not want to take up the opportunity of such a plan, will the Government look at the potential for other interested resident groups in the area to do something similar to a neighbourhood plan even when the parish council is unwilling or unable to propose one?

[Rishi Sunak]

I suggest that my hon. Friend should, in short order, invite my hon. Friend the Member for Henley to visit his area. I honestly believe that when we bring together people from the parish council and the local area to listen to my hon. Friend, they will be galvanised into action. The powers contained in neighbourhood planning are significant, and a local community would be hard-pressed not to want to seize those powers and to shape its own destiny once it has received my hon. Friend’s wisdom.

[Ross Thomson (Aberdeen South) (Con)]

I speak from a Scottish angle, and I am interested in this debate as the former chairman of Moray Council’s planning committee. Does the Minister agree that there is a real risk that when communities get involved in decision-making processes and a planning committee such as Moray Council’s agrees with them, but then the decision is then overturned by the national Government in Scotland, as we see more and more often, those communities are left disenfranchised? The great work they can do locally is lost, because they do not feel that their say is being heard.

[Rishi Sunak]

I agree with my hon. Friend. This Government very much support local communities shaping their own destinies. That is why we have supported neighbourhood planning so strongly and strengthened the provisions under which local communities shape their own futures. I know that he will welcome that, and I hope that it provides an example for the Government in Scotland to follow.

My right hon. Friend the Member for Loughborough also talked about people being consulted on planning applications. She expressed some concern about people who objected to applications not being notified. I appreciate how distressing that must be for communities, especially for people who have taken time to engage in the process, as she rightly highlighted. The planning appeals regulations, however, already require the local planning authority to notify everyone who made representations during the planning application process that an appeal has been lodged. That notification should include information on where to send any representations on the appeal and by when. Also, when appeals are decided by a hearing or inquiry, the Planning Inspectorate notifies the appeal parties of the decision and publishes all appeal decisions on its website. The inspectorate will also send copies to any interested party who has requested one. I hope that that is of some help to my right hon. Friend. I appreciate that the process is not fully inclusive, but she will understand the need to trade off the burden in large situations where multiple people have engaged in the process against the ability to request notification.

[Nicky Morgan]

I thank the Minister for that response. Of course there is a trade-off, but modern technology—in spite of the general data protection regulation, which we are all struggling with at the moment—means that notification of large numbers of parties is possible. I encourage him to look at that in the spirit of doing things with local communities, rather than doing things to them.

[Rishi Sunak]

My right hon. Friend makes her point well. I shall certainly ensure that the Minister for Housing is aware of that.

Finally, in the brief time available, I turn to the question of Government guidance on the drafting and discharge of conditions, and whether that guidance is sufficiently robust. Normally, the drafting and discharge of conditions is a matter between the individual local planning authority and the developer. Planning inspectors are required to follow national guidance, and their internal training manuals are continually updated. The Department is not aware that the quality of guidance has been raised as a problem elsewhere, but if my right hon. Friend the Member for Loughborough or her local planning authority think that the guidance in any specific area is lacking, we would be delighted to consider any suggestions that she has for how it might be improved. We look forward to receiving those in due course.

I am grateful to my right hon. Friend for securing this important debate and to all hon. Members who have contributed to it. All of us as constituency MPs receive the correspondence to which she alluded. We know how important the place in which we live is, and how it develops and evolves in housing and all other aspects is incredibly important. That is what people tend to talk to us about when we knock on their doors—not about Brexit—so it is absolutely right for this topic to receive our attention and focus. I am delighted to say that the Government strongly support the principle of local communities shaping their future, using the powers that they have been given through the neighbourhood planning process and local plans. I hope that the reforms that we are making will go some way to addressing some of the concerns that my right hon. Friend has expressed today, but I look forward to continuing the dialogue with her in the months to come.

Question put and agreed to.

Somerset County Council: Unitary Status

Rishi Sunak Excerpts

Tuesday 22nd May 2018 Westminster Hall

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

It is a pleasure to serve under your chairmanship, Mr Hollobone, for what I think is the first time in my new role. I congratulate my hon. Friend the Member for Bridgwater and West Somerset (Mr Liddell-Grainger) not only on securing this important debate, but on his continued engagement on the topic of local government. I have enjoyed the discussions I have had with him in previous parliamentary Committees and debates, and I look forward to many more. It is also a pleasure to see my hon. Friends the Members for Yeovil (Mr Fysh), for Wells (James Heappey) and for Henley (John Howell) contribute to the debate, and perhaps we may have the honour of hearing from my hon. Friend the Member for Mid Dorset and North Poole (Michael Tomlinson) later.

My hon. Friend the Member for Bridgwater and West Somerset will have heard me say before that the Government are committed to considering locally led proposals for unitarisation and mergers between councils, where requested. He will also have heard me say that the Government are not in the business of imposing top-down solutions on local government; we wait to hear proposals delivered, developed and initiated by local government.

Only last week, as my hon. Friend mentioned, we discussed in a Delegated Legislation Committee the draft secondary legislation that, if Parliament approves and it is made, would implement the merger proposal that was submitted to the Government by two district councils in Somerset, West Somerset and Taunton Deane. Today we are considering the possibility of Somerset councils wishing to pursue further restructuring to form unitary local government in Somerset.

As my right hon. Friend the Secretary of State for Housing, Communities and Local Government said earlier this month, the Government believe that there is space and scope for unitary authorities, and where unitary authorities can seek to make a difference, the Government will support that. However, we want to hear from the sector itself on the benefits that can be experienced, and we will listen.

There are two unitary councils in the ceremonial county of Somerset—Bath and North East Somerset Council and North Somerset Council. It is important to put on the record that the Government have not received any proposals from the county council or any of the district councils for further unitarisation in Somerset. However, should such locally led proposals emerge, we would of course consider them.

If such proposals were to emerge, the Government have laid out previously the three specific criteria that we will use to judge them. It will be helpful to Members if I lay them out. The first criterion is that the proposal is likely to improve local government in the area, by improving service delivery, giving greater value for money, yielding cost savings, providing stronger strategic and local leadership, delivering more sustainable structures and avoiding a fragmentation of major services.

The second criterion is that the proposed structure is a credible geography consisting of one or more existing local government areas and that the population of any proposed unitary authority must be substantial.

[James Heappey]

Since the county council kicked off this conversation a couple of weeks ago, it has come to my attention that the Government have a figure in mind for what “substantial” means, in terms of the minimum size of an authority. Will the Minister offer any detail on that?

[Rishi Sunak]

My predecessors, the Secretary of State and myself have previously laid out that a unitary authority should contain at least 300,000 people or more. That figure comes from research conducted by the Department in the past. However, each proposal will be considered on its merits.

The third and final criterion is that the proposal commands local support. In particular, the structure must be proposed by one or more existing councils in the area, and there must be evidence of a good deal of local support for it.

[Mr Liddell-Grainger]

Will the Minister say these wonderful words: there should be a referendum?

[Rishi Sunak]

I am afraid that I cannot say those specific words; indeed, that is not the Government’s previous guidance. The criterion is that there should be evidence of a good deal of local support for the proposal, including from business, the voluntary sector, public bodies and local communities.

My hon. Friend will know from the various proposals that the Government have already considered that there have been a range of ways to demonstrate that good deal of local support. Other areas have engaged electoral and polling agencies to conduct representative polling, county and district council members—who represent people in different areas—have voted and extensive engagement exercises and consultation processes have happened. There are various mechanisms, but the key is that, at the end of the day, there must be evidence of a good deal of local support.

I will elaborate a little further on what a good deal of local support means, as opposed to the mechanism for establishing that it is there. We would like to see a good deal of local support, which we assess in the round across the whole area—from business, the voluntary sector, public bodies and local communities. We do not mean unanimous agreement from all councillors, stakeholders, councils and residents. However, we expect as much consensus from councils as possible.

My hon. Friend talked about democratic deficits, and he is right to highlight the importance of local democracy. From parish councils and all the way up, strong local democracy serves communities well and can make a difference to how people live their lives and to the area that they call home. We have seen in previous reorganisations and restructuring an increase in the incidence of parishing, revitalising that most local form of democracy. For example, in Wiltshire, Salisbury became a town council as part of that process. We are seeing similar moves towards parishing in other areas, such as Suffolk, which is currently in the process of a district merger. The Government also have powers to confer charter trustees as part of any reorganisation.

[John Howell]

I agree that proposals will never get unanimous support from councils, but that is not the issue. In many cases when a unitary council has been created, parish councils have not even been asked. If we are to put the emphasis on parish councils as the basic building blocks of local government, they need to be asked and they need to be included in the decision-making process.

[Rishi Sunak]

My hon. Friend makes an excellent point. If a local area tries to demonstrate to the Government that it has a good deal of local support from every possible sector in the local area, parish councils would clearly be a set of institutions that it would be worth considering talking to. Indeed, previous proposals that we have received have specifically engaged parish councils as part of their deliberations. The charter trustee status that I mentioned also means that ancient civic traditions can be retained in an area, regardless of the final form of the restructuring that takes place.

[James Heappey]

I am keen to understand exactly what level of support is required among local authorities. If all or most districts involved in the proposal were against it, would that be sufficient to block whatever plans might come forward?

[Rishi Sunak]

I am afraid I cannot give my hon. Friend a specific quantitative mechanism or definition that needs to be met. I re-emphasise the guidance, which states that a good deal of local support is needed. I have tried my best to elaborate on how that will be interpreted by the Secretary of State when he considers proposals in the round, along with all the other criteria that he has to balance.

I am keen to give my hon. Friend the Member for Bridgwater and West Somerset a minute or two to wind up the debate, so in conclusion—[Interruption.]

[Mr Philip Hollobone (in the Chair)]

Order. In a half-hour debate, Ministers do not have the prerogative to give the Member who brought the debate time to wind up. The Minister has almost four minutes to go.

[Rishi Sunak]

Thank you, Mr Hollobone. I was not aware of that; I appreciate the extra time.

It is important that the councils of Somerset think long and hard about how best to serve their communities and about how to deliver the public services that people rely on, whether adult social care, children’s services, strategic planning or transport. It may well be that innovation and re-organisation will help to deliver for the people of Somerset, but it is crucial to note that that decision should be taken by the people of Somerset themselves. It will not be for the Government to impose a top-down solution.

[Mr Liddell-Grainger]

I will be very brief; I promise I will not wind up the debate, Mr Hollobone. I am confused, because the Minister says that there must be local involvement, but also that local stakeholders must support the proposals. Most of West Somerset’s local stakeholders are not based in the county, funnily enough. Ambulance services are based in Devon, the fire brigade is based in, I think, North Somerset and the police are up in Avon. I would love to know how that will work. I ask the Minister to think this through. The most important people are the 500,000 based in the county of Somerset.

[Rishi Sunak]

My hon. Friend makes a good point, and he is absolutely right to demonstrate that local people should have their say and that their voice should be heard. However, it is also important, when these deliberations are made, that we consider effective local government as one of the criteria. In any local area, there will be institutions and stakeholders, who may or may not be based in that area, who will make a difference to the delivery of local services, and their views will form part of those deliberations.

My hon. Friend started the debate by saying something that I wholeheartedly agree with: local government matters. I take that very seriously, as I know does the Secretary of State. That is why the Government will remain committed to responding and listening to proposals that come forward from local government. We will not seek to impose our view, but where there is a desire and a thrust for more change and innovation—whether in Somerset or elsewhere—we will look to support those involved, according to the criteria I have laid out. In conclusion, I commend my hon. Friend for the continued passion he has shown in ensuring that local democracy in Somerset remains vibrant and strong.

Question put and agreed to.

Tenant Fees Bill

Rishi Sunak Excerpts

2nd reading: House of Commons
Monday 21st May 2018 Commons Chamber

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

It is a pleasure to wind up the debate and I thank the hon. Member for Croydon Central (Sarah Jones) for her constructive support for the principles of the Bill. I very much look forward to discussing the details with her in Committee.

At the outset, I pay tribute to the Under-Secretary of State for Housing, Communities and Local Government, my hon. Friend the Member for South Derbyshire (Mrs Wheeler), who could not be with us tonight. She deserves enormous praise for the way she has brought the Bill to the stage in which we are discussing it tonight, through her tireless engagement not only with colleagues across the House, but the sector at large, and extensively with the Housing, Communities and Local Government Committee. I thank her for all her work. She is the reason that we are talking about a Bill over which there is so much agreement.

I start by agreeing with my hon. Friend the Member for Carlisle (John Stevenson). Like him, I am a committed believer in the power of free markets and competition. I approach cases of caps and bans with some scepticism as well, so I am pleased to tell him that after careful consideration of the Bill’s provisions, I came to the same conclusion as my hon. Friend the Member for Gloucester (Richard Graham): what this Bill does is address a failure of competition and a failure of the free market, which Government Members believe so passionately in. There is an inherent unfairness in a situation where a potential tenant is faced with a monopoly provider of a letting agent, and it does not strike any of us as being right. That unfairness was highlighted by my hon. Friends the Members for Rugby (Mark Pawsey) and for Walsall North (Eddie Hughes) and is most clearly evidenced in the charging of double fees, where letting fees are charging fees on both sides of the transaction. This is evidence of the broader imbalance in the market that my hon. Friend the Member for Harrow East (Bob Blackman) highlighted, and the Bill seeks to redress the balance between landlords and tenants.

We have heard many helpful contributions from members of the Housing, Communities and Local Government Committee on both sides of the House. I pay tribute to its work and in particular, to the hon. Member for Sheffield South East (Mr Betts) and my hon. Friends the Members for Harrow East and for Northampton South (Andrew Lewer), as well as their colleagues. They did an excellent job. It is worth pointing out that I counted 19 separate recommendations of the Select Committee’s report and the Government were pleased to accept 15 of those. I hope that that speaks to the value that we place on pre-legislative scrutiny—[Interruption.] We should not dwell too much on the differences that separate us.

My hon. Friend the Member for Harrow East, the hon. Member for Sheffield South East and many other hon. Members asked about retaliatory evictions, and I am pleased to say that the Government are considering the Committee recommendations arising from its wider inquiry into the private rental sector, including on retaliatory evictions, and will reply in due course.

My hon. Friend the Member for Northampton South raised the issue of new burdens funding. I can tell him with my other hat on—as a local government Minister—that there is probably no more passionate defender of new burdens funding than me, so I will ensure that the funding is there for our local authorities to enforce the Bill properly.

That brings me to the comments by my hon. Friend the Member for Lewes (Maria Caulfield). She asked about enforcement and about the fees that would be charged and gave examples of exorbitant £200 or £300 fees charged when tenants want to add a second tenant to their contract or request permission for a pet. I am pleased to tell her that the Bill seeks to end that practice. Such fees will be capped at £50 or reasonable costs, which I hope gives her some comfort.

Enforcement is, of course, incredibly important. I am pleased to tell my hon. Friend and others that there are multiple avenues by which tenants can seek enforcement of their rights: first and foremost, through redress schemes, which the Government made mandatory for letting agents some years ago and are consulting on making mandatory for landlords today; secondly, through trading standards authorities and district councils where they are not the trading standards authorities; thirdly, on the advice of the Select Committee, through the first-tier tribunal; and, if none of that works, subsequently through the county court. The fines, starting at £5,000 and scaling up to potentially unlimited fines, are significant and will act as a deterrent to errant landlords.

[Mr Betts]

On enforcement, does the Minister accept that going to a county court is quite an experience for a tenant and would probably put them off, and does he therefore accept that the first-tier tribunal itself should take the matter of enforcement to the county court on behalf of tenants who have already won their case?

[Rishi Sunak]

We do not fully agree with the hon. Gentleman on that particular point, but I hope he takes comfort from our having accepted his recommendation that in the first instance the first-tier tribunal be available for tenants to take cases to and that this will serve as a benefit to them.

On fines, in criminal cases parties will be liable to potentially unlimited fines and banning orders. I think that the combination of all those things will serve as sufficient deterrent to errant landlords.

In conclusion, the Bill will save millions of tenants hundreds of millions of pounds and will deliver fairness. It is one of the many measures the Government are taking to fix the broken housing market, and I commend it to the House.

Question put and agreed to.

Bill accordingly read a Second time.

Local Authority Overview and Scrutiny Committees

Rishi Sunak Excerpts

Thursday 17th May 2018 Westminster Hall

[Mr Clive Betts (Sheffield South East) (Lab)]

I beg to move,

That this House has considered the First Report of the Housing, Communities and Local Government Committee, Effectiveness of local authority overview and scrutiny committees, HC 369, and the Government Response, Cm 9569.

It is a pleasure to serve under your chairmanship once again, Mr Sharma. Today’s debate will consider the report of what is now the Housing, Communities and Local Government Committee. At the time it was the Communities and Local Government Committee, but what’s in a name change, after all?

The report looked into the effectiveness of local authority overview and scrutiny committees, which is an important subject. Perhaps it is a bit technical, and does not catch the main headlines in the popular press, but local government delivers important services to our local communities, including social care services for the elderly and children, emptying the bins, sweeping the streets, running libraries, and producing housing. Those are all important services, and it is important that they are done well and that the performance of authorities is scrutinised and monitored effectively.

Let us go back, for those of us who can remember, to how scrutiny came about in local government. We used to have a system—indeed, some councils are going back to it—in which all councillors were involved in the decision-making process, in the sense that they were members of committees. Then we had the idea that the Cabinet system, because it worked so well at national level, should be replicated at local authority level. Cabinets were set up in local government, and a number of councillors were appointed to them. I think someone either in Westminster or Whitehall then had the thought, “What do we do with the rest of the councillors who are not on the cabinet, who now haven’t got committees to be on?”

Councillors perform a very important role as representatives of their local communities. Acting in their wards on behalf of their constituents is key to their role. Then someone thought, “What else can we do with them; they are sitting around the town hall, city hall or county hall with nothing else to do? Scrutiny committees are a good idea—we’ll have those.” I think it was a bit of an afterthought on top of the cabinet system, although people who devised it at the time might say that it was not. Unfortunately, for some authorities, it has remained an afterthought—somewhere we can put to one side those councillors who do not have much to contribute anywhere else or, sometimes, councillors who have too much to say somewhere else and are a bit of a nuisance to the leadership of the council. Those in the leadership put such councillors on a scrutiny committee, and hope that they will go away and do something that does not really affect them.

Unfortunately, some councils see scrutiny as a problem. People can raise difficult issues that should not be raised, and sometimes it can become an issue of party political contention. Opposition councillors get put on scrutiny committees to make the life of the ruling party difficult, and ruling party councillors get put on them and told not to ask any difficult questions, because questions can always be raised in their group meetings afterwards. Councillors tell us that that is what is said to them.

However, there are very good examples of scrutiny; like Select Committees in this House, councillors challenge the executive, take on issues, investigate thoroughly and comprehensively, produce good reports and, rather than simply looking at something after the event, take policy initiatives and help to develop policy. Sometimes when there is a complicated issue—perhaps there is a general understanding in the council of where they want to get to, but not of how to get there—scrutiny committees can be really good at delving down and doing what they call “task and finish” to identify the key issues and technical difficulties, and come to agreed, well thought through conclusions. There are some really good examples of effective scrutiny.

There are good examples of councils going outside their council body and getting witnesses, expert witnesses and advisers in to help them, as Select Committees do. Unfortunately, such examples are rare. When councillors are asked why they do not get people from their local university to come in and help—those experts would probably be quite happy to be part of their local community engagement and democratic process—the response is often, “Oh—can we do that?”

We recommend looking at examples of best practice. Councils should learn from one another, and from the best examples of how to conduct scrutiny independently and effectively, by drawing in advisers from outside and engaging with the public in a meaningful way. Sometimes the way the public are engaged with—sitting at the back of a room while a council officer reads a report that has been written well in advance—is not very good. That does not engage the public, but we are looking at different ways of doing so. Taking scrutiny out to the community, setting up websites, and using social media are ways in which councils can develop and enhance scrutiny, as some of our Select Committees do.

This weekend I am going to Birmingham because the Housing, Communities and Local Government Committee, together with the Health and Social Care Committee, is doing an inquiry into social care. We are going to talk to the citizens’ jury that we have established to provide information and evidence to the inquiry. It is the first time that our Committee has done that. The Committee is also doing an inquiry into the high street. We are using a website to try to get the public engaged in feeding in their information about what is happening in their high street, and what they think should happen. We would like to see such initiatives reflected in local government. Sometimes they are, and local authorities can learn from one another as well.

The key recommendation of our report is about the culture in local government. Do those in the leadership, both politically and at officer level, see scrutiny as important? Do they see it as part of the council’s function, and as something that can add value to council decisions, or just as a bit of an irritant that can be put to one side and forgotten about? That was key to our recommendations. The reality is that if councils value scrutiny and want to make it work, they can do it, even if they may do it slightly differently in different authorities.

I do not want to keep hon. Members for too long this afternoon, but the Committee made a number of specific recommendations. The Committee’s key observation was that Government guidance on scrutiny has not been updated for a long time. The Government have accepted that, and they will produce new guidance—we had a positive discussion with the Minister about that at the evidence session. That is a good starting point, because it means that we can look at some of the other recommendations positively. Scrutiny committees should report not just to executive members of the council, but to the whole council. Again, the Government have accepted that, and we welcome it.

We recommended that scrutiny officers should have the necessary skills to help members of scrutiny committees to do investigations into detailed policy matters. We should not just have a clerk system in which someone says, “We’re here to keep a record of attendance and get the witnesses in the right places.” It should be about helping members with proper monitoring and policy development. The Government have basically accepted that recommendation as well.

Another issue was scrutiny of elected mayors and combined authorities. When any deal is done, it is really important to look at scrutiny, and ensure that resources are available for it. Those mayors and combined authorities are a further step removed, in some cases, from the people who elect them. The arrangements can be complicated, and it is important that there is proper scrutiny of them. The Government have accepted that point as well.

Moving on to issues on which the Government’s response has been less enthusiastic, and those issues that need more consideration, the Government did not accept that a summary of the resources spent on scrutiny should be published each year alongside the summary of resources spent on the executive. The reality is that, in many councils, when cuts are made scrutiny is one of the things that gets cut, because it is a bit of an inconvenience and nobody will miss it if it does not happen. Of course, the executive looks after itself. That does not happen on all councils, but there is sometimes a feeling that that happens, because the executive makes the budget recommendations. We thought that saying to councils, “Look, just publish those figures,” was an interesting way of demonstrating the extent to which they fund scrutiny, compared with other functions of the council. The Government said no to that. It seemed to us a fairly harmless recommendation, and we do not understand why the Government did not support it.

The Committee also said that a statutory scrutiny officer should be appointed in every council. Why not? They exist in unitary authorities and in counties, but not necessarily in second-tier authorities—the district councils—which perform very important functions. Why not a statutory scrutiny officer there as well?

The issue of what information is available to scrutiny committees is absolutely key. Following our report, I have done two or three talks to councillors on scrutiny committees and scrutiny officers. Everyone started nodding at the point we raised the issue of what information is available. So many times councillors on scrutiny committees have been told, “You can’t have that information; it is confidential.” There are examples of councillors having to use freedom of information requests to get information from their own councils. That is ludicrous. It is nonsense. The words “commercial confidentiality” often appear as the explanation and the excuse.

The Government’s response in that regard was an attempt to be helpful. They said that there should not be a blanket refusal to provide information and that information should be dealt with on its own merits. The very helpful point was made—I hope it is given some prominence in guidance to councils—that when contracts are let by councils, clauses should be put in to make it clear that information can be relayed to councillors and not just to a handful of people on the executive. Companies tendering for work should understand that right from the very beginning of the tendering process, before contracts are let. The Government need to build on that in the guidance because it is an absolutely key point—if the information is lacking, scrutiny cannot be done.

In many councils, more and more functions are not delivered in-house but are contracted out to private companies. Officers delivering a service in house can be called before the scrutiny committee, but if the information about a private contract is classed as commercially confidential, the contract cannot be scrutinised and nor can the service to the public. At the end of the day, that is the key point. Addressing that issue is fundamental to getting scrutiny right in an age when so many services are now delivered by third-party contractors. We must make sure not only that the information is available but that those individuals who are running the contract have to come before the scrutiny committees as well.

We also called for scrutiny committees to look at the work of local enterprise partnerships. Billions of pounds of public money is spent by LEPs, which are almost unaccountable to any part of the democratic process. The Government were receptive to the idea and said that there should be proper oversight and transparency of the operation of LEPs. They said that they would go away to think about that and write to the Committee. I know that the post is occasionally slow in this country, but I think the letter has got lost in the post. We have not received it yet. I hope the Minister has one in his pocket this afternoon to hand across the Chamber.

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

We are writing it now.

[Mr Betts]

Okay. Clearly, I think it is an important issue. Who else is going to oversee the spending and work of the LEPs if not council scrutiny committees? That is very important.

There is something that somehow got lost altogether in the Government’s response. Currently, councils have a right to oversee their own activities and the officers who perform them, although they need to do more about commercial companies. There is a very good set of rules for the health service. The service can be scrutinised by local council scrutiny committees and the health service bodies have to provide information. Officers have to come to scrutiny committees and be questioned about that. What about the other important public services?

The Department for Work and Pensions provides a lot of services at local level. So do the police. I know that the police have their own scrutiny arrangements for local police panels—I do not know whether they are quite the same—but certainly, lots of public services, such as those delivered by the DWP, are very important at local level. They do things that affect the public locally, but there is currently no local oversight. We suggested that they should be put in a similar position to health service bodies and that officials should have to provide information and evidence and be available to appear before scrutiny committees. The Government seem to have missed that out altogether in their response, as though they were a bit uncomfortable about it. I know that it might mean talking to one or two colleagues in other Departments, but it is a good proposal and one that would help transparency and monitoring of Government activity as well. I hope the Minister will be able to say a bit more about that this afternoon.

We look forward to the Government’s guidance, as well as clarification of the one or two issues that I have identified, including that long-awaited letter, but to a large extent, at the end of the day it is down to councils. We can give them guidance, but we need to encourage them to take account of the report and to work with each other to improve scrutiny.

I know that the Local Government Association is starting to look at the issues. We had a very helpful letter just before the debate from the Centre for Public Scrutiny, which has an important role to play. It gave evidence to the Committee and is now working with the LGA on how to deal with a number of matters in a practical way. They are looking at the issue of councillor training, and at examples of good practice. They are looking at how councils can be helped to understand their responsibilities. I hope that they are going to look at the idea we recommended, which the Government said they were going to talk to the LGA about, of doing some pilots on the election of chairs of scrutiny committees.

Councils are, in the end—the Committee is very clear about this—locally elected bodies, and on the Select Committee we are all, by and large, localists who believe that things can be best done and organised at a local level, but we thought the idea of having chairs elected by the home council was quite a good one. We did not want it to be imposed on councils, but we suggested one or two pilots to show what could be done. The Minister might be able to let us know how far that has gone.

We certainly welcome the work that the LGA is now doing with the Centre for Public Scrutiny to take those ideas forward. We look forward to the guidance that the Government are eventually going to produce on the basis of the report.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

It is a pleasure to serve under your chairmanship, Mr Sharma, I think for the first time. I congratulate the hon. Member for Sheffield South East (Mr Betts) on securing the debate. I thank him and the members of his Committee for their important work. I stand here in some trepidation, responding to a debate in which I think I am the only parliamentarian who has not been a local councillor at some point.

[Mr Betts]

There is still time.

[Rishi Sunak]

One job at a time, perhaps. Collectively, there is probably over half a century’s worth of local government experience in the room. I pay tribute to that service. The hon. Member for Sheffield South East said that this may not be a topic that attracts front-page headline news, but nevertheless it is an important topic. It is a credit to him and his Committee that they took the time to thoroughly investigate a topic that deserves scrutiny but that otherwise may not have had the chance to be debated and aired in this place.

Scrutiny is fundamentally important to the successful functioning of local democracy, so I welcome the opportunity to reflect on the Committee’s findings. It has a key role to play in ensuring local accountability and the efficient delivery of public services. Scrutiny committees can play a key role in voicing the concerns of local people. I hope the Government response makes it clear that I value the role that scrutiny can play in supporting accountable and transparent decision making and the effective delivery of council functions. The principal takeaway point for me from the Committee’s report, which the hon. Member for Sheffield South East alluded to, is that the organisational culture determines whether scrutiny works well. Where there is a culture of welcoming challenge, the scrutiny process in councils is effective.

I would like to start by setting out the core principles that underpin Government’s approach to scrutiny, before turning to the specific recommendations of the report. First, councils are democratically elected bodies and are ultimately accountable to their electorate. Secondly, as a localist, I take the view that councils are best placed to know which scrutiny arrangements will suit their own individual circumstances. Thirdly, Government have a role to play in ensuring that councils are aware of what effective scrutiny looks like and how best to carry it out. Lastly, overview and scrutiny is just one part of the wider accountability framework for local government, along with the requirement to publish certain information online for transparency, the requirements for independent audit, the complaints process and the presence of independent local media.

The rationale behind the Government’s response was, therefore, to accept those recommendations that would increase councils’ understanding of the importance of scrutiny and how to conduct it, but to tread carefully with the requirements that would place additional requirements on local authorities or reduce their flexibility to decide for themselves which scrutiny arrangements to put in place.

I will turn to some of those specific recommendations. The Committee’s first recommendation clearly will enhance councils’ understanding of the importance of scrutiny and how to conduct it. The Committee pointed out, not unfairly, that statutory guidance was updated more than a decade ago. I was more than happy to agree to update that. I am keen that the new guidance is of genuine use to councils and is not just a tick-box exercise that simply restates their legal obligations. My Department is already at work with the sector to ensure that it delivers the right messages in the right way. Broadly, the guidance will seek to ensure that councils know the purpose of scrutiny, what effective scrutiny looks like, how to conduct it effectively and the benefits it can bring. More specifically, it will cover some of the specific things that were heard today, such as reports to full councils or the role of the public. I look forward to publishing that revised guidance before the end of this year.

The hon. Member for Sheffield South East and the hon. Member for Makerfield (Yvonne Fovargue) raised the concern of public scrutiny of local enterprise partnerships. The Committee’s report seemed to suggest that it was the exception rather than rule. I want to reassure hon. Members that I agree fully that local scrutiny is essential to holding LEPs to account. The local enterprise partnerships national assurance framework is set by central Government and LEPs must comply with it to receive funding.

Last year, one of the Department’s non-executive directors, Mary Ney, led a review into LEP governance and transparency. We are in the process of fully implementing all her recommendations; but I agree there is more to do to ensure that LEPs and local partners collaborate effectively to deliver better outcomes for the public. That is why we are currently undertaking a Minister-led review that will consider the role of local scrutiny in LEP governance. It will also bring forward reforms to LEPs’ roles, leadership, accountability and geography. It will be published in the coming months.

I apologise to the hon. Member for Sheffield South East and his Committee that he has not received the letter that he is due. I will ensure that gets to him in short order, to set out what has already happened and what is happening to improve governance and scrutiny for LEPS.

[Mr Betts]

I thank the Minister for that reassurance. We will get a letter in short order saying that something will happen in the coming months. Could the Minister be more precise about what “the coming months” might mean?

[Rishi Sunak]

I would love to be, but the review is being conducted by my colleague, the Under-Secretary of State for Housing, Communities and Local Government, my hon. Friend the Member for Rossendale and Darwen (Jake Berry), so I do not have the exact timing to hand. The review was announced through the industrial strategy White Paper. I am sure that we will share as much information as we are able to with the Committee. The hon. Gentleman knows that, alongside that, the assurance framework is in the process of being reviewed and updated. That work is going on with people in the industry, including the Chartered Institute of Public Finance and Accountancy and officials. I will make sure that all that is contained in the letter, with as much transparency on timing as we are able to give.

Another key concern that the Committee raised was that scrutiny seemed to be a second-order matter for combined authorities. I assure hon. Members that I take accountability in these new authorities very seriously. I am confident that the framework we have put in place provides the basis for a robust and consistent approach to scrutiny for combined authorities across the country. In particular, the Combined Authorities (Overview and Scrutiny Committees, Access to Information and Audit Committees) Order 2017 was a key step in implementing devolution deals, and will ensure effective accountability for the new budgets and powers that have been devolved.

Members raised the question of resourcing. The Government announced at the last Budget that they will make available to mayoral combined authorities a £12 million fund for financial years 2018-19 and 2019-20 to boost Mayors’ capacity and resources. Combined authorities are free to use that to ensure that scrutiny and accountability arrangements are effectively resourced and supported.

I turn to the recommendations that the Government are considering. Access to information was raised by all three Back-Bench Members who spoke—my hon. Friend the Member for Harrow East (Bob Blackman) and the hon. Members for Blaydon (Liz Twist) and for Sheffield South East. They made a persuasive and compelling case that we should have a hard look at that area. As a new Minister, I tell my hon. Friend that the point about information was the one thing that really stuck with me. In our response to the Select Committee, we committed to looking at that and deciding how best to manage it.

I agree that scrutiny committees should be able to access the information they need to do their jobs effectively. I can see that some executives might seek to deny committees access to that information if they do not appreciate their obligations or understand the value of scrutiny. I want to take soundings from the sector and figure out how best to move forward before committing, but hon. Members’ case that this is something we should consider carefully will stick with me, and I will ensure that I take it away. If we decide that new measures are appropriate, I will of course come back to the Select Committee with those.

My hon. Friend the Member for Harrow East and the hon. Member for Sheffield South East also raised the role of elected chairs. My officials and I will speak to the sector and think about how best we can establish the impact of elected chairs on the effectiveness of scrutiny committees. In general, chairs should be selected on the basis of their skills, experience, integrity and objectivity, not of how amenable they are to the executive. Although the new guidance will remind councils that they already have the option to elect rather than appoint a chair, it is right that every council should decide for itself how to select its members.

Let me say a few words about some of the recommendations about which there is a small difference of opinion, which I hope I can explain. On the point about councils publishing a summary of resources, although the Government require councils to publish certain information for transparency purposes, making available details of the resources allocated to scrutiny would be difficult in practice, for the simple reason that councils often do not have a dedicated scrutiny officer or staff. Instead, they pull in resources as and when they are needed, so it may be difficult for them to produce accurate figures.

[Bob Blackman]

I remember that a former Secretary of State—namely, Sir Eric Pickles—believed absolutely in transparency, such that he insisted that every council must publish every item of expenditure in excess of £500. Given that I do not think that policy has changed, what is the problem with asking councils to publish what should be a considerably higher figure than £500?

[Rishi Sunak]

I agree that transparency is important, and I am glad that my hon. Friend supports the transparency agenda, which the Government continue to lead. Transparency is of course the best disinfectant and the best way for accountability to work in practice. There is a practical difficulty with trying to aggregate lots of small expenditures, which is why there is a £500 threshold in the transparency code. I agree that £50 here, £25 there and another £100 there may add up to a greater figure, but identifying all the individual components may be tricky. However, I agree that transparency is important.

The hon. Member for Blaydon mentioned training. In its report, the Select Committee suggests that the training offered to members and officers does not always meet their needs, and that the Department needs to better manage the funding it provides to the sector. Having looked into the training offer, I remain broadly happy with it. It already includes a specific two-day course for new or aspiring scrutiny chairs, and I am comfortable that, for now, it meets the needs of the sector.

I note that the Local Government Association wrote to the Select Committee to provide further details of the overwhelmingly positive feedback it has received about its training programme. The Committee will be aware that our new memorandum of understanding with the LGA sets out our expectation that it will remain responsive to feedback and ensure that the training it offers remains relevant and effective. However, I agree that training is important, and I hope that the response the Committee gets from the LGA reassures it that what is in place is at least a good foundation.

[Liz Twist]

I thank the Minister for those comments. Will he ensure that all authorities not only know that the training offer is there, but encourage their officers and members to take it up? We heard that not all authorities do that, so it would be really helpful if the Government, through the LGA, stressed that point.

[Rishi Sunak]

The hon. Lady is right. I note that in its oral evidence, the LGA recognised the need to get into councils that might not be doing scrutiny as well as they should. I think it will have taken that message away as a result of coming before the Select Committee and engaging on this topic, and I will pass that message on, too, to ensure that it was heard loud and clear.

[Mr Betts]

I am not sure whether the Minister covered this point. He spoke about the importance of access to information and about considering how that can be improved, but he did not make it clear whether that applies just to information held by councils themselves or to information held by other public bodies, such as the Department for Work and Pensions, the police service and the fire service, just as it already applies to the Department of Health and Social Care and its bodies at local level. Does he accept that scrutiny committees have a right to scrutinise and access information and witnesses from those other public organisations?

[Rishi Sunak]

I was talking specifically about information relating to councils’ own functions in the first instance. On the broader point, which was also raised by my hon. Friend the Member for Harrow East, there are existing mechanisms for health and crime because, when those structures were set up, those were the agencies that the sector felt it did the most partnership working with. I am happy to talk to the sector to find out whether there is appetite for a greater ability to scrutinise other bodies, whether that process would work practically, and whether the burden it would put on authorities is appropriate. It is important to recognise that many of those other parts of the public sector are scrutinised separately, and to ensure that there is not duplication of scrutiny. Every public agency tries to focus on its day job, so we need to get the balance right between having appropriate scrutiny and not duplicating scrutiny, which would mean taking focus and resources away from agencies doing their job.

[Mr Betts]

I thank the Minister for giving way a second time on this point. I hope that, having looked at that and talked to the sector about it, he will write back to the Select Committee with his findings. It is difficult to see where the Department for Work and Pensions has a spotlight shone on it often and effectively at local level. I recognise his point about putting burdens on local government. This is intended to be not a burden but an opportunity, which local authorities may take up if they wish. There would not be a requirement to scrutinise other bodies, but authorities would have the opportunity to do so if they wished.

[Rishi Sunak]

I will of course write to the hon. Gentleman when we have had conversations with the sector on that point.

[Bob Blackman]

I want to clarify the point about information, which goes absolutely to scrutiny. I made the point that the presumption should be that information should be available. Rather than the current position, in which officers grudgingly give information to scrutiny committees and suchlike, it should be for the legal officer to say why information should not be available. Will my hon. Friend look at that specific point in detail and come back to the Select Committee?

[Rishi Sunak]

Hopefully I can reassure my hon. Friend. The main point that I have taken from the debate from all contributions is about access to information and ensuring that it is not unreasonably withheld. It is tricky to get the balance right, making sure that time is not wasted and that information that is genuinely commercial or commercially sensitive in some other regard is protected. However, I have heard that message loud and clear and it is a fair point, so I will go away and think about it in more depth.

Of course, such conversations with the sector are already happening and if there is a path to do something different, we will consider it. I would be loth to commit to something now, but I can commit to examining the issue properly and seriously, given the weight and force of the arguments made.

It was reassuring to see that the Committee’s report acknowledges that scrutiny is working effectively in many councils. We should recognise that. Of course, we should accept that in some places it does not work as well as might be expected, but it does have a key role to play in ensuring local accountability and the effective delivery of services so it is important that councils know how to do it properly. I have committed to working with the sector to update the guidance, ensuring that it meets the needs of councillors and their officers, and I am happy to give further consideration to some of the topics I touched on earlier.

I thank hon. Members who have contributed to the debate. I am grateful to have had the opportunity to discuss this important topic. We are talking about scrutiny and, as was raised in Members’ comments, Select Committees, and in particular the Housing, Communities and Local Government Committee, which I am privileged to appear before, are a great example of how scrutiny can work in practice. It works best in this place—as it should in local authorities—when done on a collegiate basis, with people putting the interests of the public whom they serve first and working as a constructive friend of the people who are trying to make decisions. This Committee is a fantastic example for local authorities and the local government sector to look at. It is a pleasure to work with it, not just on this issue, but hopefully on other issues in the months to come.

Draft Somerset West and Taunton (Modification of Boundary Change Enactments) Regulations 2018 Draft Somerset West and Taunton (Local Government Changes) Order 2018

Rishi Sunak Excerpts

Wednesday 16th May 2018 General Committees

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

I beg to move,

That the Committee has considered the draft Somerset West and Taunton (Modification of Boundary Change Enactments) Regulations 2018.

[The Chair]

With this it will be convenient to consider the draft Somerset West and Taunton (Local Government Changes) Order 2018.

[Rishi Sunak]

It is a pleasure to serve under your chairmanship, Ms Buck. I thank the other members of the Committee for joining us here early in the morning. The statutory instruments were laid before the House on 29 March. If approved and made, they will provide for the abolition on 1 April 2019 of Taunton Deane borough and West Somerset district, together with their councils. They will also provide for the establishment of a new Somerset West and Taunton district covering the same geographic area, together with a new council for that district.

The Government, as our manifesto made clear, are committed to supporting local authorities that wish to combine in order to serve their communities better. The Government have announced to the House that we will consider any locally-led proposals for district mergers that are put forward by the councils concerned and that meet three criteria—namely, that the proposals will improve local government and service delivery, create structures with a credible geography, and command a good deal of local support.

Let me turn to the proposal that these two district councils developed and submitted to us for the creation of a new district of Somerset West and Taunton. The councils have a history of shared service partnerships. They are clear that the savings in that respect will be safeguarded by implementing the merger and that the merger itself will secure savings of some £3.1 million per annum. That includes safeguarding the £2.6 million of savings already secured through partnership working, and saving an additional £500,000.

In bringing forward their proposal to merge, the two councils have undertaken an engagement programme, actively engaging with residents and stakeholders from December 2016 until February 2017. The programme included an independent, demographically representative phone poll; a dedicated website with background information and an online questionnaire; a series of eight public roadshow events throughout the area; a series of nine consultation events involving groups of parish and town councillors and representatives of community groups; and various meetings with key stakeholders—businesses, partners and other local bodies. The independent phone poll was undertaken to assess local residents’ awareness of West Somerset’s financial position and of the merger proposal. By the end of the consultation period, more than 60% of the population of the two areas were aware of both.

Following their period of engagement, the two councils submitted their joint proposal to merge to the Secretary of State for Communities and Local Government on 27 March 2017. On 30 November, the then Secretary of State, my right hon. Friend the Member for Bromsgrove (Sajid Javid), told the House that he was minded to implement the proposal made by West Somerset Council and Taunton Deane Borough Council.

There followed a period for representations until 19 January 2018. The Secretary of State received a number of representations, of which 114 supported the proposal, 14 were neutral and 123 were opposed. On 22 March, the Secretary of State announced that he was satisfied that the previously announced merger criteria had been met and that he intended to implement the proposed merger and to lay before Parliament the necessary secondary legislation. That was not just the Secretary of State’s view. It was shared by the two district councils and the county council; a significant majority of councillors in the area; all public bodies that made representations to the Secretary of State—all were either supportive or neutral—the local enterprise partnership and a majority of the businesses and voluntary sector organisations that made representations; and a majority of the town and parish councils that made representations. In addition, my hon. Friend the Member for Taunton Deane (Rebecca Pow) remains supportive of the proposal. Of course, that view is not shared by all, and I am sure that we will hear later from my hon. Friend the Member for Bridgwater and West Somerset.

Let me turn briefly to the statutory framework. The Somerset West and Taunton (Modification of Boundary Change Enactments) Regulations 2018 vary the Local Government and Public Involvement in Health Act 2007 in its application to West Somerset and Taunton Deane councils during the period from when the regulations come into force until 31 March 2020. Section 15(4) and (5) of the Cities and Local Government Devolution Act 2016 provide that such regulations,

“may be made only with the consent of the local authorities to whom the regulations apply”.

In this case, both councils have consented to the regulations.

The Somerset West and Taunton (Local Government Changes) Order 2018, if approved, will be made under section 10 of the 2007 Act and makes provision for various items: abolishing the existing local government areas for West Somerset and Taunton Deane; establishing a new district coterminous with the previous areas of West Somerset and Taunton Deane, named Somerset West and Taunton; winding up and dissolving the district councils of West Somerset and Taunton Deane and establishing a new council, Somerset West and Taunton District Council; providing appropriate transitional arrangements, such as a shadow authority and shadow executive; and establishing, in agreement with the councils, any necessary electoral arrangements. We expect the Local Government Boundary Commission for England to be able to undertake a full electoral review of the new area before the elections in May 2019.

In conclusion, in considering the two draft instruments, we are assessing the merits of merging the West Somerset and Taunton Deane districts and councils to become Somerset West and Taunton, with a new district council. In this instance, it is clear that the two councils have come together to work on a locally-led proposal that, if implemented, will improve local government and service delivery in the area and command a good deal of local support. The council area also represents a credible geography. The proposed new council of Somerset West and Taunton has wide support, and both councils have consented to the making of the regulations. I have confidence that the local area will implement the district council merger by next April, to allow the good people of Somerset West and Taunton to elect their new council in May next year. On that basis, I commend the regulations and the order to the Committee.

--- Later in debate ---

[Rishi Sunak]

It is a pleasure to have the opportunity to respond to the comments made by the hon. Member for Makerfield, my right hon. Friend the Member for South Holland and The Deepings, and my hon. Friend the Member for Christchurch. I hope that I can address all the points that they raised and, of course, those of my hon. Friend the Member for Bridgwater and West Somerset, whom I fully respect for representing his constituents in the way that he sees fit.

I shall start with the misconception, which ran through comments from hon. Members on both sides of the Committee, that in some way central Government are, as my hon. Friend the Member for Bridgwater and West Somerset said, riding roughshod over local government. My right hon. Friend the Member for South Holland and The Deepings referred to a delicate relationship between central and local government, and I agree with him. It is important that central Government do not ride roughshod over or dictate to local government, which is why the Government have been exceptionally clear that we want to see locally-driven proposals and will consider locally-driven, locally-originated proposals against a set of criteria, which the previous Secretary of State reiterated in the House. That speaks to the very nature of what we are talking about here. I want to remind hon. Members on both sides of the Committee that this was a locally-driven process. The Government received a proposal that had been generated, researched, engaged with and consulted on by the local councils in question, both of which have consented to the making of the statutory instruments.

My hon. Friend the Member for Christchurch talked about an invitation. There was no invitation from central Government to the councils to put the proposal forward. It was entirely a result of their own work.

The hon. Member for Makerfield talked about the narrow council majority. I think it would be helpful for hon. Members to know the results of the council votes that were held in both areas. When the proposal was considered in Taunton Deane, 32 councillors were in favour and 16 against, with two abstentions. That is a majority of more than 64%. When West Somerset Council voted on the matter in December, 20 councillors were in favour and just three against, with one abstention. That is an 83% vote in favour. In aggregate, that combines to 70%. I will leave hon. Members to make up their own minds as to whether that it is a significant or a narrow majority.

Not only are local councillors in support, but the local area is too, including the county council, all public bodies, businesses, the voluntary sector and a majority of the parishes.

[Mr Liddell-Grainger]

I gently say to the Minister that that is not the case. I represent one of the areas, although I admit that I do not represent the other. When I talked to the local enterprise partnership, it had been asked whether it thought it was a good idea. Well, if people are asked whether they like blueberry pie, they tend to say yes. It was not given any facts; it was just asked whether it was a good idea. One of the reasons that it said so was that Hinkley Point C nuclear power station is in west Somerset. A lot of it has been predicated on that. I therefore say to the Minister that I am not sure that is correct.

[Rishi Sunak]

It is not just the local enterprise partnership. On my understanding, all businesses, voluntary organisations and public bodies that submitted formal representations were in support or not against the proposals, so I do not think what my hon. Friend says is accurate in that sense. Obviously, he is against the proposals, but my hon. Friend the Member for Taunton Deane (Rebecca Pow), who represents the other area, is firmly in favour of them.

The key point is about respecting the views of local government and the local area. As I hope I have adequately demonstrated, not only did central Government not impose anything; we did not initiate anything. We responded to a proposal that was put forward and strongly supported by the local councillors and local councils involved.

We have also heard about the so-called democratic deficit and whether people of both districts would have an adequate voice in the new electoral arrangements. As hon. Members have said, that is a misperception in the minds of the constituents who wrote in about that. Again, I will give hon. Members the facts and leave them to make up their own mind. There will be a reduction in the number of councillors across the entire area from 83 to 58, but the number of electors per councillor for the new council is 1,927. To put that in context, the average for the country for two-tier district areas is 1,925. I would argue that that lies squarely in the average for the rest of England in terms of democratic accountability and representation for ordinary people. People should be assured by that.

I was asked about service delivery, the reasons for the merger and the financial savings. In the first instance, it is important to note that the merger will safeguard the existing savings that are in place between the two councils, which are in excess of £2 million. Financially, West Somerset Council is not in the best of shape. That is not my view, but the view of the council’s leadership, the statutory section 151 officer, the independent auditor and the county council. They all make the point that if West Somerset Council finds itself in further financial straits, that would jeopardise the entire shared partnership structure in place between the two councils, which generates savings and saves people money on their council tax bill. Therefore, in the first instance, the merger safeguards an existing way of working and an existing amount of savings.

[Mr Liddell-Grainger]

I am sorry to be so boring about this. The Minister covers a very rural area as well. He just said, “If West Somerset has a problem,” but it does not. It has balanced its books for this year, next year and the year after. It is doing well, but yet again we are being told that that is not the case.

[Rishi Sunak]

I tell my hon. Friend that that is not just my view, but the view of his own council and the statutory section 151 officer, who believes that without this merger, the future of West Somerset Council is “not viable”. It is also the view of the independent auditor in the comments they have made and of the county council. I know that my hon. Friend has corresponded with the Department over several months. We remain of the view that the opinion of all the people locally involved with the council believe that this merger will safeguard the savings and that without the merger the financial situation will be extremely difficult.

On the future relationship and service transformation, I was asked about employees. That will obviously be a matter for the new council but it is worth pointing out that the two councils already operate a relatively deep shared partnership structure and use common employees in a single area. It is unlikely that there would be significant changes but that will be a matter for them.

[Yvonne Fovargue]

Will the Minister comment on the view that at least 80 redundancies will be necessary to achieve the savings that are predicted for the first year?

[Rishi Sunak]

I have not seen that number; I am not sure where that has come from.

[Mr Liddell-Grainger]

That has come from the councils themselves. The unions have done a lot of work on this. It is one in three jobs; that is where the savings are coming from—by getting rid of people. It is not a real saving; it is imaginary because it is necessary to get rid of people to make the saving.

--- Later in debate ---

[Rishi Sunak]

It is important to note that when we talk about savings of £3.1 million, only £0.5 million comes from the merger we are considering today. The remainder is already in place through the joint working and will be safeguarded by the merger. In terms of the incremental change, £0.5 million as a percentage of £3.1 million is relatively small. We are talking about safeguarding the existing joint working between these two councils, where there is not enormous duplication of staff, because in most instances there is already one set of staff delivering for both councils.

More broadly, the larger district council will be better at joined-up proposals for growth, whether it is Hinkley or developing a new university. It feels it will better execute its function as a strategic housing authority and dealing with stakeholders, all of whom prefer the efficiency and productivity of dealing with one entity. It also believes it will strengthen its hand when applying for various types of funding.

Turning to a couple of specific points raised about a unitary proposal, the Department has not received any formal unitary proposal for Somerset. Of course, should one emerge—

[Mr Liddell-Grainger]

Could I help the Minister again? I feel I am being too helpful. On the reason the county wants a unitary body, the leader of the county council came to see me and I will quote him next week in Westminster Hall. He said, “I’m going bust and want to take over the districts to balance my books.” Minister, we have a problem; let us not be cavalier.

[Rishi Sunak]

Far from being cavalier, the Government believe in doing things properly by due process. Should a proposal emerge from the county, of course we will consider it alongside the criteria that the previous Secretary of State laid out in Parliament. As I reiterated at the beginning, central Government will, as committed to do in our manifesto, support local areas that bring forward locally-driven proposals and consider them fairly and appropriately.

[Mr John Hayes]

The salient point is that the Minister has persuasively made the case that this proposal has emanated from the locality. If the locality, with the communitive interest I described at its heart, has requested that the Government consider these matters, then the Government are doing entirely the right thing in doing so. If the Minister is right—it seems from his evidence that he must be—he has satisfied my concern that these things must be driven by local people and local interests.

[Rishi Sunak]

I thank my right hon. Friend on one of the rare occasions that someone has changed their mind during a debate. I agree with him that not only have proposals been driven by the local area but they have been formally consented to by the two councils involved.

My hon. Friend the Member for Bridgwater and West Somerset made a detailed point about the definitions in the regulations and order we are considering. Of course, Taunton Deane is a district with borough status. That is very clear in the interpretation section of the order, which defines district councils for the purposes of the order. The definition is:

“‘the District Councils’ means West Somerset District Council and Taunton Deane Borough Council”.

I hope I have assured him that that was not missed.

Lastly, unfortunately my hon. Friend the Member for Bridgwater and West Somerset has raised some very personal allegations against the leader of another council, as he has in the past.

[Mr Liddell-Grainger]

Many times.

[Rishi Sunak]

Indeed. It is fair to raise those things if that is what my hon. Friend wants to do, but he has been told multiple times by the former Secretary of State, the Minister responsible for local growth, my hon. Friend the Member for Rossendale and Darwen (Jake Berry), and the Prime Minister that if he has serious allegations of any criminal or fraudulent activity, he should bring those to the police. He was told that as early as November last year, and also before that. Six months later, no one has received anything. I again urge him that if he has evidence, the appropriate course is to take it to the police.

In conclusion, I thank all Members for their spirited contributions this morning. At this point, we should wish the councils in West Somerset and Taunton Deane all the best as they embark on a new, bright future together as a new entity—Godspeed.

Question put.

Draft Dorset (Structural Changes) (Modification Of The Local Government And Public Involvement In Health Act 2007) Regulations 2018 Draft Bournemouth, Dorset And Poole (Structural Changes) Order 2018

Rishi Sunak Excerpts

Wednesday 16th May 2018 General Committees

[The Chair]

I will call the Minister to move the first statutory instrument, and debate on the second will follow. Debate on each statutory instrument may continue for up to one and a half hours. I remind the Committee that the debate should be confined to the statutory instrument being considered.

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

I beg to move,

That the Committee has considered the draft Dorset (Structure Changes) (Modification of the Local Government and Public Involvement in Health Act 2007) Regulations 2018.

It is a pleasure to serve under your chairmanship, Sir Henry. I am delighted to see so many hon. Members present. The statutory instruments were laid before this House on 29 March. If approved, they will provide for the abolition of the nine existing local government areas in Dorset and their councils, and similarly affect the existing boroughs of Bournemouth and Poole, the county of Dorset and the boroughs and districts in the county of Dorset. They will also allow for the establishment of two new local government areas and two new single-tier unitary councils for the area on 1 April 2019.

The Government, as made clear in our manifesto, are committed to supporting those local authorities that wish to combine to serve their communities better. We have also announced to the House that we will consider any locally led proposals for local government restructuring that are put forward by one or more of the councils concerned and that improve local government and service delivery, create structures with a credible geography and command a good deal of local support.

The Dorset councils’ proposals would establish a single tier of local government across the whole of Dorset, replacing the nine existing local government areas and their councils with two new local government areas and councils: one to cover the areas of Bournemouth, Christchurch and Poole, and a second covering the rest of Dorset.

Dorset estimates that that has the potential to generate savings of at least £108 million over the first six years. The full transformation programme, which unitarisation makes possible, offers the potential to save more than £170 million over that period. In bringing forward their proposal, the nine Dorset councils undertook extensive engagement and open consultation. That included a formal consultation from August to October 2016, comprising the following elements: an open consultation; a representative household survey; a survey of all parish and town councils; 15 lengthy deliberative workshops; nine in-depth telephone interviews with representatives of some of Dorset’s largest companies; and finally, the opportunity to submit written submissions.

[Simon Hoare (North Dorset) (Con)]

Could my hon. Friend amplify two points? First, the proposal is to create two new councils, not to merge existing local authorities; secondly, the most germane point is that this has been a grassroots-up proposal, not a top-down diktat.

[Rishi Sunak]

I thank my hon. Friend for both his points, which he made well and with which I am delighted to agree. This locally led and locally driven proposal came from the bottom up for Government to consider.

The consultation programme achieved well over 70,000 responses. There was clear support for moving to two unitary councils. In the representative household survey, 73% of residents were supportive. In general, across all the areas of Dorset, there was an emphatic preference for the proposed option, with 65% of residents in the representative household survey supporting it.

The then Local Government Minister, my hon. Friend the Member for Nuneaton (Mr Jones), told Parliament in February last year what criteria Government would use for assessing locally led proposals for local government restructuring, namely that the proposal is likely to improve local government in the area concerned; that it has a credible geography; and that it commands a good deal of local support.

[Conor Burns (Bournemouth West) (Con)]

The Minister is talking about the widespread grassroots support for the proposal. Will he also acknowledge that it enjoys my support as the Member of Parliament for Bournemouth West and the support of my right hon. Friend the Member for West Dorset, my hon. Friends the Members for Poole, for Mid Dorset and North Poole, for North Dorset and for South Dorset, and my right hon. Friend for Bournemouth East (Mr Ellwood)? Only one Member of Parliament in Dorset is in opposition to the proposal.

[Rishi Sunak]

I agree with my hon. Friend. He states the fact clearly: every Member bar one in the county of Dorset is supportive of the proposal.

[Sir Christopher Chope (Christchurch) (Con)]

I am that person, but I know that the Minister believes not in the tyranny of the majority but in democracy and the undertaking given by the Government in the House of Commons in 2015 that no local authority would be abolished without its consent. May I ask him to confirm that the criteria to which he has just referred were not published until after submission of the application? They were only published in response to a parliamentary question from me.

--- Later in debate ---

[Richard Drax (South Dorset) (Con)]

rose—

[Rishi Sunak]

Before I respond, I shall give way again.

[Richard Drax]

I want to put on the record that I support the move, as my hon. Friend the Member for Bournemouth West has said. Initially, I did not take part in the discussion or make a decision because I believe that it is one for local people and local councils. However, the evidence that they wanted it was overwhelming, so I back them.

[Rishi Sunak]

I thank my hon. Friend for that comment. I say to my hon. Friend the Member for Christchurch that I am happy to discuss the issue now, except I fear that he may want to return it in reference to the exchanges on the passing of the Cities and Local Government Devolution Act 2016 and the assurances he believes he was given. He has corresponded at length with the Department on that point. Suffice to say, I think there was a misunderstanding on his part about what was said. It was clearly set out by the then Secretary of State, my right hon. Friend the Member for Tunbridge Wells (Greg Clark), that the Government would not impose a top-down solution on local government but would respond to locally led and locally driven proposals. That was further clarified in the other place by Baroness Williams of Trafford, who made it explicitly clear that no one council should have a veto on restructuring proposals.

[Simon Hoare]

It is not only the noble baroness who has confirmed that point. In early December, during the Adjournment debate secured by my hon. Friend the Member for Christchurch, the then Minister, my hon. Friend the Member for Nuneaton (Mr Jones), confirmed in response to an intervention by me that unanimity was not required.

[Rishi Sunak]

My hon. Friend is absolutely right. In fact, my hon. Friend the Member for Nuneaton told the House that the Government’s intention was for those criteria to be assessed in the round and across the whole area subject to a reorganisation, and not to be considered individually by each existing council area.

Following on from that, on 7 November 2017 the then Secretary of State told the House in a written statement that he was “minded to” implement the proposal made by the Dorset councils. A period of representation followed, until 8 January this year, during which we received 210 representations. On the basis of the proposal, the representations and all other relevant information available, the Government are satisfied that all the criteria are met. On 26 February 2018 the Secretary of State announced his decision to implement the proposal, subject to parliamentary approval, and on 29 March laid the draft statutory instruments.

We believe that the proposed governance changes for which we are seeking parliamentary approval will benefit people across the whole of Dorset, in every district and borough. Our aim as a Government is to enable the people of Dorset to have as good a deal as possible on their local services. That is not the view of the Government alone; it is shared by 79% of all councillors across the whole of Dorset, and by other public service providers and businesses, including in particular those responsible for the provision of healthcare, and the police, fire and rescue, and rail services across Christchurch and the wider Dorset area.

As has been mentioned, on 29 November a number of my right hon. and hon. Friends with constituencies in the area wrote to the then Secretary of State, my right hon. Friend the Member for Bromsgrove (Sajid Javid), urging him to support the proposal submitted by the Dorset councils as the option that commanded strong local support and that will do the job that needs to be done. They stated that

“the further savings required to be made, if our councils are to continue delivering quality public services, can only be done through a reorganisation of their structures”.

The representative household survey, commissioned by the nine Dorset councils, estimates that 65% of residents across the whole of Dorset support the proposal. Of the nine Dorset councils, eight support the proposed change and have formally consented to the necessary secondary legislation.

Regarding the one Dorset council that does not support the proposal—Christchurch Borough Council—a third of its elected councillors do support the proposal. Those councillors wrote to my right hon. Friend the then Secretary of State, stating:

“We are acutely aware of the constraints on local government funding and the financial pressure that upper tier services are facing. We therefore consider it our duty to respond to these challenges by supporting the restructuring of local government in Dorset.”

Finally, it might be helpful to say something about the statutory framework.

[Toby Perkins (Chesterfield) (Lab)]

We have heard from many local Members about their support for the proposal. I have a letter here from the leader of Christchurch Borough Council outlining its view that Bournemouth and Poole could go together but, because 84% of residents voted against it in a referendum, Christchurch should be allowed to stay independent. Could the Minister explain why he came to the conclusion that Christchurch should be forced into it when the people seem to be saying that they are against it?

[Rishi Sunak]

I thank the hon. Gentleman for that intervention. I think the poll he refers to was an open-ended one run by the borough of Christchurch, which accounts for only 6% of the population of the Dorset area. Secondly, it is not only Christchurch Borough Council that is responsible for the services provided to the residents of Christchurch. The county council provides about 80% of those services. Across the piece, in the representative household survey, which was designed to be statistically representative, there is strong support among more than 60% of Christchurch residents for this particular proposal.

[Simon Hoare]

I have searched, as I am sure the Minister has, all the regulations and guidance for the status of a referendum in this process, but it cannot be found. To call it a referendum is incorrect. It was a parish poll, which is not binding on the commissioning body—that is, the borough council—and it is certainly not binding on Her Majesty’s Government.

--- Later in debate ---

[Rishi Sunak]

I thank my hon. Friend for his intervention. He is right to raise the validity of the poll. I am sure we will return to that issue later. Suffice to say, there are questions as to whether the poll is valid and they should be taken into consideration.

[Sir Christopher Chope]

In that case, why did my right hon. Friend the then Secretary of State encourage the holding of that local poll, at tremendous expense to local people, implying that the decision taken would be compelling evidence in the case?

[Rishi Sunak]

It is not my understanding that the then Secretary of State encouraged the running of that poll. Regardless of that—and my hon. Friend knows this because my right hon. Friend the previous Secretary of State told him—he did take the poll into account when considering the proposals.

To return to the statutory framework, the regulations vary the Local Government and Public Involvement in Health Act 2007 in its application to the case of the Dorset councils during the period from when the regulations come into force until 31 March 2020. The regulations require the consent of at least one relevant authority. In this case, Bournemouth, Poole, the county of Dorset, five of the districts within Dorset and eight of the nine councils in Dorset have consented to the regulations being made.

In conclusion, the merits of the abolition on 1 April next year of the nine existing local government—

[Sir Christopher Chope]

Before the Minister finishes, will he say something about the legal action that is being taken against the Government by Christchurch Borough Council on the advice of leading counsel, the letter before action that was sent, and the implications for good local government in Christchurch if we end up with litigation that ultimately results in the regulations being quashed?

[Rishi Sunak]

I am happy to do that. The Department has received what is called a pre-action protocol letter from Christchurch Borough Council, informing of its consideration of a judicial review. It is important to note that that is not the start of a formal legal proceeding. It is an exploratory letter, to which the Government have responded extremely robustly. We have set out in no uncertain terms why we believe—

[Simon Hoare]

rose—

[Simon Hoare]

I note the use of the word “again”, Sir Henry. Is my hon. Friend the Minister aware that in two conferences with leading counsel, which my hon. Friend the Member for Christchurch has referred to and one of which he attended, leading counsel advised Christchurch Borough Council that there were no grounds for a judicial review?

[Rishi Sunak]

That is a very interesting intervention from my hon. Friend.

[Sir Christopher Chope]

I do not think we are going to make much progress in this Committee if there is such misrepresentation of the facts. Leading counsel was indeed asked by Christchurch Borough Council to look at the legal issues. It was only after the regulations were laid that the council went back to leading counsel and said that it was shocked to find that they were retrospective in effect. On going back a third time to leading counsel, they advised that the borough council had a good case for quashing the regulations and wrote a letter asking the Government to withdraw them. The point made by my hon. Friend the Member for North Dorset is completely irrelevant.

[Rishi Sunak]

My hon. Friend the Member for North Dorset was making a point about the substance of the case. I can tell the Committee the content of the Government’s letter in reply to the pre-action protocol letter. It notes that there is a bad case on the grounds of delay and that the substance of the case is wholly without merit; the Government believe that it is not arguable at all. I have no doubt we will hear from Christchurch Borough Council in due course.

[Richard Drax]

I want to make one more important point. As far as the decision makers are concerned, there was cross-party agreement—all parties agreed to this.

[Rishi Sunak]

I thank my hon. Friend for that intervention. It is important to note that there is widespread support from different parties and people from different walks of life, across the entire piece, for the regulations.

That is an important note to conclude on. This is a locally led proposal, submitted by the Dorset councils, which we believe will improve local government and service delivery in the area. It represents a credible geography and commands a good deal of local support. I have full confidence in the area to implement the unitarisation by next April, enabling the elections to the new council in May next year. On that basis, I wish the councils involved the best of luck and good speed with all the proposals they want to bring forward. I commend the regulations to the Committee.

--- Later in debate ---

[Rishi Sunak]

It is with some trepidation that I attempt to respond to my hon. Friend the Member for Christchurch, not only because he held this brief a long time ago and is a distinguished Member of this House, but because when I was a small boy growing up in Southampton, his was perhaps the first local MP’s name that I knew. I put on the record my respect and admiration for his persistence in pursuing this course. It is right that we have a proper thorough, detailed debate on the issues he has raised, which we will no doubt continue to discuss after we consider this statutory instrument and move on to the next.

I would also like to thank my right hon. Friend the Member for West Dorset and my hon. Friends the Members for North Dorset and for South Dorset for their contributions. I also note the presence of my right hon. Friend the Member for Bournemouth East (Mr Ellwood) and my hon. Friends the Members for Poole and for Mid Dorset and North Poole, who I am sure we will hear from later.

We have covered so many issues. In the short time I have to respond, I will summarise and pick up in detail in the next part. In short, I echo the comments of my right hon. Friend the Member for West Dorset. He put it very well: ultimately, what we are discussing today is about people. Often frail and elderly, they are the people whom we as MPs or councillors across Dorset have the privilege to represent. Those representatives have thought long and hard about how best to serve those people, and how best to provide the public services that their constituents rely on in the financial climate and changing demographics they face.

Those councillors and people in the local area, who know their constituents best, have put forward the proposals we are considering. As I opened, I will close: these are locally led proposals, which have been developed and supported extensively across Dorset. We have heard a lot about polls, retrospection, invitations and reorganisations but we should leave with this point in our heads: across the entire area, including in Christchurch, there is a good deal of support for these proposals. They will improve local government in the area, as we heard so eloquently from my right hon. Friend the Member for West Dorset. They will improve local government for the people who live in those places. The geographies we are considering make logical sense. As the Committee considers these undoubtedly complex and difficult matters, I leave them with that in mind. This is not a top-down, imposed reorganisation.

The Government have responded constructively and diligently to the proposals that were put forward. It has taken an incredible amount of time, care and patience to consider those proposals carefully. That has included engaging with my hon. Friend the Member for Christchurch and others on many occasions on the points he has consistently raised. I am fully confident that the proposals in front of the Committee deserve our support and will benefit the good people of Dorset in the years to come. I commend the regulations to the Committee.

Question put, That the Committee has considered the draft Dorset (Structural Changes) (Modification of the Local Government and Public Involvement in Health Act 2007) Regulations 2018.

[Sir Christopher Chope]

No.

--- Later in debate ---

[Rishi Sunak]

I beg to move,

That the Committee has considered the draft Bournemouth, Dorset and Poole (Structural Changes) Order 2018.

It is a pleasure to commence debate on the second order. The order, which is made under section 7 of the 2007 Act, has several provisions. First, it will introduce a single tier of local government for a new local government area, comprising the existing boroughs of Bournemouth, Christchurch and Poole, and a single tier of local government for a new local government area covering the remainder of the county of Dorset. It will wind up and dissolve the counties and boroughs of Bournemouth and Poole, and the county of Dorset and its districts, and it will provide appropriate transitional arrangements, a shadow authority and a shadow executive for each new unitary area. Finally, it will establish, in agreement with the councils, new electoral arrangements. The order provides contingency warding arrangements for the May 2019 elections, but it is important to note that we expect the Local Government Boundary Commission for England to undertake a full electoral review of the area in time for those elections.

The order gives practical force to our debate and the restructuring that we have already considered. This is a locally led proposal submitted by the Dorset councils, which if implemented will, we believe, improve local government and service delivery in the area. It represents a credible geography, and commands a good deal of local support. I have full confidence in the local area to implement unitarisation by next April, enabling elections for the new councils in May next year. On that basis, I commend the order to the Committee.

--- Later in debate ---

[Rishi Sunak]

It is a pleasure to wind up this spirited and thoughtful debate. I echo my hon. Friends in thanking the hon. Member for Oldham West and Royton for the typically constructive attitude he has brought to our proceedings. I look forward to many more discussions with him in the months to come. I join my hon. Friends in paying tribute to Mr Rowsell, who we have heard a bit about. He and his team have worked tirelessly over the past few years to ensure that we arrive in this debate having gone through thorough diligence and due process. He is a sidesman of the 11th century priory in Christchurch, which I believe has one of the longest naves in England.

[Sir Christopher Chope]

The longest.

[Rishi Sunak]

I am corrected by my hon. Friend; it is the longest. Mr Rowsell follows his father in that role, and I thank him and his team for all the work they have done on this project.

I will briefly touch on some of the substantive issues raised. All the contributions from Members of Parliament from Dorset have been thoughtful and passionate, and they have demonstrated clearly that they take seriously their duty to represent their constituents, to disagree respectfully and to ensure that all voices are heard. I thank them for the way they have approached proceedings.

We have heard a lot about the parish poll in Christchurch and what it meant or did not mean. Not only did the Secretary of State consider that poll in the round with all the other representations, but he also received representations that were highly critical of the conduct of that poll, with many suggesting that it should have little validity at all. It is worth bearing in mind that the properly representative sample survey that was done as part of the formal consultation shows that 63% of residents in Christchurch supported the principle of two unitaries and 64% supported the specific proposal that we are considering.

It is the Government’s view that there is nothing retrospective about what we are doing here. That is similarly the view of the Joint Committee on Statutory Instruments, which has not commented particularly on this matter. These statutory instruments modify existing legislation, so that in the future certain acts can take place. According to most people’s common understanding, retrospectivity means changing the legality of an act that has already happened. In this case no act has happened. We are talking about things that are to happen.

[Sir Christopher Chope]

Will my hon. Friend give way?

[Rishi Sunak]

I will not, because there is lots to cover, and my hon. Friend and I have discussed this topic a great deal.

Let me turn to the questions raised about council tax and savings. On council tax, it is right that people are expecting a view, and I can set out for the Committee the position, not just in this case but in previous cases. There is a joint committee in place at the moment involving the councils in both proposed unitaries. It will produce proposals for the Government setting out its plans for council tax harmonisation. The Government’s job is to bring legislation to the House—which we will before the summer—that sets in place the maximum number of years over which equalisation can take place. It is then for the local authorities to decide on the exact path. It is worth bearing in mind that in the previous round of unitarisations in 2009, the period envisaged in the legislation was five years. That is something that hon. Members can work with, and soon enough we will come to a view. In the meantime, we are happy to take representations from colleagues and anyone else on that important matter. As my hon. Friend the Member for Christchurch pointed out, there are specific criteria with which those will be judged.

I will conclude by paying tribute—

[The Chair]

Order. Minister, I am afraid we have to put the question now.

Question put, That the Committee has considered the draft Bournemouth, Dorset and Poole (Structural Changes) Order 2018.

Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Bill

Rishi Sunak Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Tuesday 15th May 2018 Commons Chamber

[Madam Deputy Speaker (Dame Rosie Winterton)]

As indicated on the Order Paper, the Speaker has certified that the Bill relates exclusively to England on matters within devolved legislative competence. As the Bill has not been amended, there is no change to that certification.

Under Standing Order No. 83M, a consent motion is required for the Bill to proceed. It has been tabled and is available in the Vote Office. Does the Minister intend to move the consent motion?

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

indicated assent.

The House forthwith resolved itself into the Legislative Grand Committee (England) (Standing Order No. 83M).

[Dame Rosie Winterton in the Chair]

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

I beg to move, That the Bill be now read the Third time.

This Bill, above all, promotes fairness; it promotes fairness for hard-working business rate payers hit by a tax hike that they could not have anticipated—the so-called staircase tax—and fairness for those who struggle to find somewhere to live while properties lie empty for years. That was why we moved quickly to introduce the Bill and ensure that ratepayers, in particular, receive the urgent help that it will provide. I thank hon. Members on both sides of the House for their contributions and support in helping us to achieve this aim.

[Tim Farron (Westmorland and Lonsdale) (LD)]

The Minister is making important points and the Bill does some important things. However, it could do something important that it does not—it does not allow local authorities, such as his and mine, in very rural areas to vary council tax on second homes. He will be aware that in the Yorkshire dales and the Lake district, vast percentages of communities are empty most of the year round because homes are not lived in. That undermines schools, public transport and the sustainability of such communities. Will the Government listen to local authorities and local communities and allow council tax to be raised to tackle the problem of excessive second-home ownership?

[Rishi Sunak]

I thank the hon. Gentleman, my constituency neighbour, for his intervention. He is right to point out the issue of second homes in rural areas, which he and I have local familiarity with. I gently disagree when he says that nothing is being done. As he will be aware, the Government introduced a stamp duty surcharge for second homes. Much of the funds raised from that have gone to schemes, perhaps in his constituency and certainly in mine, in areas with high second-home ownership—for example, in Hudswell in Richmondshire, where community land trusts have been funded to create affordable housing for local occupancy. Beyond that, local plans, which no doubt will be discussed in the forthcoming debate, also allow local communities to have control over who is living in new build properties.

Work is being done, and all that followed the work done by the coalition Government to remove the automatic discount for second homes. The hon. Gentleman will be aware that that was in place for many years. The coalition Government removed the necessity for the discount to apply, and now the vast majority of second homes are not eligible for a council tax discount, but he is right to point out the issue. The Department is looking more broadly at the loophole with regard to business rates applying to second homes and them then qualifying for an exemption through small business rates relief. This has been raised by hon. Members, including my hon. Friend the Member for St Austell and Newquay (Steve Double) and others from Cornwall, so the hon. Member for Westmorland and Lonsdale (Tim Farron) can rest assured that I am keeping an eye on this issue.

I return to the Bill, which deals with empty homes. I thank our partners in the rating sector for their invaluable help with the draft provisions, together with the very detailed and technical work that was done by officials, to whom I pay thanks. This has helped us to bring effective legislation to the House that navigates the intricacies of ratings law.

I also pay tribute to the work of the Housing, Communities and Local Government Committee. Not only did its comments on the definition of a void find their way to the language in the final Bill, but I noted the points raised on Second Reading by the Committee Chair, the hon. Member for Sheffield South East (Mr Betts). He is not in his place, but I thank him and assure him that I look forward to working with him in future to ensure that Bills from my Department and in my brief go through the adequate legislative scrutiny process that we were fortunate to enjoy doing with the Committee. Lastly, I thank the hon. Member for Oldham West and Royton (Jim McMahon) for his input and constructive attitude in the Bill Committee. I very much look forward to working with him on future local government measures.

In conclusion, this Bill delivers on our commitment to fairness and supports those in our country who want to build a better life. It is a Bill for those looking for a place to call home. It is a Bill for small businesses. It is a Bill that I hope we can all welcome, and I commend it to the House.

Draft East Suffolk (Local GOvernment Changes) Order 2018 Draft East Suffolk (Modification of Boundary Change ENactments) Regulations 2018

Rishi Sunak Excerpts

Wednesday 9th May 2018 General Committees

[The Chair]

I note that the hon. Member for Elmet and Rothwell has started to take his clothes off. If anyone else wishes to take their jacket off and so on, within reason I am very happy for you to do so.

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

I beg to move,

That the Committee has considered the draft East Suffolk (Local Government Changes) Order 2018.

[The Chair]

With this it will be convenient to consider the draft East Suffolk (Modification of Boundary Change Enactments) Regulations 2018.

[Rishi Sunak]

It is a pleasure to serve under your chairmanship, Mr Davies.

The draft statutory instruments were laid before the House on 19 March. If approved and made, they will provide for the abolition on 1 April 2019 of Suffolk Coastal and Waveney districts, together with their councils. They will provide for the new East Suffolk district to cover the same geographic area and for a new council for that district.

The Government are committed to support local authorities that wish to combine to serve their communities better. We shall consider any locally led proposals for district mergers that are put forward by the councils concerned, and that improve local government and service delivery, create structures with a credible geography and command a good deal of local support.

I shall describe briefly the area that we are considering. East Suffolk is the home of a multi-million pound industry and household names including EDF Energy and BT’s information and communications technology global research and development centre. East Suffolk sits on the major trade route of the A14, linked to the port of Felixstowe. It also has a diverse and beautiful environment, with 49 miles of coastline. Lowestoft sits on the northernmost part of the Suffolk coast and is famous for being the most easterly town and the first place to see the sunrise in the United Kingdom. Home to two piers, an award-winning theme park, museums and a theatre that is home to the Royal Philharmonic Orchestra, the town is a firm favourite with visitors. Suffolk Coastal and Waveney District Councils cover the entire Suffolk coastline and share transport infrastructure that includes rail links, the A12, ports, market towns and beach resorts. Within the existing Suffolk Coastal district, Felixstowe is the largest and busiest container port in Britain.

The proposal that we are now considering re-creates the local government area of East Suffolk, which was originally created in 1888. Re-creating that area reflects the long shared history of its different parts. In local government terms, the two existing district councils have a history of shared service partnership, creating ongoing savings in excess of £20 million since 2010. Those savings will be safeguarded by implementing the merger proposal.

In proposing the merger, the two councils have undertaken an extensive engagement programme, actively engaging with residents and stakeholders from September to December last year. The programme included an independent and proportionally representative phone poll; a media campaign with press releases and promotional social media; information packs for town and parish councils; an open consultation via a dedicated webpage and an online survey to collect comments on the proposal; formal communications to all major stakeholders; presentations and talks at resident and business forums and public events; and finally a frequently asked questions document updated with commonly raised questions or concerns.

The independent phone poll commissioned to find out local residents’ views suggested that 72% of residents were in favour of the proposal to form a new single district council, once provided with further information on what the proposal would do. All the local institutional stakeholders such as the NHS, the county council, major business groups in Suffolk and all their neighbouring authorities were also in favour.

The councils submitted their joint proposal to merge their respective authorities to the Secretary of State for Communities and Local Government on 3 February 2017. The proposal set out that implementation of the merger would lead to a new district of East Suffolk with a population of almost 240,000 and would yield further savings of £2.2 million per year on top of the £20 million saved as a result of joint working since 2010.

On 7 November last year, the Secretary of State told the House that he was

“‘minded’ to implement the…proposal I received from Suffolk Coastal and Waveney district councils”.—[Official Report, 7 November 2017; Vol. 630, c. 48WS.]

There then followed a period for representations, until 8 January. The Secretary of State received a number of representations; in total, there were 20 in favour, one neutral and four against. None of the representations against the proposal raised points that had not been raised in the consultation undertaken by the local authorities.

I will add that those representations include five further representations beyond the 20 received during the representation period and referred to in the explanatory memorandum. I will arrange for the explanatory memorandum to be updated if Parliament approves the order and the order is made.

On the basis of the proposal, the representations and all other relevant information available, the Secretary of State was satisfied that the previously announced merger criteria had been met. Therefore, on 8 February this year, he announced his intention to lay before Parliament the necessary secondary legislation to implement the proposal.

Finally, Members might find it helpful if I touch briefly on the statutory framework. The draft East Suffolk (Modification of Boundary Change Enactments) Regulations 2018 vary the Local Government and Public Involvement in Health Act 2007 in its application to Suffolk Coastal and Waveney during the period from when the regulations come into force until 31 March 2020. The regulations are made under section 15 of the Cities and Local Government Devolution Act 2016 and provide that the Secretary of State may, by regulations subject to the affirmative resolution procedure, make provision about the structural and boundary arrangements in relation to local authorities, under part 1 of the 2007 Act.

I turn to the draft East Suffolk (Local Government Changes) Order 2018. If approved, it would be made under section 10 of the 2007 Act and would make provision for a series of things: abolishing the existing local government areas for Suffolk Coastal and Waveney; establishing a new district coterminous with the previous areas of Suffolk Coastal and Waveney, named East Suffolk; winding up and dissolving the district councils of Suffolk Coastal and Waveney and establishing a new council of East Suffolk; providing appropriate transitional arrangements, such as a shadow authority and shadow executive; and, finally, establishing in agreement with the councils any necessary electoral arrangements. The Boundary Commission sees no difficulty with the approach that we are taking, and it is expected to undertake a full electoral review to re-ward both new areas before the elections in May 2019.

In conclusion, in considering the two draft instruments, we are assessing the merits of merging Suffolk Coastal and Waveney District Councils to create East Suffolk District Council. In this instance, it is very clear that the two councils in East Suffolk have come together to work on a locally led proposal, which, if implemented, would improve local government service delivery in the area, command a good deal of local support, and ensure that the council area represents a credible geography.

The proposed new council of East Suffolk is widely supported, and both district councils have consented to the making of these instruments. I have full confidence in the local area to implement the district council merger by next April, to allow the good people of East Suffolk to elect their new council in May next year. On that basis, I commend the regulations and the order to the Committee.

--- Later in debate ---

[Rishi Sunak]

It has been wonderful to see hon. Members use the debate as an opportunity to display their extensive knowledge of local government restructuring, stretching back to the 1970s—some time before I was born—and to hear them emphasise and assert their strongly held regional identities. I gently say to my hon. Friend the Member for Elmet and Rothwell that, as a North Yorkshire MP, I appreciate why any community would feel sad about not being included in God’s own county—and, if I might say so, the best part of Yorkshire.

I thank the hon. Member for Denton and Reddish for his thoughtful and constructive comments. I appreciate his support. I will listen to what he says on local government funding and discuss it with the new Secretary of State. He will know that we may have some differences on that score, but I appreciate his commitment to local government in all of its aspects, and I enjoy our exchanges here and elsewhere.

I turn to my hon. Friend the Member for Brigg and Goole. When I first came into Parliament, I had the job of filling the shoes of the previous Member for Richmond, which was an impossibly tall order, and now I have perhaps the even bigger task of filling my hon. Friend’s shoes—so great was he in his job that it now has to be split between two Ministers. Unfortunately, I cannot fully answer his questions about devolution, as they come under the portfolio of the Under-Secretary of State for Housing, Communities and Local Government, my hon. Friend the Member for Rossendale and Darwen (Jake Berry), who I know will engage fully with him on them. However, on unitarisations and mergers, the criteria laid out by the previous Secretary of State last year in a written ministerial statement, and further emphasised since, refer to

“a good deal of local support”.—[Official Report, 7 November 2017; Vol. 630, c. 48WS.]

That is the test that the Secretary of State has to ensure is met, and he will judge each case on its merits. That is with regard to mergers and unitarisations, rather than devolutions, which I am sure the hon. Gentleman will pick up with my hon. Friend.

Turning finally to my hon. Friend the Member for Christchurch, it is a pleasure to see him after our discussion last week in the debate on West Suffolk. I will touch on the specific points that he made. Having debated the issue a couple of times with him, the Government simply do not agree with the view that there is not widespread local support for this merger.

As I laid out in my opening statement and then re-emphasised, an independently commissioned poll showed that 72% of local people supported the proposal. That was further supported by almost all locally elected representatives including Members of Parliament, the vast majority of councillors and all major stakeholders locally, including businesses, community groups, health trusts and chambers of commerce. On that point, we may have to agree to disagree.

[Sir Christopher Chope]

The Minister is not just disagreeing with me, he is disagreeing with the Secondary Legislation Scrutiny Committee of the other place, which drew the instrument to our attention on the grounds that there appeared to be “inadequacies” in the consultation processes.

[Rishi Sunak]

As my noble Friend Lord Bourne has said, we do not share the view of that Committee in reaching that conclusion. For the reasons that Lord Bourne and I have laid out, we think there is a substantial body of evidence to support the conclusion reached by the Secretary of State that there is considerable local support for these proposals. One test is clearly the extensive support from locally elected, democratically accountable councillors and Members of Parliament in East Suffolk.

Turning to my hon. Friend’s other point about democracy, I agree that people should feel that democracy is not too remote. He mentioned Lowestoft. I am pleased to tell him that, as a result of all the engagement that went on regarding the proposals we are considering today, new parishes have been created for Lowestoft and Alton. That was a result of the engagement that councils had with their communities, and was a response to their concerns. The creation of new parishes will ensure that the people in those communities have adequate representation.

On my hon. Friend’s point about warding and new boundary arrangements, there is a proposal to reduce the number of councillors by just over a third. That proposal was put forward by the councils themselves, which came to that number based on guidance from the Local Government Boundary Commission. Informal conversations have already been had with commission on the carrying out of a full re-warding should these statutory instruments be agreed to. As part of that process, there will be a full public consultation, as Members would expect from such a formal process.

In conclusion, I echo the comments made by the hon. Member for Denton and Reddish in paying tribute to all the councillors and bodies involved locally for the hard work they have put in over the past year to bring these plans to fruition. They are to be commended for their diligence, innovation and desire to serve their communities to the best of their ability. I hope hon. Members will join me in commending them by supporting these orders today.

Question put and agreed to.

Resolved,

That the Committee has considered the draft East Suffolk (Local Government Changes) Order 2018.

DRAFT EAST SUFFOLK (MODIFICATION OF BOUNDARY CHANGE ENACTMENTS) REGULATIONS 2018

Resolved,

That the Committee has considered the draft East Suffolk (Modification of Boundary Change Enactments) Regulations 2018. —(Rishi Sunak.)