Local Government Finance

Debate between Sajid Javid and Mike Hill

Wednesday 7th February 2018 Commons Chamber

[Sajid Javid]

There will be further pilots and I will come on to that in just a moment.

It is right that we will be going further. It is our aim for local authorities to retain 75% of business rates from 2020-21. This will be achieved by incorporating existing grants into business rates retention, including the revenue support grant and the public health grant. Local authorities will be able to retain 75% of the growth in their business rates from the new base lines in 2020-21, when the system is re-set.

The long-term plan is to allow local government to keep 100% of its business rates. With that in mind, I announced an expansion of the 100% retention pilots that proved so popular in December. As a result, we will be taking forward 10 new pilots covering 89 authorities, instead of the five we originally planned. A further pilot will begin in London in 2018-19, and existing devolution pilots will continue in 2018-19.

[Mike Hill (Hartlepool) (Lab)]

My local authority in Hartlepool finds it increasingly difficult to establish a business rates base but will participate in the programme. However, its departments face 40% cuts, and it has a £6 million shortfall. How fair is that?

[Sajid Javid]

For the hon. Gentleman’s local council in Hartlepool, there will be an increase in the core spending power of 1.9%, which is £1.5 million. He talks about fairness. It is worth pointing out that the core spending power per dwelling in his local authority is £1,931, which is significantly higher than the average for the class. I hope that that reassures him that his local authority is getting a significant amount of spending power, particularly from a per-dwelling point of view.