Local Government Finance

Simon Hoare Excerpts

Wednesday 22nd February 2017 Commons Chamber

[Sajid Javid]

My hon. Friend is right. As we move to 100% business rates retention and the requirement for local authorities to be more self-sufficient, it is right that we have the correct baselines, and that necessitates a proper review of needs for all areas, including—of course—our most rural areas.

[Simon Hoare (North Dorset) (Con)]

Does my right hon. Friend accept that one of the key bases for this welcome review is the hope that we can eradicate the urban versus rural debate? For those of us who represent rural areas, it is pretty tedious to have that arid debate every year. We are not seeking an unfair advantage for rural areas, merely fairness and transparency. I am certainly encouraged by what he has said at the Dispatch Box this afternoon.

[Sajid Javid]

My hon. Friend is correct. This is not about special treatment for one area versus another; it is about recognising the needs of each area. In more rural areas, there are some obvious differences. For example, sparsity can mean that the delivery of certain services is more expensive, while others might be cheaper. This is about having the right data and being more transparent, and then making sure that those needs are met. That is exactly my ambition in looking at this and making sure that we get it right.

--- Later in debate ---

[Robert Neill (Bromley and Chislehurst) (Con)]

I start by welcoming the Secretary of State’s statement, which was constructive both in content and tone, and I am personally grateful to him for the assurance he gave me earlier following my intervention regarding his willingness to work with my London Borough of Bromley on a pilot for business rates retention. Bromley is ambitious to grow its business base and has the scope, the ability and the connections into central London, as he probably well knows, to do so. So we will be pleased to work with the Government on that.

I also support the philosophy that underpinned the statement—the continuation of the move towards four-year planning, as longer term planning for local authorities is desirable, and the completion of the move towards 100% business rates retention. When I was at DCLG, the then Secretary of State, my right hon. Friend the Member for Brentwood and Ongar (Sir Eric Pickles) and I were able to make a start on that with the Local Government Finance Act 2012, and I am delighted to see my successor, the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Nuneaton (Mr Jones), in his place and taking through the final bit of that legislation now. It is an important devolutionary step, which I welcome. I hope it will not be the end of devolutionary steps for local government finance.

As we look at devolution deals, it is important to recognise the strong argument for more and more local authorities to become dependent on raising their own resources rather than central Government grant. Compared with many of our competitor countries, we have a narrow suite of revenue-raising powers for local government. We should perhaps think further about whether other taxes could be localised in a cost-neutral way. Obvious examples include stamp duty land tax and so on. That is further down the track, but it is important to be prepared to look seriously at that option.

I am sure that the Secretary of State will be aware of the work of the London Finance Commission—I declare my interest as a member of it—which is a cross-party commission established by the Mayor of London, following on from the previous London Finance Commission established by my right hon. Friend the Member for Uxbridge and South Ruislip (Boris Johnson) when he was Mayor of London. Sensible suggestions have been put forward to build on the devolving approach that Ministers are currently developing. That is desirable.

Given the financial constraints that the Government have inherited, the settlement itself is sensible, and I particularly welcome the way in which a number of grants will be rolled into business rate retention, which makes for a more sensible and appropriate approach. I am glad, too, that following representations made by local government, the devolution of attendance allowance funding will not happen. Authorities such as mine have a growing elderly population. In fact, Bromley has the highest population of pensioners in London—I have not quite tipped over yet, but I sometimes regard it as forward planning—and such pressures are important.

I welcome the commitment to doing more work to join up health spending and adult social care. I hope that the Secretary of State will talk repeatedly with his colleague, my right hon. Friend the Secretary of State for Health, about implementation. All too often, I have found, in my own area and from contacts elsewhere in local government, that it is not working on the ground as one would wish. The better care fund was a good initiative, and the principle is right, but these services are not being joined up in the way they should. Unfortunately, I have to say that that is all too often not for want of willingness on the part of local authorities of any complexion. The very “silo” and hierarchical nature of how the health service and health economy work means, I am afraid, that there is a considerable lack of willingness to engage on that side of the equation—and it takes two to tango.

[Simon Hoare]

Does my hon. Friend agree that, just as there is a duty to co-operate between local authorities in planning, it would be helpful if there were a duty to co-operate between our social service providers at local government level and clinical commissioning groups? That would be enormously helpful in bridging the gap.

[Robert Neill]

That is an immensely helpful and constructive suggestion. I honestly hope that the Minister will take that idea away and raise it with ministerial colleagues. Unfortunately, our experience is—certainly it was my experience when I was a member of the North East London Strategic Health Authority before I entered this place—that the health economy and health system always look up, towards the Department, and tend not to look out towards the community of which they are part. They do not have the culture of engagement and joint working that local authorities have developed over many years. To achieve that, we need pressure—serious political pressure—from the top that must be listened to. This should be viewed as a further part of the work that needs to be taken forward.