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Local Government Funding

Volume 607: debated on Monday 21 March 2016

The local government finance settlement reflects a detailed assessment of the needs and challenges of each area. We have announced a fair funding review and will work with local authorities to determine the appropriate funding needs of different types of areas as we move to 100% business rates retention by 2020.

Last month, the Government announced that 85% of the £300 million transitional fund for local government is going not to Labour or Liberal Democrat councils, but to Conservative councils. Does the Secretary of State agree with the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith) that that does not matter, because those areas “don’t vote for us”?

I am surprise to hear the hon. Gentleman ask that question, given that his county of Norfolk has benefited from £1.6 million through the transitional grant, which I would have thought that he would welcome. On what party colleagues have to say, he should take advice from Bury Council, which has said:

“The methodology is a welcome improvement on that employed for allocating revenue support grant reductions…and goes some way to redressing…years in which poorer metropolitan authorities have received an unequal share of…funding.”

The hon. Gentleman should talk to his party members as well as his constituents.

As a native Teessider, it cannot have escaped the Secretary of State’s attention that towns such as Middlesbrough have been hit hardest by his local government cuts, yet Middlesbrough has not had a penny from the transitional fund. It seems that this Government’s duty is only to those wealthier areas that voted Tory. Is he not ashamed of his callous and unfair treatment of his hometown?

The hon. Gentleman should inform himself better about what is happening in the Middlesbrough local authority. For a start, as a result of the change in methodology, Middlesbrough gets an improvement in resources of nearly £4 million. I would have thought that he had read the consultation response that I received from Middlesbrough Borough Council. In response to the question,

“Do you agree with the proposed methodology for calculation?”,

the council said:

“Yes we would agree with the proposed methodology on the basis that this does not have a disproportionate impact generally across local authorities.”

The hon. Gentleman should inform himself before he comes to the House and asks questions.

Rugby Borough Council has a proactive attitude towards development and attracting new business, and it is very much looking forward to a greater retention of business rates. The council tells me that it likes certainty. In the event of the Government effecting a change such as additional relief on business rates, could the Secretary of State clarify what the transitional arrangements would be and what compensation might be available to local authorities?

My hon. Friend is correct to raise this issue. As part of the transition to 100% retention, we need the various checks and balances that will ensure that no authority loses out. The Government and the Local Government Association will work together to design the system. I look forward to receiving the responses to the consultation, which will include taking advice from Members of this House through the Select Committee and other bodies.

The Government have cut millions upon millions of pounds from Rochdale’s council budget, but they have dumped hundreds of asylum seekers in our town, adding pressure to already overstretched local services. Local people are not happy with the situation. What is the Secretary of State going to do about funding?

Rochdale has benefited from the change to the methodology that we put in place, and the representative organisation for the metropolitan authorities has welcomed the change. The council has benefited from the local government settlement, and the hon. Gentleman should welcome that.

Following this weekend’s revelation that the Government have targeted the working poor because they do not vote Tory, will the Secretary of State admit that the same warped thinking led him to hand £465,000 of transitional funding to Tory-run Trafford council and nothing to Labour-controlled Manchester and Rochdale?

I would have thought that an Opposition spokesman would make herself familiar with the settlement. Both councils that the hon. Lady mentioned have benefited from the change in methodology. The council that her colleague, the hon. Member for Croydon North (Mr Reed), used to lead—Lambeth Council, which was Labour last time I checked—specifically called for this transitional measure, saying:

“Transitional measures are usually employed where a new distribution methodology is introduced to ensure significant shifts are not experienced…The Council believes this is sensible on the basis that…those benefitting are not adversely affected.”

That is exactly what we have done.