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Local Authorities: Financial Support

Volume 627: debated on Monday 17 July 2017

9. What discussions he has had with local authority leaders on financial support for local authorities since the Government announced their policy on the 100% business rates retention. (900510)

The Government are committed to delivering the manifesto pledge to continue to give local authorities greater control over the money they raise. We will open a conversation with local government over the next few months about the best way to achieve this.

Plans for the 100% retention of business rates fell at the general election and were not introduced in the Queen’s Speech. Will the Minister explain whether the Government still plan to legislate for 100% retention? What should already cash-strapped local authorities do in the interim as the revenue support grant is phased out?

The hon. Gentleman makes a good point. As I said, the Government are committed to delivering our manifesto pledge to give local authorities greater control over the money they raise. To give councils certainty, we have given an unprecedented four-year settlement, which 97% of local authorities have taken up. That does not end until 2019-20, during which time we will bring forward further proposals, which we will work with local government to achieve.

If Barnet got the same Government support as Camden, it would probably be a realistic option for Barnet to reduce council tax to zero. Will the Minister look at the allocation of funding between outer and inner London to give boroughs such as Barnet a fairer share of resources?

My right hon. Friend raises an important point. After more than 10 years without the funding formula being looked at, many areas across the country feel a number of challenges, with demographic and service pressures that are encountered more in some places than in others. I assure her that we will look at these matters carefully through the fair funding review.

Before the election, the Government had a plan and a timetable for business rates retention. We know the revenue support grant is going in 2020. In the absence of legislation in the Queen’s Speech, I have asked the Government five times how they will introduce measures to fill the financial black hole. Can I assume from the Minister’s answer to my hon. Friend the Member for Bradford East (Imran Hussain) that the previous measures in the Local Government Finance Bill, and the timetable, have now been ditched? Will he now give absolute certainty to local councils? What precisely will be in place by 2020 when the RSG goes?

I think this is the sixth time that I have answered the hon. Gentleman’s question; his question has been put with a considerable amount of faux rage each time, although it is an important issue. I say to him again that we are absolutely committed to what we said in our manifesto: we will give local authorities greater control over the money they raise. When his Government were in power, they only ever gave local authorities a year’s certainty—a one-year settlement. We have given a four-year settlement, which 97% of councils have taken up. That enables us to have time to bring forward a sensible solution that works for local government, and we will work with local government to deliver that.