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Surrey County Council: Financial Issues

Volume 779: debated on Wednesday 8 March 2017

Private Notice Question

Asked by

To ask Her Majesty’s Government, in light of today’s Budget announcement, what discussions have taken place and what help have they agreed to provide to Surrey County Council to deal with their financial issues.

My Lords, I beg leave to ask a Question of which I have given private notice. In doing so, I refer the House to my registered interests: I am an elected councillor and a vice-president of the Local Government Association.

My Lords, as the Government have repeatedly made clear, there is no special deal for Surrey County Council—there never has been and there never will be. The final local government finance settlement was laid in Parliament on 20 February. It is clear that the Government have not provided any additional funding to Surrey and have not promised to do so. Surrey informed the Government that it wanted to become a pilot for the 100% business rate retention scheme. DCLG made it clear that this was not possible for 2017-18 but that it could apply for 2018-19 when it will be more widely available.

So we have Councillor David Hodge CBE speaking to the Secretary of State for Communities and Local Government while he is sitting in his car at Downing Street; the Secretary of State then scuttling in to see the Chancellor; and a special adviser ringing Councillor Hodge back—a man we have heard is not the sort who gives up—to tell Councillor Hodge what he can and cannot say and to make reference to a Surrey MP who has been outstanding. Will the Minister tell us what are the issues decided upon, what is the sweetheart deal and what is the gentlemen’s agreement that has been reached between the Government and Surrey County Council? Are the Government being straight with us or did Councillor David Hodge dream up these events? Will the Minister tell us which he thinks it is?

My Lords, I have already indicated to the noble Lord that the Government have been totally honest on this throughout. Surrey County Council asked whether it could be part of the business rate retention scheme for 2017-18. That applies to devolution deals, and has been taken advantage of by Greater Manchester, the city of Liverpool, the West Midlands and London. It is not open to other authorities. We have indicated that they can apply, like other authorities—and we discussed this with other authorities before we discussed it with Surrey—for 2018-19, when it is open to all local authorities, and they will then be eligible for that assistance.

Well, what a fine mess somebody has got us into. Here we are, as has been described, with phone calls from a car to the Secretary of State—not even a meeting. Whatever the Minister believes, certainly the leader of Surrey County Council believes, as I have seen and listened to today on YouTube, that there was a gentlemen’s agreement—on International Women’s Day. Does the Minister agree that subterfuge of this sort undermines the essential prerequisite of trust and confidence that has to exist between local government and central government? Will he ensure that the Secretary of State comes clean on this gentlemen’s agreement and reveals all the other secret deals done with Conservative-run councils?

My Lords, let me restate—indeed, this was confirmed by Councillor Hodge yesterday—that there is no deal. There was never any question of special arrangements for Surrey; it is subject to the same rules as every other local authority. It can apply for consideration for the business rates retention scheme for 2018-19; it may wish to do that or not—I do not know—but it is open to that authority as it is to all authorities, whatever their political complexion. That is the position.

My Lords, I wonder if the Minister understands that there is real concern that Surrey had less need of the additional money for social care than any other authority in the country because it has the lowest proportion of population with entitlement to publicly funded social care. I know that the Minister is coming to the north-east soon, and I hope that before he does so he will put pressure on the Chancellor to ensure that the additional money for social care is allocated on the basis of need. In the north-east, there is not a single authority where less than 65% of those eligible for social care require publicly funded social care, as against 1% in Surrey. Again, the tax base in the north-east is much lower because of the lower property base and ability to raise council tax. This is an issue of need around the country, and there should not be any special deals for Surrey without addressing the needs of places such as the north-east.

My Lords, I am very much looking forward to my visit to the north-east, which the noble Baroness kindly mentioned, which as she knows includes a visit to domestic abuse services. On the finance settlement, the Government’s and therefore the department’s position is very much that we wanted Surrey to come to the agreement that more than 97% of councils came to. It chose not to do so and therefore is outside of that agreement. When I am in the north-east I shall be in listening mode, but I hope that the noble Baroness is not exaggerating my powers to persuade councillors.

This is a Private Notice Question, of which the Minister had previous notice. Can he now try, instead of reading from a prearranged brief, to answer the specific questions put by my noble friend Lord Kennedy of Southwark? His questions were absolutely clear but they were not answered. I am sure that if he needs him to, my noble friend will repeat them.

My Lords, I was absolutely clear. I am not reading from a prepared brief. The position is absolutely clear, and we have made a Written Ministerial Statement on it. I hope that the noble Lord is not seeking to make mischief—it would be unusual if he were not. There is no sweetheart deal with Surrey. There was never a prospect of a sweetheart deal with Surrey. Surrey is in the same position as every other local authority except that, as I indicated, regrettably it did not sign up to the financial deal. I do not accept the proposition the noble Lord seeks to put—that the position Surrey is putting forward is the correct position. I am sorry, but he wishes me to say something I do not want to say and am not going to say. The Government’s position is absolutely clear—there is no special deal. I make that absolutely clear.

I wonder whether the Minister can help me. Something caused Surrey to change its mind. What does he think it was?

My Lords, I have no idea. That is a question for Surrey to answer. However, we have had a freedom of information request, which I believe the noble Lord opposite knows about. We are very keen to respond to that and will do so. All the relevant documents, which I am sure will set out this matter very clearly, will be disclosed.

My Lords, the Tory leader of Surrey County Council said that there was a gentlemen’s agreement. The Minister says that there is not. Which one is telling the truth and which one is not?

My Lords, as I have just indicated, I have set out the Government’s position very clearly: that there is no gentlemen’s agreement. There is no written agreement, as I think was suggested. As I have just said, there is a Freedom of Information Act request to which we are responding by disclosing the relevant documents. I am sure that will illustrate the point I am making—that there is no special deal at all for Surrey.

My Lords, I am not here to fling accusations about. That is a matter for him to deal with. I am willing to take questions that are put to me but I cannot take questions that are properly a matter for Surrey County Council and its leader to deal with.

My Lords, the question has to be answered. Either the leader of Surrey County Council was lying or he completely misunderstood his conversations with the Secretary of State and all those others to whom he spoke. Therefore, the Government are suggesting either one or the other. I am sure that the Minister will decline to comment on either of those but can he tell us categorically whether anyone in No. 10 was involved in the discussions with Surrey County Council?

My Lords, the discussions with Surrey County Council were conducted quite properly by officials in the department and by the Secretary of State, as you would expect with local authorities and local authority leaders. We are having discussions across the board with Norfolk, Hampshire, Lincolnshire—I think—and Suffolk. They are not unique to the position of Surrey. I want to make that absolutely clear. There is nothing special about a single local authority leader having discussions with the Department for Communities and Local Government or with the Secretary of State. That is absolutely right and we would be criticised if that did not happen.