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Local Government Finance

Volume 635: debated on Monday 22 January 2018

9. What assessment he has made of the effect of the local government finance settlement on the ability of local authorities to meet their statutory responsibilities. (903422)

19. What assessment he has made of the effect of the local government finance settlement on the ability of local authorities to meet their statutory responsibilities. (903432)

Our fair and sustainable financial settlement gives local authorities the ability to protect important local services. It marks the third of a four-year deal, providing funding certainty to local government and a real-terms increase in available resources to the sector.

How does the Minister intend to ensure that, under the fairer funding review, individual local authorities receive an adequate level of funding that is not only fair, but sustainable, given that the Government’s intention to reset the business rates baseline from 2020-21 may result in all the individual growth that has been built up since the start of the business retention scheme being taken away? Can the Minister provide any assurances that this growth will be protected?

Order. May I gently encourage colleagues in preparing their questions to recognise the merits of the blue pencil? Usually something drafted can be shortened.

The Government are piloting 100% business rates retention and have seen extraordinary applications for those pilots, and we are learning from them to design the appropriate system to take over in 2019-20 together with, as the hon. Lady said, a full review of fair funding, so that we can get the allocations right.

This Government have deliberately targeted their cuts at the most deprived communities. Nottingham City Council has lost a staggering 80% of its funding since 2010. Now the Government’s only answer to the social care crisis is to add another 3% to council tax bills. In Nottingham, that will raise just £3 million, which is way short of the extra £12 million the city needs to meet the costs of caring for more elderly and disabled people. When will the Minister stop dumping the financial burden on to Nottingham’s taxpayers and start funding social care properly and fairly?

I gently point out to the hon. Lady that core spending power per dwelling in the 10% most deprived local authorities is actually 23% higher than that in the least deprived, and indeed in her local authority, it is 11% higher than the national average.

I welcome the Government’s best value inspection of Northamptonshire County Council. Will the Minister ensure that the transfer of the fire service out of the council to the police and crime commissioner is not delayed by this inspection?

As my hon. Friend knows, the Secretary of State has asked Max Caller to look at the authority, and we await his findings eagerly. It is difficult for me to comment further at this time, as I am sure my hon. Friend appreciates.

I welcome my hon. Friend to his new post. Somerset, which is underfunded relative to other local authorities, was disappointed not to be part of the business rates pilot. Will he meet me to discuss the upcoming local government finance round?

As my hon. Friend will know, we had an overwhelming number of applications for the pilot, and I am disappointed for him that Somerset is not a member. He should encourage his local authority to apply again when we rerun the pilot this year. In the meantime, I would be delighted to meet him to discuss fair funding for Somerset.

The local government finance settlement descended into a complete and utter shambles last week. The figures sent to local authorities were wrong. Back in March 2017, the National Audit Office was concerned that there was not the capacity within the Department for Communities and Local Government and the Valuation Office Agency to handle the Secretary of State’s plans. This new error will certainly not engender confidence in the Department. What steps are being taken to ensure that the error is not repeated?

The Valuation Office Agency made a mistake with the initial calculations. That was corrected and the Department has moved swiftly to provide accurate information to local authorities. I gently point out that overall the error meant that local authorities will receive an increase in the business rates retention forecast for this year.

The last time we were able to question the Secretary of State, we asked how he planned to address the unsustainable and insufficient funding for children’s services and what he would do about the £2 billion funding gap. He told us to wait and see what happened in the local government finance settlement. Well, we waited and looked at his proposal, but there is no new money for these vital services. Was that another error, and will it be corrected in future?

As I have already mentioned, local authorities will receive a real-terms increase in their aggregate funding this year and next. The Government have also invested £200 million in a social care innovation programme to look at ways to improve the delivery of children’s social services.