Local Government Finance Bill — House of Commons, 2017-01-23
Topic: Government Operations
Helen Elizabeth Hayes (Labour, Centre-left): It is a pleasure to follow the hon. Member for St Austell and Newquay (Steve Double), but Members may be relieved to know that I shall not be speaking about public toilets I support the principle of business rate retention. However, the test of the Bill must lie in the extent to which it delivers fairness across the country, and on the basis of that test, I have some concerns. My first concern is about the context of more than six years of profound unfairness to local government in which the Bill is being introduced. Local government has faced swingeing cuts, imposed initially by the coalition Government and continued and intensified by the current Government. During the period between 2012 and 2020, the average cut in spending power per household for deprived council areas will be more than five times higher than that in more affluent local authority areas. By the end of this Parliament, the average cut in those more affluent areas will be £68 per household, while for deprived areas it will be more than £340 per household It is one of the profound injustices of the past six years that many council areas in the greatest need—those with the lowest average incomes and the highest levels of deprivation—have faced the harshest cuts. The Government have been weakening the link between need and funding. It is disappointing that we are debating the Bill in the absence of details of the fair funding review, which would enable us to apply a test of fairness to the Bill and debate it properly, in a fully informed manner. There is no necessary connection between rising levels of need for social care, for example, and the ability to raise additional revenue from business rates through economic growth. In fact, in many areas the reverse will be the case, and it will be precisely the areas with the highest levels of need that also face the greatest challenges in terms of economic growth My second concern relates to the challenges currently faced by local authorities as a consequence of the cuts that they have experienced. The most acute of those challenges is in social care. A million people across the country who need care are not currently receiving any. Contracts are being handed back to councils because providers cannot make them work, and our NHS is feeling the pressure of a system that all too often does not give people the support that they need, which results in an acute health crisis There are pressures on many other local authority services as well. Libraries and children’s centres are being closed, park services are being cut, and those working in children’s services are struggling to keep our most vulnerable children safe. A system that is already under such pressure requires reform that is guaranteed to deliver additional resources to the areas that need it most. I am concerned about the risk that the Bill poses in the absence of the details of a redistribution mechanism My final concern, which I raised when the Select Committee discussed the issue, is about the loss of a democratic link between the source of funding and the services that it predominantly funds. A very high proportion of councils’ funds—up to 75% in some areas—are spent on services that protect our most vulnerable residents, but that concern is not typically uppermost in the minds of most businesses. I fear that councils may find themselves in an uncomfortable tension between voting and taxpaying residents and the businesses that will provide most of their revenue. I would welcome an assurance from the Minister that the Government will monitor the issue, and will ensure that funds for key social and community services are not eroded under pressure from a different taxpayer-stakeholder group The Government’s track record on fairness for local government funding is appalling. I call on the Government to publish details of the process for redistributing business rates so that we can ensure that the new arrangements are fair; to look, in the short term, at the crippling crisis facing social care and other local authority services, and redress the balance; and to ensure, over time, that the services on which our most vulnerable residents rely are not placed at further risk. This reform should be being introduced as part of a package of fiscal devolution reform for local government funding, designed to embed fairness in the system and place control firmly in the hands of local authorities, which know their communities best.