Local Government Finance

Part of the debate – in the House of Commons at 5:38 pm on 22nd February 2017.

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Photo of Bob Neill Bob Neill Chair, Justice Committee 5:38 pm, 22nd February 2017

The right hon. Gentleman is right. He and I both experienced that approach when we were Ministers in the same Government. What he has suggested is precisely the objective that we should work towards, but we need a steer from the top.

Let me make two more brief points. The first is about the fair funding review, which I also welcome, but it will be necessary to be bold and comprehensive. When I was a local government Minister, we had to go through about 275 bits of regression analysis to establish the formula, but we had knocked it down from about 400. Such material is not comprehensible; it is extremely opaque, and it produces consequences that are often difficult to reconcile with what any of us in local government see on the ground.

May I make a plea for one particular factor to be taken into account? I understand that, inevitably, there will be a “needs versus resource” matrix, but thus far it has proved almost impossible to build into the system a proper weighting for historically efficient authorities. A local authority that has historically been efficient and run its services well at low cost receives no credit for that. If anything, such authorities tend to be penalised. Bromley, for example, is a comparatively low council tax authority, the second lowest in outer London, but it is also the lowest in terms of the cost per head—the unit costs—of its service delivery. The system has never taken account of that, and we ought to incentivise it within the system.

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