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Local Government Finance

Part of the debate – in the House of Commons at 1:13 pm on 5th February 2020.

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Photo of Jake Berry Jake Berry Minister of State (Cabinet Office), Minister of State (Cabinet Office) (jointly with the Ministry of Housing, Communities and Local Government) 1:13 pm, 5th February 2020

I am not throwing accusations around. I suggest the hon. Gentleman checks Hansard because whatever the funding gap may be, it would have been much bigger if he and his colleagues had got their way. He voted against more funding for social care, and I suggest he remembers that when he is giving out the lectures.

In addition to helping councils address the complexity around the delivery of social care, I recognise that councils in rural communities face some unique challenges. The services they provide are often delivered over a long distance, to disparate communities. That is why we are proposing to continue the rural services delivery grant at £81 million—the highest ever to date. This funding will continue to support residents in rural counties— including Labour-controlled Cumbria, which is a beneficiary of it and which I am sure welcomes the funding, given the challenges it faces around rurality—and people who live far from local services so rely on them being delivered by their council.

We have consulted widely on negative revenue support grant, and have concluded that eliminating negative RSG through business rates income, at a cost of £152.9 million, is the right thing to do. This will deliver on the Government’s long-term commitment to the principle of sustainable growth incentives in the funding settlement.

The new homes bonus is a very important part of how we fund local councils. It rewards councils that do the right thing by building new houses to help tackle our housing crisis. We want to ensure that they continue to be incentivised, which is why we will provide £907 million of new homes bonus allocations this year.

Council tax for the average dwelling went up by 112% under the last Labour Government. That’s right—Labour doubled people’s local council tax. Of course, in Wales they have managed to triple it, but they only doubled it here in England. That is why this Government have made a commitment to give local residents the final say on excessive council tax increases. We are determined, in a way that no Labour Government ever were, to protect the interests of hard-working taxpayers while granting local authorities the flexibility they need to raise resources to meet their needs. For this reason, we propose to continue with the council tax referendum limits.