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Local Government Finance Settlement — Motion to Take Note

Part of the debate – in the House of Lords at 4:56 pm on 9th January 2014.

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Photo of Baroness Stowell of Beeston Baroness Stowell of Beeston The Parliamentary Under-Secretary of State for Communities and Local Government 4:56 pm, 9th January 2014

This system acknowledges that there is greater need in an area such as Newcastle. That is why it is receiving considerably more per household than areas that are not in as great a need. We acknowledge that and that is what we are doing. However, we also believe, taking on board the point made by my noble friend Lady Hanham, that Newcastle, along with every other area of this country, also has great opportunities to raise more funding in its own area through the various different kinds of scheme that are there and that will increase growth in the area if the opportunities are taken. We have also recognised that services can sometimes be more difficult and expensive to deliver in rural areas and have set aside £9.5 million to help them as they modernise their services.

The noble Lord, Lord Beecham, raised questions about the inclusion of social care funding. Social care funding, or the better care fund, which is worth £3.8 billion, is jointly agreed by councils and the NHS locally. Provisional settlement figures show that authorities facing the highest demand for services receive substantially more funding.

As councils are now in the process of setting their budgets, council tax payers will be looking to them to keep bills down. When we look at the local government finance settlement, local council tax payers are very much in the front of our mind. The Opposition talk a lot about the cost of living, but it is worth pointing out that under the previous Government, as my noble friend Lord True said, council tax more than doubled. This Government have done everything possible to protect hard-working families from further rises. Over the past three years, we have offered enough funding for councils to freeze council tax without losing income. We will be doing the same again for the next two years, with a further £550 million available to councils. We also intend to roll that funding into the baseline, giving certainty that councils will not lose out tomorrow by helping council tax payers today. Where bills have been frozen, the average bill payer could have saved more than £700. I very much hope that as many councils as possible will take up this offer, passing on these savings to their residents and doing their bit to help people with the cost of living.

I do not think that any noble Lord raised the issue of council tax referendums but I am sure your Lordships will wish to know that we are still consulting on the principles of that. The threshold will be announced shortly. Noble Lords should be aware that we are open to representations about a lower threshold than that set up to now. Transparency and accountability to local taxpayers are absolutely critical. Those authorities which have been setting a 1.9% increase to avoid the 2% threshold for a referendum are simply not having an honest conversation with their residents. The money is there to freeze bills so why not take it?