In something of a baptism of fire, with some members of the CLG team having only been in place for 24 hours, the new ministerial team made their debut at CLG Questions on Monday 18th July. The NHC have prepared a summary of the session below and the full Hansard entry for the session can be found here.
Business Rate Retention
Responding to a question from Lucy Allan MP on the progress made to enable local authorities to retain 100% of business rates, Sajid Javid noted that “the full retention of business rates is a reform that councils have long campaigned for, and it will shape the role and purpose of local government for many decades to come.” When asked whether there were plans to top-slice business rate income from councils with higher levels of business rate income to subsidise those with lower levels, Javid said that “some redistribution will be necessary among authorities to ensure that no council loses out if they collect lower business rates but … that where that is done, they will keep the extra revenue”
In a follow up question, Andrew Gwynne MP noted that not every area had the ability to raise income from business rates or council tax and that, when he was looking at redistribution, would he ensure a fair settlement for areas such as Tameside. Javid noted that there was, at present, a consultation on fair funding to look into the issues raised by Mr Gwynne.
Adult Social Care
Grahame Morris, the Shadow CLG Secretary, asked if the Secretary of State was “aware of a recent report by the Association of Directors of Adult Social Services, which found that 93% of councils implemented the social care precept, but that raised only £380 million.” He added that “some £1.1 billion is needed to maintain social care at its current level. Social care is facing a perfect storm … so what action is the Minister going to take to address the chronic underfunding of our social care?”
Mr Javid responded that it was a “huge priority” for the Government to ensure that adult social care was adequately funded and refuted the notion that it was underfunded. He added that the social care precept will provide an additional £2 billion a year by the end of the Parliament adding that when local authorities were asked what they would need to fund adult social care they gave a figure of £2.9 billion and received £3.5 billion.
Brexit and Social Housing
Asked about the potential effect of the UK leaving the EU on the level of funding available for social housing, the Housing Minister, Gavin Barwell, noted that the Government had “committed £8 billion to deliver 400,000 much-needed affordable homes—the largest affordable housing programme for nearly 40 years” before noting “the result of the EU referendum does not change that commitment.”
Following up on her question, Kirsten Oswald MP noted that “the UK has had £43 billion of European Investment Bank loans over the past eight years, whereas non-EU countries such as Norway or Switzerland have had only £1 billion. Can the Minister provide any detail on his contingency plan for the funding of social housing and infrastructure projects when that EU finding inevitably dries up?”
The Minister acknowledged that “that obviously makes some contribution towards our delivery of affordable housing” but reiterated that “the Government have committed £8 billion. That will deliver starter homes, shared ownership homes and more affordable and intermediate rent housing”.
In a supplementary question, Kevin Hollinrake asked “does the Minister agree that as we have made the decision to leave the EU, now is the right time to consider more investment in social rented homes to meet local needs and local affordability?” to which the Minister responded “we need a mix of tenures—a mix of offers” adding that the question “tempts me into decisions that will ultimately be for the Government and for the Chancellor at the next Budget, but he makes a powerful case for further investment in affordable housing.”
In his supplementary, Clive Betts MP asked “are the Government still committed to building a million homes in this Parliament? Given that leaving the EU could have a depressing effect on the private house building industry, will he reconsider the Government’s current policy of not providing one single penny towards the building of social housing in their budgets, and recognise that to deliver a million homes, we will have to build some social housing?”
In his response, Barwell said that yes, the Government remained committed to building a million new homes. He continued that “we are looking at a mixed programme, including investment in affordable and intermediate rent, as well as shared ownership and helping people to own their own homes. I point the hon. Gentleman to the research that shows that 86% of our constituents want to own their own home. One of the critical things that we should all be trying to do is help people enjoy the opportunity that nearly all of us as Members of Parliament enjoy.”
Brexit and House Building
In response to another Brexit themed question, this time on the effect of Brexit on house building, Gavin Barwell replied that the Department for Communities and Local Government are keeping markets under review, and that the Ministerial team would be meeting with the major house builders this week.
Responding to this, David Hanson highlighted that “uncertainty breeds uncertainty, and the problems faced before and after the referendum have resulted in the market value of many building companies falling by as much as 40% because of uncertainty about the future.” He Will he agree to report back early to this House on what steps we can take to secure confidence on new build in the housing market?” Replying, the Housing Minister said “I am certainly happy to undertake to do that. I have two points to make. First, the right hon. Gentleman will have seen the steps that the Bank of England has taken to reassure markets following the referendum. Secondly, I draw his attention to a statement by Peter Andrew, the deputy chairman of the Home Builders Federation, who said on 5 July ‘House builders remain confident in the underlying level of demand for housing and will continue to deliver the homes the country needs’”.
In his contribution, John Healey – a former Housing Minister and recently resigned Shadow Housing Minister – said that “on house building, new research from the House of Commons Library shows that, in the six years under last week’s Prime Minister, fewer new homes were built in this country than under any Prime Minister since the 1920s, including 14% fewer than under Gordon Brown, despite the downturn; 21% fewer than under Tony Blair; and 35% fewer than under Margaret Thatcher. The new Housing Minister and Secretary of State are not responsible for their predecessors’ mistakes, but they are responsible for what happens now, particularly in the light of the EU referendum. After six years of failure on housing under Conservative Ministers, what changes can we now expect to see?”
Mr Barwell responded that Mr Healey “was one of my predecessors, and under him new house building was at the lowest level since the 1920s. Obviously, we had to recover from that position. Net new dwellings last year were at the same level as the average over the whole period of the Labour Government. I point the right hon. Gentleman to one statistic: in the year to March 2016, 265,000 homes were given planning permission, which is the highest figure on record.”
In a question to the Minister, Emma Lewell-Buck highlighted that “over the next five years alone, the north-east was due to receive £726 million in EU funding, but the north-east devolution deal promises only £30 million a year for 30 years.” She added that “many devolution deals were already in a state of collapse before the EU referendum. With such high levels of uncertainty because of Brexit, is it not time he revisited all the devolution deals?”
The Secretary of State responded saying that “there is no need to reconsider any of the deals. These are good deals that have been reached by local leaders and central Government, and they will all, in turn, help to boost local growth. The hon. Lady mentions EU grants. As my hon. Friend the Minister for Housing and Planning has mentioned, it is important that we bring certainty, and that is what we will be working to do.”
Many Opposition MPs sought reassurances from the Ministerial team that any EU Regional Development funds earmarked for communities in the North were honoured in light of the decision to leave the European Union. Grahame Morris noted that “assurances on EU structural funds—£5.3 billion of funds for local government—is a key issue. With respect to the Minister may I point out … as an MP representing a northern constituency that only one of the top 15 infrastructure projects receiving the most public funding is in the north? What assurances can he give that leaving the EU will not widen the economic divide in our country, and what guarantees can he give that investment from the EU will be maintained up to and after Brexit for the UK?
Andrew Percy, the new Minister for the Northern Powerhouse, responded that “if he had seen the new Prime Minister speak outside No. 10 when she took office, he would know that she is clear that delivering economic development across the United Kingdom outside London is a key priority. That is exactly what we have done through our devolution process, the local growth fund initiative, £12 billion of funding, and commitments such as High Speed 2 that go way beyond anything promised by the hon. Gentleman’s Government on transport in the north of England.”