Draft Localism Act 2011 (Consequential Amendments) Order 2014
The Committee consisted of the following Members:
Abbott, Ms Diane (Hackney North and Stoke Newington) (Lab)
Blunkett, Mr David (Sheffield, Brightside and Hillsborough) (Lab)
† Cairns, Alun (Vale of Glamorgan) (Con)
† Fitzpatrick, Jim (Poplar and Limehouse) (Lab)
† Gilbert, Stephen (St Austell and Newquay) (LD)
† Glen, John (Salisbury) (Con)
Goldsmith, Zac (Richmond Park) (Con)
† Jones, Susan Elan (Clwyd South) (Lab)
† Lewis, Brandon (Parliamentary Under-Secretary of State for Communities and Local Government)
† McFadden, Mr Pat (Wolverhampton South East) (Lab)
† Perry, Claire (Devizes) (Con)
† Raab, Mr Dominic (Esher and Walton) (Con)
† Russell, Sir Bob (Colchester) (LD)
† Sawford, Andy (Corby) (Lab/Co-op)
Simpson, David (Upper Bann) (DUP)
† Stuart, Ms Gisela (Birmingham, Edgbaston) (Lab)
† Vickers, Martin (Cleethorpes) (Con)
Helen Wood, Committee Clerk
† attended the Committee
Fourth Delegated Legislation Committee
Tuesday 28 January 2014
[Mr George Howarth in the Chair]
Draft Localism Act 2011 (Consequential Amendments) Order 2014
8.55 am
The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis): I beg to move,
That the Committee has considered the draft Localism Act 2011 (Consequential Amendments) Order 2014.
Good morning, Mr Howarth. It is a pleasure to serve under your chairmanship this morning. I hope that we do not keep the Committee too long.
The order was laid before the House on 7 January. I will start by briefly explaining the background to the draft order, which is due to be considered shortly under the affirmative procedure in the other place.
The Localism Act 2011 introduced council tax referendums as a replacement for the previous capping regime. It did this by amending the Local Government Finance Act 1992 and inserting a new chapter on council tax referendums. It also inserted a new section 31A, changing the way the local authorities in England determined their council tax. Other consequential amendments were made to the legislation, including to the Greater London Authority Act 1999. The order before the Committee today updates the legislation to take account of changes that have taken place since the Act was passed; it corrects several minor drafting errors and it provides a route for the GLA to recover from any errors and oversights during the budget-setting process. I will explain that in just a moment.
I do not propose to cover each of the amendments in detail, but for the record I will say a few words about each. Article 2 details how local authorities should take account of any transfers from their general fund to their collection fund, when determining their council tax requirement. Such transfers would be rare, but are theoretically possible, so it is sensible to include a reference to them in legislation.
Article 3 makes it a requirement for major precepting authorities such as county councils, when estimating their expenditure for the year, to take account of certain payments which may become due to billing authorities. This is again a minor amendment, to ensure that legislation captures all the existing payments and transfers between authorities.
Article 5 corrects a drafting error in amendments made to the Greater London Authority Act 1999 by the Localism Act 2011. It requires repayment of grants by the GLA to be classed as expenditure, rather than income as currently and incorrectly stated. Article 6 removes a redundant reference in the GLA Act to “relevant special grants”.
Article 7 also amends the GLA Act to address an unforeseen deficiency in the statutory timetable for the GLA when setting and revising its budget and council tax requirement. This is probably the key article. If the
GLA were to set an excessive council tax increase, in common with the obligations on all local authorities, it would be required to hold a binding referendum to seek local agreement to the increase. As part of this process, it would be required to draw up an alternative budget that did not require an excessive increase in council tax, which could be adopted if the referendum were lost. There are statutory deadlines for these budgets to be set, revised and approved. So it is possible for the GLA through error or oversight to set an excessive council tax increase without having also gained approval for an alternative non-excessive budget. Article 7 therefore provides the GLA with a way to recover from such a situation, by allowing the Assembly to approve a revised non-excessive budget at a later date.A copy of the draft order was shared with the GLA and revised in the light of its comments. I hope that, with that short explanation, the Committee is able to accept these measures, and I commend the order to the Committee.
8.59 am
Andy Sawford (Corby) (Lab/Co-op): It is a pleasure to serve under your chairmanship, I think for the first time, Mr Howarth. I do not intend to detain the Committee for very long. We accept that these are tidying amendments. I have spoken to the Greater London Authority and the Local Government Association about them, and they are in support, which gives me great comfort in supporting them.
The Local Government Association in particular took the opportunity to ask me, as the amendments relate to the council tax referendum limits, to express to the Minister—I have given him notice that I intended to do this—the concern of the whole of local government about the council tax referendum limits, at a time when it is having to make extraordinary savings, greater than any other part of the public sector.
Of course, in some areas of the country, those savings are unfair, as my hon. Friend the Member for Birmingham, Edgbaston (Ms Stuart) said only a few weeks ago in an important debate in Westminster Hall. It was noted that the 10 poorest areas of the country are losing from their grant 10 times more than the 10 richest. That is something that you may know from your own local authority, Mr Howarth. The failure of the Government, contrary to their previously stated policy, to inform local authorities of the council tax referendum limits at the same time as the provisional statement is extremely disappointing, not least because the statement itself came late in the form of a written statement on 18 December. So local authorities have their hands tied behind their back as they consult their communities on hugely important decisions about local public services because they do not yet know what referendum limits the Government will impose. As they are related to the order, perhaps the Minister will take the opportunity today to confirm what the limits will be.
We will not oppose the order itself.
9.1 am
Sir Bob Russell (Colchester) (LD): I will just use this opportunity, as we are talking about a local government measure, to say that local government reorganisation took place 40 years ago in April and ever since then successive Governments have made local government
less local. I wonder whether all political parties should reflect on that. Local government is increasingly less local. We have had the sustainable communities legislation and localism legislation, yet local government is less local than it was 40 years ago.