Yes, it is very clear that more new homes are being built. The right hon. Member for Leeds Central talked about need. One of the biggest recipients of the new homes bonus has been the inner-London borough of Tower Hamlets. It has built homes in a needy area, and it has been one of the biggest beneficiaries of the new homes bonus. There is therefore a direct correlation, and that correlation also relates to need. With respect to the hon. Member for Sheffield South East (Mr Betts), his point was not the best he has made in debates in the Chamber.
It is worth observing that local authorities have calculated that they will see an increase in business rate income in 2014-15, thanks to the Government’s economic policies. Some 91% of local authorities anticipate that their business rate income will grow during 2014-15, because we are starting to get the economy back on track. Having record levels of jobs and economic activity would be prejudiced by the Labour party, but that is the real way to create sustainable funding for local government, not a culture dependent on tweaking handouts.
My hon. Friend the Member for Hornchurch and Upminster (Dame Angela Watkinson) made an important point about why we need to move away from the culture of dependency. Historically, there were disparate levels of resourcing between inner and outer-London boroughs. Once upon a time, that to some degree reflected the demography of London, but that demography has changed significantly. As I know from the experience of my London borough of Bromley, the pressures facing outer-London boroughs are now much closer to those of inner-London boroughs. As my hon. Friend the Member for Beverley and Holderness (Mr Stuart) observed, the artificial inflation of the weight given to density has made the problem worse in some cases. Throughout this Parliament, my right hon. Friend the Secretary of State
and his ministerial team have gradually sought to rectify such wrongs, and I hope that in the next Parliament we can build on the very solid foundations built so far.
At the end of the day, I hope that we can move away from the artificial argument about dependence on the central Government grant. We should give local government the tools to invest, which is why the new homes bonus and the retention of business rates are so important. A fairer and more transparent basis for funding is critical, and that is what the coalition Government have delivered.
There is still more to do, although none of us would disagree that local government is probably the most efficient part of the public sector. That is why I was pleased to see the excellent work done through the better care fund. I represent a top-tier authority, and most such authorities regard adult social care as one of their principal funding pressures. Once the better care fund is established, I hope that much more work will be done to align adult social care with health services. Local authorities can often deliver many of the health-related aspects of services for elderly people more efficiently than the traditional health service model. Again, my right hon. Friend the Secretary of State is to be congratulated on opening up that new opportunity, which sensible authorities, such as mine in Bromley, have already seized. We must ensure that health authorities and commissioning groups understand that too, and that they fully co-operate and do not seek artificially to hang on to money—often, their local government colleagues may be best placed to get the best bang for local residents from the available buck. I hope we will see more of that important development.
Although not directly part of the grant settlement, I hope my right hon. Friend will continue to point out to colleagues in the Department for Education that we could look for greater flexibility in the operation of the dedicated schools grant. That is a good thing in itself, but some types of educational spending currently fall outside its parameters, and we could consider that issue for the future.
None of that takes away from the fact that every local government Minister has to do a balancing act when they set out the local government finance settlement. I believe that the DCLG ministerial team has done a good job, and above all we must keep bearing down on the deficit and keep public finances under control. Equally, we should continue to reward councils that do the right thing. In due course, as my right hon. Friend the Member for Wokingham (Mr Redwood) was hinting—I will say this in a way that does not make me out of order, Madam Deputy Speaker—I hope that as we consider future funding arrangements for the whole United Kingdom, we will be able to give more weight to councils such as Bromley that have historically shown high levels of efficiency. Bromley delivers its services at the lowest unit cost per head of any London borough, and it also happens to have the second lowest level of central Government grant. The more we remove local authorities from the need to depend on that ratio of central government grant the better, and the more likely it is that they will profit from their own efficiency. That is the way forward.
I hope that in the short term we will look again at some elements of the way the grant is calculated and give greater weight to efficiency. It is probably right that
there should be a greater relationship in local government between behaviour and out-turns, and between behaviour and consequences. The best thing would be to ensure that a higher percentage of local government spend is raised locally, and the Government are on course for that. They have made a good start but can always continue to do further work in future. At least we are able to offer local government a realistic programme as we go into the general election, building on achievements that have been delivered, rather than on the inherently contradictory flights of fancy from Opposition Members. We respect local government—I spent many years of my life in local government, and there are good people and authorities of all colours. For all the words of the right hon. Member for Leeds Central, imposed centralism is not the answer, and we must build incrementally—as the Secretary of State rightly has done—to return powers increasingly to local government. This finance report is consistent with that path, and I hope the House will support it.
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