Communities and Local Government Committee

Oral evidence: Work of the Department for Communities and Local Government 2016, HC 736
Tuesday 8 November 2016

Ordered by the House of Commons to be published on 8 November 2016.

Watch the session

Members present: Mr Clive Betts (Chair); Rushanara Ali, Bob Blackman; Helen Hayes; David Mackintosh; Melanie Onn; Mr Mark Prisk; Mary Robinson

Questions 1 – 70

Examination of Witnesses

Witnesses: Sajid Javid MP, Gavin Barwell MP, Marcus Jones MP and Andrew Percy MP.

Q1                Chair: Good afternoon, everyone.  Welcome to this evidence session with the Secretary of State and the ministerial team from DCLG.  Secretary of State, welcome.  For you and two members of your team it is your first time before the Committee, but Marcus we have seen on a number of occasions previously.  I am sure he has told you how well we treat Ministers in the Committee.

Marcus Jones: Absolutely.

Chair: Before we begin, members of the Committee will want to put on record any particular interests they have.  I am a vice-president of the Local Government Association.

David Mackintosh:  I am a Northamptonshire county councillor.

Mary Robinson: I employ a local councillor in my parliamentary team.

Bob Blackman: I am a vice-president of the LGA.

Rushanara Ali: I am chair of a charity called UpRising, which the Secretary of State spoke at an event for earlier this year. 

Chair: That has put on the record our various interests.  Secretary of State, you would like to say a few words for us at the beginning of the session.

Sajid Javid: Mr Chairman, thank you and members of the Committee for giving us this opportunity to appear in front of your Committee, to discuss whatever is on your mind and to focus on the issues you would like to.  Having run other Government Departments as well, I have come to see the huge value Select Committees can add to having better public policy.  I really welcome the scrutiny that your Committee will provide and look forward to working with you all in a very constructive and positive manner.

Q2                Chair: Thank you for that.  That is appreciated.  Can we begin by talking about some of the high profile policies that the Government have introduced and see where we are up to in terms of progressing them?  The first is with regard to the right to buy for housing association tenants.  We have a number of pilot projects working now.  Could you bring us up to date with where those pilot projects are up to, and when we are we likely to see a report from them and then the policy rolled out further?

Sajid Javid: Of course.  To start, I will just say that we have the whole ministerial team here, apart from our Minister for Communities in the Lords.  At relevant points, if it is possible, I will bring in the relevant Minister. 

This is a key policy that the Government remain very committed to delivering.  As you have said, we have a number of pilots in place.  Where we have them, they are progressing well and providing us with new information and detail that we can use to come up with the final policy, as we spread it throughout the country.  There are still a number of issues of detail that we need to agree within Government.  This will build off the very significant agreement that my predecessor had reached of having a voluntary arrangement with the housing associations.  We intend to keep that voluntary arrangement in place and build on it.

Q3                Chair: When are we going to get some results from the pilots, and then when will the policy be taken forward from there?

Sajid Javid: We are evaluating what is coming in at the moment.  I cannot tell you exactly when we will publish those results and take the policy further, but it is our intention to have this policy fully in place by the end of this Parliament, as it always has been.

Q4                Chair: Currently, the funding for the pilots I understand is being paid for directly by the Treasury, but ultimately the whole policy will be rolled out and paid for by the sale of high-value council assets.  Most councils are now doing their budgets for next year and do not have any idea what figure is going to be placed upon them to estimate the high-value assets they are supposed to be selling.  Can you give us more information about that?

Sajid Javid: We are very much aware that, as you say, once we switch from the pilots with Treasury funding to direct funding from local councils, those councils will want to know what the burden on them might be.  That is something we do not want to surprise any council with; they will be given a fair notice of what it might be.  As we progress and have more details, we will share them.

Q5                Chair: Will councils be expected to find any of that money, with regard to the sale of high-value council assets, in next year’s budget?

Sajid Javid: If you allow me, I can ask the Housing Minister to come in at this point and talk about it in a bit more detail.

Gavin Barwell: We have not taken a decision on timing yet, but, as you will be aware, we have a statutory duty to consult councils before making any determination, setting out the payment that would be required.  The regulations would require the affirmative procedure in the House.  There is clearly quite a significant process that we have to go through before we can start making charges.  We have not made a decision yet on timing.

Q6                Chair: It would seem a bit unfair, given the length of time, to expect councils to have a figure that they could then implement for 1 April next year, would it not?

Gavin Barwell: As I said, in terms of the process we have to go through, consulting and then taking affirmative regulations through the House, you can see that there would be quite a notice period before we could start making any charges.

Q7                Chair: Presumably, you want to start the process of councils having to find that money at the beginning of a financial year, as far as councils are concerned.

Gavin Barwell: We want to make sure it is a smooth process.  I am very aware of the fact that the legislation that went through in the Housing and Planning Act 2016 was quite controversial.  When we roll out the policy, we want to make sure that it operates smoothly, and that requires giving people plenty of opportunity to comment on the detail of the regulations and giving councils plenty of time to implement.

Q8                Chair: One of the other issues around it, again in the Housing and Planning Act, is the percentage of starter homes that are going to be required on developments.  Are you any clearer about what that might be or when it might be determined?

Sajid Javid: The starter homes policy is in place, but we are still looking at the best way to implement it and to get the highest return on having requirements on developers for starter homes.

Q9                Chair: There is no timetable for that at this stage.

Sajid Javid: I could not give you a definitive timetable at this point. 

Q10          Chair: Can I ask another question on the pay to stay scheme?  Are we any clearer when regulations and rules about that might be announced?

Sajid Javid: We are in active discussions on that internally in Government at the moment.  We are very much committed to that.  It is a very important point of fairness.  We have set the raw detail about how it would work, but there are still some factors to work out before we can implement it.

Q11          Chair: If I summarise the housing policy, “work in progress” might be the best description.

Sajid Javid: No.  There are certain elements that are in progress and we have just discussed a few of them.  More broadly speaking, for example, the current Neighbourhood Planning Bill going through Parliament is a very important part of our housing and planning policy.  Work on detail is in train, but there are other elements that we are still working on.

Q12          Chair: This Committee is asking questions, but there are councils and others out there who are going to have to implement policies, who will be incredibly frustrated by the lack of any clear indication about when they will know what they are going to have to do.  Councils have enough challenges at present without a lot more uncertainty created by Government.

Sajid Javid: I certainly accept that we want to have as much certainty as possible for councils, whether it is on the housing policy funding or otherwise.  For example, in terms of local government financing, which I may get on to later, our historic deal to have four‑year settlements for local councils is a way to provide more certainty where otherwise there would not be any.  I take the general point that, where we can come out with details on schemes or policies that have been announced sooner rather than later, we should do that.

Q13          Chair: Can I take you back to 15 December last year?  That is nearly a year ago.  We had a session with the then Housing Minister, Brandon Lewis.  Mark Prisk asked a question of the Minister about the financial projections on the funding of right to buy discounts; the building of replacement homes; the Brownfield Regeneration Fund; and the Government’s policy that the Brownfield Regeneration Fund, the replacement of the housing association houses sold and the replacement of the local authority houses sold would all be funded out of the sale of high-value council assets. 

Brandon Lewis said in response that he was not in a position to give the figures at that time and that he heard a range of figures being quoted, “which is why I do not want to give you my pitch as to whether it will be one figure or another, but, towards the end of the first quarter of next year,”—that is this year—“I will be able to give you a firmer position on that.”  The end of the first quarter was March; we are now in November.  We have not had anything at all about the financial impact assessment of the sale of high‑value assets and all the other financial matters associated with the right to buy.  Why is that?

Sajid Javid: To add a bit to what I said earlier, we are still developing the details of this policy.  It is not possible to provide more financial detail on the impact until we have finalised that.

Q14          Chair: Is it not normally a good idea to work out the financial impact before you determine the policy?

Sajid Javid: You are asking for more detail.  The Government have already shared and published headline numbers, but, referring back to your earlier questions about the potential impact on councils with high‑value homes as we implement the policy, we do not have that detail at this point.  When we publish the full details of the policy, we will be able to share it. 

Q15          Mr Prisk: Your ministerial team, Secretary of State, rightly pointed out the importance of developing homes of all tenures.  Can you explain your plans for the development of more social housing and how many additional homes that will deliver?

Sajid Javid: Yes.  First of all, I recognise that social housing is a very important part of the mix of homes that we want to provide.  I think I am right in saying that roughly a third of homes built in the last year, just to give a sense of their importance, and all types of social homes were provided by housing associations.  They are an important factor to consider as we work hard to increase the number of homes being built.  

There are a number of funds already in place to help support housing associations in particular, in terms of the flexibilities of their borrowing powers, the funds that we are able to provide them, the support they get through new developments and the commitments that are made by developers to affordable housing.  We are now looking at other ways that we can provide support.  Those discussions are ongoing, but rather than dial that back in any way we want to see what further support we can provide, so they can continue contributing to the homes shortage that we have in this country.

Q16          Mr Prisk: Presumably, therefore, you will want to hopefully maintain that percentage of a third of the 4 million homes planned for this Parliament.

Sajid Javid: Sorry, can you ask that question again?

Mr Prisk: You said that about a third of the total last year were social homes.  Are you therefore saying it is your intention to deliver a similar proportion of the million homes?

Sajid Javid: I would expect to see it still represent around a third, if not more over time.

Q17          Bob Blackman: On the issue of housing generally, one of the particular issues for London—I am looking at the Minister—is the affordability for people to purchase homes.  What consideration have you given to increasing the shared ownership provision, both across the country and in London in particular?

Gavin Barwell: The two questions interrelate to a degree.  We have inherited a position where the affordable housing programme is now very heavily constituted by funding for shared ownership.  It is a product that has worked very well in London and there is potential to grow it further, but there are other parts of the country where it is just beginning, essentially.  In the budget, there is a very significant increase in funding for shared ownership. 

As Mr Prisk was alluding to, one of the things that people have been requesting, which I have tried to reflect back, is that we make sure we have support for different kinds of tenures within the overall affordable housing budget.  The Secretary of State and I feel very strongly that there is a need for more housing of virtually every kind in this country.  We need to make sure that, in the mix of Government programmes we have, we have the resources there to support all of them.  Mr Blackman is quite right to say that help to buy shared ownership can make a really big contribution to helping people get onto the housing ladder.

Q18          Melanie Onn: In light of the ambition for a third of the million houses planned to continue to be social housing, how will you support housing associations in delivering that?

Sajid Javid: The third is social, including the types of affordable housing that are provided together.  The support we provide comes in many forms.  It is direct grants to the housing associations, for example.  Also, the flexibility that housing associations have earned over the last few years allows them to borrow more with greater flexibility, which allows them to deploy more capital in total.  We are looking at other ways that we can provide support. 

The ways that I have mentioned so far are very significant in terms of increasing the total amount of support.  For example, by 2021, we expect 400,000 new affordable housing starts with a total investment by Government of £8 billion, which is one of the highest ever over such a short period.

Q19          Melanie Onn: May I have a quick follow‑up?  I applaud the Minister’s commitment to affordable housing.  My concern would be around investment in rental properties, which I believe is truly affordable housing.  Will there be support for that as part of the third of the social housing makeup?

Sajid Javid: There is support for that.  We will look to see in which further ways we can support that.  If I can share this with you, some of the work done so far has meant that, in terms of social, the waiting lists have been falling.  They have fallen considerably from their height, but we are looking to see what more we can do to increase supply.

Q20          Mr Prisk: On the question that I asked earlier, the third, Secretary of State, is for social and various forms of affordable housing, either rented or part ownership.

Sajid Javid: Yes, it includes affordable.

Mr Prisk: It is all of those.

Sajid Javid: Yes.

Q21          Helen Hayes: In the last budget round, there was no capital grant line in the Government’s budget for new affordable housing schemes that are not already committed.  That was something the Committee picked up on last year.  Are you indicating that, in the Autumn Statement, we might expect to see the emergence of a new commitment from the Government to fund investment in social housing directly?

Sajid Javid: No, I am not indicating anything specifically about the upcoming Autumn Statement.  I am indicating that the Government take social and affordable housing very seriously and we are looking at ways that we can support it further.

Gavin Barwell: There are two issues here.  There is the affordable housing programme, which I think Ms Hayes was referring to, but there is also the guarantee scheme that the Government offer to those who provide affordable housing, which allows them to borrow at lower rates and therefore, effectively, to provide more housing.  There is some support there already, but we have a White Paper coming out later this year; you can look at that.  We have both clearly given signals that we are very keen to see more forms of every single tenure of housing.

Q22          Chair: Without putting words in your mouth, Housing Minister, housing associations and local authorities, for example in the Sheffield city region, have written to you and to the agency, saying, “We can deliver more homes, but shared ownership does not work as well in this part of the world as it does in London.  If there were a bit more flexibility towards the building of affordable homes to rent, it would enable us to have more houses built.”  You are now listening to that argument.  Even though you are not necessarily committed to responding to it positively, you are listening to it.

Gavin Barwell: We will be setting out our strategy in the White Paper, but the message that flexibility can drive higher supply is one that I have heard consistently.

Q23          Rushanara Ali: Secretary of State, this Committee raised concerns about the risk to housing associations that grow too big and become over‑commercialised.  The quality of services, particularly maintenance and repairs, is worsening for social housing tenants.  They also noted the problems in relation to one merger, which affects my constituency: Affinity Sutton and Circle.  I raised this in an Adjournment debate, which Minister Barwell addressed, about the failure in local accountability and governance, and appalling records in maintenance, to the point where this was addressed in a regulator’s response. 

We are concerned that, as they become more commercialised, the services provided to those tenants are going to get worse.  There is a pattern, not just in my constituency but across the country.  Can the Secretary of State give us some assurance that more action will be taken to ensure this does not happen in future and that some preventative measures are being taken to address this?  I am looking for a stronger answer from the Secretary of State than his Minister in the debate, because my constituents are not satisfied with where we are at the moment.

Sajid Javid: In a moment, I will bring in the Housing Minister, because I know he has done a huge amount of work on this already in the short time he has been on the job.  That is also a demonstration of how seriously we take this.  You are right: there is a very mixed performance of housing associations across the country.  It is not necessarily associated with the size.  There are some of what we might call smaller ones that seem to do an excellent job.  Equally, there are some small ones that probably could merge with some others and become stronger together.  You rightly highlight the issue around maintenance and repairs not being done, in some cases where there is evidence, in the way that we would all think is reasonable.

We are looking at what more we can do about this.  Housing associations are independent.  Clearly, we want them to be successful.  As Government, we cannot dictate to them exactly how they do things; nor do we want to do that at all.  Their independence and the flexibilities they have are an important way to allow them to deliver their mission.  We are taking this particular issue—the maintenance and repairs—seriously.  You said you wanted to hear from me.  Hopefully, that has reassured you as to how seriously we are taking it, but the Housing Minister is looking at this and seeing what more we can do.

Q24          Rushanara Ali: I am grateful to the Housing Minister for following up on the specifics, but for the purpose of this Committee it would be really helpful to know from the Secretary of State what action will be taken to make sure that housing associations, as they have become bigger and more commercialised, protect social housing tenants, because it is not good enough to say they are independent.  They are subsidised by the public and should be accountable to the public.  In this case, over £250 million of public money has gone into funding Circle Housing from your Department and elsewhere. 

We would not tolerate private landlords treating people in this way.  Why is it acceptable because they are independent?  I am not putting words into your mouth, but there is almost a complacency going on, which suggests that the commercialising that is happening and could potentially happen elsewhere will make matters much worse, despite the fact that we are putting a lot of public money into these organisations.  While I recognise many are doing an excellent job—small, medium and large associations—this case sheds light on the dangers of a lack of accountability.  I want to know from the Secretary of State what powers he will give the new independent regulator, in order to make sure this does not happen in future.

Sajid Javid: First, I do not think there is any complacency.  That is not to say there is not an issue here.  You are absolutely right to focus on the fact that there is public money involved.  We want to make sure every penny is spent wisely.  We have an independent regulator already.  We do not have to wait for a new regulator; we have a regulator.  That is the HCA.  It has a job to do.  It takes it very seriously.  It has a lot of resource invested in that part of its job: the regulation of housing associations.  It is looking at this, and looking at it seriously. 

We want to learn from the evidence, and we will look at whatever the regulator comes forward with in terms of changes we might have to make to regulation or otherwise.  We will take a serious look at that, but I want to be led by the evidence and the work of the independent regulator.  It is important we let them do their job and then take what they come up with very seriously.

Gavin Barwell: For the record, I think it would be unfair to characterise my response as in any way complacent.  I put on the record my offer to the hon. Lady in the debate, and afterwards when I came to speak to her, that I would be very happy to come to her constituency to see these cases and to raise the case directly with the housing association concerned.  The description she gave in that debate of what some of her constituents have had to endure is completely unacceptable.  I am very happy to put that on the record now.  The regulator is independent.  Ministers cannot interfere in the detail of how the regulator does the job.  What I certainly can do is raise her concerns directly with the housing association concerned. 

Q25          Rushanara Ali: Just to clarify, Minister, I did not mean you were being complacent, but there is a complacency in terms of what has happened so far.  It is hundreds of cases, potentially in the thousands, if we look in the round at other areas and other residents that are affected.  We need action fast.  There has been, in my view, some complacency in terms of the regulator not stepping in quickly to give the warnings to the organisation, so that action is taken to address the problem and my constituents and others do not have to wait months, in some cases, for very critical issues to be resolved.

Gavin Barwell: The changing nature of housing associations offers a real opportunity in terms of driving up supply, which I would hope we all want to see.  You are absolutely right to say that we need to make sure they stay true to their mission statements.  We need to keep a very close eye on these things.  As I said, I am very happy to come and look at this particular case.  There are other examples of associations that have gone down this route and are still providing a very good service.  We need to understand what went wrong in this case and get it put right as soon as possible.

Q26          Mr Prisk: Can I turn to supported housing?  Two months ago, the Government set out their intention to have a new funding model.  Eight weeks on, how will that model work?

Marcus Jones: Mr Prisk, you make an extremely good point.  It is a really important issue and one where we need to settle the market in terms of making our intentions very clear.  We did that in a written statement in September, where we made it very clear that we will defer the application of the LHA policy until 2019.  We made it very clear that, from then, rent would be paid at the LHA rate and then topped up by local authorities in a ring‑fenced fund that would be equivalent to the funding being put into this particular area at the moment.

We are working very closely with the DWP and other Government Departments in relation to the solution, so to speak, and we expect to come forward with that solution in a reasonable period, so that we can then provide further confidence to the market.  We have already received very positive feedback from a number of organisations, not just housing associations but also charities like Women’s Aid, for example, which has been quite supportive of the announcement that we have already made.

You are absolutely right.  We need to come forward with this in a reasonable space of time and that is what we absolutely intend to do.  There is a lot of work going on within Government at the moment to address this issue.

Q27          Mr Prisk: We might come back to what is a reasonable space of time, in the light of answers to previous questions.  Having been sitting there some years back, I am aware of the Whitehall definition of “publishing something soon”; I probably said it myself.  Can I also ask about the question of the devolved funds?  Is this going to be a permanent solution or is it something that will tide us through for just a few years?  The problem, thinking of the YMCA in my own area, is that many of these are charitable organisations.  If this is just two or three years, it is not going to work.  They need to know this is a permanent establishment.  Do I take it that they can have that assurance?

Marcus Jones: As you quite rightly identify, it is about confidence of the organisations involved and developers to invest over a long‑term period.  I can say to you that we are absolutely committed to that.  We have committed to ring‑fencing the amount that will be required to go to local authorities, but we are also looking very carefully at what we expect the cost to be, going forward, to make sure we can give confidence to the organisations that we want to keep providing this type of supported housing and enable them to take a significant amount of capital funding from the Government to provide new units.

Q28          Helen Hayes: Supported housing is an enormously diverse sector.  There are many different types of supported housing in my constituency, which are all equally important to the people that they support.  I accept the point about the ring‑fencing of funding, and I know that the announcement about the separate special protection for domestic violence refuges was particularly welcome.  Under the new arrangement, what is to stop councils deciding at a local level that some forms of supported housing are perhaps more important or more valid to their area than others and distributing the ring‑fenced fund for supported housing in a less broad way than it currently is at present, to the detriment of some of those communities that are served by supported housing?

Marcus Jones: That is the type of thing that we are looking at within the work that we are currently doing.  We also want to make sure that local authorities apply the funding to the purpose of supported housing, and not juggle the funds around within their treasury department where they can use funding for other purposes.  We are looking very carefully at how we make sure those funds are applied to supported housing.

Helen Hayes: I am thinking, for example, about the difference between supported housing for older residents and supported housing for ex‑offenders.

Marcus Jones: That is one of the beauties, if I can use the term, of having a devolved system, because in many places there will be different circumstances.  You have local authorities where there are prison populations, for example.  You have local authorities where there are a far higher number of older people than younger people, for example.  This will supplement the work that local authorities are already doing in terms of commissioning this type of housing anyway.  It will provide a better package, as long as we are able to put the funding to it that we have committed to do.

Q29          Melanie Onn: I just wanted to ask a question about the 1% rental cut for people in supported and, I believe, sheltered housing.  Can there be a commitment to residents in Chatteris House and Bovill House, in my constituency, that their provision will not be closed, and similarly, around the country, that those sorts of services will not be closed as a result of that cut?

Marcus Jones: We have done an extensive exercise of speaking to housing associations and other providers, consulting and discussing the issues with them.  We have done that in regard to the solution that we have come forward with as well.  While the organisations in question, in a desirable world, would not necessarily want to take the 1% rent reduction, I do not sense a feeling coming back that it will lead to a widespread closure of provision. 

It is important to remember in this context that, while we are willing to put the funding in as we have committed to for the extent of the provision that is being provided now, there is a necessity to deal with the deficit and reduce Government spending.  This is part of that and, in the context of the amount of funding that we are talking about, this is a far smaller amount than could possibly have been the case.  That has been recognised by many of the organisations we are dealing with. 

I would also say to you that many of the organisations, particularly the homelessness organisations, have been very pleased that the shared room rate will not apply to people living in supported housing.

Gavin Barwell: It is perhaps worth adding briefly, because we do not necessarily know the particular places you named in your constituency, that refuges, alms houses, community land trusts, co‑operatives and specialised supportive housing have been exempted from that policy.  It is worth putting that on the record.

Sajid Javid: In exceptional circumstances, if a supported housing provider comes to us and can demonstrate that that particular policy—the 1% reduction—will put them in severe financial difficulty, then we can make further exceptions.

Q30          Mary Robinson: Moving on to planning now, local authorities have a responsibility and duty to have a local plan that has been agreed locally and judged as sound by the planning inspector.  Sitting alongside that is the responsibility and the ability of the Minister to intervene in those local plans, as recently happened with Bradford.  How does that ability for ministerial intervention sit with the localism agenda and the spirit of localism?

Gavin Barwell: Our presumption would be that, in the vast majority of cases, we should not exercise that power.  It is worth putting on the record that, in respect of Bradford, we have not yet intervened.  All we have done is issue a holding direction, so we can consider whether the issues raised there would merit intervention or not.  It is important to clarify that. 

In the vast majority of cases I would expect local authorities to produce their own plans, to have them independently inspected and then to adopt them.  There are occasions where a policy in a particular local plan might give rise to issues of national significance.  It is reasonable for Ministers in those circumstances to consider that.

Q31          Mary Robinson: Is it the national significance criterion, then, that would be the key issue?

Gavin Barwell: It would have to raise an issue of that kind, certainly.  These intervention plans have only been used on three or four occasions.  They are used very sparingly, much in the same way that, on rare occasions, Ministers will either recover appeals from the Planning Inspectorate or call in planning decisions for ministerial decision.  They are a very small minority of the total quantum of planning decisions that are taken.

Q32          Mary Robinson:  In terms of the localism agenda, and neighbourhood forums and their plans, how will the power to intervene relate to those circumstances where there is a very local plan, a neighbourhood plan, and then maybe a local authority plan?

Gavin Barwell: To the best of my knowledge, we have never used those powers in relation to neighbourhood plans.  One of the key underpinnings of the neighbourhood planning legislation is that neighbourhood plans have to be consistent with the strategic policies of the local authority plan that sits above them.  If we get to a point, which I hope we will very shortly, where all local authorities have an up-to-date local plan, then neighbourhood plans proceed from there and there should not ever, therefore, be any situations where an individual neighbourhood plan is raising issues of national significance.

Q33          Mary Robinson: What is the position where neighbourhood plans have been brought into force prior to the strategic plan?

Gavin Barwell: They are always examined before they are brought into force.  There, the test would be both against whatever local plan framework was in place—there might be a partially out of date local plan, for example—and against the National Planning Policy Framework, to test compatibility with national planning policy.

Q34          Mary Robinson: The localism agenda would sit very fairly and squarely with the more local level, though.  How would that spirit of localism be reflected through the local authorities’ plans and your ability to intervene?

Gavin Barwell: As a starting point, what we want to see in the planning system is full coverage of local plans, where local communities have had an input into what development should happen in their area, where it should go, what sites are suitable for development and where needs to be protected.  Below that, some of the detail can be filled in by individual local communities using neighbourhood planning. 

The Secretary of State referred to the Neighbourhood Planning Bill, which we are taking through Parliament at the moment and which strengthens that regime.  Government have a responsibility in terms of setting the overall policy framework and, as I said, reserving in exceptional circumstances the right to intervene in either individual plans or in specific planning applications.  The most likely circumstance for intervention by Ministers is in making sure that we get local plan coverage. 

I am very clear, from the few months I have been doing this job already, that the way to stop a lot of the contention that we see in the planning system at the moment is to get local plans in place across the country, so that developers can be very clear about local communities’ expectations, where they want to see development go and the sites in the area that are precious to people that they want to see protected.

Q35          Mary Robinson: To get those plans in place, planning authorities need to have the planners and the departments working well.  There has been a suggestion that there had been a reduction in resources.  What will you be able to do to support local authorities and their departments?

Gavin Barwell: It is a message that the Secretary of State and I have had consistently in our job.  On lots of issues, people say contradictory things to us, but this is one where virtually everybody who has come into either of our offices has said the same thing.  The Department recently consulted on resourcing of planning departments.  There is a White Paper coming later this year and you can expect to see our response to that consultation in the White Paper. 

Q36          Mr Prisk: Briefly on that point, what role do you see for planning resource agreements in localities?  Westminster does this, although I can see it is not necessarily relevant to every planning area.  Do you think there is a role for those as opposed to planning fees or to complement them?

Gavin Barwell: There is certainly a role for those.  As you say, it is probably one of those situations where the arrangements will work in certain parts of the country and not everywhere.  Alongside them but not to replace them, I would suggest, across the country.

Q37          Mr Prisk: Would you want to encourage them?

Gavin Barwell: Absolutely.  It is something that is worth looking at.  Lots of developers say to us, for example, that they would be prepared in certain circumstances to pay additional fees to the normal ones in order to have a premium service, essentially.  One of the things that Government always have to bear in mind when thinking about planning fees is that they are paid by individual families who are looking to extend their home, but also by very large public limited companies, which would often be prepared to pay significantly more because, as a quantum of their potential profit from a development, they are a pretty small share.  You always have to strike that balance when it comes to planning fees.  Those kinds of agreements or other flexible arrangements are all worth looking at.

Q38          Chair: In terms of the Planning White Paper, will you also deal with the recommendations of the Local Plans Expert Group?

Gavin Barwell: We have partially dealt with them already through some of the amendments that we have laid to the Neighbourhood Planning Bill.  If you would like me to run through those, I would be happy to.  We have dealt with several issues in amendments that we tabled during the Committee stage of that Bill, if you would like me to expand on those.

Chair: It might be helpful to do that.

Gavin Barwell: We have laid an amendment that will make clear that there is a statutory requirement to have a local plan.  We have tabled amendments that would give the Secretary of State additional powers to intervene in situations where a local authority is not producing a local plan, either to ask a group of authorities to work together to produce a plan over a wider area, or in exceptional circumstances to enable us to ask a county council to get involved in producing a plan.  We have also tabled an amendment in relation to the publication of planning policies in a digital form.  I think there is huge potential there. 

It may be of interest to the Committee: I had someone come to my constituency surgery a couple of months ago, and this person had a very detailed map of a particular town from the ONS and he had graphically overlaid on that the planning policies of the relevant local authority.  This system had identified 351 small sites in that area where the planning policies of the council would say housing development was suitable.  He was then planning to work with small builders in that town through joint ventures, with him essentially taking the planning risk and them building the sites out. 

If we had a common format in which to publish this information, it could do a huge amount to provide visibility to people about what planning policies mean in practice, which sites are suitable for development, as local communities see it, and which areas are protected.  Those amendments have gone down, but the rest will be responded to.

Q39          Chair: The common measure of housing need is something the LGA identified.

Gavin Barwell: That is not covered by the amendments.  The Secretary of State said, in his speech at Second Reading, that he was broadly supportive of what the Local Plans Expert Group had said, and we will be responding to the remainder of the recommendations as part of the White Paper.

Q40          Helen Hayes: I want to turn now to adult social care.  The Secretary of State and his team will be aware that this Committee is currently undertaking an inquiry into adult social care, which will report shortly.  We are seeing significant evidence, as part of that inquiry, that there is a growing gap in funding and an increase in the number of adults with increasingly complex care needs.  I would ask, in that context, whether you believe that you are funding adult social care adequately.

Sajid Javid: This is one of the most important services that any local council provides.  For that reason, not surprisingly, since I have come into this job, it is one of the first things that councils bring up, because they release how important it is for their communities. 

They are seeing big increases in demand across the country.  Many councils have faced big demographic changes over the last few years and that has had a big impact.  That is why the Government have already recognised the need for significant additional resource.  That is why we have put in place over this spending period, over this Parliament, an additional £3.5 billion of funding altogether.  Some £2 billion of that is through having more flexibility to increase council taxes through this new precept—increases of up to 2% a year.  The vast majority of councils have indicated they either already have taken or will be taking advantage of that.  By 2020, that will be about £2 billion a year of additional resource.  There is also the better care fund, which comes in over time, but by 2020 will be £1.5 billion. 

Taken together, that is a significant increase in resource.  Implied in your question is: “Is that enough of an increase, given the increases in demand?”  We need to listen carefully to those who are providing these services and not least take into account some of the additional pressures they are facing, not just the demand but on the cost side, especially through the introduction of the national living wage, which applies to more than half the workforce in the adult social care sector.  We are watching that and working closely with councils on it. 

My Department is working closely with both the NHS directly and the Department of Health, because, as you will know, Ms Hayes, and the Committee is aware, one of our ambitions is that by 2020 we see integration plans across the country of health and adult social care provision.  Ultimately, that will be one of the ways in which we can deliver a more efficient service.

Q41          Helen Hayes: We will return to integration between health and social care in a moment.  Many local authorities have submitted evidence to this Committee that indicates that the social care precept, while it is a welcome contribution to the funding of adult social care, does not meet the shortfall that is left by the wider cuts to their budgets, and in some cases does not even come close to meeting that shortfall.  Can I press you a little on what your plans are for the future of the social care precept?

Sajid Javid: We are sticking to the announcement that was made in the March budget, which is hugely significant in terms of the extra resources it can provide, coupled with the better care fund as well.  We will, during this time, keep things under review, to make sure that what we are providing or enabling as additional resource is sufficient, and work closely with other Departments, to make sure the information we have matches what they have.  All I can say at this stage is that we are aware of the pressures.  We have, at the same time, released significant new funding, but we will keep it under review.

Marcus Jones: In that context, you may be aware that the disabled facilities grant was increased significantly—more than doubled—during this Parliament; it is now £500 million.  One of the challenges that we have is to keep people living well and in their own homes for as long as we can.  That is good, not just from the point of view that they are in their own environment, but because it keeps them out of the acute healthcare environment and reduces the cost to the health service.  It is important to point out that many local authorities are now using that to reduce the cost of providing social care, because it is allowing them to keep people well for longer.

Q42          Helen Hayes: Clearly, that increase in funding is welcome.  The overwhelming evidence this Committee is receiving from local authorities is that there is still a huge problem with the resourcing of adult social care.  Turning to the better care fund, I believe it was me who asked the question of you, Minister, as to whether you thought that there would be a problem, given the back‑loading of the better care fund, with capacity in the care sector in the short term.  Local authorities are feeling the squeeze in terms of cuts to their wider budget, but the better care fund does not kick in until 2019-20. 

Again, as part of this inquiry, we are seeing evidence of care providers handing back contracts to local authorities, because they are not financially viable to run those contracts any more, and evidence of care homes closing.  You gave your assurance that you thought there would be no loss of that capacity.  We are seeing, as part of this inquiry, evidence that that loss of capacity is indeed occurring.  Will you consider bringing forward the increase in the better care funding to address that crisis?

Marcus Jones: If I take us back to last year, we spoke at great length before the spending review to local government organisations like the LGA.  It was flagged up at that point that they wanted around £2.9 billion of extra funding over the spending review period.  We looked at it very carefully and, with the social care precept and the flexibility on the council tax referendum threshold—the adult social care precept—this package is worth up to £3.5 billion. 

There is an issue in relation to provision in some areas and we need to be very aware of that.  We also need to look at this in the context of the wider situation.  We have many areas now where the demographic has changed and there is very much an older demographic, compared to a number of neighbouring areas where people have migrated as they have got older.  Perhaps we will come on to this in a moment, with the needs assessment in relation to business rates retention.  We need to look at this situation very carefully in the context of the work that is happening there, because there is a big question as to whether at the moment we have the balance right.

Q43          Helen Hayes: Turning to the question of the integration of the NHS with social care, do you agree with what seems to be an emerging consensus across the sector that there is an argument for some NHS funding to be directed to social care, but particularly where it has the capacity to keep older residents out of hospital by providing better support in their homes and enable people to live more independently for longer?

Marcus Jones: The original better care fund does that because the funding that goes to local government goes through the NHS in that sense.  Within our vision for health and social care and where we want to get to by 2020, we want to see it as a joined‑up service, where the public do not know whether it is the health service or social care because it is integrated so well.  I think you are saying, Ms Hayes, that you believe we need to get to that position. 

In regard to that, where we will be in 2020 is probably a very different place than where we are now.  Going back to the point that the Secretary of State made, the cumulative effect of the social care precept and the additional council tax, once we get to 2020, will put local government in a far better place to give the confidence for the health service to integrate fully across the piece.

Q44          Helen Hayes: Talking about a journey towards further integration, in the meantime, the NHS is fully engaged in the STP process, which is resulting in fairly dramatic restructuring of services in some areas, fairly dramatic cost savings in others and a reconfiguration of services across wider health economies.  Do you think that local government has been sufficiently involved in that process to be drawing down and capitalising on the benefits and the cross‑savings that should come from a move towards further integration?

Marcus Jones: In terms of the STPs, the health service is working up plans at the moment in that regard.  Health and wellbeing boards will be part of that process.  I know, from speaking to colleagues in the Department of Health, that they fully expect local authorities to play a significant part in any changes that are made or not, as the case may be in a particular area.

Q45          David Mackintosh: On this point, I welcome the funding around the social care precept, the better care fund and the increase in things like the disabled facilities grant, but in my view, and from the inquiry that we have currently underway into adult social care, one of the challenges is around the structural issues we face at local government level.  Increasing the disabled facilities grant will give money to one part of the local government family, but adult social care will be undertaken by others in some parts of the country, like my area where there are two‑tier authorities. 

I wonder, in keeping with the theme of trying to work closer with the NHS and hospitals integration, which is really needed, how you will use your power around devolution packages to bring together some of these bodies and bring about that structural change as well as the increase in funding.

Marcus Jones: You make an extremely good point.  Quite often, the disabled facilities grant goes to the district council as the lower‑tier authority, and adult social care funding and the statutory responsibility for adult social care goes to the upper‑tier authority.  It is certainly the view of this Department that, when we are looking at devolution deals, we want to look for deals that include innovative thinking and different ways of doing things.  Where local areas want to innovate and bring that type of package together for adult social care, as a Department, we will certainly listen.

Sajid Javid: A good example of that in the current batch of devolution deals is the Greater Manchester deal, which in this regard, in terms of integration of the NHS and adult social care, is easily the most advanced.  That partly came about because there was a local ambition for it.  Local leaders there came together, working with the NHS, came to Government and said, “We think we can do a good job.  We can get the efficiencies.”  They made a good case.  That demonstrates that our door is open for other areas, as they go through the process of devolution, to look at such deals.

Q46          David Mackintosh: I welcome that.  We have visited Greater Manchester and seen that in practice.  Where the local level ambition is not there, does your Department want to look at ways in which we can encourage that to happen?

Sajid Javid: Yes.  That is why it is, generally speaking, our ambition that by 2020 we have integration deals, if we can call them that, with each area of the country, in terms of working with the NHS but maybe also integrating services more broadly in their region.

Q47          Melanie Onn: Over the past year, we have seen 118 local authorities volunteer to participate in supporting vulnerable Syrian refugees.  For the first year, the programme team has specified what local authorities are responsible for providing, but that is not the case for years two to five.  I wondered whether there is more that the Government could be doing, and what specifically are you doing, to help local authorities provide accommodation and school places for those refugees?

Marcus Jones: We are absolutely aware that, in year one, there was the funding package in the context of the foreign aid budget that was used to support Syrian refugees coming in on our resettlement programme.  Years two to five are also extremely important, and that is why we have committed £129 million at the spending review in 2015 to assist local authorities in that context.  We will be working with those authorities that have taken and continue to take Syrian refugees to use that funding in a positive way, so we can allow those councils to support the people that they have been kind enough to take in.

Q48          Melanie Onn: Those local authorities that have not participated have specifically cited a lack of suitable accommodation and school places.  Is there any assistance being offered to those authorities that have not yet participated to achieve the 10,664 additional childcare and school places that would be needed over the next five years?

Marcus Jones: We have made abundantly clear that we will not expect any particular local authority to take more Syrian refugees than their local structures are able to cope with.  That is the important thing here.  We were not intending at the outset to bring thousands of people from Syria and put them into one or two areas of the country.  We wanted those people to be integrated throughout the country, and local authorities of all political persuasions have come forward in a very positive fashion to accommodate those refugees. 

I would like to reiterate that we have not mandated any authority in this regard, and we certainly do not want local authorities to feel obliged to take more people than their local structures can cope with, because we are concerned to make sure that people have the right infrastructure in areas, rather putting them in a position where they cannot cope.

Q49          David Mackintosh: I want to talk about business rate retention.  I just wondered if you could update the Committee on your analysis of the business rate consultation process.

Sajid Javid: We are still very committed to the whole policy of 100% retention by 2020.  It will be a fiscally neutral event.  Approximately an additional £12.5 billion will go to local authorities collectively, and local councils will take on new activities, taking account of the additional funds they will receive.

It does give local authorities something many have been asking for for years, if not decades, which is more autonomy over local finances.  They will be able to keep any increase in rates they generate by attracting new businesses and other activities that generate more growth.  At this point, we are working out exactly how that would work and what additional responsibilities councils will take, but we have also announced, alongside the business rates review, the fair‑funding review or the needs‑based review, to take into account, first of all, that there has not been a proper fresh look at local authority funding based on needs for well over a decade.  This is the right time to do it.  A decade is a considerable amount of time and lots has changed, not least the demographics in many local authorities, but it also fits in well with the retention policy.

Q50          David Mackintosh: In terms of the consultation, when can we expect to see the responses and the analysis of it?

Marcus Jones: If I can just recap in terms of the consultation itself, the point of the consultation was that we deliberately wanted it to be open so that local authorities would be able to give us their views, particularly in terms of how this system would work to benefit local government.  We have had a significant response.  The consultation closed on 26 September.  We have had 450 responses from local authorities and other organisations in terms of this consultation.  We are currently analysing all those responses and we will then look to confirm the direction of travel in this regard. 

We also have, next year, the legislation coming forward to put the framework in place for the business rates retention system as we want it to look by 2020.  As you can imagine, there is a lot to do between now and then to shape the direction of travel in terms of how the system will look, taking into account all the various factors that we need to as we get to that point.

Q51          David Mackintosh: Notwithstanding anything that comes out of that consultation process, is it fair to say that this is currently on track and intended to go live on the date that we anticipated in 2019-2020?

Marcus Jones: I would say that it is on track.  A significant amount of work is being done by our Department at the moment to put us in the position to put the enabling legislation in place early next year.  We may need to do further consultations as we go through this process.  We have all sorts of different things to look at.  We have to work out what new burdens councils will take on for the additional £12.5 billion that is going to local government; that is a significant job in itself.  We have heard very loudly from local government in terms of some of the things they might not want to see in that mix.  We are analysing those responses very carefully. 

We also have to look at the important issue of redistribution and how that may look.  We have to make sure that, because some areas do not raise as much business rates as others, they do not lose out from day one of this process.  We have to look at how we incentivise local authorities, because this is the big win: that you widen the business rate base and you get to keep a significant amount of that funding, but we have to manage that against risk.  We have to make sure that we give a strong incentive, but also that local authorities are not left in a position where, if they get a significant revaluation or a business closes, for example, it blows a hole in the particular local authority’s budget.  

Added to the needs assessment that the Secretary of State mentioned, these are all things that we are taking significantly into consideration.  We had 200 responses to the needs assessment consultation that was done at the same time.  To answer Mr Mackintosh’s question, we are on track.

Q52          Bob Blackman: In terms of the piloting of 100% business rates retention, I understand you are talking to seven different types of authorities.  Have we any indication about how this is going to work as a pilot?  Are you going to try different things for different areas, given that you have a mixture of counties, boroughs and so on, or is it going to be seven pilots, very similar?

Marcus Jones: You are making a good point, because there are different structures of local government in different areas and we need to take that into account.  We are currently working up and nailing down what those pilots will look like.  I would say to you, Mr Blackman, that we are considering the pilots in terms of how they will look.  Taking into account your comments, at this point I am not able to tell you whether it will be one system or the other, or a mixture of both, but we are certainly considering those points very carefully.

Q53          Bob Blackman: One of the considerations is new responsibilities with 100% business rate retention.  Are new responsibilities going to be devolved to those councils that take up this pilot process?

Marcus Jones: That may well be a longer-term approach.  The initial pilots may well just be around the grant that is received from the Government in the context of business rates.  As we go through and get more advanced with this, as we get towards a position where this will be implemented fully, we will look at what we can devolve in those pilots, having worked out what we intend to devolve across the piece shortly thereafter.

Q54          Bob Blackman: What do you expect to get out of the pilots themselves in terms of output, given that you are going to start in April 2017 and the whole rollout will start in April 2020?  Lessons have to be learnt; otherwise there is not much point in doing a pilot, is there?

Marcus Jones: You are absolutely right.  It will be a gradual approach where not everything will be completely devolved from day one, and there will be different places where we are able to test out different levels of devolution in that context.  The Secretary of State has already referred to Greater Manchester, which is far more advanced than any other place in the country.  We are constantly learning lessons from that situation and that will feed into our thinking for how the full system will work.

Q55          Bob Blackman: Moving to another area, can you explain, Secretary of State, why the intention is to cap local and parish councils, given that they account for only a very small amount of council tax?

Sajid Javid: It is something we are looking at in terms of making sure we have the right processes in place to prevent council tax bills from growing too fast.  It is not something we have made a final decision on yet.

Q56          Bob Blackman: When do you expect to announce the position?  A lot of the local authorities are putting their budgets together right now. 

Sajid Javid: We are conscious of that, and we want to do it in time so that local authorities can take it into their plans.  It is something that is very live at this point and we are making final decisions on it.

Marcus Jones: Can I elaborate on that?  It is something that Government have been mindful of for some time.  To put it in context, last year the average parish precept was well over 6%.  Inflation is far less than that, and that has caused concern within many communities. 

There are two things, though.  There are places where parish precepts have been increased significantly without any additional burdens being taken on by that particular parish, and there are situations where parishes have taken on significant increased burdens and they have put the precept up.  In the consultation that we have put out and are currently considering the responses to, we have made it quite clear that we would not look to apply strict referendum principles to a place where they have taken on additional burdens and responsibilities that they would need to increase the precept to cover.

Bob Blackman: That is helpful.

Q57          Chair: Minister, you mentioned very properly the twin objectives.  The Committee has been very supportive of the 100% business rate retention scheme in principle.  You mentioned the need to give incentives to local authorities to increase development and raise their own money, but also the issue of redistribution to those areas with less ability to raise money and greater need.  Do you really think those twin objectives can be fully met in a system with no external grant in it at all?

Marcus Jones: We are looking at that very carefully.  The important thing with this is that we are speaking to the sector to try to get as close to those principles as we can.  We have a working group with the LGA where we are currently working through the answers to many of those questions.  We are making progress.  There is a lot more work to be done and it is a challenge, as you quite rightly identify.  Our aim is to get as close to those principles as we possibly can.

Chair: We look forward to you coming back and giving evidence to us when we start again with our inquiry, when you are in a position to do that.

Q58          Melanie Onn: The north‑east deal collapsed on 7 September.  The Sheffield deal is under threat of judicial review.  Greater Lincolnshire collapsed on 20 October.  Norfolk and Suffolk lost four districts in June and the Isle of Wight voted against the Solent deal on 19 October.  Do you think that devolution is losing momentum under your leadership at all?

Sajid Javid: Not at all.  It is going from strength to strength.  My Minister here is getting excited.  He senses an opportunity to talk, but not yet. 

Melanie Onn: Uncharacteristically quiet.

Sajid Javid: You might get to say something throughout the whole Committee.  The first thing to recognise, very generally, is that we are not just pursuing devolution for the sake of devolution.  We genuinely believe that, done rightly, it can help to boost local growth and local productivity.  We have a big problem in particular with productivity in this country, where the south‑east is very strong and the regions are far behind.  One way to deal with that is to have more local decision-making, but that decision-making must be over what I would call an economically functional area.  That is why we are trying to work with local councils and leaders to bring these areas together on a voluntary basis.  It is a bottom‑up process.  It is for local leaders to agree to where they can see the benefits. 

Ten deals were announced back in the March Budget.  It is fair to say that turned into 11 when East Anglia broke up into two, but then you referred to the north‑east deal as well, which is one of those that were announced, but is definitely not going ahead.  There is a process of reaching an agreement with each area.  Each one was in principle.  Each area looks at the deal and, once they have finished their consultations, then they are required, in almost every case, to have the votes of all the constituent members of each combined authority.  The final decisions are often made by the chief executives, in consultation with the respective leaders of each local authority. 

There is a process to go through, and no one would be surprised that, at the end of that process, there might be one or two that no longer want to continue with the deal.  It might be for economic reasons.  It might be for local political reasons.  There could be a variety of reasons, but we are not going to impose these deals on any area.  If they come forward and stick to the deal, we will stick to our side of the deal.  Where they are agreed, they go ahead and we have the mayoral elections, they will be transformative.

Melanie Onn: You said final decisions will be made by chief executives, not elected individuals.

Sajid Javid: I did not say that.  I am happy to clarify, if you like.

Q59          Melanie Onn: If you could clarify it, I would appreciate that.  With regard to the votes that have been undertaken, you mentioned that those are only advisory.  Is it the case with all votes that you would only be saying that they are advisory?

Sajid Javid: Which votes are you suggesting are advisory?

Melanie Onn: The votes around the devolution deal.  You are saying they are only advisory, because the final decision will be taken by chief executives and leaders of councils, regardless of the votes taken by local authorities.  Is that correct?

Sajid Javid: No, it is not “regardless”.  Let us take Greater Lincolnshire, for example.  Altogether, there are 10 constituent members of that.  Each council, with all the elected members of that council, will take a vote—and I think they all have now—and decide whether they agree with the principle of the deal and going ahead with the deal, now that they all have the final details of the deal. 

In doing so, the council decides whether they want that to be the final decision for their council, or if they want the ultimate decision, when the final order is published—because they are working off a draft order at this point—to be delegated by them, the elected leaders, to their chief executive and council leader.  That is a decision for them to make.  We are not telling them how to make the decision, but in each and every case it is a democratic decision by locally elected members of the council.

Q60          Melanie Onn: For example, Lincolnshire County Council may vote overwhelmingly to reject the Greater Lincolnshire deal, and then there will be a subsequent vote to decide whether to devolve the final decision to the chief executive and the leader of the council.

Sajid Javid: Let us take that particular example, and the Minister will use it to explain.

Andrew Percy: The issue, Ms Onn, is that in Lincolnshire they have a strong leader model, which is the same model that they have adopted in South Kesteven.  The votes of the council are advisory, but because they have adopted the strong leader model the executive, which is democratically elected councillors, in both Lincolnshire County Council’s case and South Kesteven’s case, can make the final determination. 

The Secretary of State is absolutely right that, in terms of the final order, most councils are choosing to devolve the final agreement on the powers, orders, etc., to the leader, in consultation with the chief executive, but the decision to proceed at every step of the way is taken democratically according to the governance structure that that local authority has adopted.  In Lincolnshire’s case, it is a strong leader model, so it is vested in the leader and his executive.

Q61          Chair: In any of these deals, if some councils have decided they do not want to go ahead—or sometimes just one council—if the rest of the councils want to go ahead with the deal, what is the Government’s position on that?  Would you then allow them to take up the deal and get on with it?

Sajid Javid: Not with those particular deals.  For example, Ms Onn had mentioned the north‑east deal.  In that case, you had seven councils.  When it came to making a decision and each of those respective councils voting on that deal, four of the councils decided not to go ahead with the deal.  When you have four out of seven, in that case it is crystal clear that you cannot go ahead with that particular deal.  It just does not have the support required to make it a success. 

In almost every case, councils had a consultation in advance of making a final decision on the deal.  That is the case, for example, in the Greater Lincolnshire deal, and that includes, therefore, the 10 constituent members of the proposed combined authority.  Even if one of the 10 then rejects the deal or makes the ultimate decision not to be part of the deal, it will end the entire deal, because the consultation was done on that basis.  To try to continue with a new deal, let us say with nine members, would require the process to start again.

Q62          Mary Robinson: In Greater Manchester’s case, 10 local authorities have had a history of joint working over about 30 years.  Are you finding that, in those cases where there is a history of joint working, the deals are coming together more easily?  In areas where there is not the history, is that not the case?  If that is what is happening, what can we do to further the co‑operation between the councils?

Sajid Javid: That is a very good observation.  You have picked an excellent example with Manchester.  Long before devolution deals were really on the agenda, there has been good co‑operation.  A spirit of partnership and trust across political divides has come about, and that has absolutely helped to bring these deals about. 

In areas where it is more challenging to get agreement across local leaders on deals, I would not put it down just to that.  Again, if we take Lincolnshire as an example, the council leaders there work well together in many other respects, for example on joint transport, with some joint spatial plans and ideas.  There is a history, maybe not as deep as the Manchester example. 

Ultimately, part of it is just trying to work with local leaders and showing them the benefits that can take place for their local residents.  Again, it brings me back to the point of productivity.  When you are able through a functional economic zone to better address issues such as transport, make more strategic decisions, share spatial planning skills, it will benefit the local community in terms of growth and productivity.  Of that, there is no question.

Mary Robinson: We move seamlessly on to Brexit.

Chair: Saving the best until last.

Sajid Javid: I thought we would get away without discussing that.

Q63          Mary Robinson: I want to have a look at how local government is going to be involved in these Brexit arrangements, particularly with regard to the funding.  I know that some assurances have been given with regard to the £5.3 billion of EU funding committed to local regeneration schemes.  How is that commitment going to be successful and what part will local government play in the negotiations?

Sajid Javid: First of all, the instructions of the British people are clear.  We are getting on with the job of Britain leaving the EU.  No one pretends it is going to be a straightforward process.  There is a long way ahead yet.  Every Government Department is involved in that, some more than others.  Clearly, DCLG has a role to play.  You mentioned funding, but perhaps I could share with you other areas in addition where DCLG will have a role to play. 

One thing that is important is for me and my Ministers to make sure we are properly involving local leaders, listening directly to those organisations that might be most affected—the LGA, the DCN, the CCN and all these key groups—and making sure, where they have concerns or issues over the coming months and years, that those voices are heard, particularly within the Department for Exiting the European Union, but also round the Cabinet, because there will no doubt be many discussions about exactly what our approach should be. 

The first and probably most important issue that has come up here and now—and there was some direct Government response to that; you have just referred to part of it—is around local government funding.  As we all know, the EU regional funding has been an important source of funding for almost every part of the UK.  It was important to bring clarity to that as quickly as possible after the referendum.  It was good that, once the new Prime Minister was in place, the Chancellor could very quickly confirm that any deal signed up until the Autumn Statement would be honoured in full. 

Very recently, the Chancellor went further than that, and this was welcomed by local leaders and local businesses, to say that any deal signed before we exit the EU could also be funded in full, even if the funding goes beyond the exit date, subject to those deals meeting our own national priorities and as long as we can confirm that they are good value for money. That, again, was welcomed by all. 

Beyond the ERDF, I have had questions around the funding from the EIB—the European Investment Bank—particularly where it has sometimes worked with housing associations.  We are getting questions around whether the EIB will still be involved and in what way.  I am not able to answer all those questions at this point, but we are listening, taking note of those and discussing them internally.  I know colleagues within Government and other Ministers will be discussing them with EU partners.  At this point, it is important to hear from others about where they think the concerns are.

There are also opportunities when it comes to local government funding, in terms of local growth‑type funding.  The longer-term opportunity is the ability for us to fashion, if we wish to do so, a type of local funding that is much more bespoke to our own national needs, not having to have rules that are set elsewhere.  It also throws up opportunities for local areas, perhaps working on a pan‑regional basis, such as the northern powerhouse, the midlands engine and others, to promote trade and investment more directly and take a more direct role in that going forward.  If you would like, I can talk about some areas that are important in terms of DCLG and the EU, or I can leave it there.

Q64          Rushanara Ali: Secretary of State, since the vote to leave the European Union, racist incidents and hate crime went up dramatically, as you are aware.  Your Department has a role in promoting integration.  I was wondering if you could say a bit more about what additional support local authorities are getting to try to tackle some of the rising levels of intolerance and in order to help promote cohesion.

Sajid Javid: I welcome the opportunity to talk about another part of my responsibilities that I take very seriously, which is the broader communities function.  This falls very much into that, in terms of promoting more cohesion and, alongside other Departments, fighting hate crime wherever we find it.  One of my first visits, within a couple of days of being appointed to this job, was to a Polish community centre in Hammersmith, which soon after the referendum result had been the victim of racist crime. 

That was partly to show the Government’s concern and support for those who are suffering in that way; to show how seriously we take it; and to make sure the programmes that we have in place are really making a difference.  In the last five years, the Government in total spent some £60 million in trying either to fight hate crime or to promote cohesion.  We want to make sure, where we hear such reports from across the country, that those programmes are the right programmes, and if we need to provide more support we will certainly do that.

Q65          Rushanara Ali: Is the Casey report likely to be published?  Does the Secretary of State think that it is going to help this agenda?  There have been reports that some of the potential findings are uncomfortable reading for Government Ministers.  Could you comment on that?

Sajid Javid: The Casey report will be published.  There is a draft report at this point.  I and other members of the Government have looked at it.  It is an independent report and it will be published.  It is very important that this work is completed.  It is very much the start of a process.  There will be a number of recommendations in that report when it is published, and once it is available we want to make sure—

Q66          Rushanara Ali: Do you have a timeline for publication?

Sajid Javid: I could not be specific, but we will not have too long to wait.  I did not want to refer to what Mr Prisk said earlier.

Q67          Rushanara Ali: New Year, before Christmas or after Christmas?

Sajid Javid: It is not too far away.  I do not want to give a specific date, because ultimately the Government does not control when it is published; it is a decision for Louise Casey, the author of the report.  It is very much her report.  The broad work that she is doing on how we can help boost opportunity and promote more integration in some of the most deprived communities in the country is very important.  I cannot comment on the recommendations yet; we will have to consider them carefully, but we will take them very seriously.

Q68          Rushanara Ali: I hope the Secretary of State will forgive me for asking this question, but I could not resist.  Do you regret the comment you made on Question Time about the ruling frustrating the will of the people?  Do you feel it is an appropriate message, given that we need to bring the country together, that people have different views and that those who brought the case have the right to be heard in our judicial system?

Sajid Javid: The comment that it has been reported I made is entirely incorrect.  That is why The Times, the Radio 4 Today programme and others have printed apologies today for suggesting that I somehow attacked judges or the judiciary in any way.  Can I ask you, Ms Ali, have you heard the comments?  Have you watched the television clip and heard the comments directly yourself, or is it second‑hand reporting?

Q69          Rushanara Ali: Yes, relating to the remark referring to the case that was brought and the person who brought the case.

Sajid Javid: Can you be more specific with your question, in that case?

Q70          Rushanara Ali: It is in relation to the different views that people have.  What I asked is: do you regret the way in which it has been reported?

Sajid Javid: Let me be clear.  It is entirely inappropriate for anyone to attack judges for doing their jobs.  We are very lucky to live in a country where we have judges that are rightly independent.  They go about their job and no one should be attacking judges for doing their job.  They have been asked to do something and they are doing it.  Whatever they ultimately decide, and there is an appeal in this case, is what will be accepted by everyone and, of course, the Government. 

I do think it is legitimate, and this is what I did in the comments that you are referring to, to question the motivation of the litigants.  That is entirely appropriate, because I believe that some of the litigants and, indeed, some who support them have motivations to defy the will of the people expressed in the referendum.  It is entirely appropriate to question that.

Chair: On that point, we have slightly lost track of the main stream of our session this afternoon, but nevertheless thank you, Secretary of State and Ministers, for coming and dealing with a whole range of different questions.  I am sure we will be following several of them up, not least when we get the Housing White Paper and the indications from the Government about how you intend to take business rates forward, among other issues.  Thank you very much for coming to give evidence this afternoon. 

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