Devolution agenda is “delegating Treasury cuts”

The government’s financial devolution agenda to local authorities is an “iron fist in a velvet glove” according to Labour’s communities spokesman Jon Trickett.

Trickett, speaking in the Commons debate on the second reading of the Cities and Local Government Devolution Bill, criticised the government for making local government more dependent on central government.

He also said that the bill should contain more detail on how equalisation of business rates would work under new proposals to allow councils to retain all income from the levy.

Trickett said: “The truth is that the Secretary of State is not devolving financial power, or any power. He is delegating Treasury cuts. What the government give in pennies, they take back in pounds.”

He said that the bill lacked measures to introduced financial autonomy and fresh financial arrangements for councils.

“Anything that pretends to offer devolution with one hand while retaining the power to control finances with the other is nothing more than an iron fist in a velvet glove,” he said.

Trickett also called on more information from the government on how redistribution of business rate income between the poorest and richest areas would work.

During an intervention, Conservative MP Bob Neill said that equalisation could take place on a sub-national basis.

“If, as I hope is the case, we see combined authorities and other authorities voluntarily pooling their business rate receipts because that makes sense, particularly if the combined authorities are to be based upon natural economic units so that the development area is not likely to be in the area of one single constituent authority but within the combined authority, the logic then for pooling business rates is all the more enhanced.”

He said that the move could provide critical mass enabling councils to borrow against the income.

The bill passed its second reading following a vote.