Contribution
My Lords, I have tabled Amendments 7 and 24 in this group and have added my name to Amendments 14, 31 and 41 in the name of my noble friend Lord Fox. I have also added my name in support of Amendments 5 and 22 in the name of the noble Earl, Lord Lytton, to which he has just spoken. This is an important group of amendments because it seeks to expose the problem that the Government have in applying a higher multiplier to some businesses without targeting them, as we heard on an earlier group this afternoon.
Searching through the Valuation Office Agency’s information reveals, for instance, that about 60 civic centres or town halls, and 80 police headquarters or very large city centre police stations, are included in this higher rate. If the top end of the higher multiplier is applied to these properties, that will add 20% to the business rates bills of those local authorities or police authorities, at a time when both have severe problems with their finances and are struggling to make ends meet.
It is not just police headquarters, police stations and town halls: 80 courts, from the Supreme Court at one end to large magistrates’ courts at the other, are included in the rateable values assessed as being above £500,000—this is in the information that the Minister shared with us at the weekend—as, indeed, are 80 prisons. I am not quite sure why the Government are including town halls, civic centres, police HQs, courts, prisons and 630 schools in the higher multiplier. Why would any Government want to impose 20% higher costs, potentially, for business rates on those publicly funded essential institutions? I am sure the Minister will have a reply; whether it is one I will accept is a different matter. It gets worse: 300 further education colleges are included in this.
We just had a skills Bill passed through this House, which purported to increase the advantages of a skills agenda for young people. Most of us know that FE colleges have been consistently undervalued and underfinanced over the last 10 to 14 years—or even more. Adding this to the list of their problems will not help the skills agenda, nor will 360 state schools. Why on earth would you include state schools in this catch-all of the higher multiplier? Within the budgets and funding for state schools there is an element to cover their non-domestic rates costs. Whether that will be increased for those who are caught up in this higher valuation remains to be seen. I am just quoting from the information that the noble Lord shared.
On top of that, 310 universities are caught up. As I declared earlier, I am a vice-chair of the University of Huddersfield. I know how hard the changes that the previous Government made have hit university funding. Across the country, universities are having to close departments—often those that are vital for the future growth agenda that the Government are following. I need to hear from the Minister how the Government will address this non-targeted way of having the higher multiplier. Will all those state-funded institutions that I listed—local government, police, prisons, courts, schools and FE colleges—be compensated for the potential higher rate multiplier and therefore the 20% increase in their business rates? Universities function as businesses now and have very little income that comes directly from government, but they are facing very challenging financial futures, which is absolutely contrary to what the Government want to achieve from their emphasis on R&D. That cannot happen if universities struggle to make ends meet.
The challenge the Government have is to ensure that the changes result in the same income from NDR as previously. Between 30% and 40% of local government funding now comes from business rate income. As well as my earlier questions, can the Minister assure this Committee that local government will have the same total funding pot from business rates as it does now and—because of the way the system works—that no local authority will suffer a loss in income from business rates as a result of these changes? I will not go into the way it works for local government. The Minister will understand that assuring the total funding pot of business rates does not necessarily mean that each local authority will continue to have the same level of funding.
The question is whether the Minister can assure us that schools, colleges and so on—all those publicly funded institutions that may have to pay considerably higher costs in business rates—will have compensatory funding from the Treasury to meet those additional costs. Otherwise, they are giving with one hand and taking away with the other.
I am going to leave my noble friend to talk about the importance of music venues. The noble Earl, Lord Lytton, knows that I support both the amendments he has tabled, to which I have added my name, and I do not wish to add anything further to what he said. I am looking forward to the Minister’s answers to my questions .