Communities Secretary Eric Pickles has flatly denied to Public Finance that he warned the prime minister that a £500 cap on Housing Benefit would increase homelessness.
Speaking to PF
after addressing the CIPFA annual conference in Birmingham today, Pickles said
he had not issued such a warning to David Cameron. He also robustly defended
the proposals, which he said had been put off until 2013 to give councils more
time to prepare.The issue came to the spotlight at the weekend after a leaked document appeared to show the communities department was at odds with Number 10 over the £26,000 a year benefits cap. The letter from Pickles’ former private secretary to Cameron’s private secretary, written in January, suggested that 20,000 more people could end up on the street.
Pickles and other ministers in his department have since tried to distance themselves from the letter.
In Pickles’ conference address, he said he ‘welcomed’ today's report on the future of local authority audit and inspection from the Commons communities and local government select committee. He drew attention to the MPs’ conclusion that the government’s post-Audit Commission proposals were consistent with wider moves towards localism and greater financial autonomy.
He also used the address to further denounce the watchdog. He told delegates: ‘How can we have confidence in a spending watchdog which has held its board meetings in an Oyster Bar to discuss “improving corporate governance”, and then lost the receipt for the £800 bill?
‘Or which was spending £1,500 a year on flowers for the reception of its Millbank office – which only stopped in September 2010. Didn’t they sense the urgency of the Emergency Budget?
‘Spending watchdogs and district auditors are in no position to lecture councils on financial probity if they themselves don’t care about delivering value for money and protecting taxpayers’ cash.’
Pickles revealed his next plans for greater transparency and accountability in local government to the conference. He intends to extend the requirement for all spending over £500 to be published online to contracts and tenders over £500.
On the Local Government Resource Review, Pickles confirmed that business rates would be repatriated. ‘No more Whitehall hoovering up the rates the second they are collected. No more councils forced to come to the Treasury with a begging bowl... I am determined that councils should see a link between the success of local firms and the state of their own coffers,’ he said.
He added that those with poor business rate bases would not lose out in the new system, denying suggestions that it was a way of ‘punishing our enemies’. He said: ‘We will ensure there is a tariff that moves people to the position they currently are. We will have a yearly yield that we will take from more prosperous councils and put in a central pool.
Pickles said the next stage of the resource review would involve a second wave of Community Budgets, which would be ‘more ambitious’ than the first pilots. This would involve two ‘local’ neighbourhoods and two councils ‘on a bigger geographic scale’ pooling all their national funding for local services in a single pot. ‘And though we are starting on a small scale with these pilots, make no mistake, this is the shape of things to come. Local control over cash as the norm, not the exception.’
Pickles ended his address by praising the contribution of CIPFA members. He said: ‘We are transferring power and freedom over finance because we have faith in councils’ ability – in your ability – to spend cash wisely, to be the guardians of public money.
‘When local government collectively has spending power of some £53bn of public money each year, even a couple of per cent of improvements could unlock a billion pounds’ worth of efficiencies.
‘So keep doing what you do. Making taxpayers’ money count, making services come together, making local government work.’
In a question from the audience, Pickles was probed about the frontloaded nature of the cuts councils are currently facing. He replied: ‘I know it’s tough but you are at the forefront of delivering stability to the British economy. Without this you would be looking at much greater cuts down the line.’
PF’s full video interview with Pickles will be published on the PF website shortly.
