HC Deb 30 November 1999 vol 340 cc131-3
1. Mr. John Healey (Wentworth)

If he will make a statement on the Government's proposals for determining the standard spending assessment settlement for local authorities for 2000–01. [99006]

The Minister for Local Government and the Regions (Ms Hilary Armstrong)

I was pleased to announce to the House last week that we have again provided a generous increase in grant for local authorities, which will enable them to continue to pursue with vigour their policies and the Government's priorities for action.

Mr. Healey

I thank my right hon. Friend for that answer. Is she aware that in authorities such as mine in Rotherham there is strong support for the principle of the three-year freeze in SSA changes and for the longer-term finance review? Will she give particular consideration in that review to the treatment of capital financing? Will she condemn last week's comments by councillor Peter Chalke, leader of the Tory county councils network? He said that the settlement demonstrates that the Labour Government is the enemy of the countryside. The average increase for all authorities in the settlement is more than 5 per cent. and the increase for Councillor Chalke's authority in Wiltshire is 5.6 per cent.

Ms Armstrong

I think that Councillor Chalke, along with some Conservative Members, made his remarks before he had studied the settlement. There were no changes in methodology. The settlement showed, as Conservative Members ultimately had to agree, that shire counties got an above average rise. We have to work hard to move forward and ensure that local people understand the settlement, which should reflect the additional money that the Government are putting in so that local people know the priority that is given to public services at local level.

Mr. Adrian Sanders (Torbay)

Does the Minister accept that authorities that find that the SSA formula does not reflect fairly on them have been disadvantaged in year one, disadvantaged this year and further disadvantaged next year? Surely that is unfair. They are having to put up their council tax above the Government's targets and cut services. Surely they deserve a better deal than being told that there can be no changes to the unfair formula for three years.

Ms Armstrong

As I announced to the House last week, we have continued damping arrangements that mean that no education authority receives less than a 1.5 per cent. increase. All authorities knew what they were to get over the three years. It is easier for any organisation to have a three-year plan rather than a single-year plan to decide how money is to be used and how to get the best from that spending.

Mr. Mark Fisher (Stoke-on-Trent, Central)

On the long-term future of the SSA, does my right hon. Friend accept that the effect of the current formula is so bizarre and awry that a city such as Stoke-on-Trent receives hundreds of pounds per child less each year than areas of acute deprivation such as Surrey and Hertfordshire? Will she urge her working party to act as quickly as possible and will she undertake to be bold and radical in tackling a problem that has defeated government for the last 10 years?

Ms Armstrong

My hon. Friend is right to point out that some of the effects of the current formula are difficult to justify locally. That is why we are having a root and branch review. We are working with authorities throughout the country in an attempt to find an alternative to the current SSA methodology. The overwhelming view that was expressed in the survey of authorities that we conducted was that SSAs are not working effectively. It is not just me but the authorities that have to be radical in how they look at future funding. We need a system that is as fair as possible, but they must recognise that it is inevitable that not everyone will be fully satisfied.

Mr. Nigel Waterson (Eastbourne)

Will the Minister confirm that support for shire districts has plummeted under this Government? They have had a cut of £220 million, or 28 per cent., on what they received in 1997–98. Kent is facing an £8 million cut in total grant next year. Does she accept that it is no consolation to such councils, mainly in country areas, as they face great unfairness, higher council tax and cuts in services, that they have what she calls stability for three years? They would far rather have had the chance to come to see her last year or this year to persuade her to change the methodology. Does she accept that in talking about generosity and stability, she is merely disguising the true position, which is that many of the councils are being treated unfairly by the Government not only in year one, but in years two and three, so that it truly is a case of this Government being the enemy of the countryside?

Ms Armstrong

That is arrant nonsense. As the hon. Gentleman knows, shire counties have done better than average this year. No shire county—not a single one—is having its grant cut. Every county and every metropolitan authority is receiving a minimum 1.5 per cent. increase, which does not equate to a cut of £8 million. The hon. Gentleman can project what he would like to spend next year, and then say that a salary has been cut because it is not meeting his budget. That is what he is talking about, but that is not proper budgeting. Kent, along with other areas, is receiving the minimum protection, but Kent is doing better than that. If one adds up the amounts going to shire counties and shire districts, the amount going to the countryside is, to put it mildly, generous.