HC Deb 20 October 1993 vol 230 cc270-1
10. Mr. Beith

To ask the Secretary of State for the Environment what representations he has received from northern local authorities about the area cost adjustment.

Mr. Curry

We have received many representations from all parts of the country about the area cost adjustment in the course of our review of standard spending assessments.

Mr. Beith

Has the Minister taken particular note of the feelings of northern authorities, such as Northumberland, which have to meet the same pay settlements for firemen and teachers as authorities in the south but are not compensated in the same way? The system appears to have cost Northumberland £2.5 million in the past year. Since some of those authorities have widely scattered populations and, therefore, very high costs in other respects, will he consider carefully some way to ameliorate the situation quickly in next year's settlement?

Mr. Curry

The fact is that those who get the area cost adjustment think that it is indispensable and that those who do not think that it is disgraceful. We are subjecting the adjustment to careful scrutiny to decide whether it stands up. If it does it will be retained; if not, it will be modified or we will get rid of it. On the right hon. Gentleman's question about sparsity and scattered rural communities, when we announce the review—we are nearing the final stages—I am sure that he will realise that we have sought to identify all those factors that genuinely compel local authority spending. I am sure that he will find that the adjustment is comprehensive, rational, fair and a great improvement on what we have now.

Mr. Robert B. Jones

Will my hon. Friend contrast the question of the right hon. Member for Berwick-upon-Tweed (Mr. Beith) with the stance of Liberal county councillors in Hertfordshire, who are saying exactly the opposite, as Liberals tend to do? Is not it a fact that no proper case has been put for the abolition of the area cost adjustment? The left-wing majority on the Association of County Councils formed by Liberals and the Labour party is out to cane the district and county councils of Hertfordshire and Surrey.

Mr. Curry

All the elements that go into the standard spending assessments are being subjected to careful examination and scrutiny. I am determined that that should be done fully and that the outcome should be balanced and fair. Where an element has stood up to that scrutiny and it is clear that it is justified, it will be retained. Where it is clear that the weighting is wrong, we shall seek to adjust it and when it should go it will go. We shall end up with a more rational and transparent system, which will more accurately reflect the real costs pushing up local government expenditure.

Mr. Henderson

Does the hon. Gentleman accept that the real issue is not merely the point made by northern region councils, although that is important, but the absurdity of the present system? Under the all-ages social index, which, as the Minister knows, is an important component of the standard spending assessment, Oxford is calculated as more deprived than Liverpool and Cheltenham as more deprived than Newcastle. Will the Minister admit that if a fair and accurate system is to be found it must take into account the real factors of deprivation, such as unemployment and income levels? Will he tell the House today that, before the announcement on local government finance in December, he will make an announcement on any changes that he may propose to the SSAs?

Mr. Curry

The answer to the second part of the question is no, because we shall make the announcement about that when we announce the rate support grant settlement. On the hon. Member's third question about the all-ages social index, because the discussions that have taken place with the associations have not been behind closed doors, he will know that we are examining whether unemployment and health indicators should be brought into the index. We shall announce those conclusions and if those indicators are included it will be because our analysis shows that they should be and that they show areas of real need.