Council Tax (Hansard, 16 March 1994)

§ 14. Mr. Rendel
To ask the Secretary of State for the Environment whether he will introduce transitional relief for those new authorities which, as a result of the local government review, will face disproportionate increases in their council tax bills.

§ Mr. Curry
We are discussing with local authority associations the arrangements to finance new councils. When a new council receives a standard spending assessment that does not reflect its inherited commitments, we shall consider whether we should provide transitional help to protect council tax payers.

§ Mr. Rendel
In the light of that response, will the Minister assure us that, in practice, he will not enforce local government reform on any area against the wishes of the local community?

§ Mr. Curry
The purposes of local government reform are perfectly clear. They are to achieve a more accountable form of local government and to achieve more efficient local government. It is also a reform which corresponds to the needs of local people. If first tests demonstrate that changing the system of government will deliver those benefits, that is what we shall do. But if a fairly clear case can be made that that is not so, the Government have no national blueprint. We are not doing it just for the sake of change.

§ Mr. Oppenheim
What is the likely effect on a new authority's council tax levels? In Derbyshire county council's dying days, the deputy leader has been thrown into gaol for fraud and continues to draw his council's allowances; the former leader has resigned in disgrace, having squandered millions building a millionaire's complex in Yalta in the Crimea; and, habitually, close friends and relatives of senior Labour politicians get top jobs in the council. Is that not real corruption and gerrymandering and will not a cost be passed on to any new councils that are formed after the county council is abolished?

§ Mr. Curry
I am sure that all of us want the new councils to start with a completely clean inheritance and perhaps with a different set of values, as well.

§ Mr. Henderson
The Minister will be aware from his consultations with local authorities and others, especially Conservative colleagues, of the many anxieties about the cost of local government reorganisation. Has the Department commissioned a study to assess the overall cost in England arising out of any changes in the local government review? If such a study has not been commissioned, will the Minister tell the House why?

§ Mr. Curry
It is very simple. Let us be clear: there is a distinction between transitional costs and net costs. The net costs will be met. At the end of the day, we think that 877 the realisation of efficiencies, and so on, will pay for the transitional costs. However, until we know what shape local government will take, until we know what the commission comes forward with and until we know what the House will accept, it is utterly impossible to come to any conclusions. We have made it clear that we shall make available to local authorities credits to finance those transitional costs. All the commission's projections show that there will be a pay-back period in efficiency and in avoiding duplication, which will finance the transitional costs, including the rolled-up interest.

§ Mrs. Lait
Does my hon. Friend share my anger and that of my constituents at the blatant politicking that Lib-Lab-run East Sussex county council puts into its magazine "Countywide", which merely defends its current position? Is that not as bad as the loony left councils, and will it not be a cost to council tax payers, now and in the future?

§ Mr. Curry
I never cease to be amazed by the number of councils that tell me that they need more standard spending assessment because they are so hard up that they cannot finance essential services, yet they always manage to finance consultants, Queen's counsel and other people to argue for their own survival. Several councils have put out misleading propaganda, such as polls that can have only one result. I have seen East Sussex's literature, and it has been one of the most conspicuous authorities in doing that. A genuine debate about the merits of local government reform and how best to deliver services is to be encouraged, but simply trying to protect one's own job by misleading the public shows local government at its worst. We shall examine most carefully the costs incurred by such councils.