HC Deb 18 May 1994 vol 243 cc799-801
7. Mr. John Evans

To ask the Secretary of State for the Environment what plans he has to revise the present standard spending assessments system.

Mr. Curry

We intend to discuss with the local authority associations a number of possible changes in standard spending assessments.

Mr. Evans

Does the Minister agree that, in view of the corruption in Westminster city council, revealed by the BBC "Panorama" programme on Monday night, and the apparent connivance of Ministers to rig grant to Westminster, perhaps the only worthwhile revision would be to remove the grant allocation system from the hands of Ministers and put it in the hands of an independent grant commission?

Mr. Curry

I do not agree with that for one minute. The Select Committee on the Environment examined the way in which SSAs were distributed and concluded that it was done entirely objectively. I have no doubt that the Labour party ran over the system with a fine-toothed comb, but it has not managed to discover any bias in the system— because it is not there. For a member of the Labour party, which spends its life talking about quangos, to propose setting up another one is slightly curious.

Mr. Ian Bruce

Does my hon. Friend agree that the area cost adjustment, which applies only in the south-east of England, has absolutely no basis in fact or logic and that the sooner it is done away with the better? Once that happens, areas such as Dorset will start to benefit from the real costs of providing services rather than working under a fudge factor, which was introduced to stop the high-spending Labour councils in London going bankrupt.

Mr. Curry

I do not agree with my hon. Friend. The area cost adjustment would not exist if there were no objective reason for it. We examined it carefully. We must, however, consider the way in which it tapers as it leaves central London. I have made it clear to the local authority associations that it will be one of the focuses for the continued review of SSA systems.

Mr. Snape

Has the Minister seen the Department of Environment's "Index of Social Deprivation", which reveals that Sandwell is the ninth poorest borough in England? Many other black country boroughs feature in that list of deprivation. Is he aware that, today, the Tory leader of Walsall council said that the Government must face the fact that the shire counties have been treated much better than inner-city areas? Does not that sort of national corruption of local government finance deserve a "Panorama" programme of its own? Is not it about time that the Government recognised the fact that local authorities, particularly Labour-controlled ones, are being held back from what they are trying to do by the financial rigging of the Government?

Mr. Curry

That is completely untrue. If the hon. Gentleman looks at the councils that receive the largest grant, he will see that they are all in the inner cities and Labour controlled. If he reads further from the "Index of Social Deprivation", he will discover that Westminster comes 26th and St. Helens comes 54th. That justifies the differential, does it not?

Dr. Spink

Is my hon. Friend aware that in a recent report of the Select Committee on Education it was proposed that the education element of the SSA should be removed and that it should be calculated under an alternative common funding formula? Will he consider that report and discuss it with my right hon. Friend the Secretary of State for Education?

Mr. Curry

I am perfectly willing to discuss improvements in the system. At the moment, the system is formula-driven. What matters in that case is to ensure that the formula picks up real needs as sensitively as it can and distributes them to where the need is. Therefore, we shall have to continue to review some elements, especially of social need, and we shall do so. People try to make out special cases for this, that or the other. It is always possible to argue that it would be nice to have more money here or more money there, but there is an absolutely equitable system of distribution and no one has been able to prove to the contrary. They cannot prove it because it is not true.

Mr. Straw

In the new spirit of rationality that has broken out between the Front Benches, the Minister must surely recognise that one of the reasons why the Conservative party had its worst results for more than 50 years in the local elections and the Labour party its best results for 13 years, is a lack of confidence in the impartiality of the SSA grant system. There was overwhelming criticism of that system not only from the Labour party but from council tax payers, who simply could not understand the fairness of the system. As the Environment Select Committee made many criticisms of the SSA system, and as the Audit Commission recommended an independent grant commission, why does the Minister continue in his refusal to consider that and to begin discussions across the Chamber about that sensible proposal?

Mr. Curry

I did quite a lot of knocking on doors during the local election campaign—[Interruption.]—especially in Wandsworth, Westminster and Kensington, and I was not engaged in spontaneous discussion about the SSA system at many of them. We have an objective system and the local authority associations co-operate with it fully. We are committed to ensuring that we make that system as finely tuned as possible without its becoming so complex as to be incomprehensible. We have set out on a good course. A further review is under way and I see no reason to change that.