Local Government Finance (Hansard, 19 October 1994)

§ 3. Ms Church
To ask the Secretary of State for the Environment when he plans to meet representatives of the local authority associations to discuss the settlement of local government finance for 1995–96.

§ 12. Mr. Khabra
To ask the Secretary of State for the Environment when he plans to meet representatives of the local authority associations to discuss the settlement of local government finance for 1995–96.

§ 13. Mr. Jim Cunningham
To ask the Secretary of State for the Environment when he plans to meet representatives of the local authority associations to discuss the settlement of local government finance for 1995–96

§ The Minister for Local Government and Planning (Mr. David Curry)
I discussed the finance settlement with local authority associations on 10 October.

§ Ms Church
When the Minister discussed those plans with local authority associations, did he give them an assurance that the report in the Local Government Chronicle on 7 October, to the effect that he did not put up a fight against Treasury plans to freeze local authority expenditure, was untrue? Can he assure the House that the Treasury plans published in the Red Book will not be cut further, leading to additional cuts in vital services and higher unemployment?

§ Mr. Curry
The local authority associations had obviously seen that report, and my right hon. Friend, if I am quoting him accurately, said that they should not believe everything that they read in the paper.

§ Mr. Khabra
Will the Secretary of State outline to the House what steps he is taking to remove the anomaly that exists in the local government revenue support grant settlement, whereby six outer London authorities have no choice but to pay their teachers the inner London weighting allowance, whereas it is calculated in the standard spending assessments that they must pay only the outer London weighting allowance? That is an anomaly. Will the Minister answer the question, please?

§ Mr. Curry
I understand that the Under-Secretary, my hon. Friend the Member for Hertfordshire, West (Mr. Jones) is meeting representatives about that this afternoon. But I can be helpful to the hon. Gentleman. His question touches on the earlier cost adjustment—the sums that are directed towards the south-east area to compensate for higher labour costs. I made it clear to the House last year that I was not satisfied with the way in which those sums were directed in the south-east area, and that I would therefore review the relationship between central London and outer London and the taper towards the south-east. I shall propose changes to that when we announce the rate support settlement, and I hope that they will give some satisfaction to the hon. Gentleman.

§ Mr. Jim Cunningham
Why is it that, in the previous SSA settlement for local government, the Secretary of State did not take into account the Prime Minister's pledge to help people who could not afford to pay VAT? Many of my constituents find that, when 261 they apply for a community charge rebate, the assistance that they get for VAT is taken into account. Will the Minister do something about that?

§ Mr. Curry
With respect, the hon. Gentleman misunderstands the purpose of the SSA systems. Compensation for VAT has been announced in the context of the pensions measure. As regards the SSA, we try to distribute an amount according to the needs of local authorities and their ability to deliver a standard system. The hon. Gentleman came with representatives from Coventry last year to discuss certain matters. In the present settlement those matters will, of course, have been put right from his point of view, so I hope that he will be satisfied.

§ Sir Peter Fry
When my hon. Friend speaks to the local authority representatives, will he make it clear not only that there should be concern over the way in which the area costs adjustment is currently calculated but that fundamental change is needed to prevent the kind of unfairness that currently exists, particularly in counties such as Northamptonshire, which has suffered considerably as a result of not being included in the adjustment?

§ Mr. Curry
I know that my hon. Friend is very concerned about that. I have met him and his fellow Members of Parliament from the county, and we have plans for a further meeting quite shortly on the matter. I recognise that the area cost adjustment is, of course, liked very much by those who receive it and that those who do not receive it find it difficult. It is a question of balance. I hope to get the most sensible balance that we possibly can in that area.

§ Dame Elaine Kellett-Bowman
May I inform my hon. Friend that my constituents are interested not only in how much money is provided but in how it is spent? They are therefore extremely anxious to secure the abolition of the high-spending Lancashire county council, but unfortunately the county has seen fit to spend huge sums of ratepayers' money circulating to every head teacher, every head governor and every Lancashire county council employee a wholly distorted view. We very much hope that the commission will not permit itself to be influenced by that wholly unfair action on the county council's part.

§ Mr. Curry
Whether or not moneys have been spent legally is a matter for the district auditor. As regards the future structure of Lancashire, until the Local Government Commission issues its recommendations I have no role to play. When it does so, I have no doubt whatever that my hon. Friend will be one of the first through the doors.

§ Mr. Jacques Arnold
But is it not the case that Conservative local authorities tend to get less Government grant per head but nevertheless charge the lowest council taxes on average? Is not that best exemplified by Gravesham borough council, which, in its last year of Conservative rule, had the lowest council tax in Kent, yet which, in its first year of Labour rule, already had the fourth lowest?

§ Mr. Curry
It is true, of course, that the grant tends to be directed to those inner-city areas with the greatest need. But I am very happy to pay tribute to Gravesham 262 borough council for the excellent way in which it administers the funds in north Kent. It plays a very important role in the whole of our strategy for the area.

§ Mr. Rooker
When considering the settlement for 1995–96, will the Minister pay attention to the country's second city? Birmingham funded the international convention centre with only its own taxpayers' money and European money, but the Conservative central council will meet there next year only if it receives a £53,000 grant and subvention. The Tory party should pay its own way before using Birmingham's facilities.

§ Mr. Curry
The hon. Gentleman knows perfectly well that once a local authority has received grant, it can use it for the purposes that it deems most fit for the area. Birmingham chose to devote its funds to the construction of facilities. Contractual relationships between Birmingham and anyone else are entirely a matter for those concerned.

§ Mr. Waterson
Is my hon. Friend aware that East Sussex county council, which currently enjoys the benefits of a Lib-Lab pact in its ruling group, appears to have overspent by £1 million so far this year on its social services budget? When my hon. Friend comes to use his powers both in terms of the settlement and by way of capping, will he bear in mind the profligacy of many Labour and Liberal Democrat-controlled authorities?

§ Mr. Curry
As my hon. Friend knows, we issue the rate support grant in consideration of the needs of local authorities; the limits to which they are allowed to spend have no political colour. It is an absolutely objective system, the Opposition party accepts that it is objective and while I hold this job it will continue to be objective.

§ Mr. Straw
As objective as it has been in Westminster and Wandsworth, shall we say.
Does the Minister understand that the universal capping of council budgets is not only unjustified and undemocratic, but has failed to work in its own terms? That, by the way, is what many members of the Minister's own party are now saying.
Will the Minister confirm that six Conservative associations—including one in Croydon, in the constituency of the new Parliamentary Under-Secretary of State, the hon. Member for Croydon, Central (Sir P. Beresford)—submitted resolutions to this month's Conservative party conference which called for capping to be scrapped? Will the hon. Gentleman confirm that so great was the fear that those resolutions might be carried that not one of them was called? When will he recognise that nothing symbolises the over-centralisation of the country more than authoritarian ministerial control over services that local communities should be free to provide?

§ Mr. Curry
I am perfectly aware that capping is not popular with all councillors, including some Conservative councillors. I am not ashamed about that; they are quite free to express their opinions. But there are other considerations, such as what the nation can afford and the requirements of public finance. I should be obliged if the hon. Gentleman would tell me whether he intends, in the first year of a hypothetical Labour 263 Government, to abolish capping immediately and allow local authorities to spend all the accumulated receipts without restraint. That would be a very important contribution to public finances.