§ 2. Dr. Wright
To ask the Secretary of State for the Environment if he will make a statement on the area cost adjustment element of standard spending assessments. 
§ The Parliamentary Under-Secretary of State for the Environment (Mr. Robert B. Jones)
I have previously said that I wish to take a fresh look to see whether we might improve the boundaries of the zones used in the 331 calculation of the adjustment. We and the local authority associations are currently looking at the initial findings of research on this which we commissioned.
§ Dr. Wright
I am grateful for that answer. Can the Minister go on to explain to my constituents in Staffordshire why each pupil in secondary education in Surrey gets an extra £310 a year compared with my constituents' pupils in schools in Staffordshire? Would he also explain why the 10 counties that have had the largest increase in standard spending assessments since 1990 are all in the south-east and have all benefited from the area cost adjustment? Finally, can he tell the House why he has not been minded to accept the new basis for the area cost adjustment suggested by the Association of County Councils which would give Staffordshire an extra £9.5 million and go some way to offset the damaging cuts to education and other services that are taking place at the moment?
§ Mr. Jones
I am sure that the hon. Gentleman is as aware as anybody else that that sort of argument falls into fault lines according to those who receive it and those who do not. It is therefore all the more important that the Government should carry out research to make sure that the area cost adjustment is based on proper statistical analysis. We have carried that forward by discussions with the local authority associations. The ACC is one of those which have put forward ideas, but those ideas also have to be tested by proper and rigorous statistical analysis. So far, I am afraid, it has been unable to justify its approach. What I think is dangerous about the hon. Gentleman's argument is that he has failed entirely to recognise the additional costs that fall on local authorities, not only those such as Surrey, which he cited, but on inner London local authorities, which are controlled in virtually every case by his party.
§ Sir Anthony Grant
Does my hon. Friend recall that for many years, I have drawn the attention of the Government to the crazy situation whereby if people take one step over the border from Bedfordshire or Hertfordshire into Cambridgeshire, they are suddenly deemed to be in a low-cost area? That is manifest nonsense. The result is that millions of pounds have been lost to Cambridgeshire which could have been used for education purposes. Therefore, any initiative that my hon. Friend takes is welcome. When he gets the results of the research, which I hope will suggest changes to travel-to-work areas, will he act quickly?
§ Mr. Jones
Of course, we will look at the results of the research. I know that my hon. Friend has been a doughty fighter for Cambridgeshire in this and other cases for many years. Of course, he is right. We have to look at those methods of statistical analysis that match best the real pressures to spend, whether the areas involved are in the existing south-east or immediately outside.
§ Mr. Illsley
The Minister will be aware that the amount of money spent on the area cost adjustment has doubled since 1990 to something like £1.6 million. He has heard from hon. Members of all parties that there are many discrepancies between adjacent areas, some of which receive the area cost adjustment and some of which do not. Will the Government consider a specific cost approach and London weighting, or other specific data, in order to achieve an immediate change rather than wait until the research is available?
§ Mr. Jones
Our approach is based on specific data and research carried out by reputable organisations. London weighting is not the only additional cost borne by authorities in the south-east. Indeed, I see the hon. Members for Holborn and St. Pancras (Mr. Dobson) and for Greenwich (Mr. Raynsford), who are sitting on either side of the hon. Gentleman, squirming in embarrassment about the fact that he is arguing that the area cost adjustment should be reduced because that would hit their constituencies very hard. The adjustment has to be justified by rigorous statistical analysis, not by the hon. Gentleman's political prejudice.