HC Deb 15 March 1995 vol 256 cc888-9
7. Mr. Rendel

To ask the Secretary of State for the Environment what plans he has to change the methodology for calculating standard spending assessments for 1996-97.

Mr. Curry

I announced my programme for SSA changes during the debate on local government finance in the House on I February, at which the hon. Gentleman was present.

Mr. Rendel

In the discussions that the Minister expects to have this year, will he take account of the growing discrepancy between the amount of interest on balances which is assumed in the formula and the actual amount raised?

Mr. Curry

The principle of notionality is at the heart of the system. We are trying to ensure that, over local government as a whole, we reflect what happens across the board. When it comes to individual councils, if we move to a system in which the SSA formula is there simply to reflect the actual spending patterns of councils, we will get some very grave distortions and unfairnesses. I am willing to examine all aspects of the SSA, within reason, and I shall certainly look at the point that the hon. Gentleman raised. However, he will understand that there is a basic principle and that, if we actually started to track individual spending, there would be serious problems in trying to run an objective system.

Mr. Colin Shepherd

Is my hon. Friend aware that the concept of area cost adjustment continues to cause great heartache among shire counties, not least Hereford and Worcester? Will he join the local authority associations in reviewing the methodology so that a more sensible, transparent and apparently fair mechanism can be worked out to solve the problem?

Mr. Curry

We have already discussed with the local authority associations a research programme that would consider whether we could move towards a travel-to-work concept in assessing overall employment costs. I have said to the Association of County Councils that, if it can develop its suggestions into a practical alternative methodology, I shall examine that, along with whatever other ideas come forward to deal with the matter.

Mr. Dobson

Does the Minister accept that, whatever changes he may make in the methodology, if the Government continue to assume, for the purpose of calculations, that Westminster is the fourth most deprived place in Britain, the system will be rigged to the advantage of Westminster? If virtually every other local authority received the same Government support as Westminster, those authorities would not need to collect any council tax; they would go around paying out rebates.

Mr. Curry

It is about time that the hon. Gentleman visited Westminster. [Interruption.] Perhaps he should visit the bits of Westminster that he does not customarily visit. Yesterday, I received a delegation from Brent, Hammersmith and Fulham, and Westminster in relation to their bids for the urban programme to aid severely deprived parts of those boroughs. If the hon. Gentleman thinks that the 100 yards around Palace green represent Westminster, that shows that he knows damn little about local government.

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