HC Deb 15 October 1996 vol 282 cc575-6
5. Mr. Lidington

To ask the Secretary of State for the Environment what plans he has to implement the recommendations of the independent review into the area cost adjustment. [38354]

Mr. Gummer

In our consultation, all four local government organisations have expressed reservations about implementing this review and have asked for further work. I will consider the representations after my meeting with them tomorrow.

Mr. Lidington

Does my right hon. Friend agree that the independent review endorsed the view expressed by Buckinghamshire county council and other local authorities in the south-east that the area cost adjustment needs to be enhanced rather than reduced? Will he look seriously at implementing the report by the independent review team, especially in the context of the difficulties that we face in Buckinghamshire as a consequence of Milton Keynes becoming a separate unitary authority?

Mr. Gummer

It is unusual for all the local authority associations to express similar reservations, with differing degrees of intensity, about the difficulty of implementing a report. Therefore, I think that it is proper to listen to them carefully. I understand my hon. Friend's view, and the report makes some very important points. However, I do not think that we should rush ahead without hearing what the local authorities have to say.

Mrs. Anne Campbell

Is the Secretary of State aware that, under the review's proposals, Cambridgeshire county council would gain by about £10 million this financial year? Does he believe that the Government were justified in imposing a capping limit on Cambridgeshire in its standard spending assessment in the face of that sort of evidence?

Mr. Gummer

All those who would benefit from the proposed changes are very much in favour of them, and all those who would lose from them are very much against them—the fervour increases with the degree of gain or loss. We maintain a fair and reasonable system. Cambridge was warned that, if it sought to gain money from the community outside that system, it would be capped—and capped it was.

Mr. Hendry

Is my right hon. Friend aware of the great concern in Derbyshire and elsewhere about the way in which the current area cost adjustment works? Is he aware also that there is great dismay that the basis of the proposed reforms appears to be fundamentally flawed because the whole range of incomes has not been taken into account, particularly public sector salaries? Will he give an undertaking to take those concerns fully into account before he makes a final judgment about the proposals?

Mr. Gummer

My hon. Friend points to only one of the issues raised by the local authority associations. They are concerned about some of the methodology used. I am determined that any changes we might make would commend themselves to the House as a whole and would remain in place for a reasonable and stable period. In order to do that, I must take into account precisely the points that my hon. Friend has made.