HC Deb 16 December 1997 vol 303 cc115-8
5. Jane Griffiths

What representations he has received in response to the changes in economic and social needs indices announced in the 1998–99 local government settlement. [19397]

Ms Armstrong

We have received a number of representations from local authorities and others in response to the changes in the economic and social needs indices announced in the provisional 1998–99 local government finance settlement.

Jane Griffiths

Does my hon. Friend agree that, following this year's local government settlement, the two very different shire district authorities that form part of my constituency of Reading, East—urban, Labour-controlled Reading, which has a number of social need and deprivation indicators, and suburban and semi-rural Wokingham, which has few—[HON. MEMBERS: "Reading."]—not reading—have received help with the difficult and costly transition to unitary authority status?

Ms Armstrong

I thank my hon. Friend for that question. I know that different authorities have very different needs, and it is right that those needs should be properly reflected when we consider the allocation of money to those authorities. The economic and social indices used by the previous Administration were believed and trusted by no one. We have tackled that as an important part of achieving fairness this year, as can be seen in the results for Wokingham and Reading.

Mr. Boswell

Will the Minister bear in mind the need for eventual changes in the area cost adjustment, in the light of the Elliot report? Does she accept that, although we may generously allow her and the new Government a year to review the situation, by this time next year counties that do not benefit from that adjustment, such as Northamptonshire, will be looking for action?

Ms Armstrong

I am pleased that the hon. Gentleman will allow me at least one year. He was prepared to allow his Government a lot longer—I know that they struggled with the area cost adjustment for every year that I have been in the House. The hon. Gentleman will know that I have announced further research into the area cost adjustment, and we shall return to the matter next year.

Mr. Bill O'Brien

I thank my hon. Friend for the Government's generous contribution to local government in the form of education funding. Will she take note of the fact that local government care for the elderly still faces substantial need? In view of the new challenges confronting local government in looking after the elderly, when she considers the formula for 1998–99, will she give special consideration to the social needs facing many local authorities, especially my local authority, Wakefield?

Ms Armstrong

The settlement this year included a final transitional amount of £350 million for community care. Also, this year we changed the SSA for social services for the elderly. I recognised, as did my right hon. Friend the Deputy Prime Minister when he made the statement, that, although we had got a better and fairer settlement, it was a tough settlement for local government. It will take us some time to begin to catch up on the 18 years of deficit.

6. Mr. Lansley

When he plans to meet representatives of the Local Government Association to discuss the 1998–99 settlement. [19400]

Ms Armstrong

I am currently planning to meet them on Wednesday 14 January.

Mr. Lansley

When the Minister meets the Local Government Association, will she explain why, when the Deputy Prime Minister said that the purpose of his statement was fairness, the Government proceeded with the rampant unfairness of not implementing the changes to the area cost adjustment that were promised by the Prime Minister to the Cambridge Evening News in April this year before the election? Cambridgeshire has the lowest SSA per head of any shire county, and the failure to implement the review means that Cambridgeshire is not properly compensated for the cost of providing services.

Ms Armstrong

As I have already said this afternoon, there has been less agreement about, and less support across local government for, area cost adjustment than any other single issue. My right hon. Friend the Deputy Prime Minister has tried to make changes this year that can be upheld properly and credibly. Those changes have general support across local government—even if individual authorities have not benefited from them.

There is no consensus or agreement regarding the area cost adjustment and the Elliot review, and we are not able to achieve that at present. Therefore, we have commissioned additional research into actual costs and we shall examine that matter, together with all other suggestions, with local government next year. We gave a commitment that we shall examine whatever changes are proposed, but those changes must be robust and must stand the test of time.

Mr. Hoyle

Can the Minister explain the concept of fairness, as Chorley is the only council in the north-west that has suffered the double blow of reductions in SSA and in revenue support grant? Could there have been a mistake? Will the Minister hold an urgent meeting with the local authority—around the table and not by video link?

Ms Armstrong

Any change always means that there are winners and, unfortunately, losers. I predicted that outcome before the settlement: it was bound to happen. I shall, of course, be happy to meet Chorley council. I am simply trying to make life easier for it and for council tax payers by suggesting a simpler method. However, we want to ensure that every authority is treated fairly within a formula and a set of formulae that achieve general agreement across local government and in this place.

Mr. Burstow

When the Minister meets the Local Government Association in January, will she take the opportunity to reassure it that the Government have no plans to ask local authorities to provide services to disabled people while scrapping the disability living allowance to pay for that?

Ms Armstrong

The hon. Gentleman knows that he is pushing his luck: Social Security questions were yesterday. I assume that he missed being called then. We are of course keen to work with local government and to discuss a wide range of topics with it. I am sure that the Local Government Association will bring many matters before me on 14.January.

Mr. MacShane

In her meetings with the Local Government Association, will the Minister assure the House that she will convey a message of partnership and of respect for the work of our 12,000-odd local councillors? Such an approach would be in stark contrast to that of the Conservatives, who, for 18 years, patronised, derided and sneered at them, and treated them as the enemy within. Services provided locally are a vital part of the community, and everyone—certainly those in my constituency of Rotherham—is delighted to see a Minister finally treating local government as an equal partner.

Ms Armstrong

We meet local government representatives on a regular basis because we believe that local government is a legitimate and proper democratic tier of government. It ill behoves hon. Members in this place to criticise the behaviour and activities of those at another level of government. It is important for all who believe in democracy to support local government and achieve the best service at local, as well as central, level.

Sir Norman Fowler

If the Minister believes that, will she accept that, in addition to the other costs imposed by the Government, the Chancellor's pension tax is currently costing local authorities £300 million a year? Why will the Government not tell local authorities who will bear that cost?

Ms Armstrong

I am sorry that the right hon. Gentleman obviously has not been able to keep up with the level of on-going negotiations between central and local government. The Local Government Association is currently conducting a survey to establish what the precise cost will be. [Interruption.] There is no point seeking to guess the survey's findings when they have not yet been delivered. No one in local government has yet formulated the cost. We have agreed that when that cost is known and when we are aware of the actuarial costs of the revaluation, those factors will be taken into account next year during the settlement process.

Mr. Watts

Will my hon. Friend accept my congratulations on the improvements that have been made to the standard spending assessment system this year? Will she accept also that the people of St. Helens will be laughing in the aisles to hear Conservative Members talk about fairness when their Government introduced a system that meant that Westminster, which has the same population as St. Helens, received far more grant than St. Helens? If St. Helens had received the same level of grant as Westminster, no council tax would have been levied. Indeed, we would have been able to give a £1,000 rebate to every member of the St. Helens community.

Ms Armstrong

As I have already said, the changes that we have made in the SSA this year were arrived at after full consultation with local government during the summer. It was widely accepted that changes in the economic and financial indices and those related to commuters and visitors would make the system much fairer. I accept that there is still more work to be done, but I thank my hon. Friend for his recognition that this year's settlement is much fairer and better than those arrived at in previous years.