HC Deb 07 July 1998 vol 315 cc847-9
4. Dr. Phyllis Starkey (Milton Keynes, South-West)

What responses have been received to the consultation paper on improving local financial accountability. [47623]

The Minister for Local Government and Housing (Ms Hilary Armstrong)

We have received 491 wide-ranging responses to the consultation paper on improving local financial accountability from local authorities, other organisations and members of the public. In due course, we will place a list of respondees in the House Library and full copies of the responses in the Department's library.

Dr. Starkey

One of the issues that will undoubtedly have been covered in the consultation is whether local authority self-financed expenditure should be treated in the same way as central Government spending for control purposes. There are strong arguments in favour of allowing local authorities much greater discretion in self-financed expenditure, not least because that would bring us into line with most of our European partners. Is my hon. Friend prepared to look again at that issue, especially for councils that are already clearly demonstrating their accountability to their local electorate?

Ms Armstrong

In his recent announcement to the House, my right hon. Friend the Chancellor dealt with that issue and made it clear that, although there has been a change to the manner in which public expenditure is accounted for, local authority self-financed expenditure none the less remains an important part of overall public expenditure.

We are considering how we can encourage good practice in local government and how we can make sure that authorities, many of which are working effectively, respond financially and in other ways to the needs and aspirations of local people. That includes keeping local taxes down as much as possible while achieving good value, quality services. We shall find ways of encouraging and supporting such councils and encouraging the spread of good practice throughout local government.

Mr. Paul Burstow (Sutton and Cheam)

Will the Minister confirm that the vast majority of respondents to the consultation confirmed their clear view that they want an end to capping—whether sophisticated, crude or otherwise—and that replacing it with something else would not be satisfactory since it would certainly mean abandoning the promises given by Ministers when in opposition? Will she also scotch the rumours circulating in the local government press that the Government will be unable to introduce their White Paper on local government before the summer recess?

Ms Armstrong

I have not read that speculation. We intend to continue our work on the responses to the consultation so that we can present a White Paper to the House before the recess. I can confirm that many respondents wanted to get rid of crude and universal capping: it was never a commitment of anyone who is now a Minister to break the relationship between central Government and local government. Central Government will always have an interest in what local government does, and in its spending power—that is what partnership is all about. Increasing local democracy will increase the autonomy of local government, but we must do both. Central Government will continue to be interested in the way in which local government spends its money.

Mr. Bill O'Brien (Normanton)

Will my hon. Friend have regard to the representations made by Special Interest Groups of Metropolitan Authorities—SIGOMA—in the review to which she refers? Will she have special regard to the fact that secondary school children in the Kensington and Chelsea constituency receive £3,949 per pupil, whereas those in Wakefield receive £2,728? The difference is more than a third. Will she bear in mind the imbalance and unfairness between the sums allocated for education to Tory-controlled Chelsea and Kensington and to Labour-controlled Wakefield?

Ms Armstrong

It is my responsibility, and one that I take seriously, to listen to representations from all groups. All groups are currently making representations on behalf of the different local authorities that they represent so that they can contribute to our deliberations on achieving a fairer standard spending assessment. In that way, all people, wherever they live, will know that they are being treated fairly.

Mr. Richard Ottaway (Croydon, South)

Will the Minister agree that local accountability goes out the window if she diverts £200 million in cash from the education of deprived London youngsters to the newly created coalfields region in the north? Will she deny reports that she plans to alter the education budgets of London boroughs by disregarding ethnic origin in calculating additional educational needs? Does she accept that there is a huge ethnic minority in London, and that removing the extra funding will result in larger classes, teacher redundancies and school closures? She may think that tinkering with local government finance is the right thing to do, but she does not have the right to do what is wrong.

Ms Armstrong

I welcome the hon. Gentleman's sudden conversion to being concerned about those matters. I am also remarkably encouraged to hear him say that people must be careful about tinkering with local government finance. He might have said that to his colleagues when they were contemplating the poll tax.

I have made it clear to the House on many occasions that there is a proper process of consultation on standard spending assessments. That is taking place now, and it is not my job to pre-empt it. We shall go through the responses to our consultation seriously, and deliberate at the end of the consultation process later in the year.