HC Deb 20 October 1998 vol 317 cc1069-70
11. Dr. Vincent Cable (Twickenham)

If he will report on his progress towards removing capping from local authorities. [54336]

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

Our White Paper in July announced our intention to end crude and universal capping while taking a new reserve power to limit excessive council tax increases.

Dr. Cable

Will the Minister acknowledge that there are many councils under all three parties that cannot meet the Government's expectations for improved education standards, care in the community and the new best value requirements for replenishing reserves without much greater freedom to set expenditure and local tax levels than the Government are willing to give them?

Ms Armstrong

In the comprehensive spending review we announced what we feel are substantial and realistic increases for Government contribution to local government spending and for overall local government spending. I am convinced that the spending limits about which we have been talking will enable local government to meet its targets and its commitment to improve services, and enable local people to take advantage of the opportunity offered by those services. We are ending crude and universal capping but, it is none the less, in the interests of the entire country for an eye to be kept on overall public spending, and that is what we intend to do.

Mr. Andrew Lansley (South Cambridgeshire)

Will the Minister explain how it can make sense for the forthcoming budget round to set capping criteria only after local authorities have set their budgets? Will she also explain why the Local Government Association takes the view that her proposals will lead to increased uncertainty and subjective judgments"?

Ms Armstrong

The system that we shall operate this year was introduced by the previous Administration, who changed the way in which they implemented legislation when they felt that local authorities were out of control. We cannot, this year, amend the legislation, so to end crude and universal capping we need to work within the existing legislation, which means no presignalling of individual budgets.