HC Deb 23 April 2002 vol 384 cc129-31
1. Hugh Bayley (City of York)

What steps he is taking to bring SSAs in English unitary authorities closer to the national average. [49393]

The Minister for Local Government (Mr. Nick Raynsford)

We are currently reviewing the system for distributing grant to local government. We have said that the new formulae will take into account the circumstances that authorities face. Clearly, circumstances in unitary authorities vary enormously, as they do elsewhere. Therefore, I do not think that it is helpful to set broad goals, such as moving a particular group towards an average. That would lead us to a system where everybody gets the same irrespective of differing needs and local circumstances, which would not be fair.

Hugh Bayley

When the City of York was created as a unitary authority in 1996, it inherited from the Conservatives one of the lowest SSAs in the country. I know that the Government acknowledge the need for change in the local government funding formula, and that they have brought forward proposals in that regard. Will my right hon. Friend say whether the Government intend to bring forward legislation in time to affect the local government finance settlements next year?

Mr. Raynsford

I am pleased to be able to tell my hon. Friend that we intend to introduce changes in time for next year's local government settlement, although that will not require legislation. The proposals will be subject to a period of consultation with local government and other interested parties during the summer, and we intend to make the necessary arrangements so that the new system can be in force from April 2003.

Mr. Andrew Rosindell (Romford)

In his review, will the Minister look at the London borough of Havering, which receives substantially less than other boroughs with similar populations? For example, Redbridge next door gets £50 million more than Havering. Does he agree also that it is better for local money to be spent on local services than on the bureaucratic and unnecessary regional assemblies around England with which the Government appear obsessed?

Mr. Raynsford

The system is based on a proper and serious assessment of the needs of each area, taking account of different circumstances and requirements. Simplistic and crude comparisons of the grants available to different areas are usually very wide of the mark. However, I assure the hon. Gentleman that the Government are looking carefully at all the factors relevant to local government needs, in London and in other parts of the country. We intend to produce a system that is clearer, simpler and easier to understand than the current system, and one that is also fairer.

As to regional assemblies, the hon. Gentleman will have to await our proposals. However, it is our intention not to create bureaucracy but to create structures that add value and improve regional economic performance.

Ms Julia Drown (South Swindon)

My right hon. Friend said that it was important to take into account the circumstances of different authorities. Swindon borough council receives the lowest education SSA of all unitary authorities. Schools elsewhere in the country receive £1,000 more per pupil than is the case in Swindon, where standards are higher. Does my right hon. Friend accept that that is unacceptable and unfair, and that the situation cannot continue?

Mr. Raynsford

My hon. Friend raises a perfectly fair point about the weight to be given to the per-pupil allowance in the educational element of the grant distribution formula. However, other factors need to be taken into account, such as special local circumstances. Authorities in rural areas face greater costs because of sparsity, for example, and there are particular deprivation factors in inner-city areas, and where there are high concentrations of people for whom English is not the first language. Any system must take account of the whole range of factors, and that is why we propose to carry out detailed consultation before we finalise our proposals.

Mr. Malcolm Moss (North-East Cambridgeshire)

Despite the Government's continual boasting about increases in SSAs and levels of grant money to all local authorities, including the unitary authorities, real-terms council tax rises under Labour have averaged 5 per cent a year, compared with 2 per cent. under the previous Conservative Administration. Is not that yet another example of a Labour Government stealth tax?

Mr. Raynsford

No, it is not. The details show that the largest increases in council tax this year have been imposed by Conservative authorities. If he wishes to criticise council tax increases, the hon. Gentleman could do no better than to talk to his colleagues in those Tory shire counties which, in the year after an election, have chosen to have a very large increase in their precept. That is an example of the politics being played by the Conservative party, and the House will have no truck with that approach.

Ms Karen Buck (Regent's Park and Kensington, North)

Boroughs such as mine, Westminster and the royal borough of Kensington and Chelsea did well in this year's settlement, but is my right hon. Friend aware that the figures issued last week on households below average income show that London as a whole has more families at risk of poverty than any other region in England? Will he assure me, therefore, that the current review into SSAs will take into account both London's exceptional costs and the extremely high levels of deprivation across the capital?

Mr. Raynsford

My hon. Friend makes an extremely valid point. As she will know from my earlier comments, we are considering carefully all the relevant factors in all areas of the country. Inevitably, there will be some difficulty during that process, because every area and every group of authorities sees the review as an opportunity to increase its share of the total. Everyone cannot be a gainer in that process, however, and it is our duty to be thoughtful and careful and to come to the best and most prudent conclusions that will genuinely respond to needs and create a fair framework for the grant distribution settlement. That is the basis on which we are acting, and I hope that my hon. Friend will bear with me and will understand the difficulties that face us as we try to come up with an appropriate solution.