HC Deb 02 April 2003 vol 402 cc907-8
7. Paddy Tipping (Sherwood)

What plans he has to increase the proportion of local government funding raised locally. [106165]

The Minister for Local Government and the Regions (Mr. Nick Raynsford)

A major review of local government funding, including the balance of funding raised locally as against that provided by central Government, will begin, under my chairmanship, later this month.

Paddy Tipping

Does my right hon. Friend accept that the fact that just 20 per cent. of local government finance is raised locally can isolate and disconnect local councillors from the consequences of their decisions? When will he change the balance between local financing and national financing?

Mr. Raynsford

Actually, the proportion raised locally is slightly higher than my hon. Friend suggests, but his key point is correct—it is important that there should be a strong link between local democratic accountability and raising finance for local services. That is precisely why we are initiating the review of the balance of funding that will look into those very issues.

Mr. David Curry (Skipton and Ripon)

But the Government already have a programme to increase the amount of tax raised locally—it is called the council tax. In a year in which they have increased national insurance contributions; settled the public sector pay and pensions increases; insisted on passporting education expenditure through even when there has been no grant to cover it; failed to recognise the crisis in social services; about which every Member in the House has been telling the Minister; and granted tax-raising powers to the Mayor of London, it is not surprising that council taxes have increased by a long way ahead of inflation. It is entirely the Government's responsibility.

Mr. Raynsford

The right hon. Gentleman was a Minister with responsibility for local government, so he will know that the grant increases that this Government have given—a 25 per cent. real-terms increase—compare favourably with the 7 per cent. cut in grant when he was a Minister. This Government support local government. It is Conservative-controlled councils that are raising the council tax.