HC Deb 05 March 2003 vol 400 cc803-5
4. Linda Perham (Ilford, North)

What additional freedoms and flexibilities he plans to make available to high-performing councils. [100652]

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

Last November, the Office of the Deputy Prime Minister published detailed proposals for extending freedoms and flexibilities to local government in the context of the comprehensive performance assessment. Those authorities categorised as excellent will enjoy substantially less ring-fencing, a dramatic reduction in obligations to produce plans, a three-year inspection holiday and participation in the innovations forum, which will explore new ways of delivering better public services.

Linda Perham

I thank my right hon. Friend for that reply. Sadly, my Tory-run local authority, the London borough of Redbridge, will be unable to take advantage of those freedoms and flexibilities because it has been criticised by the Audit Commission for patchy achievement against five budget priorities. What action will he take to ensure that councils that have had their weaknesses identified and are setting a very high council tax despite receiving above-inflation Government grant receive clear advice and support so that there is better financial management of their budgets in future?

Mr. Raynsford

I assure my hon. Friend that the purpose of the comprehensive performance assessment is to encourage improvement in the performance of local authorities. We have put arrangements in place to assist authorities with capacity building and a series of other measures that are designed to tackle weaknesses. I am sure that her authority will benefit from that in the same way as other authorities that have had disappointing results from the comprehensive performance assessment.

Mr. James Clappison (Hertsmere)

Is the Minister aware that Hertfordshire county council received the highest score on comprehensive performance from the Audit Commission under the exercise carried out at the behest of his Department, yet it received the lowest increase in grant of any county council? Council tax payers in Hertfordshire face an increase of 18 per cent. as a result of the Government's scandalous treatment of the south-east. Does that not show that, whether it is local government services or university admissions, this Government punish excellence in the name of cack-handed socialism?

Mr. Raynsford

I am surprised that the hon. Gentleman can say that with a straight face, because he was a Minister in the Department in the last years of the Conservative Government. During that period, grants to local government were cut by 7 per cent. in real terms. That was his record. Hertfordshire county council has received an increase of 3.9 per cent. from this Government. That is Labour putting money in, whereas the Tories threaten cuts.

Geraint Davies (Croydon, Central)

Do the flexibilities that my right hon. Friend is considering include discretion over passporting of expenditure and the ability of councils to borrow, as with the new ideas for foundation hospitals?

Mr. Raynsford

My hon. Friend's authority, which had a good assessment in the comprehensive performance process, can expect to benefit from significant freedoms. I am pleased that its discussions with my right hon. Friend the Secretary of State for Education and Skills have produced an amicable and satisfactory outcome. I am sure that the authority will want to continue to drive forward the excellent services that it has prided itself on delivering in Croydon.

Mr. Edward Davey (Kingston and Surbiton)

New freedoms are welcome, but does the Minister realise that by threatening to cap councils the Government have egg on their face yet again, because in opposition they opposed Conservative capping? Are the record council tax rises the fault of this Government, with their control-freak approach to local authorities, whereby Ministers ring-fence much of the grant money? Rather than capping, would it not be much fairer to put a small income tax rise on the very wealthy and cut council tax bills by £100?

Mr. Raynsford

We have ended the crude and universal capping that the previous Government adopted. Would the hon. Gentleman ignore entirely a 55 per cent. council tax increase by an authority that cut its council tax by 25 per cent. in an election year? Would he do nothing about that? The Government believe that it is right to take a responsible approach to council tax. We are giving extra freedoms and flexibilities to local government, but we also believe it is right that local government be prudent and responsible. Some of the authorities controlled by the Liberal Democrats and certainly by the Conservatives have taken a less than responsible view of council tax setting this year.

Mr. Peter Pike (Burnley)

Does my right hon. Friend accept that although Burnley council would always want greater freedom and flexibility to tackle the problems that it faces, the No. 1 thing that it needs is more finance and resources to get on top of those many problems?

Mr. Raynsford

I very much agree with my hon. Friend about the importance of resources, which is why I am sure that he will welcome the Government's decision to allocate an increase of 12.6 per cent. to Burnley council, which faces difficulties and is benefiting hugely from the Government's grant distribution system.

Mr. Mark Field (Cities of London and Westminster)

Will the Minister give an assurance that those councils that were deemed excellent in the recent review will be exempt from any proposed capping?

Mr. Raynsford

We have already made it clear that we do not intend to cap authorities that have an excellent or good rating under the comprehensive performance assessment. However, it is incumbent on authorities that aspire to be good and excellent to be responsible in the organisation of their financial affairs. I am sure that the Audit Commission will want to keep a close watch on all authorities, including those that are good and excellent, to ensure that there are sound budgeting standards and that the temptation to manipulate the council tax for political purposes does not get the better of some authorities' judgment.

Mr. Eric Pickles (Brentwood and Ongar)

Has the right hon. Gentleman had an opportunity to look at the record of the high-performing councils, which in the past 10 years have had some of the lowest increases in council tax? This year, their increases are among the highest: the only thing that has changed is the grant formula. When that was announced in December, the right hon. Gentleman said that it was a generous settlement and there was no need for council tax to rise. He accused me of scaremongering for suggesting that band D council tax would be £1,000 for the first time, and that there would be double-digit inflation. Given that we were looking at the same figures, why was I right and he hopelessly wrong?

Mr. Raynsford

The people who are hopelessly wrong are the hon. Gentleman's own local authority, which has just admitted that it made an error and managed to double count £3.7 million. He would do better to talk to Essex county council about getting its figures right instead of lecturing us.