§ 3. Hugh Bayley (City of York) (Lab)
If he will obtain data to allow a market forces factor in the local government funding formula to be examined for the City of York separately from North Yorkshire. 
§ The Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister (Phil Hope)
The area cost adjustment is the element of the local government funding formula that takes account of higher wage and rate costs in each area. The new area cost adjustment is a huge improvement on the old system, which gave a top-up only to authorities in the south-east. The Office of the Deputy Prime Minister uses wage data from the whole North Yorkshire area to calculate the area cost adjustment for the City of York and for North Yorkshire county council. That is to ensure that the area cost adjustment is stable and reliable from year to year.
§ Hugh Bayley
Wages and house prices are higher in York than in North Yorkshire, which of course is an entirely separate local authority area, but York, unlike Leeds, does not receive the area cost adjustment. Will my hon. Friend consider changing the formula so that York's costs can be calculated separately from those of North Yorkshire and we can be considered for the area cost adjustment in relation to our costs, which are different from those in North Yorkshire? Does he recognise that it is important for York to get this help after this year, in which it has faced from its Liberal Democrat council one of the highest council tax rises in the country?
§ Phil Hope
Currently, the funding formula is set for at least the next year, but I understand my hon. Friend's concerns and we may explore the potential for calculating the area cost adjustment at a finer geographical level. I am anxious however, to ensure that we have enough wage data to produce stable and reliable area cost factors each year. My hon. Friend is a great champion for his constituency, and he will be pleased to hear that his council in York got an increase of 6.2 per cent. in grant from the Labour Government, and an extra £10.5 million in specific grant. I therefore share his concerns that Liberal Democrats in York raised their council tax by 8.5 per cent. The fact is that Liberal Democrat councils cost more.
§ Miss Anne McIntosh (Vale of York) (Con)
I hope that the market forces provision will recognise not only that, as the hon. Member for city of York (Hugh Bayley) said, wages are lower in North Yorkshire than in the City of York, but that residents living in villages such as Nun Monkton in North Yorkshire will be given preference over travelling showmen trying to set up winter quarters in that area?
§ Phil Hope
I am not absolutely certain about the connection between the area cost adjustment and the village of Nun Monkton, but central Government funding for local government means that rural areas, like urban areas, have received substantially more grant from this Government than they ever did from the Tories.