HL Deb 29 March 2001 vol 624 cc408-9

3.22 p.m.

Lord Dixon-Smith asked Her Majesty's Government:

When they will announce the result of their review of local government expenditure.

The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Lord Whitty)

My Lords, we shall announce our decisions on the reform of the local government finance system in a White Paper later this year.

Lord Dixon-Smith

My Lords, I am grateful to the Minister for that immensely helpful reply. Can he assure the House that there is no truth in the reports, which have appeared on occasion in the press, that the Government are planning a major shift in resources from the South East of England to the North?

Lord Whitty

No, my Lords. We are considering the requirements of local authorities across the board. We are conducting a fundamental review to find a fairer way to distribute grants. The final effect of such distribution between different sort of authorities and geographical areas will be seen at the end of that process. There is no strategy to shift resources away from the South East.

Baroness Hamwee

My Lords, does the Minister accept that although the South may be wealthier than parts of the North, within the South, and particularly London, are areas of enormous deprivation? Three of the most deprived boroughs in the country are in London. Do the Government accept that the review needs to be in fine detail not broad-brush?

Lord Whitty

My Lords, yes. That is precisely what we are doing. We are considering every aspect of local authority provision and the demographic and physical areas they cover. We are taking into account all such dimensions. There is no discrimination against London in that process.

Lord Renton

My Lords, will the Government bear in mind that the foot and mouth crisis will diminish the income and increase costs of local authorities in rural areas?

Lord Whitty

My Lords, we recognise that the immediate effect may be that of further costs to local authorities and, to some extent, diminishing income. We hope that that is a temporary change and that the system of local government finance which we are addressing here will stand us in good stead for many years. Clearly, whatever adjustments have to be made in the short term following the foot and mouth outbreak will need to be taken on a separate basis from the long-term financial structure.