§ Sir Teddy Taylor (Rochford and Southend, East)It is a pleasure and an honour—[Interruption.] I am surprised that hon. Members are leaving the Chamber, because this is an important and significant issue.
You will be aware, Mr. Winterton, that my hon. Friend the Member for Rayleigh (Dr. Clark), who shows great integrity in all his activities, has been a champion of Rochford over the years. Unfortunately, he cannot be here today because he is chairing a vital conference on science and the general election, which aims to ensure that science is given appropriate consideration. He greatly regrets his absence and has asked me to apologise on his behalf.
Adjournment debates are used for all sorts of purposes: to promote a cause, to identify insoluble problems and lay responsibility for them on Governments, and to play at politics and blame the Administration for the bad weather. On hearing my arguments, I hope that the Minister will accept that I am doing none of those things, and that the problems faced by Rochford district council are serious and on-going. There is a genuine need to review the matter and to deal with what is one of the greatest injustices that I have encountered since entering this place some 37 years ago.
When constituency boundaries were changed at the last election, four areas were added to my constituency: Rochford, Great Wakering, Barling and the island of Foulness, all of which fall within Rochford district council in the county of Essex. Southend, of course, is a unitary authority that is entirely divorced from Essex. Such is the strength and commitment of the people of Southend that I am sure that they would rejoice at the opportunity to leave not only the country of Essex but the European Union, particularly in the light of the previous debate.
Rochford, however, is a different kind of place. When Southend was negotiating its independence, informal approaches were made to discover whether neighbouring Rochford would like to come along with us. The response was unambiguous Rochford did not want to join any other authority, and if ever it had to do so, the last—the very last—place it would join was Southend-on-Sea. Such disputes have gone on for many years. A wonderful and stimulating reformed sinner established a group of churches in Rochford known as the peculiar people. After achieving so much in Rochford, the group embarked on a missionary venture to Southend, which is five miles a way. However, on arrival they were stoned by the people of Southend and advised that, if it was sinners that they were looking for, they should return speedily to Rochford.
Even today, there are problems such as disputed territories. I had the pleasure of attending a meeting in Rochford two weeks ago, at which the potential of Southend airport was discussed. I was advised that there was no such place and that I must have been referring to Rochford aerodrome. There is even a political difference between the two areas. In May last year, every seat in the Southend, East part of my constituency elected a Conservative councillor. However, after the constituency was extended I did not have a single Conservative councillor in Rochford, although I did 102WH have one in Great Wakering and Foulness, and in a recent by-election we managed to win one seat in Rochford. You will therefore appreciate, Mr. Winterton, that the marriage was not the easiest of enterprises.
However, since the last election I have done my best to get to know the new areas and to assess their problems and the opportunities that they present. I have been glad to co-operate with borough officials and councillors who represent Rochford, Great Wakering, Foulness and Barling, regardless of political party. Happily, we have an excellent chief executive in Mr. Warren, and excellent officials. In fairness, some of the councillors are also excellent. There is the splendid Roy Pearson, who is a Conservative councillor in Great Wakering; Peter Stebbing, who is a Labour councillor and chairman of the parish council; and Mr. Fox, who is a Labour county councillor.
I found that Rochford had a frightening problem with financing. On studying the figures in detail, I was horrified to discover that it was by far the worst financed borough in Essex and one of the worst in the United Kingdom—11th worst by my calculation. Rochford is a large authority. It includes Rochford, the borough that I represent, as well as places such as Rayleigh, Canewdon, Paglesham, Ashingdon and many other areas, which are ably represented by my hon. Friend the Member for Rayleigh and others.
What are my grounds for complaint? I know that figures can often be stretched and misrepresented if one refers only to direct Government grants and not to the money that comes from the business rates, and if one fails to take account of population changes and talks up the standard spending assessment as though it were a grant. I have done my best to help the Minister obtain the fairest possible figures over eight years, covering Conservative and Labour Governments, to make it abundantly clear that I am not trying to play politics.
Essex consists of 12 local councils, including places such as Braintree, Uttlesford, Castle Point, Colchester, Tendring, Basildon and Harlow. This year, the standard spending assessment per head—the amount that councils are allowed to spend per head of population—is £75 for Rochford, and it is £78.85 next year. In every other part of Essex the figure is much higher. Our £75 this year compares with £124 in Harlow, £100.93 in Tendring, £93 in Colchester and £95 in Epping Forest. Next year, Rochford's £78 compares with £131 in Harlow, £114 in Basildon, £107 in Tendring and so on. Of course, circumstances vary, but why does it cost almost twice as much to provide the identical services in Harlow as in Rochford? It does not seem right or fair.
Let us forget about total spending and look at the grants that are provided—the external support coming to Rochford. That is even worse. The figure for rate support grant—the money that the Government hand out to local councils—is unbelievable. In 1994–95 Rochford received £21 a head. The Government sent a little cheque to Rochford and said, "That's your money". In 1997–98 that was cut to £15.70 a head, in 1998–99 it was £10 a head and next year it will be £6 a head—down from £21 to £6.
In fairness, it would be misleading to mention only those figures because the Government also hand out a share of the non-domestic rate, which used to be known 103WH as the business rate. In 1994, the figure was £32.24 a head. What is it now, following the massive cut in the rate support grant and the big increase in prices and inflation? I was shocked to discover that it was £32 in 1999 and that next year it will be £37.55.
If we add up all the money from the Government, the grant and the business rates, the total in 1994 was £53.30 a head. Next year it will be £43.67 a head. I calculate, therefore, that the cash coming to Rochford per head of population over the past eight years has been cut by 18 per cent.
What have been the consequences for Rochford? It has had to exercise the most astonishing caution in its spending. Over the eight years that I have mentioned, under both Conservative and Labour Governments, its budget increased by only 10 per cent., about 1 per cent. a year. During that time, prices have been soaring and the increase in demand for local government services has been astonishing. However, even with a penny-pinching policy on spending, the council has had to force up the rates massively because the money coming from Government has been cut so much. During those eight years, the increase in the rates has been 65 per cent., which is about 8 per cent. a year.
We know that Governments of both parties are never unhappy when local rates go up rather than national taxes, but in the case of Rochford, the ratepayers have been taken to the cleaners. How can the Minister justify an 8 per cent. rise in rates for an area which has had to slash its spending in real terms? Is there any reason why Rochford should be punished in this way? It is not a spendthrift council and it never has been. On looking through the records, I see that it was one of the first councils in Britain to privatise services such as refuse collection, street cleaning, grounds maintenance, leisure management, facilities management and buildings repair and maintenance. It has been so efficient that Lady Thatcher would be proud.
Is it because the residents are fed up with Rochford council? Strangely, despite the miserable treatment that they have had from Governments of both parties, a recent opinion poll showed that it is the highest regarded authority in Essex. In other words, local people think that it is doing a good job despite its difficulties.
Perhaps things have changed for the better with new Labour. I think that the Government will accept that until this year they have not—in fact, they have continued to get worse. In fairness, although this year's grant change is minimal, there has been a 5.1 per cent. increase in SSA, which is the amount that the council can spend.
That sounds good, but the population has increased, so the actual increase per head is only 3.7 per cent. What is most worrying is the extra spending that Government policy is forcing on the local council. Government funding has increased by £168,000, but that must be compared with the additional cost of the council's new responsibilities: £35,000 for the concessionary fares scheme; £30,000 for contaminated land investigations; £46,000 for the benefits verification framework; £69,000 for the external best value inspection and audit; £20,000 for homelessness; £96,000 for recycling, stage 1; and 104WH £157,000 for additional staffing to meet those responsibilities. Therefore, we are not only back at square one, but a great deal behind.
The council has survived only by utilising balances, securing savings, forcing up the rates and cutting back services. That is not fair and there is a need for an urgent review. Rochford is in no sense an affluent area. Of course, there are some lovely houses and wealthy families, but there is also a fair amount of poverty, deprivation and social need.
I hope that the Minister will think about what I have said today. I hope that she will check the figures I have quoted and examine the total cost. I hope that she will accept that Rochford has been unfairly hammered and deserves a better deal. You will know from your considerable and splendid experience in the House, Mr. Winterton, that I try to explode only when something is very unfair. I have got into lots of trouble, but I hope that the Minister will accept that I am genuinely not trying to play politics. The problem has worsened under Governments of both parties. Rochford has had an unfair deal and I wonder if the Minister could think about a way of giving it a fairer deal. That would be reasonable and it is something that should happen quickly. I thank the hon. Lady for listening so patiently. I am only sorry that the hon. Members who were talking about the problems of Cyprus did not realise that Rochford has big problems that demand equal attention. I hope that the Minister will think about what I have said.
§ The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Ms Beverley Hughes)I am grateful to the hon. Member for Rochford and Southend, East (Sir T. Taylor) for giving us the opportunity to debate the local government settlement as it applies in Rochford in the coming year. I pay tribute to the way in which he is looking after the interests of his constituency, particularly those new areas that he has acquired since the general election. He has put a great deal of effort into getting to know them.
I accept the genuineness of the hon. Gentleman's position and the way in which he has tried to pursue the issue as he sees it. I cannot agree with all he said, but I accept that he is approaching the matter in a neutral, non-party political way and that he is concerned for the interests of the people of Rochford. Before I go into any detail—some matters are technical as the hon. Gentleman acknowledged—I must place the issue in the context of the local government revenue expenditure as it has panned out over the past few years.
I hope that the hon. Gentleman accepts that, in the context of the 2000 spending review, when considering the settlements for local authorities, we have genuinely tried—and succeeded—to reverse the position of local authorities generally in terms of the amount of cash going in. Our priority has obviously been education and social services. Shire districts, such as Rochford, depend principally on another section of the settlement—the environmental, protective and cultural services block. It does not receive funding for educational services because it does not provide any.
This year's settlement alone provides a real increase of just under 2 per cent. in the provision of services within that block. Local government as a whole—and 105WH Rochford, in particular—will know that provision in that area has stood still because of a lack of funding for many years. In real terms, since 1997, there has been a 14 per cent. increase in funding to local authorities compared with a 7 per cent. cut in the, four years before 1997–98. In the overall context, there can be little argument that we are providing greater levels of investment, and there is general agreement that the settlement provides welcome improvements in the money going to local authorities. It should mean that most local authorities can settle their council tax rise at a lower level this year, as they have done during the past two years.
I appreciate that the hon. Gentleman wants to know the details for Rochford. The current position for this year is that Rochford will receive £3.418 million in general grant, which is an increase of 3.9 per cent. The first point to note is that that is comparable with the average for shire districts. Indeed, it sits exactly at the average for shire districts, which is a 3.9 per cent. increase in general grant. The total SSA increase for the next financial year is just more than £6.1 million, an increase of 5.1 per cent. That is higher than the average increase in SSA for shire districts. The average SSA is 4.6 per cent. Rochford's SSA for the environmental, protective and cultural services block, its main source of funding, increased by 5 per cent. compared with the average for shire districts of 4.5 per cent.
In the context of shire districts as a whole, Rochford is not doing too badly for the next financial year. However, I understand that the hon. Gentleman is worried about Rochford's funding over a longer period. It is a fact, as he said, that, from 1995–96 to 1998–99, there was a pattern of decline in the total standard spending assessment received by the district. I will not deal with the pattern before the 1998–99 settlement as it was the province of the previous Government, although I understand that there were methodological changes affecting Rochford and that the decrease was not due to data.
The decrease in 1998–99 occurred because of a methodological change that was undertaken at the request of, and with the consent of, the local government community. In the first settlement that we introduced, we had to change the deprivation indices used in the district services environmental, protective and cultural services block methodology because they were not representative of the amount of deprivation in an area and were widely criticised throughout local government.
Before that year, that block had included two composite indices of deprivation, known as the economic and social indices, which were shown to be statistically correlated with the need for higher expenditure in deprived areas and had, therefore, been used as proxies, to skew SSA allocation towards those deprived areas. Concern was expressed about the validity of some of the variables contained in the indicators in measuring deprivation. Two of the indicators, in respect of homelessness and temporary and non-permanent accommodation, were heavily criticised as being too loosely defined, and more dependent on local authority spending decisions than on actual need in an area.
Extensive consultation was done on the issue, and we reviewed the indicators used in those two indices. As a result, with consensus and consultation, two new indices 106WH were developed that were found to have a much better statistical correlation than the previous ones. They were introduced into the district services EPCS block in 1998–99. Because they were new, they produced a slightly different SSA distribution. Indeed, the change was intended to establish a better fit between the indices and deprivation.
It is true that Rochford was one of the authorities that lost rather than gained following the introduction of those new indices, which were largely responsible for the 4.3 per cent. SSA reduction that Rochford experienced that year. However, since then, Rochford's SSA has increased each year. I do not accept the hon. Gentleman's claim that that has only happened this year, but I appreciate that the increase may not be as fast as he would like. The main reason for the increase is that the Government have been able to put more resources into local government generally.
We should consider the years subsequent to the methodological change that affected the area. During 1999–2000, in the next settlement, the SSA increase was 1.2 per cent., and would have been higher but for data changes—that is, Rochford lost some aspects of population. In 2000–01 and 2001–02, there were no SSA methodological changes that affected shire district councils because we had stated that, during the three-year review of revenue grant distribution, no methodological changes would be made. In 2000–01, Rochford's SSA increase fell slightly, by 0.6 per cent., due to data changes—there were changes in the population groups fed into the formula—and to larger than average decreases in measures of deprivation. This year, Rochford benefits substantially, due to a larger than average increase in population—1.3 per cent. compared to a national average of 0.5 per cent.
The hon. Gentleman mentioned two specific issues. He considered funding in terms of spending per head in Rochford compared to other parts of Essex and the country and spoke about what he said were extra spending requirements in Rochford. As I have explained to the hon. Gentleman in correspondence, many spending pressures and measures of social deprivation are used in the SSA formula. Rochford has a level lower than the Essex average on virtually all the indicators, such as housing benefit, morbidity, mortality, overcrowding and income support claimants. Rochford has fewer of those problems in its population than other parts of Essex, and that is why it receives a lower SSA than its Essex neighbours. Although Rochford has its share of less affluent areas, the borough as a whole has less deprivation than its neighbours as measured by those indicators. Harlow, for example, which the hon. Gentleman mentioned, has three times the rate of housing benefit claimants of Rochford. Tendring has approximately twice the unemployment rate of Rochford. Those figures highlight the differences in cost pressures between the boroughs. That explains the differences in spending per head: other parts of Essex face higher cost pressures to meet the needs of the population.
The hon. Gentleman also contrasted the increase in Rochford's SSA for the next financial year with various items of what he calls extra spending that he argues are being forced on the council by Government policy. Although central Government may lay down standards or outcomes that we want to achieve, we rarely direct 107WH local authorities to achieve those results in only one approved way with one specific level of expenditure. It follows that it is a central feature of the local govt funding system that most funding is not ring-fenced for a particular purpose, but paid in the form of general grant. Increases in funding for new responsibilities are usually included in the general grant and it is up to local authorities to decide how they will deliver the better services that we all want.
I acknowledge that the SSA formula can never match exactly the circumstances of each local authority; some will feel that they have done well and others that they have done not so well. The hon. Gentleman may think that Rochford falls into the second category, although I should tell him that during the long consultation period, Rochford made no representations to me about any aspect of the proposed settlement. Until we reached the final settlement, we did not hear from Rochford about any fears about the proposed level of funding.
I assume that the figures given by the hon. Gentleman for cost pressures facing Rochford are council estimates. It is for councils to assess individually how best to meet the pressures on them and the needs of their local residents. I have no way of knowing whether the estimates that he cited are reasonable, but in any case it is for the council to decide how to spend the money that it has been given. We are confident that nationally we have provided sufficient resources to meet the costs of any new responsibilities. Those sums are generally included in the block—for example, we have estimated the increased costs of the statutory minimum concessionary scheme that the hon. Gentleman mentioned as being £54 million, which has gone to local authorities as additional money in the block.
The settlement for Essex is also relevant, because Essex provides services directly to the people of Rochford. For the forthcoming year, the total grant for Essex—general grant and ring-fenced grant—will increase by 7.3 per cent., together with additional spending money.
§ Sir Teddy Taylorrose—
§ Ms HughesI am in my last minute, and although I do not like to say no to the hon. Gentleman, I must draw to a conclusion. I understand his points but I also believe that Rochford has had a fair settlement in the context of the general increase in funding for local authorities that we have tried to provide.
§ Sir Teddy TaylorIf the Minister has time, would it be possible for her to visit Rochford? The people of Rochford would be grateful, and I am sure that it would be of great benefit.
§ Mr. Nicholas Winterton (in the Chair)I am sure that the Minister has heard that. We must now move on to the next debate.