§ Mr. Barry FieldTo ask the Secretary of State for the Environment what estimate he has made of the impact on council tax levels in the south east of England of the abolition of the area cost adjustment. [2564]
§ Sir Paul BeresfordThe abolition of the area cost adjustment was not proposed by the team reviewing the area cost adjustment or by other participants in the discussions this year. I have not estimated the impact on council tax levels in the south-east of England of the abolition of the area cost adjustment. To do so would involve making assumptions about capping limits in the new circumstances and about local authority responses.
§ Mr. FieldTo ask the Secretary of State for the Environment what proposals the Department's working party has made for the future of the area cost adjustment; and what assessment he has made of the impact on the Isle of Wight of the abolition of area cost adjustment. [2563]
§ Sir Paul BeresfordThe review of the area cost adjustment recommended a new method for calculating the adjustment, using data from the labour force survey to determine a factor for each local authority in England. Several variations of this approach were included as options in the report of the standard spending assessments sub-group to the Consultative Council on Local Government Finance. No proposals to abolish the area cost adjustment were made by the review team or in the sub-group report. For illustrative purposes, the effect on SSAs for 1996–97 of abolishing the area cost adjustment has been estimated. The SSA for the Isle of Wight would be reduced by £3.4 million, which is 3.5 per cent. of its SSA.