HC Deb 26 April 2004 vol 420 cc787-9W
Mr. Clifton-Brown

To ask the Deputy Prime Minister which authorities receive area cost adjustment; on what basis it is calculated; how much each receives; and what plans he has to review it. [166926]

Mr. Raynsford

The area cost adjustment is the element of the funding formula which directs extra resources to local authorities with higher wage and rates costs. The Office of the Deputy Prime Minister calculates an area cost adjustment (ACA) for every authority in England and it acts as a multiplier on formula spending share (FSS) formulae. Where local wages are low the Office of the Deputy Prime Minister raised the ACA value of that area to one, to ensure that low pay local authority areas do not lose out. Where wages and rates costs are higher, the authority receives a positive ACA top-up.

It is possible to present the FSS figures for each authority in terms of a basic amount plus top-ups, one of which is the ACA. The figures provided in the table, which have been made available in the Library of the House, detail which authorities receive an ACA top-up and how much each authority receives split by FSS sub-block. These figures are consistent with the 'Simple Presentation' guide to the funding formulae, which is available on the internet at; http://www.local.odpm.gov.uk/finance/0405/simppress/index.htm.

The Office of the Deputy Prime Minister calculates the ACA using the best available evidence on wage and business rate costs. The calculation is set out in the area cost adjustment methodology guide. This document is on the Internet at http://www.local.odpm.gov.uk/finance/0405/acamethods.pdf and can be made available in the Library of the House.

The Office of the Deputy Prime Minister announced in the 2001 white paper 'strong local leadership—quality public services' (CM5237) that following the anticipated reforms in 2003–04 the funding formulae will be frozen for at least 2004–05 and 2005–06. The Office of the Deputy Prime Minister does not intend to change the way that the ACA is calculated during this period. If it is decided that changes to the formulae should be made for 2006–07, a full consultation on options for change would take place prior to the normal settlement round for that year.

Mr. Keetch

To ask the Deputy Prime Minister whether his Department includes fire authority, police authority and parish council precepts in calculations determining the level of increase in council tax bills; and if he will make a statement. [167294]

Mr. Raynsford

The published figures for council tax bills in each billing authority area include all precepts. However, the Office of the Deputy Prime Minister has always published figures for the level of, and increase in, police and fire authorities' precepts as well as the billing authority's council tax including parish precepts and the total council tax bill payable in a billing authority's area. For 2004–05, information on levels of, and increases in, billing authority council tax with and without parish precepts, were published on 25 March and are available on the Office of the Deputy Prime Minister's website: www.local.odpm.gov.uk/finance/ctax/ctax045.htm.

Mr. Keetch

To ask the Deputy Prime Minister what the average council tax bill for a Band D property in Herefordshire was last year; what it is expected to be in the forthcoming year; what percentage change this represents; and if he will make a statement. [167295]

Mr. Raynsford

The average council tax bill for a Band D property in Herefordshire was £1,071 for 2003–04 and is £1,185 for 2004–05. This represents an increase of 10.7 per cent. if the underlying figures are rounded to the nearest penny.