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Mr. Gummer: I hope that my hon. Friend will accept that I have worked with some considerable vigour to

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understand the representations that he has made and to examine ways in which we could help. My hon. Friend has been extremely assiduous in pressing the real case that he has. I accept that there are particular problems in the county which he represents in part.

It must be explained to anyone who asks about these matters that we try as far as possible to march together with the local authority associations in the assessment of those things that must be taken into account. I think that my hon. Friend's constituents would understand that when even those local authority associations that want changes tell us that they think that it would not be possible to introduce them in the coming year, we must, as a prudent Government, take that seriously. It is not a matter in that instance of the political complexion of the particular association. It is an association that says, "Yes, we want these changes but we genuinely know that not everything could be done in this coming year."

In those circumstances I think that it would be possible for my hon. Friend to explain to his constituents that I by no means turn my back on the changes that are wanted. Indeed, I have made some clear statements about the matter. I have listened carefully to my hon. Friend's representations and I understand that there are pressures. I say to them, however, that it would be wrong to take into account something that all the local authority bodies, for technical reasons, say cannot be introduced this year.

Ms Joan Walley (Stoke-on-Trent, North): After all-party delegations to the Secretaries of State for Education and the Environment, may I say how disappointed I am that there will be no real increase in local government spending in Staffordshire, including Stoke-on-Trent? Will the Secretary of State confirm that Stoke-on-Trent's capping limit is £182.834 million, and that the SSA is £180.201 million? Will he tell me how it can be fair when we have a system that is flawed from the beginning, which means that Staffordshire pupils are each allocated as much as £288 less than pupils in the top education authority in Hertfordshire? How can that be fair and how can such a policy can be carried over and continued?

Mr. Gummer: The hon. Lady is right in that the permitted increase in budget for Stoke-on-Trent is1.3 per cent., and that for Staffordshire as a whole it is 2.5 per cent. I also agree with her that it is true throughout the country that different local education authorities spend more or less than others. The reasons for that are partly historical and partly because of particular issues that arise.

The hon. Lady is keen for local authorities to make their own decisions about these matters. The SSA system seeks to assess the needs for each local authority in the most effective way. We work these things out with the local authority associations. On these issues there is a general agreement that what we are doing is about right. That must be so because in no case has the Labour party said that it would to change a system in its extension when it comes to education. There is no proposal from local authorities or the Labour party to have a new system of dealing with education SSAs.

Mr. David Congdon (Croydon, North-East): I welcome the extra 3.6 per cent. for education, but presumably that means that the SSA for all other services will be less than the 2.5 per cent. average that my right

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hon. Friend mentioned. Will he confirm that, to keep overall spending within those broad levels, local authorities will have to get their act together on compulsory competitive tendering and stop trying to bend the rules to favour their direct services organisations? Social services departments should be much more willing to use the private sector and to divest themselves of their homes, which are much more expensive to run.

Mr. Gummer: My hon. Friend has put his finger on precisely the point. Other services, such as the fire service and the police, will be able to spend more--the figure for the fire service is 4 per cent. Local authorities must play their part in ensuring that we spend less of the public's money in the Government. The figures that we are discussing represent a quarter of Government spending. Unless we keep spending down to just below 40 per cent. of GNP, we will not be able to compete with the rest of the world.

My hon. Friend is right that local authorities should not immediately reach for more money from the state or from the council tax payer, but should seek ways of saving money and improving services. Through my discussions with Labour local authorities, I have discovered that they hate the concept of contracting out. The Labour party wants to abolish compulsory competitive tendering, because it wants more expensive services at a lower level provided by people who never have to compete. We want competition, and we want the people who offer the best service to win.

Mr. John Evans (St. Helens, North): Will the Secretary of State confirm that next year, as a result of the increase announced today, the tax demands of most council tax payers will increase by two or even three times the rate of inflation, and the rents of council house tenants will be substantially increased? Will he also confirm that, as a result of the reduction in support for housing associations, they will next year build fewer than 40,000 houses to rent?

Mr. Gummer: The hon. Gentleman should ask his own local authority about its plans to meet the needs of his area. He should ask whether it will push up the council tax, or whether it will find better ways of saving money. He should ask how it will use the extra money provided by the Government, and whether it will go beyond compulsory competitive tendering to voluntary competitive tendering. It could investigate the possibility of large-scale voluntary transfers to improve the conditions of its council house tenants. It could go through the gamut of things that can be done to improve services and reduce costs. If it does that, it will not have to put up the council tax.

Sir Irvine Patnick (Sheffield, Hallam): I welcome the overall settlement for local authorities. What action does my right hon. Friend propose to take against Sheffield, which holds back the SSA for education? It provides no extra money, then blames everyone save itself. Action is required, because it holds back that percentage and then blames the Government.

Mr. Gummer: My hon. Friend should not be surprised about that. Sheffield council has taken that attitude for a long time. There are two former leaders of Sheffield

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council in the House, both of whom were responsible for one of the worst run local authorities in the country. They increased the council's debts, and the people of Sheffield are still paying for their bad management.

Mr. Robert Ainsworth (Coventry, North-East): Does the Secretary of State accept that his bluster and deliberate over-complication of the matter is designed to hide the fact that the figures that he has just announced will lead directly to a £43 increase of the band D council tax--the 23rd Tory tax increase? He is trying to confuse the issue.

Does he also accept that the problem will be worse for Coventry, given the 1.5 per cent. increase in the standard spending assessment? As he insists on defending Westminster council, will he tell us whether, if Coventry had to raise only 4 per cent. of its expenditure through the council tax, it would show the same level of incompetence and offer the same overly expensive services as Westminster?

Mr. Gummer: The hon. Gentleman clearly prepared his question before listening to the extremely clear statement that I made--if, that is, he had a chance to listen, given the noise that Opposition Front Benchers were making. I do not know where he gets his 4 per cent. figure. In fact, Westminster raises 14 per cent., more than Tower Hamlets, Wandsworth or Lambeth, and it happens to have some of the worst areas of deprivation in the country.

As the hon. Gentleman knows, if he wants to get a better figure he should do what I would do, and use the Islington figures. That would enable him to produce a wonderful answer for his own council--but, of course, it would not be in accordance with the fair way of sharing out the money. He might look at what Westminster received under a Labour Government: he might get some more money that way. All of it, however, would add up to 14p on income tax. The hon. Gentleman should remember that as well.

My statement was as clear as any statement made from the Dispatch Box on this subject, but more detailed, because the local authority associations--all of them run by Labour--have asked for considerable changes in order to ensure that the system is fairer.

Mr. David Lidington (Aylesbury): Does my right hon. Friend understand my concern about the possible impact of the disaggregation of SSAs on Buckinghamshire county council, following the establishment of a unitary authority in Milton Keynes? Has he considered introducing a damping arrangement? I understand that that was done for Scottish authorities that were in a similar position. Will my right hon. Friend remain open to representations from Buckinghamshire county council in the weeks to come?

Mr. Gummer: Certainly. I have discussed the matter with most of those who are concerned with these issues, and my Ministers and I have been keen to ensure that there is a fair and objective division between the various authorities. I believe that an agreed position may well be secured between Buckinghamshire and Milton Keynes. I am aware of the problems, and I have already announced a damping system, which will help.

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