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Mr. Gummer: I shall be happy to give way in a moment, but I must get one more paragraph in first.
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During the period of consultation on our proposals, we have received representations from individual local authorities and from local authority associations, all of which we have considered carefully. Some of the representations concerned the accuracy of the data used in the calculation of the SSAs. We have examined each of the concerns, and have made corrections where necessary. As in previous years, we shall seek to discuss with representatives of local government possible ways in which the SSAs might be improved in the future.
No doubt the hon. Member for Holborn and St. Pancras will repeat his allegations about the SSA methodology in his speech. He has never quoted any significant expert opinion supporting his case--although that comes as no surprise, given that the last time we discussed those issues, he boasted that he
A report by the independent Audit Commission concluded that the SSA system was
Mr. Frank Dobson (Holborn and St. Pancras):
The fact is that--as one of the junior Ministers pointed out in a letter to my hon. Friend the Member for North-West Durham (Ms Armstrong)--things have changed so much that the Government cannot say whether Westminster received more or less.
Mr. Gummer:
The hon. Gentleman does not notice the truth. Westminster received proportionately more under Labour: in comparison with what other authorities received, it received more. That is a fact; that is the fact that Labour Members criticise; that is the fact that my figures in the Library prove. The hon. Gentleman's whole case is shot below the waterline, and he knows it.
That was pointed out to the hon. Gentleman this very Friday by John Humphrys--not a well-known supporter of the Conservative party. Mr. Humphrys described the hon. Gentleman's mathematics as the "mathematics of the madhouse". That is what he said when the hon. Gentleman could not answer any of his questions except by returning to the subject of Westminster.
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The second question is this. Why, in every local authority finance settlement since the SSA system was introduced, has Westminster done worse than the inner London average, while Camden and other councils receive more and more? Would the hon. Gentleman like to explain that? Again, his case is shot below the waterline.
As I said in November, I shall continue to pay a special grant to compensate authorities that have lost more than 2 per cent. of their SSA as a result of SSA methodology changes. That is a fair arrangement that recognises the special problem of a sudden drop in SSA, although also recognising the need to phase out such support, so that grant can be redistributed according to improved measures of need. The Special Grant Report (No. 23) will establish the grant for 1997-98 and some £65 million will be distributed to local authorities next year.
I also propose to damp council tax increases that are a direct result of reorganisation and come above a £52 threshold at band D--that is £1 a week--for authorities reorganised this year and last year. That threshold is lower than that on which we consulted and takes account of representations that were made to us by authorities. The scheme will result in the payment of grant worth £14.53 million and will benefit council tax payers in North Lincolnshire, Redcar and Cleveland, Rutland, Dorset and Bedfordshire. It builds on the scheme that has operated this year. I shall lay regulations to implement the scheme before the House tomorrow.
This morning, I received a letter from the chairmanof the Association of Metropolitan Authorities,Sir Jeremy Beecham, objecting to one tenth of 1 per cent. of revenue support grant being used in that way. One tenth of 1 per cent.--so much for brotherly love. The Labour leader of the Local Government Association says no, not a penny more to help Labour North Lincolnshire, not a penny more to help Labour Redcar and Cleveland and not a penny more for independent Rutland or Liberal Democrat Dorset, let alone all-party Bedfordshire, despite the particular difficulties of their council tax payers. So much for the egalitarian Labour party and for those who want to share the burdens. They do not want us to give a penny more, even it amounts to only one tenth of 1 per cent.
Sir Peter Emery (Honiton):
Will my right hon. Friend take into account the fact that, although Devon county council cannot run a whelk stall, in the past two years, it has twice been given more than the average increase for its SSA, but has run its reserves down lower than is sensible, and lower than they have ever been? It suggests that it will give up educational discretionary grants because it cannot afford them, although the money would have been available if it had spent the budget properly.
Will my right hon. Friend take into account the fact that there is a real problem with Torquay and Plymouth leaving the Devon region? That involves educational factors and affects many local schools in villages. Torbay, Torquay and Plymouth are of course compact. Will he please consider those matters when he comes to the decision on the SSA for Devon as a single county?
Mr. Gummer:
We shall certainly have to consider all the ramifications. That is why we have offered, for example, immediate help in two tranches to those that are reorganised. We shall of course have to consider the
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Mr. Hugh Bayley (York):
The Secretary of State will recall that, when the City of York was established as a unitary authority, people in the outlying areas that were absorbed into York received an assurance from the Government that their services and, in particular, their schools would be funded at the same level as the county council's, yet the SSA for City of York council has increased by less than the national average--by 1.1 per cent. compared with a 1.5 per cent. national average--and North Yorkshire county council's SSA has been increased by 2.4 per cent.
The Secretary of State will know that the Minister for Local Government, Housing and Urban Regeneration kindly received a deputation from myself, the hon. Member for Ryedale (Mr. Greenway), and councillors from all parties on City of York council, who believe that the SSA settlement was both unfair to York and broke the Government's pledge to treat York in the same way as the county council from which it was taken: in the final SSA figures, York's SSA has been reduced rather than increased. Will the Secretary of State comment on the position? What hope can he hold out that York will be treated as generously and in the same way as North Yorkshire county council?
Mr. Gummer:
The disaggregation between the City of York and North Yorkshire county council was done by mutual agreement--both sides agreed to the disaggregation. Of course, it is right to say that in future we may look again at the way in which various figures are put together. However, the hon. Gentleman should not make the figures for this year the subject of disagreement between us, as there was agreement between the two local authorities involved. It was one area that did not have the fierce arguments that almost cause the need for someone outside to broker an agreement.
I am aware that we have received a delegation and we shall be considering certain aspects that it put forward. However, the hon. Gentleman should accept that for this year the disaggregation was agreed between the two authorities and was not imposed from outside.
Mr. Gummer:
I must get on with my speech, but I shall give way to the hon. Gentleman later.
I am also specifying a base budget in the relevant notional amounts report for local authorities that are being reorganised, are subject to a boundary change, or whose budgets are affected by changes in funding arrangements for nursery vouchers or national parks. That will allow me to make a fair comparison between years for capping purposes.
Finally, I come to my proposed capping criteria. I have listened carefully to the strong arguments put to me to relax the provisional criteria that I announced in November. [Interruption.] I shall again take interventions from hon. Members. If that makes a little longer the time that the hon. Member for Holborn and St. Pancras will
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As I said, I have listened carefully to the strong arguments put to me to relax the provisional criteria that I announced in November--[Interruption.]--arguments that Nottingham council would support. I am sorry that the hon. Member for Nottingham, North (Mr. Allen) is bored by his council. Both Nottingham and Nottinghamshire councils had their usual complaints, to which we listened with our usual courtesy--something that the hon. Gentleman has never extended either to them or to me.
"never felt compelled to agree with experts."--[Official Report, 1 April 1996; Vol. 275, c. 56.]
Fortunately, the experts do not feel compelled to agree with the hon. Gentleman.
"a more sophisticated system for equalising needs than any overseas system examined in this study and . . . an improvement on its predecessor in many respects".
It will be remembered that its predecessor was the system so often lauded by the hon. Member for Holborn and St. Pancras. Another study, by Rita Hale of the Chartered Institute of Public Finance and Accountancy and Tony Travers of the London school of economics, found that
"no overseas country appears to have a full grant system which goes so far in its attempt to achieve full equalisation".
If the hon. Gentleman wishes to continue his line of argument, he needs to answer two simple questions. First, if--as he alleges--the Government rig the system in favour of Westminster city council, why were the previous Labour Government more generous to Westminster, relative to most other authorities, than the present Government; and why, when Labour Members asked for the figures and they were put in the Library, did they discover that they were wrong and I was right? They do not refer to those figures any more.
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