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6.17 pm
Mr. Jon Trickett (Hemsworth): I think that I heard the hon. Member for Wellingborough (Sir P. Fry) refer to the current settlement as tight. In Wakefield, the region that I represent, it is far more than tight; it is devastating. It will devastate local communities. As you are no doubt aware, Mr. Deputy Speaker, even as we hold this debate, local councils are meeting to discuss precisely how to cope with the financial crisis. On the reform of local government finance, the settlement may be tight, but what is unacceptable is that it is inequitable. It is precisely that which is at the core of the Labour party's charges against the current settlement.
I understand that the matter was last debated in the House on 31 January last year. Unfortunately, I missed that debate because I was happily campaigning in the Hemsworth constituency waiting for the result that would be announced the following day. It was--
Mr. Mike Hall (Warrington, South):
Very cold.
Mr. Trickett:
It was very cold. I recently referred to that in Committee. I should like to share these comments with all hon. Members. It was so cold that parts of my anatomy--certain extremities--have still not defrosted, at least according to my wife.
Although I could not be in the House on that day, I am familiar to some extent with the secrets and mysteries of local government finance, as I was leader of Leeds city council for seven years and, before that, I sat on the management team for three years. Over a period of 10 years, I was responsible for discussing the expenditure of about £10 billion at today's prices. During those years, I learnt a great deal about local government; indeed, I became fondly attached to local government. I was able to witness at first hand the intelligence, integrity and entrepreneurial skills that many people brought to local government. The commitment to public service and civic values was, above all things, what inspired the vast majority of practitioners in local government.
During that period, local government quite literally had dozens of Acts of Parliament or legal enactments of one sort or another imposed on it by this Conservative Government--all of which, without exception, were aimed at constraining the ability of local government to serve its communities. I have every sympathy with local government because of the Government's record and, in particular, the current revenue support grant settlement, which I would describe as both misleading and perverse.
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It is misleading, if not downright dishonest, to reduce national taxation while squeezing local government--thereby bringing about an increase in local taxation and, therefore, an aggregate increase in the overall taxation burden. The Government have made a number of misleading statements. For example, they constantly claim--although it does not fool anybody--that the total increase in local authority spending is 2.5 per cent. However, local government reorganisation must be paid for out of that money, as well as additional policing and new community care clients. In addition, account must be taken of the demographic growth factors in education. Therefore, the spending increase is more like 1.5 per cent. There are further pressures on local government spending, such as inflation and a range of pay settlements that are outside the scope of local authority control.
The truth is that, whatever they say, the Government are effectively setting council tax levels. The scope for local action or creativity by local councillors and officials has all but disappeared. During the seven years that I was leader of my council, we experienced three different tax systems for local government--the old rating system; the ill-fated, disastrous and reactionary poll tax; and, now, council tax. The one that has finally put a straitjacket on local government is the council tax, with all the legal ramifications of capping and so on.
The settlement will cause real problems for local government. I want to talk about the national position before dealing with Wakefield in particular. The Department of Transport has admitted that the £146 million allocation for local road maintenance is inadequate if councils are to comply with the Department's code of practice, let alone with commitments under the citizens charter. The Office for Standards in Education, the Government body that regulates education, has said that standards in more than 5,000 schools have been adversely affected by book or equipment shortages. The British Geriatrics Society has said that shortfalls in social services funding are a significant contributory factor in NHS bed blocking. Serious problems face local government, which impact on local councils, on communities and, ultimately, on individuals throughout the length and breadth of the country.
I want now to deal with the problems facing the authorities that are described as the Webber-Craig authorities, of which Wakefield is one. If the settlement is severe nationally, the formula by which the RSG is distributed is perverse. It is that perversity which lies at the core of many of the problems facing authorities such as Wakefield and others in the Webber-Craig basket.
It has already been said that the formula under which the standard spending assessment is distributed is wholly perverse and does not have a semblance of fairness or equity about it, as can be shown times without number throughout the country. The index of social conditions tries to identify the amount of deprivation within an authority. It puts Wakefield as the 232nd most deprived council area out of 358. Why does Wakefield suffer so badly under the RSG distribution system? Why is
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Everyone is aware of the extent of deprivation in the Wakefield area, so how can Wakefield end up £12 million short compared with the average? Indeed, if Wakefield were raised to the average of metropolitan districts, it would receive £20 million in additional resources. That would mean a great deal in, for example, Hemsworth--traditionally a solid mining area which, over the centuries, has contributed to the wealth of the nation. Now, sadly, it faces severe deprivation because of the closure of the mines.
Mr. David Hinchliffe (Wakefield):
My hon. Friend is making an important point. During the past 15 years, Wakefield has lost 20,000 mining-related jobs, yet there appears to be no means within the mechanism for calculating the revenue support grant to take account of the efforts that the local authority has made on economic regeneration. That anomaly in the current arrangements affects my hon. Friend's constituency as well.
Mr. Trickett:
My hon. Friend makes a telling and important point. A range of indices is used within the calculations, some of which are given far too much weight, while others are almost entirely ignored. For example, the devastating impact of the closure of mines on the local economic and social infrastructure should be taken into account.
I have been trying to illustrate the perversity in the way in which the formula operates. Why does Wakefield receive £2,536 per pupil when Wandsworth receives £3,551--a differential of about £1,000 per child? Perhaps we should worry about a system that puts a price on the head of a child. It is worrying to think that a child in Wandsworth is somehow considered to be worth £1,000 or 40 per cent. more than a child--or any other individual human being--living in Wakefield. It is a disgraceful system. How can it be justified, morally or otherwise?
Mr. Curry:
I should like to pursue the hon. Gentleman's point. Is he saying that the amount per child should be the same across the country, or is he saying that he accepts that it should be different, but that the differential is too wide? It is a very important point. Does he accept, for example, that educating a population with a large ethnic minority group costs more? It is important to know exactly where he stands. It is easy to remark, "We get less, so it is unfair." In that differentiation, he must spell out what he thinks are the bounds of fairness.
Mr. Trickett:
I thank the Minister for raising that issue. There are two or three issues to consider in the way in which the SSA system works, and the first is the system's obscurity. It is difficult for lay individuals, elected officials, hon. Members and, undoubtedly, Ministers to understand precisely how the figures are derived. When one analyses them, in many cases, it is difficult to justify the weight given to certain factors. Ethnicity is a difficult example, and it could bear further examination. I do not believe that an individual should be rewarded by additional funding under the SSA simply by
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