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Mr. Raynsford: As the hon. Gentleman has acknowledged, the Government did not adjust the cap, and he voted in favour of that cap. Clearly, he has had a further think in the meantime and is advocating a different course. He has told us that the former Minister, the right hon. Member for Skipton and Ripon (Mr. Curry), said that he would have taken a different view this year. That may be; it is interesting how people can change their point of view after the event, and not least after an election defeat. We as a Government, however, must consider the position that we have inherited, and that is not an easy position.

I want to make some general points about the new relationship between central and local government, to which the Government are committed. The Government have a new agenda for Britain's future, and a vision for local government's place in that future.

We want to reinvigorate local government, in ways that encourage increased democracy, with local people having the chance of more of a say in the affairs of their council. We want local government to have increased autonomy, with more freedom for authorities to take their own decisions; increased accountability, with elected representatives being more visibly accountable for their actions; and increased partnership between central and local government and between local authorities and people, businesses and groups in their area. The hon. Member for Oxford, West and Abingdon alluded to a number of those aspirations and quoted from our election manifesto, to which we are committed.

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Within that framework, local authorities have important roles as both commissioners and deliverers of a wide range of local services. Authorities are responsible for assessing service needs for groups and individuals; for balancing priorities; for setting objectives; for procuring delivery and/or providing services directly; and for monitoring quality and standards, reviewing performance and acting on complaints. Those are all important tasks.

We have been busy in the month since the general election. In the Queen's Speech, we announced a major programme of legislation for the first Session, including many Bills affecting local government, on the release of capital receipts, the establishment of a new strategic authority for London and the establishment of regional development agencies throughout England, as well as Bills on education and on crime and disorder and one setting up the welfare-to-work programme.

Only this week we have signed the Council of Europe's charter of local self-government and set out our proposed approach on replacing compulsory competitive tendering with a duty on local authorities to secure best value.

That pace will continue. We shall examine with local government the scope for pilot studies on a range of issues, such as best value, a new approach to regeneration, community planning and partnerships with other agencies, and democratic innovations. We shall also work on the scope of the new duty to promote economic, social and environmental well-being that we intend to place on local authorities, to strengthen their community leadership role and encourage innovation and local partnerships in the delivery of services and development and regeneration projects.

That volume of local government business reflects the importance that we attach to local government. The local government agenda will keep us all very busy over the length of this Parliament and, I hope, beyond it, but we shall also make prompt progress. Our agenda is positive. Our Government want to be judged on our success in improving the quality of life for all people and on the extent to which we have made a difference.

On local government funding, all public expenditure programmes have to be examined rigorously each year, and local government spending, which accounts for a quarter of all public expenditure, is no exception. Decisions on local government spending must take into account not only the pressures on local authorities, but the scope for greater efficiency and effectiveness in local authorities.

We have, of course, inherited this year's local government spending plans, and have given a clear commitment to retain them. Although we are committed to reviewing the local government finance system in future years, for this year at least we must work within the current spending plans.

The hon. Member for Oxford, West and Abingdon mentioned standard spending assessments, as did the hon. Member for Wantage. SSAs are the basis for the distribution of revenue support grant. They are based on measures of spending need that apply to all local authorities, and are discussed with representatives of local government. The SSAs for 1997-98 have been announced. As with total local government spending plans, we have said that they will not be revisited and we do not propose to do so now.

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Having said that, we are committed to a fairer distribution of Government grant among authorities, and believe that there is scope for improvement in the arrangements in future years. My colleagues and I will look closely at the SSA system with that aim in mind. We shall listen to local government views on how SSAs might be improved, both for 1998-99 and in the longer term.

If the hon. Member for Oxford, West and Abingdon feels that the SSA system does not treat Oxfordshire fairly, I should be happy to examine any proposals that he has for different methods of calculation or other appropriate changes. However, any system of this nature must be universal and any changes would need to apply to all local authorities equally. In making any changes, we will, of course, want to be sure that they will produce a sounder assessment of needs. I should welcome any specific proposals that he may have.

The local government finance settlement for 1997-98 saw the total standard spending assessment for all local authorities increase by £1.1 billion or 2.5 per cent. on 1996-97. Oxfordshire county council's SSA increased by more than £8.7 million, or 2.7 per cent. That is above the average increase for counties, which was 2.1 per cent., and is well above the overall increase for English authorities of 1.5 per cent.

Two important areas--one was mentioned tonight, and the other featured in a recent publication by Oxfordshire county council--are education and fire services. Oxfordshire's education SSA increased by the shire county average of 3.5 per cent., while the fire SSA went up by 6.4 per cent., compared with an average of only 5.5 per cent. The county also did well with a 4.4 per cent. increase in its highways maintenance SSA--while the shire county average showed a fall--and with a 3.9 per cent. increase in the other services SSA, compared with an average increase of only 2.1 per cent. Those figures do not suggest that Oxfordshire has suffered unfairly in relation to other counties in this year's SSA; quite the contrary, if anything.

Dr. Harris rose--

Mr. Raynsford: I have only five minutes in which to complete my reply. I hope that the hon. Gentleman will accept that in a time-limited debate, I cannot give way. If he wishes to make observations, I should be happy to accept them in writing. RSG distribution for the 1997-98 settlement is a closed matter, following approval of the local government finance settlement by the House in February, and it will not be reopened. We must look to the future and build a successful partnership, with local government playing its part.

With regard to capping, we gave clear signals that while we proposed to replace in due course the crude capping system that currently operated, that would have to wait for future years. We said that in the meantime we proposed to follow the intentions of the previous Government for 1997-98--a financial year which, as everyone knows, began almost a month before the general election that returned the Labour Government. All authorities, including Oxfordshire county council, knew that when setting their budgets.

Only three out of the 436 authorities in the country set budgets significantly over their provisional capping limits. Our decision to designate those authorities demonstrates

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that we are taking our commitments on spending seriously. Indeed, we have also made it clear that under our plans for replacing the current capping system in future years, we shall retain reserve powers to deal with exceptional cases where unreasonable budgets are set. The hon. Gentleman also alluded to that. So this year all three authorities will be required to reduce their budgets unless they can convince us that they should not.

Under the capping legislation, capping principles apply to classes of authority, and we can consider an individual authority's circumstances only if it budgets over cap. Oxfordshire was permitted to increase its budget by 2.2 per cent., which was the average permitted increase for shire counties. Certainly on the basis of the information that we have seen so far, there is nothing to suggest that Oxfordshire is in a tougher position than other counties that have budgeted within cap. Our proposed cap would still allow the county to increase its budget by £7.35 million compared with 1996-97. We consider that to be reasonable and achievable.

Decisions on priorities in services is a matter for the authority itself. It is not for me to suggest that the authority should make reductions, or where those reductions might be made if the cap is confirmed. Local authorities would understandably object if we sought to dictate exactly how each pound was spent.

At this stage in the capping process, authorities can accept the caps that we have proposed. When that happens, the cap limit is then set by notice and the authority can immediately set a revised lower budget and recalculate its council tax. Sending out new bills will obviously impose an extra administrative burden, and that

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expense will have to be met from within the authority's revised budget. However, that is a direct result of the authority's decision to breach the provisional cap, and all authorities are aware of the implications of doing so.

When a county council is required to recalculate its council tax, the burden of rebilling will fall on the district councils in the area. However, those billing authorities can recover the costs from the county. In terms of the effect on services, it will be for the authority itself to decide spending priorities within the resources available to it.

Should Oxfordshire wish to challenge its cap--from what the hon. Member for Oxford, West and Abingdon said, I suspect that we shall receive representations from the authority and hon. Members who have connections with the county--it has 28 days from the date of designation, that is, until 18 June, to propose an alternative amount, together with its reasons for doing so. As well as submitting its written case, the authority will have an opportunity to meet me or one of my colleagues to put its case directly to us. We shall be open to such representations and we shall consider them carefully, as we shall the points that have been made in tonight's debate. We shall then consider all the relevant points before reaching our decision.

Final caps will be set out in--

The motion having been made after Ten o'clock, and the debate having continued for half an hour, Mr. Deputy Speaker adjourned the House without Question put, pursuant to the Standing Order.

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