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Mr. Raynsford: The hon. Gentleman took rather more than the customary time, leaving me less time than is the normal courtesy to reply to his questions. I was giving him a detailed response on the issues that he raised, including the rationale for changes in the SSA methodology. I intended to come to his other specific points, but if I do not manage to do so, because time runs out, that will be his fault, not mine.

The principles that we adopted for changes in the SSA methodology were all agreed with the Local Government Association. The principles now make it more explicit how measures of need are evaluated. That represents an improvement on the previous formula, whereby some affluent areas were ranked higher in terms of deprivation than other parts of the country with more obvious economic and social problems. Indicators such as morbidity rates and the proportion of residents on income support have been--in my view, rightly--added to the indices.

We have confronted the inequity in the present system whereby visitors and commuters were attributed the same economic and social characteristics as residents. Previously, sparsity, density and measures of neediness applied to all those categories. That was clearly a gross anomaly and now they will apply only to those living in such areas. There was clearly something wrong with a system that prescribed that all visitors and commuters to an area were as deprived as the average resident. We shall continue to take account of the extra costs of visitors and commuters, but only the fair costs.

We have proposed in the settlement to change the way in which we deal with the costs of borrowing. During the 1980s, local authorities had several choices about how to use capital receipts. They could spend them on new investments or they could use them to repay debt. At present, the capital finance system works to the advantage of those who repaid debt. We propose to change it so that where an authority would do better from having its capital financing SSA worked out using its actual level of debt in 1990, rather than the notional level previously used, that measure will be adopted.

One significant part of the calculation of SSAs in which we have decided not to implement any change at present concerns the area cost adjustment, which the hon. Gentleman mentioned. The Prime Minister said that we would review that, and we have done so. We have received considerable representations from people in

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local government who were unhappy about the Elliot proposals and supported a specific cost approach. Wetherefore specifically commissioned further work to examine the merits of such an approach.

Dorset county council fares well from the proposed SSAs. Its--

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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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