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Mrs. Angela Browning (Tiverton and Honiton): I have a favour to ask of the Deputy Prime Minister--he will gather that I am desperate. Will he receive a delegation from Liberal Democrat-controlled Devon county council between now and February? The council has been lobbying for a meeting and his Department is usually quite generous about that. When he meets council representatives, will the Deputy Prime Minister ask them why the money that they have received from the centre for flood defences--there is a total underspend by the council of £1.3 million--is not being spent?

The Deputy Prime Minister will be aware of the devastation in my constituency in places such as Gittisham, Ottery St. Mary, Cullompton and Whimple. I declare an interest, in that I live there and I too was flooded out. The Deputy Prime Minister would save me having to raise the matter in an Adjournment debate. Devon county council hopes that it can persuade him to increase the money that he intends to give it. He could do my constituents a great favour in return by examining how the council controls the money that it receives and, in particular, how communities are disadvantaged by the way in which the council spends the money that it is allocated for flooding.

Mr. Prescott: The hon. Lady raises an important point, and it is one that we have considered. I do not know how the settlement affects Devon, but money has been put into accounts for several local authorities to deal with flooding. They have been claiming back money on the basis that there are funds in those accounts, but we shall now reimburse only the money that is spent. Several authorities have been burrowing away the money and not using it for flood defences.

Mrs. Browning: Yes, that is what the Liberal Democrat council has been doing.

Mr. Prescott: I take the hon. Lady's point. If that is what the Liberal Democrats have been doing, it is terribly disgusting. We are about to change that system. It is typical of the Liberals to hide the money and then call for more.

Dr. Howard Stoate (Dartford): I congratulate my right hon. Friend on what will be seen as a fair settlement for Kent of 4.7 per cent. I congratulate him particularly on reserving judgment on removing the area cost adjustment, which he will know is a concern to boroughs such as mine in Dartford which stood to lose many of their services. When he gets round to the detailed and complex discussions on the area cost adjustment, will he take into account the great difficulties faced by borough councils that do not have social services and education in their budgets? Will he also recognise the significant pockets of deprivation that exist even in leafy areas such as Kent?

Mr. Prescott: We want to take those matters into account. I mentioned earlier, in regard to proposals made by county councils about using sparsity as a

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criteria, that we have taken that into account. Whether we are considering the provision of library services or elderly services, we have made an adjustment and it is reflected in the settlement today.

I can tell my hon. Friend that we have been discussing the area cost adjustment ever since we came to power. We have narrowed down proposals to 21 formulae. I am not yet convinced that we have one that I can bring to the House and say with confidence, "This is right and proper and it is the fairest method," so I have not come here today to make further advances on that. My hon. Friend can rest assured that the services provided by local authorities will be taken into account in assessments.

Mr. Tony Baldry (Banbury): Last year, Oxfordshire county council managed only by moving a substantial chunk of education spending to prop up personal social services spending, and by substantially hiking the council tax bill. What does the Deputy Prime Minister say to those in Oxfordshire who are worried that, this year, the settlement might result in another substantial hike in the council tax bill, and a substantial reduction in social service provision in the county?

Mr. Prescott: I recall people from Oxfordshire making a very similar case to me. It was a reasonable case. We had some disagreements about it, but I understood their problems, which resulted from the fact that the previous Administration gave them a very restricted contribution.

There is a great difference between the latest settlement and that made in the last year of the previous Administration. Oxfordshire county council gets a 3.8 per cent. increase in this year's settlement; in 1994-95, when the Tories were in government, the council got an increase of 0.5 per cent.--half a percentage point. No wonder Oxfordshire had problems providing services. That was the settlement that we inherited from the previous Administration.

This is our settlement--our judgment about fairness--and 3.8 per cent. compares very favourably with 0.5 per cent. under the hon. Gentleman's Administration. It means that Oxfordshire gets an extra £9.5 million for education. That is an increase of 4.6 per cent.--a substantial increase, which fairly represents the best deal that Oxfordshire has had for years.

Mr. Harry Barnes (North-East Derbyshire): Although there is still a lot of work to be done on area cost adjustment and educational needs, I congratulate my right hon. Friend on the 5.4 per cent. increase overall in the total spending assessment, and on an increase which was said to be 7 per cent. in real terms over three years. I understand that Derbyshire county council will get a 6.1 per cent. increase, and that its police will get a 6.4 per cent. increase. There have been considerable problems in both areas. However, the figures are not great, given those for other district councils.

I understand that education provision is very much to the fore in connection with the county's position, but has the idea of enhancing the population figures been considered? North East Derbyshire district council suffers because it loses a considerable amount of money owing to the fact that people work in Sheffield and Chesterfield. That fact needs to be taken into account by the

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Department for the Environment, Transport and the Regions in assessing a fair settlement for the district council.

Mr. Prescott: This is another part of the argument about the criteria for SSAs and the area cost adjustment. Arguments about population will be considered, as will arguments about many other factors. Views differ, and I should like more information and more discussion before I reach a conclusion.

Each settlement takes into account the services that are provided by each authority, and the 6.1 per cent. for Derbyshire county council takes into account police services, which my hon. Friend rightly points out are being given 4.1 per cent. However, he must take into account the fact that the Home Secretary looks to the police for a 2 per cent. improvement in productivity this year. These settlements and accounts are based on efficiencies and productivity.

Mr. Geoffrey Clifton-Brown (Cotswold): On the face of it, the settlement for Gloucestershire county council looks generous, but it is based on smoke and mirrors. The education settlement is 1 per cent. below the national average, although Gloucestershire is already among the lowest-spending councils on education in the country. Our police settlement will involve a £1.5 million cut in the police budget. The council tax payers of Gloucestershire will suffer, because the council tax that they pay will increase by considerably more than the average of 4.5 per cent. If that is the case, will it not simply be a distribution from the shire counties of this country to the northern urban counties, paid for by the council tax payers of the shire counties?

Mr. Prescott: Another claim for smoke and mirrors. At least, before giving his analysis, the hon. Gentleman felt obliged to say that the settlement looked generous. It not only looks generous; it is generous, whatever it is compared with. The 5.7 per cent. increase that Gloucestershire is receiving is far better than the awards in many years under the previous Administration, and far better than was given last year.

I know that the hon. Gentleman is not criticising the education settlement, but I am sure that people in Gloucestershire will welcome the fact that there will be £12.1 million more for education--one of our priorities. The hon. Gentleman appears to be arguing that there will be a shortfall in police funding, but he is not taking into account the agreement between police authorities and the Home Secretary on the efficiency and productivity improvements to be expected this year. That, of course, runs right through the local authority settlements. I am not simply giving money to the local authorities and telling them to get on with it.

Local authority modernisation means giving best value. I expect services to be delivered more efficiently and effectively, with greater productivity; otherwise I am wasting money that I could be providing for other services. That is what best value is about and what I intend to bring about. It is not smoke and mirrors, but a real increase and a benefit to the hon. Gentleman's constituents. It is a pity that he did not finish by saying that, on further reflection, it was a good settlement--but we live in hope.

Mr. Gordon Prentice (Pendle): This is indeed a good settlement. Will my right hon. Friend say a word or two

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about the other services block, which is important to small district councils like mine in Pendle? In particular, environmental health officers have new responsibilities for monitoring air quality, policing food establishments and so on. I want to be reassured that the settlement will ensure that the money goes where it is needed in those front-line environmental health departments.


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