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Mr. Lindsay Hoyle (Chorley) indicated assent.
Mr. Bercow: It is an unsatisfactory guessing game, as the hon. Gentleman rightly agrees. I hope that the Under-Secretary, who is an intelligent man, will concede that it does not make sense to operate on that basis, given that if a decision made by the council is wrong and it is capped against its expectation, it will have to re-bill. That would cost Buckinghamshire £500,000. That is not sensible. Let us know the ground rules and operate according to them.
Of one thing we can be certain: whatever consultation the Government have undertaken, Buckinghamshire county council has consulted. It has surveyed residents, staff and stakeholders. It has issued consultation documents on its proposals and had a healthy and supportive response to them. It has staged a series of briefing meetings for people with a particular interest in the subject. As a result, beyond doubt, the message is this: we support the council's priorities, we want the services to continue, we are prepared to pay the cost for them.
Mr. David Lidington (Aylesbury):
I am grateful to my hon. Friend the Member for Buckingham (Mr. Bercow) and to the Minister for allowing me to intervene briefly in the debate. I congratulate my hon. Friend on his success in obtaining a debate on this important subject.
I shall make three points. First, I remind the Minister that in each of the local government settlements that the Government have announced since the general election, they have transferred money away from Buckinghamshire to other areas of the country through changes in the standard spending assessment formula. That has created difficulties for a council that is already run economically and prudently, and whose electors are accustomed to the level of services that it provides.
Secondly, the decision by the Government this year not to roll forward the special transitional grant for social services into the standard spending assessment for 1999-2000 was unprecedented in the years since the new system for funding social services was first established. We in the House all know that the care of the elderly, the learning disabled and other vulnerable people involves a long-term commitment by the social services department of a local authority. It cannot be switched on in one financial year and switched off the next because of an sudden, unheralded, unforeseen and unprecedented change in the Government's policy.
I very much regret that the Government chose to make such a switch in policy and I hope that Ministers will consider allowing flexibility of the sort that my hon. Friend called for. If they do not do so, there is a real threat to services such as the Princes Risborough day centre in my constituency, the Endeavour day centre in Chesham, which serves the constituents of my hon. Friends the Members for Chesham and Amersham (Mrs. Gillan) and for Beaconsfield (Mr. Grieve), and day centres in High Wycombe that serve the constituents of my hon. Friend the Member for Wycombe (Sir R. Whitney).
Short of cutting social services, there are only two ways in which the county council can compensate for the regrettable change in the Government's policy. One is to increase the council tax severely in a way that would
inevitably bear hardest on those people on pensions or fixed incomes. The second is to reduce planned spending on education in a way that would also be unwelcome.
The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Nick Raynsford):
I congratulate the hon. Member for Buckingham (Mr. Bercow) on his success in securing the debate and giving us the opportunity to consider the provisional local government settlement for Buckinghamshire in the coming financial year.
The local government settlement is an issue of considerable interest to local authorities. Today, we came to the end of the consultation period on the proposals that my right hon. Friend the Deputy Prime Minister announced on 2 December. Many local authorities, including Buckinghamshire, as the hon. Gentleman observed, have made representations on the settlement and have sent representatives to see Ministers to press their case. I can assure the House that, before we take final decisions, we will carefully consider all the comments made on our proposals, including those made by the representatives of Buckinghamshire and those made by hon. Members in this evening's debate. We expect to be able to announce the final settlement early next month.
I will comment later on the settlement and what it means for Buckinghamshire, but I should put the comments made by the hon. Gentleman in context.
We have provided the best settlement for seven years. We have provided a 5.4 per cent. increase for councils total revenue spending. That is an additional £2.6 billion and provides local authorities with a real increase of 2.9 per cent. I am confident that local authorities will continue to produce more efficiency savings as they continue to modernise. Therefore, the increases that we have provided will provide even greater headroom above inflation.
The English settlement provides an extra 7.2 per cent. or £1.4 billion for education, on top of the extra £5.4 billion that my right hon. Friend the Secretary of State for Education and Employment announced that we would be providing over three years for capital investment in modernising our schools.
Council tax payers will have also been pleased to note that we are not expecting them to pick up the tab for this extra expenditure. We have allowed for an extra £2 billion of Government grant, so that council tax bears only its fair share of additional spending. That provides that, if local authorities increase their budgets in line with SSAs,
council taxes will rise by 4.5 per cent. on average--I appreciate that, within this figure, there will be variations between authorities. I will come on to that point later.
Personal social services receive an extra £500 million or 6.1 per cent. in cash terms as part of the Government's new approach to social services. That is a 3.6 per cent. increase in real terms. We are increasing resources by more than 3 per cent. a year in real terms, on average, over the years 1999-2000 to 2002-03.
I am sure that authorities in Buckinghamshire will recognise that this is a good settlement and that they have benefited from it. As always, authorities are affected to a lesser or greater extent by the changes made to the distribution of Government grant.
Last year, we announced a number of changes to the SSA formulae to make them fairer. This year, we have made more changes to SSAs, where those are justified and will lead to a fairer system.
We have specifically made changes to the children's social services formula. The new formula has been introduced following detailed research, mainly undertaken at York university, which has been the subject of thorough and detailed discussion with local government. The analysis used to develop the formula reflects the pattern of service costs since the Children Act 1989, and includes details of all types of children in touch with social services.
The formula includes plausible factors influencing the need to spend and uses a statistical method which ensures that results are not biased by historic levels of funding. The new formula for children's social services provides a better indication of need and a fairer allocation of grant among authorities than the previous one.
All the major criticisms of the formula have been fully investigated. We did not introduce it in last year's settlement because there were doubts which required further examination, and that examination has taken place in the intervening year. As a result, a fostering cost adjustment has been developed to allow for the uneven costs of foster care across England.
Although standard spending assessments for some authorities are reduced as a result of that change, we have ensured that no authority will receive less grant from the Government in 1999-2000 than it did in 1998-99.
We have also introduced changes which make allowance for the additional cost of providing social services for the elderly in their own homes in rural areas and, for the next financial year, the distribution of grant will take account of deprivation in the part of the formula that deals with what are called county services, such as libraries and probation.
However, we have not made other changes which were suggested to us. Despite extensive discussions with local government, no clear-cut improvements could be identified on issues such as the area cost adjustment and the additional educational needs SSA. We were pressed to make changes on those, but we did not do so because we did not believe that they would be justified.
Many authorities in the south-east were concerned about possible changes on those issues and made
representations to us. We accepted that none of the proposals that we had before us represented a clear improvement on the existing system, so we have left that part of the formula unchanged.
We will continue to seek ways of making the system fairer, and we have launched a long-term, three-year research programme to try to find a fairer, more robust, simpler and more stable way of distributing grant. That is the biggest challenge in local government finance, because the demands of fairness on one side and simplicity on the other are not easily reconciled. We have an extremely complex system, which many people think is not as fair as it should be. The challenge over the next three years will be to achieve a system that is more comprehensible to ordinary people and that also achieves the objectives of fairness.
As we said in our July White Paper, we do not expect to change the SSA formula over the next three years. That will allow a period of stability for local government, and for the research, to find out whether we can come up with different ways of distributing grant.
We also announced SSA totals for three years in the comprehensive spending review. Those may change slightly, to reflect changes in local government's functions and responsibilities. Apart from those, there will be no changes, so the new approach will allow local government to plan ahead on a firm basis--for three years--for the first time. That can be only good news for councils and council tax payers alike.
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