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Mr. Evans: The right hon. Gentleman may say I am wrong; we shall see if that is so when the Under-Secretary of State for Wales winds up. I only hope that his performance today is better than the one he gave earlier this week on the private notice question. [Hon. Members: "Shame."] His statement was shameful. I hope that today he will answer some of the questions put, even though he was not able to do so then.
Devolution will be upon us after May, and it will have an enormous impact. Today's revenue support grant settlement debate will be the last that we shall have in the House of Commons. Will the Minister say something about the Barnett formula, and about the confidence of local authorities in both the three-year settlements and their prospects for the future?
The Parliamentary Under-Secretary of State for Wales (Mr. Jon Owen Jones):
This has been an interesting and wide-ranging debate on the local government finance report for Wales. Next year, the decisions that we have been discussing will fall to the National Assembly for Wales. Today, hon. Members have raised various points about the funding of local services for their constituents.
The local government settlement for 1999-2000 builds upon the comprehensive spending review and, for the second year, we have addressed the funding deficit that we inherited from the previous Administration. There are undoubtedly still spending pressures on local authorities, but in the spirit of the partnership that we have fostered in Wales, the most acute pressures have been alleviated. In particular, the additional £70.2 million for education
will enable local authorities to meet the teachers' pay settlement and have money left to spend on education. I am sure that when the hon. Member for Ceredigion (Mr. Dafis) does his sums, he will find that that is the case. We estimate that the teachers' pay settlement for 1999-2000 and the hang-over from the last pay settlement will cost about £50 million. Some £20 million is available for local authorities to target at local education priorities.
Several hon. Members--my hon. Friends the Members for Bridgend (Mr. Griffiths), for Vale of Clwyd (Mr. Ruane), for Cardiff, North (Ms Morgan) and for Preseli Pembrokeshire (Ms Lawrence)--related their experiences of looking after children or of teaching. They expressed their strong support for the Government's policies, which will achieve a reduction in class sizes and an increase in nursery education.
My hon. Friend the Member for Cardiff, North expressed her anxiety that we should safeguard playgroups in the voluntary sector. I endorse her views, and I know that my hon. Friend the Member for Neath (Mr. Hain) will take them into account. My hon. Friend the Member for Bridgend spoke about the need to secure social services--particularly when dealing with children in care. That is very much a Government priority. By allocating money to our sure start programme, we hope to be able to tackle some of the problems before they become insurmountable. I know that my hon. Friend will support the Government's actions in that area.
Sure start is also a way of trying to co-ordinate Government policy to bring about joined-up central and local government. The hon. Member for Montgomeryshire (Mr. Öpik) talked about trying to integrate services. He referred to integrating health and social services in order to achieve better value for money and increased service provision from the same funding. I hope that the hon. Gentleman will support the Government's efforts in trying to pool budgets as a way of utilising the same amount of money to best effect within different departments and areas of local government.
The settlement for 1999-2000 is a good settlement for local government in Wales.
Mr. Barry Jones (Alyn and Deeside):
Will the Minister give way?
Mr. Jones:
Yes, but only this once.
Mr. Jones:
I am very grateful. The documents refer to job creation and the moneys for that. Since April, my constituency has lost 1,250 jobs and we are very concerned that we may lose assisted area status. How might the Welsh Office help my constituency in north-east Wales to retain assisted area status?
Mr. Jones:
My hon. Friend is always assiduous in promoting his constituency--we could all learn from him. No decisions have been taken about which areas will qualify for deregulation on the assisted area map. Flintshire will be considered for inclusion, along with the rest of the United Kingdom.
We have delivered on our commitment to minimise ear-marked resources. We agree that all local councilsare best placed to identify local funding priorities.
The settlement for 1999-2000 also includes indicative figures for the following two years. This forward-looking approach will allow local government to plan local priorities over a three-year horizon. In each of the three years, we will deliver an increase of more than 2 per cent. in real terms, which will enable local government to respond better to local service pressures.
As part of the consultation on the provisional settlement, the police authorities and their representatives have asked my right hon. Friend to look again at the way that capital charges have been calculated. He has responded to their concerns, and this has resulted in an increase of £1.8 million over the provisional figures announced in December. We are prepared to listen and are committed to developing meaningful partnerships. The National Assembly for Wales will be able to begin its work on the basis of sound partnership.
I know that not all local authorities are happy with the council tax reduction, or damping, scheme. We agreed the parameters of the scheme for 1999-2000 with the Welsh Consultative Council on Local Government Finance. It decided on a scheme that it considered best met the needs of local government in Wales, knowing that there would be winners and losers. The damping scheme is an excellent example of how well local government in Wales can work together, with some authorities contributing to the damping top slice so that poor authorities can receive the benefits.
As my right hon. Friend said at the beginning of the debate, the standard spending assessment formula is not perfect. The independent study commissioned jointly by the Welsh Office and Welsh local government associations will be available later this month. My hon. Friends the Members for Blaenau Gwent (Mr. Smith) and for Gower (Mr. Caton) have asked us to address their concerns about poorer authorities apparently not receiving as many resources as they should. We shall re-examine the funding formula, but there are reasons why local authorities receive different sums--not least, demographic changes. Population movements in south Wales in particular have led to some local authorities receiving an increased allocation as a result of population growth.
I acknowledge that earmarking £70.2 million of the increase for education and £5 million for Utting means that there will be pressures on other services. However, if councils increase their education budgets by £70.2 million and their other budgets by the balance of the increase in net total standard spending, spending will increase by 4.9 per cent. for social services--because of the £5 million support and the introduction of a Quality Protects Wales initiative--and by 4 per cent. for other services. That takes no account of local decisions on council tax and resources released by efficiency savings. We expect that, when best value comes in, local authorities will be able to deliver greater efficiency savings, and thus release greater resources.
This settlement represents a good deal for Wales and provides a sound foundation on which the National Assembly can build relations with local government. We have a challenging agenda of modernisation ahead, but with the support of our partners in local government and others, we believe that we can meet that challenge. Welsh local government will receive a record funding increase of £878 million over the next three years. That is
nearly £300 per person in Wales. In the circumstances, it is a very good settlement for the people of Wales, and I commend the reports to the House.
Question put and agreed to.
Resolved,
The Parliamentary Under-Secretary of State for Scotland (Mr. Calum Macdonald):
I beg to move,
That the Local Government Finance Report (Wales) 1999-2000 (HC 203), which was laid before this House on 3rd February, be approved.
That the Local Government Finance (Amendment) Report (Wales) 1998-1999 (HC 204), which was laid before this House on 3rd February, be approved.--[Mr. Hanson]
That the Special Grant Report (Wales) 1999 (HC 177), which was laid before this House on 28th January, be approved.--[Mr. Hanson.]
4 pm
That the Local Government Finance (Scotland) Order 1999, dated 28th January, a copy of which was laid before this House on 1st February, be approved.
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