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2.44 pm

The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Keith Hill): I begin, as is usual, by congratulating my hon. Friend the Member for Hammersmith and Fulham (Mr. Coleman) on having secured a debate on the index of local deprivation. I also congratulate him on his effective speech. I am grateful for the opportunity to inform him and the rest of the House about progress on my Department's review of the index. Before doing so, I shall explain what the index is and what it is used for.

At the heart of the Government's agenda lies our determination to tackle social exclusion and poverty in this country and to provide equality of opportunity. As my hon. Friend knows, that is one of the key commitments in our manifesto. The activities that we have undertaken since May 1997 include the work spearheaded by the social exclusion unit; setting up the new deal for communities programme, which has been so successful in my hon. Friend's constituency; and launching a refocused single regeneration budget. That shows clearly that we are firmly committed to helping those communities that live in the most severely deprived parts of the country.

Ask the average person in the street where the most deprived areas of England are located, and the chances are that he will think immediately of the great conurbations of the north, the west midlands and the inner-city areas of London. In many respects, that view would be right, but it is one that is more likely to be based on general impressions or gut feelings, rather than on a technical analysis. The Government, however, must make judgments on which are the most deprived areas that are based on a technical assessment of the factors that point to an area being deprived. The main measure that we use is the index of local deprivation.

The index is a measure of relative deprivation for local authority areas in England. It combines a number of indicators that are chosen to combine a range of economic, social and housing issues in a single deprivation score for each area. It enables areas to be ranked relative to one another according to their level of

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deprivation. The current index was published on 11 June 1998. It updated the 1991 index of local conditions, largely with 1996 data, and realigned it to the new local authority boundaries as they stood on 1 April 1998.

The index has been used by my Department to inform the development of policies and to target regeneration funding at the most deprived areas. It is being used increasingly outside the Department as well. For example, it is being used by the Department for Education and Employment for identifying areas for selecting area-based initiatives. Also, the social exclusion unit recognised the index as a key source of information about deprived areas in its report entitled "Bringing Britain Together: a national strategy for neighbourhood renewal".

Despite that background, there was heavy criticism of the methodology used to construct the 1998 index. Also, the data used to compile it were getting rather old, and better data for small areas were becoming available for the first time. To ensure that future policy decisions are based on the most relevant methods and the most recent information that enables smaller pockets of deprivation to be picked up, the Government decided to undertake a fundamental and independent review of the index. In December 1998, my Department commissioned the university of Oxford to carry out this work.

During the summer of 1999 there was an extensive consultation exercise about the indicators to be included in a new index. In the light of that work, and the many valuable points that were made during the consultation, it has been decided that the new index will consist of 33 ward-level indicators of deprivation. These will be organised into six key domains of deprivation: low income, employment deprivation, poor health and disability, low education and training, poor geographical access to services and poor housing.

These indicators and domains are a significant improvement on the existing index, which was largely based on district-level data, mainly from 1996. Where ward-level data were used, they came from the 1991 census. We shall now have 33 indicators that are more up to date, that relate to a smaller area level and that reflect a wider range of dimensions of deprivation than the previous selection.

The importance of obtaining and using data at small-area level to secure effective neighbourhood renewal strategies and programmes is likely to be emphasised by the social exclusion unit in its consultation document on the national strategy for neighbourhood renewal, which is to be published in March.

The 1998 index was generally considered too biased towards urban areas. That is why we have introduced a domain on geographic access to services. That will be based on four indicators, three of which concern people who depend on benefits being able to get to either a post office, a food shop or a general practitioner. The fourth indicator concerns people with children aged five to eight being able to get to a primary school.

Some of those who responded to the consultations claimed that by introducing this domain we are now biasing the index in favour of rural areas. The Government do not share that view. We acknowledge that people who live in rural areas are more likely to experience access problems, but who would disagree that

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the ability to get to a post office, food shop or GP is a necessity for all poor people? Geographical access has a weighting of only 10 per cent. in the index. My hon. Friend gave a dramatic example from Palace ward in his constituency, and he singled out geographic access. However, I have no doubt that if all six domains are considered together, the findings for Palace ward will be different.

After the Oxford university review team devised an agreed set of indicators and domains of deprivation, it created a methodology for bringing together all the indicators so that we have an index that identifies the location of the most deprived areas. That is far from easy, and we had to try to address the problem that the previous method--chi squared--tended to give higher deprivation scores to areas with larger populations.

The Oxford team consulted expert opinion widely, including eminent professional statisticians who were involved in the whole review. Moreover, in addition to a large interdepartmental steering committee, the Oxford team benefited greatly from an advisory panel, which included academics, statisticians and local Government officers. The Oxford proposals on methodology were put out for full public consultation in December.

The six-week consultation period ended on 17 January and we have received more than 120 responses. The approach that has been taken is supported by the majority. My Department and the Oxford team are now analysing each response. Unfortunately, therefore, I cannot report on the outcome of the analysis today. However, I stress that we shall consider carefully all the points raised in the responses, and undertake any extra work that may be necessary before making any decisions. We aim to publish a new summary index in the spring. That will be followed by a lengthier report from Oxford university, which will appear later in the summer.

It is perhaps an obvious point, but when we change the basis on which the index is calculated, some areas will move up and others will move down the index. We acknowledge that that may be due to the changed methodology and indicators more than to changes in overall patterns of deprivation. However, that should not prevent us from striving to put in place the best possible mechanism for identifying levels of deprivation.

My. hon. Friend expressed anxiety that the draft index may disadvantage some London boroughs, including Hammersmith and Fulham, because they will appear lower in the deprivation rankings under the revised index. However, I stress that the data on which this draft index is based are still being checked. Furthermore, the rankings may change if the methodology is revised in the light of consultation. I should also point out that, in the overall measure of deprivation on the draft index, which is at district level, five of the 10 most deprived districts were London boroughs. Indeed, the worst three districts were London boroughs.

My hon. Friend and others have asked why the new index does not recognise the sheer scale of ethnic minority populations in London and elsewhere. We are confident that the 33 proposed indicators fully cover the problems that ethnic minorities face. For example, we include indicators on income support receipt, unemployment, overcrowding and poor health, all of which are disproportionately experienced by many ethnic minority groups. However, we should not overlook the sheer

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diversity within the ethnic minority community, as reported by the eminent 1997 Policy Studies Institute report. We therefore believe that it is inappropriate to include a reductionist indicator, which assumes that all ethnic minority people are deprived.

Hon. Members may also have noticed that the index does not contain a crime domain. There is a lack of crime data at the small area level. However, we hope to improve those data for the next revision of the index. The social exclusion unit's policy action team 18, which deals with better information, and my colleagues in the Home Office are examining that. The Association of London Government has examined the index closely and has submitted its comments on methodology. I give the assurance that those observations will of course be considered, along with all other responses.

My Department uses the index to target regeneration funding such as the single regeneration budget and the new deal for communities on the most deprived areas. On 17 December, we launched national bidding guidance for round 6 of the SRB. My hon. Friend and other hon. Members whose constituencies cover local authority areas among the 65 most deprived, according to the existing index, will be pleased to hear that those areas are eligible to bid for funding for comprehensive schemes under round 6. That eligibility will not be affected by their ranking in the revised index.

As my hon. Friend may know, the current index was taken into account in selecting areas to be invited to bid for funding under the second round of the new deal for communities, which my right hon. Friend the Minister for Local Government and the Regions announced on 10 November. He will certainly know that Hammersmith

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and Fulham is an invited area and I can confirm that, wherever it ends up on the revised index, its eligibility for the second round will not be affected. Furthermore, resources from European structural funds have been allocated for 2000-06 with reference to the 1998 index. I hope that those facts give my hon. Friend the reassurance he is looking for.

Looking to the future, funding for all regeneration programmes, including expenditure on programmes aimed at deprived areas, will be determined by the 2000 spending review, which is currently under way. Decisions have yet to be taken on how the index would be used to target resources at deprived areas and the weight to be given to deprivation scores and other relevant factors in determining funding allocations. We shall also consider the need for any transitional arrangements.

The rankings may change, but that should not prevent us from pressing on with a new index. My Department, other Departments and a range of outside bodies urgently need better information on which to target their policies and with which to address the significant problems that deprived areas face. We accept that the new index would never be perfect while we lacked small area data on some of the measures that we would like to cover. We also accept that it would not provide an absolute measure of deprivation and thus it would be important to use it sensitively and appropriately. Nevertheless, we are confident that the new index will provide us with the best possible means available at the moment for identifying the most deprived areas in England.

Question put and agreed to.

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