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Ms Armstrong: The hon. Gentleman should know all about political bias in local government settlements.

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We are seeking to get rid of it. We believe that best value and modernising the political structures are a means of ensuring that councils can respond more effectively to the needs and aspirations of local people.

Mr. Barry Gardiner (Brent, North): My right hon. Friend and I have formed the habit of crossing swords at this time of year over the past three years. I welcome the announcement of a 4.4 per cent. increase this year and the inclusion of the data changes in this year's settlement. I would also welcome the floor of 3.2 per cent., were it not that, last year, my local authority, the London borough of Brent, found itself not on the floor but in the basement. I would welcome this year's announcement even more if she could assure me that this year Brent will be found closer to the ceiling, in which case she may have to scrape me off it.

Ms Armstrong: I am happy to tell my hon. Friend that Brent will receive a 4.5 per cent. increase this year. It will also benefit from the neighbourhood renewal fund allocation.

Mr. Michael Howard (Folkestone and Hythe): What evidence does the Minister have that bed blocking is coming down in east Kent? What effect will the imposition of a ceiling on the formula have on the amount of grant made available to Kent county council to allow it to fund its social services department in a way that would put an end to bed blocking in Kent?

Ms Armstrong: Recent evidence submitted by the Department of Health to the Health Select Committee in the summer showed that bed blocking is coming down. We set further targets to reduce it in the national priorities guidance. Clearly, there are particular pressures in different parts of the country, and that is precisely why my right hon. Friend the Secretary of State for Health is putting an additional £100 million into this year's settlement and is examining other national health service budgets. When the right hon. Gentleman was in charge, nothing like that happened.

Mr. David Watts (St. Helens, North): I welcome the overall statement, but many of us are bitterly disappointed that the system has not been completely reviewed after three years of a Labour Government. When does my right hon. Friend believe that the full review will have taken place, and when are the changes likely to be implemented?

Ms Armstrong: We are still in the middle of consultation on the local government finance Green Paper. I share my hon. Friend's frustration at its not having been possible to have a more root-and-branch reform. I have tried to move so as to take as many people with us as possible. There are sharply differing views on this matter from authority to authority, so trying to find a way forward that does not leave one authority feeling that it is being discriminated against is not easy. We are working with authorities to find an effective way forward. The Green Paper has been well received. I have yet to receive the written responses, but that is the impression

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that I get from talking to people. In the early months of the next Parliament, we ought to be able to make the full reform.

Mr. Steve Webb (Northavon): My local authority of South Gloucestershire, as the Minister knows, fares badly under the existing standard spending assessment formula. Will the Minister confirm that the decision to take account of wage pressures in London and the south-east but not elsewhere in the country is particularly unfair on fast-growing authorities with tight labour markets such as South Gloucestershire?

Ms Armstrong: I know that the hon. Gentleman has an oral question on this tomorrow. I simply remind him, however, that all the Liberal Democrat authorities, as I understand it, asked us on Friday to implement the ACA changes. I understand that he may be making a separate point for South Gloucestershire. We have sought to be as fair as possible to everyone and that is the reason for the floors and the ceilings.

Ms Karen Buck (Regent's Park and Kensington, North): I welcome my right hon. Friend's decision not to make methodological changes this year that affect the area cost adjustment in respect of London authorities. Is she aware, none the less, of the extreme pressures on London local authorities because of factors such as population growth and homelessness, with some 40,000 families currently in temporary accommodation in London? I agree with the need to put a floor under authorities suffering the consequences of population loss, but will my right hon. Friend address sympathetically the needs of local authorities that have reached the ceiling through no fault of their own?

Ms Armstrong: Of course I understand the difficulties faced by authorities in London for the reasons outlined by my hon. Friend, and the problems faced by authorities in other parts of the country for other reasons. We are acutely aware of the costs of homelessness in London, and I understand the points made by the Association of London Government about that. The part of the settlement dealing with that is the best for many years, with a 1.8 per cent. real-terms increase in each year and 2.7 per cent. more in 2001-02. However, my hon. Friend the Minister for Housing and Planning and I are discussing how we will continue to keep a close eye on this and make sure that people do not suffer.

Mr. John Wilkinson (Ruislip-Northwood): Is it not the case that residents of most London boroughs will face seriously increased council taxes next year and, of course, the supplemental charge of a precept for the Greater London Authority? Why has the Minister not mentioned the additional costs of refugees and asylum seekers for London boroughs? Is she not aware that my borough of Hillingdon, which covers Heathrow airport--through which a quarter of asylum seekers to the United Kingdom come--has submitted to the Minister of State, Department of Health, the hon. Member for Barrow and Furness (Mr. Hutton), a memorandum pointing out that unaccompanied refugee children will cost the borough £3.15 billion a year above grant. [Interruption.] I mean £3.15 million--forgive me. I exaggerate. It is easy to get

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worked up because homelessness and the additional costs are serious burdens on local people, and they feel extremely strongly about it.

Ms Armstrong: I understand that. The costs of asylum seekers are not met through the settlement. That is the result of a special grant from the Home Office. I am in constant touch with my Home Office colleagues to discuss this and to ensure that we do whatever possible to alleviate the problem, not just in London, but particularly in London. We recognise that there are serious problems in London, but the dispersal programme means that other authorities are also involved.

Ms Claire Ward (Watford): I welcome my right hon. Friend's decision to include the new earnings survey. Hertfordshire will need to look at the ceilings and floors to see where we benefit.

May I take it from the Government's decision that they accept the principle that it is more costly for schools in Hertfordshire in particular and in the south-east in general to be able to do the job that they need to do, and that that must continue to be reflected in the finance that becomes available from central Government to local government?

Ms Armstrong: The House now knows why this statement is always difficult: some of my hon. Friends hold one view and others another. We recognise the need for some acknowledgement of costs. We are not convinced that the current ACA is the most effective method of achieving that, which is why the matter is under review. We recognise, and the alternative methods demonstrate, that this factor cannot be ignored.

Mr. Christopher Fraser (Mid-Dorset and North Poole): The Minister will be aware of a letter to the Secretary of State from Purbeck district council regarding statutory mandatory travel concessions. She will also be aware that, for a predominantly rural council such as Purbeck, even a prudent approach to the scheme, including essential cross-boundary travel, will, on the basis of the figures available so far, require an increase in council tax of £5, or 6.5 per cent.

The Minister's answers have been less than clear so far. Will she confirm that all additional costs faced by councils such as Purbeck will be completely covered by the Government when they introduce the scheme?

Ms Armstrong: The hon. Gentleman seems to want me to say that there will be no council tax increases. Of course, local authorities and local citizens will contribute through council tax. I do not know how he can tell us the exact amount of council tax that will be needed to cover whatever decisions are taken in future, given that he has not yet read the figures, and nor, I suspect, has the council. I am confident that councils will be able to implement reasonable council tax increases, lower than last year's, because the statement has covered all the pressures on local government, and there is a substantial increase this year in the amount that the Government are giving.

Mr. Jeff Ennis (Barnsley, East and Mexborough): I welcome my right hon. Friend's statement, especially on additional SSA help for the worst-funded local authorities, such as Barnsley and Doncaster, which serve my

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constituency. There is no doubt that, under this Government, the increases in block grant have been exponential compared with those introduced by the previous Government. Will the Minister also comment on the increase in the other services block grant for next year?

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