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Mr. Curry: It was about council tax.
Ms Armstrong: We make no prediction on council tax increases. As for the 4.5 per cent. for council tax benefit subsidy limitation, we are not saying that authorities should set council tax at that level. That would kick in only if their increase in standard spending assessment were 4.5 per cent. or less; it is not a prediction of council tax levels. Indeed, Conservative and Liberal Democrat Members predicted last year that the figure would be substantially higher than 6.8 per cent. We do not predict--they do, and they got it wrong.
My right hon. Friend the Home Secretary will be dealing with police budgets, and I am sure that the right hon. Gentleman will put his point to him. As for the right hon. Gentleman's third point, that is a matter for the Welsh Assembly.
Mr. Jeremy Corbyn (Islington, North):
The Minister will be aware that last year a number of Members representing inner-London constituencies--including me--made strong representations to her about the level of Government support for inner-London local authority services, owing to the very high cost of service delivery and the acute social problems arising from transient communities and a high population turnover. She will also be aware that over the past year the situation has become much worse, given the problems caused by the rapid rise in house prices.
Is my right hon. Friend prepared to receive any further representations, part way through this comprehensive spending review and in advance of any other grants that she might give, on the very high costs of inner-London
services? Is she aware that, two years after the Government came to power, substantial cuts are still being made to services in my borough because of the local authority's funding problems? That impacts badly on other Government efforts made through welcome measures such as the single regeneration budget, which affects part of my constituency.
Ms Armstrong:
I have already said that there is a review of the method of distribution. My hon. Friend's concern for London areas and the Conservatives' concern for rural areas must both be accommodated in the review. The Association of London Government--along, I am sure, with my hon. Friend's authority--is already thinking hard about the options and about how future funding will be taken forward. I will be having discussions with it over the next few months, after which we shall issue a consultation paper to consider how to proceed.
This year's increase in SSA for education in my hon. Friend's borough is 5.1 per cent. That compares with a national increase of 4.5 per cent. for education authorities. I know that there are budget problems, though not all of them have arisen simply because of funding. Some have related to management, and the authority is trying to sort out that problem so that people in Islington will know that they will receive decent services for the amount that they are able to pay.
Mr. Patrick McLoughlin (West Derbyshire):
Can the Minister assure us that no person aged over 65 will pay more than a 75p increase in council tax?
Ms Armstrong:
Council tax is not a matter for me. The hon. Member for Eastbourne (Mr. Waterson) has asked me not to interfere in councils, but the hon. Member for West Derbyshire (Mr. McLoughlin) asks me to tell him what the council tax increase should be. Perhaps he should collaborate with his Front-Bench colleague.
Mr. David Kidney (Stafford):
It must be a novelty for the Opposition to see a Government who both promise real-terms increases year after year and keep those promises. Councillors and residents in Staffordshire will certainly appreciate the extra money in this three-year settlement. May I tackle my right hon. Friend on a technical point about the operation of the formula for distributing money from central to local government? Has she given any thought to--or will the consultation consider--raising funding for councils at the bottom of the Government's funding table?
Ms Armstrong:
My hon. Friend has taken particular interest in that idea. Authorities whose education funding is below average held a meeting in Staffordshire last week. The problem with averages is that some authorities are bound to be below while others are above. That is the nature of things. We are searching for fairer funding for all, but it is difficult. Overcoming past problems has led us to make significant funding injections, but some authorities and residents still feel sore. I hope that our review will come up with something that local people will find more rational and easier to understand.
Mr. A. J. Beith (Berwick-upon-Tweed):
Does the Minister recognise that the settlement cannot allay the concerns of the many children, parents and teachers who
Ms Armstrong:
I understand that point. I have met members of Northumberland county council several times. My constituency abuts Northumberland, and I regularly meet folk from the county in my normal constituency activities. It is difficult for local people to understand what is happening.
The formula tries to take account of need and, to reflect the additional sparsity factor, Northumberland receives the highest amount per head of population for any shire county. Every authority feels that it should receive more, and we shall probably never reach a position in which everyone feels fairly treated. We are trying to put more money into education and to ensure that it is distributed so that every child receives the opportunity that he or she needs.
Judy Mallaber (Amber Valley):
May I warmly welcome the review of local government finance and ask my right hon. Friend what input local authorities will have in that review? In particular, will she consider representations from authorities such as Amber Valley, which is implementing the Government's modernising agenda, but suffers under the over-complex revenue support grant formula, to which she referred, from being a mixture of urban and rural authorities?
May I also reiterate the comments of my hon. Friends the Members for North-East Derbyshire (Mr. Barnes) and for Stafford (Mr. Kidney) about the position of a number of education authorities as a result of the system introduced by the Conservatives? For example, a secondary school in my constituency gains several hundred thousand pounds less than an equivalent school in a southern county.
Ms Armstrong:
Of course, local authorities will be involved as much as they wish in the review. Officials from the Department have already been travelling around the country holding regional briefings to encourage authorities to think how things could be done differently. If we cannot find a way forward, we will have to revert to standard spending assessments. I hope that we can find a way. The LGA is very much part of the present discussions at official level. We will lay all the suggestions before the House and local government so that every authority will be able to have an input.
Mr. Christopher Chope (Christchurch):
Will the Minister withdraw her earlier irresponsible statement to the effect that increases of 4.5 per cent. would not cause any hardship to council tax payers? Does she realise that for Dorset pensioners such as increase would be far in excess of 75p a week? Why will the right hon. Lady not speak out now and say that she will condemn any council
Ms Armstrong:
Of all Tory Members, the hon. Gentleman should know better. He was a Minister in the Department and presided over very vicious settlements--much more vicious--for local government. He was there when the poll tax was introduced and, I suspect, lost his seat because of it, so we will take no lectures from him. Let me make it absolutely clear that I did not say that any level of increase was all right. I said that the Government do not set the guidelines--that is a matter for councils.
Mr. Tony Colman (Putney):
As an honorary member of the board of the London First Centre, the inward investment agency for London, I have for about eight months been pressing my right hon. Friend the Minister to ensure that there is full transitional relief for the revaluation of the base for the uniform business rate. On behalf of the business community in London--both current and future--may I thank her for the full phasing that she announced and in particular for the additional cherry, which is the additional help for small and medium-sized enterprises? Will she comment on the variability of the change in the base for the business rate throughout London? Some areas have, perhaps, overheated in the past five years and others have not--I realise that advantages may accrue to Putney in my constituency, where rates may be zero or falling.
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