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Miss Julie Kirkbride (Bromsgrove): I am sure that my hon. Friend wants to hear from Worcestershire, where there are three marginal Labour seats and three Conservative-held seats. A Labour council has been in charge for the past four years, during which time council tax has risen by 50 per cent. This year everyone has a choice. On a Worcestershire council website one can choose a council tax increase of 7.5 per cent., 10.5 per cent. or 13.5 per cent. Only with the latter figure will there not be a cut in services.
Mr. Waterson: That says it all about what is happening in the real world.
Ms Armstrong: Will the hon. Gentleman give way on that matter?
Mr. Waterson: In a moment, but let me finish on this point. There is no need for the Minister to get aggressive.
I enjoyed meeting my hon. Friend the Member for Bromsgrove (Miss Kirkbride) recently with the delegation of head teachers from Worcestershire, who brought to this place all the concerns of hundreds of teachers and thousands of parents about the massive problems being caused in the education system by lack of Government funding.
Ms Armstrong: Is the hon. Gentleman saying that he wants to encourage large tax increases? I refer him to Essex, which is a county that the Conservative party runs, although only just. The leader of that council said that this year it would have the largest council tax rise of any county council. That is against the background of Essex county council receiving a total increase in spending of 7.3 per cent. this year, and that does not include the extra £100,000 that it is getting in education money. Should any authority be talking about high council taxes and rises when it is getting an increase of 7.3 per cent. from external funding?
Mr. Waterson: That shows what the Minister is seeking to achieve. By starving Conservative-controlled councils of the funding that they need, she is trying to provoke a situation in which they are blamed for having to increase the council tax beyond what is reasonable.
Mr. John Bercow (Buckingham): Will my hon. Friend give way?
Mr. Waterson: I will not give way any more at the moment.
Those council tax rises hit some of the most vulnerable people in our society. The figures show that one third of the increase in the state pension under this Government has been eaten up by soaring council taxes. In the past three years, the state pension has risen by £421, whereas the average band D council tax bill has risen by £158, which is equivalent to 38 per cent. of the pension rise. That is a staggering amount for elderly people to have to find.
Despite what I was saying about the Government starving many Conservative-dominated areas of funding, Conservative councils still have the lowest council taxes. In the coming year, a typical band D household is paying £724 under the average Conservative-controlled council compared with £124 more--almost £2.50 a week--under a Labour-controlled council.
In case the Liberal Democrats think that they are going to escape scot free, I should point out that the average band D tax in the councils that they control is £803, which is over 10 per cent. more than in Conservative-controlled councils. Of course, the Liberal Democrats now preside over Liverpool, which is the council with the highest council tax in England. A band D tax payer there now pays nearly £100 a week.
That is not the end of the bad news for ordinary citizens, as it is evident for all to see that, far from delivering greater efficiency and accountability in local government, the Government's best value regime is producing a bloated bureaucracy and heavy additional costs for already hard-pressed councils. The Government have allocated £40 million for best value and the Local Government Association has demanded an extra £175 million.
The Government are forging ahead with their centralising agenda for local government. They are busily imposing the cabinet system on the majority of local authorities. Only a few days ago, they forced through the House their misguided plans for greater secrecy in local government. The inexorable rise of specific grants as a proportion of Government grant means the tightening of central Government control over local government--there has been a rise in just one year of 18 per cent. in the proportion of specific grants.
On top of that, we have the Minister's continued boast that capping has been abolished. Of course, no such thing has happened. The Government have not scrapped crude and universal capping--I notice that in last year's Hansard that came out as "cruel" and universal capping, but in the Minister's lexicon, that amounts to the same thing. That remains as a reserve power. There is also the so-called "refined" capping on the council tax benefit limitation scheme.
As if all that were not bad enough, the Labour Government are planning a raft of new taxes on local communities: congestion taxes; workplace parking taxes; and supplementary business rates. The Government have been an unmitigated disaster for local government and for the communities served by local government. I urge my right hon. and hon. Friends to vote against the report.
7 pm
Mr. Jeff Ennis (Barnsley, East and Mexborough): Thank you, Mr. Deputy Speaker, for allowing me to speak in the debate. I am sure that many other Members want to speak, so I shall try to keep my contribution brief.
I must point out, however, that the amount of time allowed for this important debate is scandalous; many hon. Members will not have an opportunity to contribute.Members on both sides of the House will agree that what local government needs more than anything else is a fair funding grant system, based on definable need. I am sure that one thing that will emerge from the debate is that the current system does not fulfil that basic criterion. I imagine that the reactions of hon. Members to this year's settlement, which was announced in the House on 18 December, will largely depend on the class of authority that they represent.
The average settlement for metropolitan authorities outside London was 3.8 per cent; for shire and unitary authorities, it was 4.9 per cent; and for London authorities, it was 6 per cent. Barnsley received an additional 3.2 per cent. and Doncaster received 3.6 per cent.--both of which are below the metropolitan average.
I know that the Minister for Local Government and the Regions has received many representations from all classes of authority, especially from non-London metropolitan authorities, about this year's settlement. There is no doubt that the Government have listened to their representations. They can be proud that they have increased standard spending assessments by an average of 4.3 per cent. in each year since taking office. The average of the last four years under the Tories was a paltry 1.5 per cent.
Additional support outside the rate support grant settlement has been found so as to ease specific pressures on councils. The Government have increased by £100 million the first-year allocation to the new neighbourhood renewal fund; that is targeted support for local authorities representing the 88 most deprived neighbourhoods. Indeed, Barnsley received an additional £1.3 million and Doncaster received an additional £2.2 million in such funding.
There is no doubt that my constituency is one of the most deprived in the country. Last year, it was calculated that the gross domestic product per capita in Barnsley, East and Mexborough was only 62 per cent. of the European average. I understand that is the lowest in the UK--no wonder Barnsley and Doncaster and the rest of South Yorkshire qualify for objective 1 funding from Europe.
Barnsley and Doncaster will also benefit from the additional £11.6 million flood relief funding allocated to the Environment Agency to relieve pressure on council tax payers in flood-affected areas. They will share the additional £52 million education budget support grant for local authorities that received more modest increases in education funding from the RSG. Doncaster will receive an additional £880,000, but unfortunately Barnsley will receive only an additional £180,000.
The Government have thus responded positively to local authority concerns, but local authorities such as Barnsley and Doncaster, languishing at the bottom of the SSA league, need not additional pockets of grant aid but fundamental changes to the local government funding system. I know that the Government are committed to such changes. Until we address the inherent problems embedded in the current SSA formula-funded grant system, local authorities at the bottom of the SSA league will always struggle.
Next year's budget for Barnsley and Doncaster--the two local authorities that I represent--will be extremely tight, but of the two, Barnsley's position is by far the more difficult to address. Data changes and the area cost adjustment have resulted in a loss of about £2.2 million to Barnsley.
The Government's ceilings and floors concept is good in principle, but, as it operates at present, it does not close the gap. Indeed, it has a perverse impact, as the poor pay for the poor. Barnsley pays £100,000 into the fund to ameliorate Liverpool's losses and Doncaster pays back £218,000. Even after those additional resources, Barnsley still faces estimated cuts of about £11 million over the next two years.
I fully support the Government requirement to passport moneys to key priority services, such as education, social services and highways, but it means that nearly all the reductions under consideration will fall on the "other services" block. By how much will the "other services" block grant be increased next year?
That block covers general community services, so the impact of cuts will be felt in reductions in, for example, welfare rights--a service that Barnsley can ill afford to cut. One in three households in my constituency include at least one disabled person. As a Government, we are trying to encourage the take-up of initiatives such as the minimum income guarantee. If we cut welfare rights officers in Barnsley, we shall not achieve that.
Barnsley is having to consider reductions in land reclamation. Our reclamation programme is extremely large because of the legacy of the former mining industry. The need to clear up our industrial eyesores is drastic if we are to succeed in attracting new inward investors to Barnsley. We shall have to consider reductions in economic development and regeneration initiatives. Barnsley and Doncaster are in an objective 1 area, yet no additional resources can be allocated to meet councils' contribution to capital and revenue schemes.
We might have to consider reducing services such as trading standards, environmental health and street cleansing. The irony is that those reductions would fall on the very services that have been determined as priorities by the local community, through local area forums and strategic local partnerships. The Minister is aware that Barnsley has probably led the way in adopting the cabinet system; we did so long before it was made compulsory, as it were. We are working hard to the Government's modernisation agenda.
Significant job losses are expected because of Barnsley's budgetary position. It is anticipated that about 225 full-time equivalent posts will be lost, with an associated cost of about £1.8 million. Unfortunately, such costs cannot be prudently met from balances; the authority's external auditor has already determined that they are inadequate, so such additional one-off costs will have to be met from further cuts. Will the Minister consider our authority for additional help--for example, via the capitalisation of such one-off costs with an appropriate allowance from supplementary credit approvals?
I know that the Government are wholly committed to the successful future of local government and the valuable services that it provides. The Government must realise,
however, that the current SSA system was set up by the previous Conservative Government specifically to disadvantage certain classes of local authority, which include Barnsley and Doncaster in the traditional Labour heartlands. The only way in which we can successfully address the bias inherent in the existing system is to introduce a more transparent and simpler funding regime based on local need. The sooner after the general election that the next Labour Government bring in such a system, the better it will be for all concerned.
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