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Mr. Tony McWalter (Hemel Hempstead): My hon. Friend makes a powerful case. However, even without a fundamental review--which would be very difficult to conduct because of the factors that he mentioned, such as an ageing population and the fact that different age groups have different levels of need--does he not accept that floors and ceilings are a good way of addressing the needs issue? This year, even councils that were subject to ceilings still received a real-terms increase. Is not that approach also the best way of dealing with the needs of those who have essentially been pulled up to the floor?
Mr. Darvill: I broadly accept that the floors did help. Had they not existed, we would be discussing far greater difficulties across the country. Therefore, to that extent, the system must be welcome. If there is not a fundamental review of the system in the next 12 months, we will undoubtedly be considering other devices and ways of tinkering with it, perhaps by increasing the floor, to ensure that greater difficulties do not arise.
Mr. Tim Loughton (East Worthing and Shoreham): By the very same logic that the hon. Gentleman has just used, is it not clear that the many authorities that have lost out because of the ceiling will be losing not only bonus money, but money that is essential to cover additional spending on social services, flooding, best value and everything else? As authorities will now not be receiving that money, money will have to come out of spending on other core services.
Mr. Darvill: The hon. Gentleman gave the example of flooding, but I understand that financial provision has been made for it. I cannot deal specifically with the point, but I have seen in the papers various figures on provision to deal with flooding. The hon. Gentleman is undeniably right, in the sense that those local authorities will have their ceilings reduced and will therefore have to adjust their services downwards.
However, the fundamental problem was created in the broad post-poll tax settlement, when the present complexity was created. Admittedly, it is this Government's job to do something about it. Until they do, the debate on these matters will continue, as it has this evening.
The underlying message that I want to give to Ministers is that, although the overall benefits enjoyed by councils must be recognised, there are councils around the country
that are suffering. The delivery of services in those areas is becoming increasingly difficult. I shall support the Government generally this evening, but I want to draw Ministers' attention to my concerns in this area.8.51 pm
Mr. Christopher Chope (Christchurch): The hon. Member for Upminster (Mr. Darvill) said that he did not think that adequate time had been allowed for the debate. I agree: I am surprised that the Minister has so little influence with the Government that she was unable to secure a whole-day debate on the matter. [Interruption.] I think it important to discuss the orders before us separately, but the Government were prepared to offer only three hours for debate on the subject of the revenue support grant for England.
When I was a local government Minister, the debate used to go on all day. Hon. Members would stand up and complain on behalf of their area, saying that they had been done down by the Government. It was traditional in those days for hon. Members worried about their area to vote against the Government, even when they were members of the Government party. I do not know whether that will happen tonight, but I suspect that the Government's agenda is to try to restrict the debate so that they are exposed to less criticism from their Back Benchers than they properly should be, given the injustice of the arrangements that now prevail.
There is a set amount of money to be distributed, and the Government's method of distribution is very unfair for some councils. I shall deal in my remarks with the case of East Dorset district council, which covers about half of the area of my constituency.
Mr. Darvill: Does the hon. Gentleman accept that in my contribution I contrasted the very low settlements received under the Government that he supported with the much higher settlements received under this Government?
Mr. Chope: I know that that is what the hon. Gentleman said. However, what I have to say about East Dorset will show that his proposition is not accurate in relation to particular councils. Moreover, I doubt its accuracy as a generality. The pre-Budget report produced by the Treasury shows that the Government expect the yield from council tax to increase by two to three times the rate of inflation this year. That is the same rate of increase as occurred last year and the year before that.
That means that the Government expect council tax payers to pay a higher contribution to the costs of local services than they did under a Conservative Government. That is now causing real hardship. In a written answer that I received yesterday, I was told that, in 1998-99, 6 per cent. of pensioner households were in what I would describe as council tax poverty--that is, they were paying more than 10 per cent. of their income in council tax.
Hon. Members of all parties have been concerned for many years about people in fuel poverty. They are people who spend more than 10 per cent. of their net income on fuel. I submit that it is horrendous for pensioners to have to spend more than 10 per cent. of their income on council tax. Those figures are increasing, but the Government have not been collecting the data for the past year--no doubt because having them revealed would be rather embarrassing. I know from my constituency, which has a
large number of pensioner households, that the burden of the council tax is becoming unbearable and that increasing numbers spend more than £1,000 a year on council tax.Annex A of the report shows that East Dorset district council is identified in part III as a receiving authority area. It will receive £51,647 as a result of this report. I shall therefore not be voting against this report because the people of East Dorset are grateful for small mercies.
Underlying that figure is the fact that East Dorset district council will receive in Government grant this coming year no more than it has received in the current year, despite having to take on extra burdens and responsibilities imposed by the Government--indeed, by this House--through legislation. I refer in particular to concessionary fares, about which I have been in correspondence with the Minister on a number of occasions. When the Government announced that they would introduce a mandatory minimum standard for local authorities in relation to concessionary fare schemes, they said that they would put aside sufficient money to meet the additional costs. I have no reason to doubt that they did just that. However, they have not distributed that money in a fair and equitable way. Not a penny of that extra money has come to East Dorset district council, so other councils are receiving money over and above what is necessary to pay for the extra burden.
Only two district councils--East Dorset and Hart--receive no revenue support grant. The Minister and the Government know that. They know that if they use the RSG as the mechanism for distributing resources when they impose new burdens on local authorities, none of the extra resources will go to East Dorset or Hart. Obviously, I am more concerned tonight about East Dorset than I am about Hart, but the principle is fundamental. The Government are imposing new burdens; they make general propositions, saying that they will fund the costs of those extra burdens out of taxpayers' money and then expect some councils to meet the full costs themselves. In East Dorset, where about 25 per cent. of the population are pensioners, that effectively means that pensioners--many of whom live in difficult circumstances--will have to pay substantial increases in council tax to meet the additional burden of the concessionary fares scheme which many of them will not wish to use.
In East Dorset, it is estimated that the additional cost of the concessionary fares scheme, even in its minimalist state, will be £150,000. That probably represents an 8 per cent. increase in the council tax in East Dorset on band D and for all households, simply on account of the extra burden imposed by the Government. Then there is the extra burden of best value audit fees, which is a particularly heavy burden on the smaller and smallest councils--an issue that has been raised on both sides of the House but has not received a sympathetic response from the Government. There are something like 300 new best value inspectors, who are being funded through best value audit fees by the citizens of East Dorset and elsewhere. Frankly, it is impossible to see any benefit accruing to the people of East Dorset as a result. Dame Helena Shovelton, who used to be in charge of deciding who would run the lottery--she has given that job up--is the chairman of the--
Madam Deputy Speaker: Order. I remind the hon. Gentleman that this debate concerns the purpose, needs and adequacy of the special grants.
Mr. Chope: Absolutely, Madam Deputy Speaker, and I hope that that is the issue with which I am dealing.
In the introduction to the annual report of the Audit Commission, which was published in July, its chairman, Dame Helena Shovelton, said:
- "We are committed to make sure that our Inspection Service will work with authorities to help them to seize the opportunity best value brings and achieve real improvements to the quality of local services and the quality of local people's lives."
This is a narrow issue, but it is important. How can it be fair that a council should get no cash increase--we are not even talking about an increase in real terms--in Government support at a time when the Government are imposing major new financial burdens. As a consequence, the level of service will be reduced and there will probably be substantial increases in the council tax. As a result, an even higher proportion of pensioner households will pay more than 10 per cent. of their income in council tax every year.
The Minister said in her introductory remarks that the report would ensure stability of funding. That expression will go down like a sick joke in East Dorset.
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