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Mr. Byers: When my hon. Friend has the opportunity to study the White Paper, he will see that the role of parish and town councils is genuinely valued, probably for the first time in a Government document. We shall provide about £30,000 for each parish and town council to support democracy and any proposals that they might have to develop best value in their area. That is a good initiative. The document identifies how real improvements and benefits for each tier of authority will flow from the proposals, and no tier, whether it be the county or the parish or town council, has been left out of the proposals.

Angela Watkinson (Upminster): What assistance can the Secretary of State offer this year to local authorities such as the London borough of Havering, which receive a perversely low settlement under the current system? What help can he offer the council tax payers who suffered the third highest increase in the country last year—12.5 per cent.—and who face a possible increase this year of more than 20 per cent? Why is he not receiving any delegations this year?

Mr. Byers: As for Havering, on any judgment the settlement announced last week is obviously generous. The local council in Havering will have to explain why it is even considering a council tax increase at the suggested level. Given the funding that is being made available and, indeed, the additional funds that may be made available as a result of the abolition of the council tax benefit subsidy limitation scheme—which will benefit a number of local councils—the council needs to consider the level of

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council tax increase that it should be setting. There is no good reason for that proposed increase, as we have made clear.

On receiving representations, we are adopting the same policies as successive Governments—Conservative as well as Labour.

Mr. Eric Illsley (Barnsley, Central): I warmly welcome my right hon. Friend's statement and the White Paper. My right hon. Friend is aware that, back in 1990 with the introduction of the poll tax, my local authority was one of those that were capped—mainly owing to the standard spending assessments. Can he confirm that a new formula will be in place for next year to do away with the SSAs, which have been the blight of local government since 1990? Can he also give some indication of what will be in the new formula to take into account the needs of local authorities?

Mr. Byers: My hon. Friend has been a powerful advocate for change in the SSA regime. From his experience in his local authority, he knows of the regime's detrimental effect. The mechanism was not designed to reflect the needs of local communities or the degree of service being provided; it had nothing whatever to do with those objectives.

I can confirm that the SSA regime will be abolished—this will be the final year in which it will be used. A new formula will be in place to take effect from April 2003. It will be my intention that the new grant mechanism will reflect service needs and also the level of provision in local authority areas. I hope that, as a result of pressure from authorities such as that of my hon. Friend, there will be real benefits from the changes that might be introduced.

However, I have to give a few words of caution. My worry is that everybody seems to believe that their local authority will be a winner as a result of the formula changes. That will not be the case. The nature of any change of system means that some people will gain while some do not. We shall have to wait to see what the position is for individual authorities, but I am sure that we shall be able to target funds to areas that need them most.

Mr. Andrew Robathan (Blaby): I doubt that the Secretary of State has yet had an opportunity to read yesterday's Leicester Mercury. If he had done so, he would have read in the political commentary, under the headline "An idea that's best forgotten":

Will the Secretary of State clarify the answer that he gave my right hon. Friend the Member for North-West Hampshire (Sir G. Young)? What is the Government's policy on regional assemblies, which were so proudly trumpeted four years ago in a White Paper issued in 1997?

Mr. Byers: I am afraid that I shall have to repeat the comment that I made earlier: there will be a White Paper in the new year on the whole question of elected regional assemblies. I reaffirm the point that there will be no imposition of regional assemblies on any region that does not want them—it will be left for local people to decide.

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We are giving local people the choice as to whether they want an elected regional assembly. That will be welcomed by many people.

We should not be scared to hold the debate about elected regional assemblies. Certainly, there may be people in the east midlands—including those on the Leicester Mercury—who do not support such assemblies. Good, let us hold the debate. In most parts of the world, there is strong regional government and we should think about whether that is right for England. At least let us hold the debate—we should not be scared of that—and let local people decide. That is how it should be done. There will be a White Paper in the new year, and people can then make up their own minds.

Kali Mountford (Colne Valley): I congratulate my hon. Friend on his extraordinary announcement this afternoon. However, it is difficult to engage our constituents in debate about local democracy when they are trying to unpick the funding formula—never a debating point on the doorstep. When my right hon. Friend replaces the SSAs and is looking for areas of genuine need, will he ensure that his assessment is open, transparent and fair, and that it measures poverty according to genuine poverty indicators—unlike some of the nonsense that we experienced during the 18 Tory years? Will he also ensure that it is fluid enough for genuine local democracy to reflect the needs of rural areas where there are isolated pockets of poverty, so that we can really address those needs? Perhaps then people will have some confidence in the outcomes of local government.

Mr. Byers: We all know the way in which the SSA formula was manipulated by Conservative Members when they were in government to reward some of their favourite councils—[Hon. Members: "No."] We all know that that is what happened; the figures are there for everyone to see. Conservative Members know that that is the case. My hon. Friend is absolutely right that we have to ensure that the replacement for the SSA regime is fair, open, just and transparent. We shall do precisely that. Most important, the replacement will need to reflect the demands that are made on a local authority service. If there are high levels of poverty and unemployment, or sparsity issues in rural areas, those matters will have to be taken into account when we consider the new formula that will take effect from April 2003.

I assure the House that we shall consult widely on the replacement formula. Above everything else, we shall ensure that people can understand it, and that they know that the system is not fixed in any way, but responds to the needs of a local authority area and reflects the service level being provided.

Mr. Nicholas Winterton (Macclesfield): As one of those on the Conservative Benches who spent some time in local government before being elected to this place, I ask the Secretary of State to accept that many Opposition Members appreciate the valuable democratic role played by local government whether it is at the parish, town, district or county level. Local government, to be successful, needs to be local. Does the right hon. Gentleman accept that, to meet the criteria that he has rightly set out in his statement today, funding will—as the hon. Member for Colne Valley (Kali Mountford) said—have to be fair? Although the Government did not expect

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it, my own Macclesfield borough council has been disadvantaged because of the formula change. Will the right hon. Gentleman therefore be prepared to meet me and the chief executive of my council to discuss the problem? Funding is clearly critical to local government's success in meeting the Government standards that he has rightly announced today.

Mr. Byers: The hon. Gentleman is absolutely right that a fair funding regime is the crux of the matter. As I said earlier in relation to Wealden, the settlement raises a particular issue in relation to district councils. We are aware of that issue, and I should be more than happy to receive the information on Macclesfield.

Mr. Winterton: At a meeting?

Mr. Byers: I think that the issue goes wider than just Macclesfield, but—

Mr. Winterton: Indeed, it affects a number of other councils.

Mr. Byers: The point that I am trying to make, if I may do so without being interrupted, is that there is a specific issue to do with Macclesfield. I should of course be more than willing to receive that detailed information. However, there is also a wider issue to do with borough councils which we have to address and we are considering it. I hope that we shall be able to give the hon. Member for Macclesfield (Mr. Winterton) some reassurance about our intentions on that matter.

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