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David Taylor (North-West Leicestershire): Having spent my adult life in local government, I ask the Secretary of State to forgive me for not waving my Order Paper when he finished his statement. Does he acknowledge that, behind the smokescreen of past bonfires of controls, previous Governments were frantically fabricating further controls on local authorities? Is he confident that this is indeed a bright new dawn for local government? Will he consider the position in shire districts—particularly as that position is spelled out in my own early-day motion 351—whose funding regimes, as announced last week, have actually experienced a move backwards? Is he confident that the new scheme will, as the hon. Member for Macclesfield (Mr. Winterton) questioned, provide more generously? I share the hon. Gentleman's concerns.
Mr. Byers: My hon. Friend makes an important point about the need to be eternally vigilant on controls. We have to do that. Today's announcement will make possible a big improvement by reducing the number of plans by more than a third, reducing the number of consents by more than 50 and reviewing another 30 of the consents. However, there will always be further pressure to add new plans and new regulations. As I said, we have to be vigilant to ensure that we do not give in to those particular pressures.
As I acknowledged, we are aware from the consultation process that an issue has arisen from the settlement. We are considering how we can overcome the difficulties that have been caused to a number of shire districts. I am confident that, as a result of consultation and current discussions, we shall be able to make proposals that will ensure that councils do not go backwards, but benefit from the improvements.
David Taylor: Some have gone backwards.
Mr. Byers: Let us be clear that we are now in consultation. The announcement last week was not the final one but part of the consultation process, and many people are expressing their views. If consultation exposes difficulties, we can reflect on them and have a different outcome if we feel it appropriate to do so. In this case, we are likely to be able to respond positively to the concerns expressed.
Mr. David Heath (Somerton and Frome): Does the right hon. Gentleman appreciate that there will be a warm welcome for the removal of capital controls, but some disappointment that he cannot be more explicit about what he intends to do to replace the standard spending assessment? In that respect, can he give a commitment that the iniquitous area cost adjustment is as dead as the standard spending assessment?
Secondly, will he reduce the gross disparities in funding between areas? For example, the funding per pupil in our schools cannot be based on any sensible assessment at the moment.
Finally, can the right hon. Gentleman confirm that the new system, whatever it may be, will reflect the real expenditure within local authorities, and take into account the fact that some, like my own in Somerset, have spent massively above the education and social services SSA year after year because of their belief that those services are important and need adequate funding?
Mr. Byers: It would be foolish to rule out particular aspects of the formula. It is too soon to say whether there will be something like the area cost adjustment. There is a genuine issue about levels of pupil funding. My right hon. Friend the Secretary of State for Education and Skills is looking carefully at how we can improve the position. There has been a dramatic increase in the amount of funding per pupil that we have put in over recent years, and I have no doubt that she will want to continue that.
In terms of the new formula, it is important to consider the level of service provided by the local authority. I do not like the sort of system that we have at present, under which the standard spending assessment bears no relation to the level of spend on particular services in an individual authority such as Somerset. If we are allocating money, we should do so on the basis of the level of service provided by an individual local authority. I am confident that that will be part of the make-up of the new grant regime.
Mr. David Borrow (South Ribble): Does my right hon. Friend agree that it is crucial that the locally raised portion of local government finance is seen to be fair and adequate? Will he look again at whether the business rate should be determined locally rather than nationally? Does he agree that, in the absence of regular revaluations, the council tax will be seen as increasingly unfair and that, because of the multiplier, many people see it as unfair in any case? There are not enough bands to ensure that people in very low-value properties feel that they are paying a fair whack through the council tax. Will my right hon. Friend consider that issue as well?
Mr. Byers: We have no proposals to change the existing business rate arrangements. The White Paper outlines the proposition of business improvement districts,
which the House has been informed of before, and goes into some detail about how we want to carry forward that initiative.We have announced that there will be a revaluation, and the aim is to introduce it with effect from 2007. There is a genuine issue about low-value properties and the extent to which the system is seen as unfair. We indicate in the White Paper that there may be opportunities to look in detail at ways of dealing with that. As my hon. Friend knows, there are a number of properties of lower value in the north-west of England. People believe that it is unfair that there is no distinction between the levels in band A, and we may wish to consider that. I accept my hon. Friend's points; we need to ensure that people regard the council tax as fair, and I know that there are reservations about that.
Miss Julie Kirkbride (Bromsgrove): May I tell the Secretary of State that today's announcement of the reform of local government financing will be welcome in Worcestershire, so long as he takes into account the statements about fairness, about which we have heard so much this afternoon? He will be aware that last week's local government settlement did not go down well in Worcestershire because, once again, the gap between the funding for children in Worcestershire's schools and the English local authority average increased even further. At the moment, about £250 less is spent on the schooling of children in Worcestershire than the average for all English local authorities, and that gap grew again by £17 in the secondary school sector. The right hon. Gentleman will also be aware that the head teachers forum is proposing to take the Government to the European court on the issue of fairness, so can I take a message back to the forum to the effect that, far from growing wider, the gap will at the very least start to diminish under his new arrangements?
Mr. Byers: The local government settlement announced last week shows that Worcestershire received an increase well above the rate of inflation. Many people would regard that as a reasonable settlement in the circumstances, but, obviously, the head teachers there will need to take whatever steps they feel are appropriate. I hope that, beyond 2003, the new funding formula will be fair, just and transparent and that the head teachers and parents of Worcestershire will be able to see that such a scheme is put in place. I have to tell the hon. Lady that one of the reasons why they have been discriminated against over the years is that the Conservative funding formula in place since 1990 has led to an appalling settlement for Worcestershire. I am pleased that Worcestershire has had an increase well above the rate of inflation this year.
Mr. Neil Turner (Wigan): I congratulate my right hon. Friend and the whole team on this afternoon's statement, which represents a fundamental shift in the relationship between local and central Government, dismantling the command system that the Conservative party built up, year on year, during its time in office. It does not simply represent a bonfire of regulations; it represents a bonfire of the vanities—the vanity which says that Westminster knows best and that Whitehall can devise one system that fits all. Will my right hon. Friend confirm that the White Paper builds on the Local Government Act 2000, under which local authorities are allowed to serve their
communities better? I particularly welcome the abolition of the council tax benefit subsidy limitation scheme, which hits poorer communities such as mine disproportionately. Will my right hon. Friend confirm that that scheme will be abolished in 2002–03?
Mr. Byers: The White Paper builds on the steps that were taken in the previous Parliament, during which we considered the constitution of local authorities. In the current White Paper, we consider the level of service and the relationship between local and central Government, and we shall try to put it on a totally new footing which respects the important role that local government can play. I knew that my proposals on the abolition of the council tax benefit subsidy limitation scheme would be welcomed in Wigan, because I attended a meeting there about six weeks ago at which I was told in the clearest possible terms that one of the positive things that we could do in the White Paper was to propose the abolition of the scheme. My hon. Friend strongly supported that proposal. I am delighted that we have been able to deliver on the Wigan recommendations. Yes, I can confirm that that proposal will be introduced with effect from April 2002.
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