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Mr. Raynsford: The hon. Gentleman referred to a gramophone record at the start of his speech. Does he not think that we are hearing exactly the same record that he played yesterday in the House? Does he recall that when he quoted the same letter I told him that I regarded that figure of 9.9 per cent. as unreasonable? Does he acknowledge that that is the Government's position?
Mr. Moss: Making the same point twice does not undermine the fact that it is a good point. If the Minister thinks that the figure is unreasonable, perhaps he should take issue with some of the Labour-controlled county councils that seriously fear they will have to come up with council tax increases of below 10 per cent.
The Government seem genuinely perplexed that, despite their trumpeting of the above-inflation increase in grant that they have given every year, there have been even larger increases in council tax. Is that because councils have been inefficient or profligate? Not so, says the evidence. During the past four years, the majority of councils, of all political persuasions, have experienced great difficulty in maintaining a standstill on services, let alone funding real improvements to those services.
In the equivalent debate last year, complaints about the settlement came raining down from the Labour Benches on the then Minister. I do not see much difference in this evening's debate. The explanation for the large increases cannot lie with inflation, which has averaged about 2 per cent. over the relevant period. Nor do we believe that the overall total settlement figure is inadequate. At 7.4 per cent. it is, as the Minister said, well above inflation.
The answer to the conundrum lies in the double whammy imposed on local authorities by the Government and by the Minister's Department. On one hand, they have increased the regulations and burdens on councils, while on the other they have fiddled with the funding formula, put up taxes that directly affect local authorities' costs and altered the way that grant is distributed so that less money—not more—is going to front-line basic services.
Let us examine those extra costs and burdens, which have risen far faster than Government funding.
Mr. Clelland: I, too, take issue with the Minister on some of the points he made about the 7.3 per cent. average
increase, because local authorities such as Gateshead are receiving only 5 per cent. which will cause them difficulty. However, does the hon. Gentleman realise that during the first three years of the Labour Government the average increase in grant to Gateshead council was about 4.5 per cent? In the last three years of the Conservative Government, the increase was 0.7 per cent. In those circumstances, who does he recommend that the people of Gateshead vote for?
Mr. Moss: If the people of Gateshead are prepared to tolerate yearly council tax increases of three times the rate of inflation, I suggest that they may not be voting for the wrong party.
In relation to the extra costs and burdens, there is the real impact of the Government's stealth taxes. Advance corporation tax has increased the cost of providing pensions. The hidden iceberg of costs for local government pensions is estimated at £300 million each year.
Fuel tax rises have increased transport costs for councils, and the Government's insistence on bumping up landfill tax each year without a commensurate reduction in other taxes to compensate is causing councils a real problem. Local councils paid out £163 million in 1998–99, and by 2004 it is estimated that landfill tax will rise to £348 million a year.
Another obvious burden is that of best value. That has led to an excessively bureaucratic centralising regime and has proved itself not only incredibly complicated but—even worse—extremely expensive for councils to operate.
The Government would argue that they have recognised those increased costs, but the allocation of £40 million for central best value administration falls woefully short of the real costs to councils. The Local Government Association has complained that it costs an extra £175 million more than the allocated amount.
Criticism of best value does not come only from those on the Conservative Benches. In Wales, the National Assembly decided to abolish the regime. Labour Finance Minister, Edwina Hart, conceded that the system was "terribly bureaucratic". The Labour leader of the Welsh Local Government Association, Sir Harry Jones, stated that councils were spending more time on process than on actual service delivery.
The Government recognised that they have problems with best value. They could hardly have been unaware of the howls of protest coming from the councils, but their response—to hold a review—is pathetically inadequate. They should admit their error and scrap this absurd regime at the earliest opportunity. We would.
The list of new obligations does not end there. After the recent highly damaging floods, the costs to councils were not remotely covered by the emergency grants from the Government. Only this week, in the Civil Defence (Grant) Bill, the Government proposed restricting by 25 per cent. contingency and emergency planning expenditure in order to reduce their own liabilities. In the wake of 11 September, there are likely to be higher—not lower—costs for local government and the fire authorities.
On asylum funding, there is still a shortfall between the costs to councils and the Government's grant aid. Last year, the Association of London Government stated:
- "Government grants made no provision for the education and social care costs of supporting asylum seekers in the year 2000–01. This is a problem because data lag means that authorities can wait up to two years before the asylum seeking child appears in the SSA formula for funding."
Finally, on waste and recycling, we have the ridiculous situation whereby, from this January, fridges will be subject to the ozone depleting substances regulation, with very little extra grant being made available. The most ludicrous situation of all is that there is as yet no facility in this country that can do the necessary disposal. The Government must have known that that directive would be implemented this year. Why was there such woeful preparation and why is there such inadequate funding? The Government's offer of just £6 million is laughable. The LGA has estimated the total cost to local authorities to be some £60 million, so the legacy of the Government's mismanagement of the issue will be mountains of rusting fridges littering our landscape for years to come.
Perhaps the key area of budgetary pressure, for those councils tasked with the responsibility, is that of personal social services. There is real concern that the resources have not increased by any more than the forecast totals of 5.4 per cent. in the 2000 spending review.
Mr. Betts: The hon. Gentleman has just listed a catalogue of problems facing local government and the extra costs that he believes that local authorities have. Would he like to say by how much the grant to local authorities should be increased in excess of what the Government have recommended?
Mr. Moss: If the hon. Gentleman had been listening, he would have heard me say some moments ago that we have no argument with the total level of funding at a 7.4 per cent. increase, which is generous in relation to inflation. I am arguing that the Labour Government have burdened councils with all sorts of extra regulations and red tape and then not given them the money to deliver. That is the issue.
I return to the subject of personal social services. Why have the Government stayed with those outdated figures when all the evidence points to severe and increasing demand for children's services and care for the elderly? The Government know that local authorities are already spending more than £1 billion over the total SSA to try to meet those increasing demands. To ignore the facts, to ignore the crisis, is to condemn thousands of the most vulnerable people in our society to a life of misery.
- "The present system is not working. Older people are suffering and will continue to suffer as a consequence. They deserve better."
Mr. Moss: The Minister must be patient. I shall come to that later. There was last year, and has been promised
this year, £200 million from the health budget to help alleviate bed blocking. That is a source of money that a Conservative Government could certainly turn to, as the present Government have turned to it, so there is no magic in all that.The words that I just used about social services were quoted from the report of an inquiry, chaired by the right hon. Member for Birmingham, Hodge Hill (Mr. Davis). He recently chaired an independent commission of inquiry into social services in Birmingham. The report also concludes that:
- "Birmingham's problems are not unique. There is national underfunding of social services—especially the services for older people. However it is inescapable that it"—
- "either finds the money or reduces the service it provides. Significant extra funding must be made available for Social Services as a whole . . . the identification of funding on a suitable scale is largely the responsibility of Central Government."
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