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Mr. Chope: Does my hon. Friend agree that what matters is not just the overall level of funding for social services but the way in which it is distributed? Will he express some sympathy for the people of Dorset, where there are 88,000 citizens aged over 65 and the amount of funding for social services per person over 65 is £183 less than the national average? Does he agree that that is totally unacceptable?
Mr. Moss: I agree with my hon. Friend, who makes an important point.
The crisis in social services is of the Government's own making. Where is the sense in formulating ever more regulations for the nursing and residential home sector when private homes are closing down at a rate of knots? There are now some 47,000 fewer care beds than there were in 1997. That is a scandalous record, brought about by an incompetent Government. There appears to be little or no communication between the key Departments that have an input into this problem. At Prime Minister's questions, the PM himself seems totally oblivious to the time bomb that is ticking away under his nose.
Mr. Julian Brazier (Canterbury): My hon. Friend has just mentioned Prime Minister's questions and the Prime Minister's complacent answer when attention was drawn to the crisis in the East Kent hospitals at the moment. Those problems are heavily driven by the loss of more than a quarter of our nursing home beds over the past three years.
Mr. Moss: My hon. Friend makes my point for me.
Those, then, are the key cost pressures for local government. Now let us take a look at the funding pressures.
In 1998, the Labour Government altered the methodology by which the revenue support grant was to be distributed. Those changes are still in place. They perpetuate the initial inequalities and unfairness and they penalise the better-managed councils.
Over the lifetime of the last Parliament, the shire counties lost an estimated £700 million in grant funding, while London lost £450 million. We are not arguing that
the shire counties have not received any grant increases; rather, we are arguing that they would have received more grant if the funding formula had not been changed.In the current settlement, the Government have also perpetuated the flawed funding system of floors and ceilings in their grant allocation. What is the point of having an elaborate system of SSAs, dependent on the collection and appraisal of huge quantities of data, if that exercise is subsequently ignored because the Government do not like the outcomes?
Mr. Raynsford: If I give the hon. Gentleman the figures of the cumulative increase in standard spending assessment for London, metropolitan areas and shire areas in the course of the lifetime of Labour Governments and compare it with the Conservative Government, he might find those figures instructive. Over the past four years, there have been year-on-year increases of 4.4 per cent. for London, 4.3 per cent. for metropolitan areas and 4.6 per cent. for shire areas. The respective figures during the Conservative Government's period of office from 1994–95 to 1997–98 were 0.6 per cent., 1.3 per cent. and 1.8 per cent. respectively. All categories—shire, metropolitan and London—have done very much better under the Labour Governments.
Mr. Deputy Speaker (Sir Michael Lord): Order. There have been several long interventions in the debate. A number of hon. Members are very anxious to speak and unless interventions are briefer, or perhaps non-existent for a while, a lot of hon. Members will be very disappointed.
Mr. Moss: A wink is as good as a nod, Mr. Deputy Speaker.
Mr. Moss: I shall now return to the floors and ceilings issue. What could be more illogical or perverse than to have poor councils coughing up some of their grant to help even poorer councils? Only the present Government could come up with the philosophy of robbing Paul to pay Paul.
The unfairness of that redistribution is felt particularly by those councils in the south-east planning region that enjoy the area cost adjustment. Many of these have seen their grant reduced even though the SSA calculations were based on real need. If that is the Government's answer to the reform of the area cost adjustment, they should come clean and tell us. Reform, I would remind the House, was promised by the Prime Minister in Cambridge in the run-up to the 1997 general election. Five years later, we are still waiting—yet another example of a broken promise.
One of the most detrimental changes to local government that the Labour Government have made is that of the switch since 1997-98 from block grants to specific grants. As well as treating local councils as nothing more than mere agents of central Government, that practice actually takes money away from basic front-line services.
Non-police specific grants have increased from 4 per cent. in 1997-98 to over 14 per cent. in the current settlement. Not only are these specific grants unobtainable by certain councils but they frequently involve a complex bidding and allocation mechanism. That adds to the bureaucracy, and costs councils time and money.
The LGA is concerned about that increase in the proportion of resources devoted to ring-fenced funding, particularly for education and social services. Is not the planned increase in specific grants this year perverse in view of the Government's conclusion in their recent White Paper that the growth of ring fencing is "excessive" and that
- "it threatens to erode local decision-making responsibility, limit authorities's ability to tackle environmental priorities and to increase council tax levels."
Finally on education, there is the fiddle of the funding transfer from post-16 education to the Learning and Skills Council. Many councils and the LGA believe that too much has been transferred out of the revenue support grant total because of an overestimate in the growth of sixth form numbers. The £16.8 million post-16 budget support grant does not compensate in full for that loss.
So what is the outcome of this misdirected and incompetent double whammy of extra burdens on the one hand and fiddled funding on the other? Every year, council tax has soared by three times the rate of inflation, despite the Prime Minister's promise before the 1997 election that he had no plans to increase tax at all. Over the past four years, council tax has risen by £212 on band D homes—equivalent to a 30.7 per cent. increase.
At least this year the Government have come clean and planned for that increase three times above the rate of inflation. In the small print of the November 2000 pre-Budget report, council tax receipts across Britain are budgeted to rise from £14.8 billion to £15.8 billion—a 6.7 per cent. increase. Of course, as we know, inflation is predicted at 2 per cent. in that report. Actual increases are likely to be higher in the shire counties, as I have already mentioned in referring to the letter from the secretary of the Labour group.
That hike in council tax—it is likely to break the £1,000 barrier significantly for band D homes for the first time—is one of Labour's more effective and less obvious stealth taxes, but it hits the most vulnerable in society disproportionately. In fact, it is a form of regressive taxation—something the Labour party in opposition said it would never countenance.
Let us consider pensioners. Between 1997 and 2001, a couple's basic state pension rose by £837. At the same time, band D council tax went up by £212. Therefore, 25 per cent. of the couple's pension increase was grabbed back in council tax, and the figure for single pensioners is 30 per cent.
Despite all those pressures, Conservative councils still have the lowest council taxes in the country. Currently, the average household pays about £88 a year more on a band D council tax bill in a Labour council and £63 more in a Liberal Democrat council, compared with Conservative-run councils. Labour and Liberal Democrat-controlled councils have the highest council taxes in England, and 13 of the councils with the 20 highest council taxes in England are Labour controlled—none is Conservative.
The message is clear to all those who have a vote in the forthcoming local elections: vote Conservative for the lowest council tax. People should not blame their local council for council tax increases at three times the rate of inflation—the blame lies with the Labour Government and this team of Ministers. The sad thing is that all that is avoidable. The problems are all of the Government's own making; they are caused by their spin philosophy, which promises all and delivers nothing; their craving for central control; their fiddling of the funding formula; their switch to specific grants that they can control; their imposition of additional burdens, costs and red tape; and their total failure to address the inherent and severe problems in social services.
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