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15 Oct 2002 : Column 274—continued

Mr. Raynsford: As I was saying, I was delighted at the very large numbers of Members who attended yesterday's seminar and at a similarly large number who attended the other seminar that we held the week before. I am very sorry that the hon. Gentleman was unable to attend either of those events. For his benefit and that of others who were not able to attend the seminar, the answer is that I made it clear that we will continue floors and ceilings in future years.

Several hon. Members rose—

Mr. Raynsford: I shall give way to my hon. Friend the Member for Don Valley (Caroline Flint).

Caroline Flint (Don Valley): My right hon. Friend said that the allowance per mile of local roads would be considered. May I bring to his attention the dilemma that faces many coalmining communities, which has been raised by the Coalfield Communities Campaign—namely, the number of unadopted roads in those communities and the problems of finding finance to work with residents to bring them back into council ownership? Will he consider including, at least for a few years, unadopted roads in target areas in the allowance per mile?

Mr. Raynsford: My hon. Friend presciently anticipates exactly what I was about to say. Local authorities rightly feel passionately about changes to the formulae that would better reflect their local needs and circumstances. Equally, Members on both sides of the House want their area to get a fair share of the cake. We will listen carefully to all that is said tonight and on any future occasion when such a debate may be held. Within the bounds of feasibility—as I suspect that some of the demands will be mutually contradictory—we will endeavour to reflect in our final decisions the concerns that have been voiced. We do not expect to please everyone.

Sir Paul Beresford: If I may take the Minister back a couple of paragraphs in his speech, he was talking about protection of local authorities and using floors. In the assessment of the floor, is he taking into account grant or grant plus discretionary grant?

Mr. Raynsford: The hon. Gentleman asks a technical question about the way in which floors are constructed. To explain the matter briefly, without going into too much detail, as I do not want to take too much time, the purpose of the floor is to ensure that no authority gets

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less than a prescribed sum determined in a particular year. That refers to general grant distributed currently through the SSA system and grant that will be distributed through the formula grant distribution framework in future. It applies to general grant.

We do not expect to please everyone—we would be very foolish if we thought that we could do so. In fact, we will have done rather well if we do not disappoint everyone. What we are determined to do, however, is to replace the old, discredited SSA system with a new grant distribution formula that is fairer, that better reflects today's needs and circumstances, that is less complex, less confusing and less perverse, and that enables local authorities to plan with greater certainty and to deliver the high-quality services that people rightly expect from their local council.

9.14 pm

Mr. Eric Pickles (Brentwood and Ongar): I regret what has happened. Despite any reservations that we may have about the formulae, it is clear that the right hon. Gentleman has put in an enormous amount of effort and work. The two seminars were very good and well attended, and he went out of his way to answer the points made, so it is a shame that such effort has been rewarded by this debate. The subject deserves a full day's debate. I am pleased to understand that we will have a further debate on the matter—a continuation of this debate—on the Floor of the House. I am sure that all the Members who have constituency cases to make will not be disappointed to learn that.

Sir Patrick Cormack : Does my hon. Friend agree that if there is to be a continuation of this debate, as the Leader of the House has promised, it must take place on the Floor of the House? We cannot continue somewhere else a debate that was started here.

Mr. Pickles: I entirely agree with my hon. Friend. The working of the usual channels are a complete mystery to me, but a bearer of tidings passed down a whisper that the debate might well take place on the Floor of the House. If that is so, we can be a little easier on the Government. However, we look forward to continuing with the debate.

While I am in a mood to hand bouquets to the Minister, let me present him with another sweet-smelling rose. I congratulate the Government on achieving what many thought was impossible. They have taken a complex formula, added their special magic and made it even more complex. The once impenetrable labyrinth of local government grant is now firmly shrouded in mist.

More seriously, the Government have taken a system that relied heavily on formulae and that ensured minimum interference from the Government and added a strong element of discretion. The County Councils Network referred to such discretion in its advice to all Members of the House. It said:

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That is right. One of the most remarkable features of local government finance and involvement from the centre is how little manipulation took place in the past. [Laughter.] I am sorry to be greeted by such laughter of disbelief, because I do not believe—

Mr. Watts rose—

Mr. Deputy Speaker: Order. The hon. Gentleman is not giving way and he should be heard with the same quiet as the Minister for Local Government and the Regions.

Mr. Pickles: In fairness, I may have slightly provoked the hon. Member for St. Helens, North (Mr. Watts).

Mr. Nigel Waterson (Eastbourne): Will my hon. Friend give way?

Mr. Pickles: Of course. I shall then give way to the hon. Member for St. Helens, North.

Mr. Waterson: My hon. Friend speaks about manipulation, but is he aware that, under the Government's proposals, my county of East Sussex could lose up to #44 million, which equates to 900 teachers or care for more than 2,000 vulnerable elderly people?

Mr. Pickles: I am aware of that. I had the opportunity to visit my hon. Friend's county council a couple of weeks ago and was most struck by the need that exists there. I was also struck by the time—87 hours a week—that its excellent chief executive had spent on dealing with Government forms and the like. My hon. Friend makes an excellent point.

Mr. Watts: If the hon. Gentleman believes that the previous Government did not manipulate the present system, will he explain why, when the changes took place, they transferred millions of pounds from Labour authorities to Tory authorities? My authority lost #10 million overnight.

Mr. Pickles: I thank the hon. Gentleman for that question, but I have as good a memory as his. I recall the time that Bradford was Labour controlled and was on a similar band to Wandsworth. When Wandsworth did very well, Bradford did very well. In fact, we went and became Conservative controlled.

The Minister is right to say that there is a strong element of rough justice in the system, but instead of providing greater equality, the Government have instead increased the rough justice. A change of such magnitude should be based on consensus. The Minister referred to the seminars organised by his Department. I attended only one of them, but I suspect that the others were as good tempered. Members from both sides of the House offered sound advice and there is a willingness to find a fair formula. However, it is impossible to build a consensus on the basis of transferring and losing #304 million to the metropolitan authorities, as estimated by the County Councils Network. The figure could even be as high as #800 million, based on some calculations.

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The way in which the calculation has been put together and the various options available make it difficult, even for someone who is as keen as mustard on local government finance, to work out a precise picture for each authority.

Judy Mallaber (Amber Valley): If the hon. Gentleman is concerned about disparity and losing money, does he think it right that his authority gets #200 more per primary school pupil than my county council, which is not a metropolitan area? Is that fair? Is there anything to justify why his area's needs are greater than mine, which is a far more deprived area?

Mr. Pickles: There are many different reasons for that, which is why the formula has been so difficult to agree. For example, there are levels of deprivation and staffing costs to consider. The hon. Lady misunderstands and she is not helping the debate if she thinks that I am defending the existing scheme. One reason why the Government have spent such a long time producing an alternative is that it is a difficult thing to do. I was hoping that we might arrive at a consensus and believe that that is still possible. Local government deserves a system that is transparent and understandable. It deserves a system that we can all support.

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