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24 Oct 2002 : Column 451—continued

Madam Deputy Speaker: Order.

3.11 pm

Mrs. Annette L. Brooke (Mid-Dorset and North Poole): Much has been made of the strange name of my constituency. This diverse area contains one unitary

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council, one county council and two district councils, one of which is part of the small group that does not receive any revenue support. In passing, may I say that I hope that the Minister is reconsidering the proposed merger of the revenue support grant and the redistributed non-domestic rate. The authorities, common factor is low funding, historically among the lowest in the south-west. To put that into context, the SSA per capita for the south-west is the lowest for any region. At #876, it is 12 per cent. below the English average of #995. As the lowest of the low, it is not surprising that the councils initially welcomed the idea of simplicity, transparency and ease of understanding. Obviously, there was a strong belief that the history of underfunding would at last be addressed.

I am heartened by the number of hon. Members who have mentioned the f40 group. The areas that it includes are situated throughout the country and the fact that so many people are talking about the issue represents the strength of feeling that exists. Not surprisingly, I support option 5. Poole unitary authority has the sixth lowest education funding in the country. Dorset is also well towards the bottom of the list of the lowest 40, although that is not reflected in its results. In the past few weeks, I have received hundreds of letters about the issue. Parents cannot understand why their children are allocated #100 less per head than those in Hampshire schools, for example. We have been hearing that they were not doing so well, but as many other hon. Members have said, the main issue is the size of the discrepancy between the highest and lowest funding, which causes great concern among parents.

Bob Spink (Castle Point): Does the hon. Lady share my curiosity about the Government's proposal to remove more money from education in counties where the results are good—the best in the country—and use it to reward counties where the results are much lower?

Mrs. Brooke: I shall move on, as I do not think that that is the main issue.

I was saying that we have excellent teachers despite the low funding, although I am afraid that we have been very disadvantaged in terms of physical resources. The basic allowance per pupil simply must be higher.

On social services in the south-west, a recent analysis shows that there is a #70 million care gap. Local authorities are warning that the social care safety net is not adequate for children, the elderly and the vulnerable. Poole is an especially small unitary authority. In the past few years, it has seen unbudgeted overspending on children's services. I do not think that anybody wants to address that issue. We cannot easily do so; children are at risk. The difficulty is that just one expensive placement throws the whole budget. I urge the Minister to take on board the fact that those are significant problems and that it does not matter how good the councils are or what their political flavour is.

This will be my third effort to speak about waste management. I keep getting the phrase, XNobody wants more ring fencing" thrown back at me, but I have received many representations from all the major organisations involved, including the Local Government Association, saying that they would like an extra waste block to be established—I should call it a

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separate waste block, in view of the merger within EPCS. I am not referring to targeted funding that is clearly identified—I want the resources to be identified for the much-needed recycling that we are all going to do provided that the funding is available. It is vital that those resources are clearly provided. That does not mean ring fencing; it means giving local councils the tools to do the job that they want to do and which our constituents want them to do.

Matthew Green (Ludlow): Is it not strange that while waste is in the large EPCS block, it should be affected by deprivation indices? It is hard to see why deprived areas need more money to collect waste. I would have thought that the waste should be accounted for on a per head basis—

Madam Deputy Speaker: Order. That is rather long for an intervention.

Mrs. Brooke: I thank my hon. Friend for his intervention.

I should like to add my comments on resource equalisation, on which my feelings are very much the same as those already expressed. The proposed mechanism seems very crude. If it takes effect, it will reward historically high-spending authorities at the expense of those with a more buoyant tax base. I believe that it would direct funding from the south-west, which is already the lowest-funded area, to the north-east and north-west. In this case, enough is enough.

I share the concern expressed by an earlier speaker about what might happen to the police budget. There is great fear about the issue in my constituency. Dorset police authority is the second lowest funded in England and Wales, and predicts a shortfall of between #5 million and #8 million. On the other hand, I am receiving letters saying that people do not want more police as they cannot afford to pay the council tax increase.

We need more police and services, but wherever people live, the basic pension is the same. If some of the changes go ahead, resulting in massive cuts, the impact will be felt through that very unfair tax, the council tax. Year after year, pensioners in my constituency are seeing their pensions eroded. It is not the council's fault that there are large percentage increases in council tax. It is the wrong type of tax for funding local services. Some of the proposals in the new models for finance cannot seriously be considered without our addressing the fact that local authorities will have to raise the money for any extra burden that is imposed on them.

3.18 pm

Mr. David Watts (St. Helens, North): I am very pleased to take part in this important debate. As other hon. Members have said, we are talking about how 25 per cent. of public expenditure will be allocated. That has a major impact on all our constituents, so I am pleased to see so many hon. Members present.

I should like to be as brief as possible, and to begin by dispelling some of the myths that have featured in the debate. I understand the difficulty that the Government will have in making their decisions, as there will be some winners and some losers. Some authorities have got used to very low council taxes and high-quality services, while

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others, such as my own and many members of SIGOMA, have had low-quality services and high council taxes. It was amazing to hear the right hon. Member for Kensington and Chelsea (Mr. Portillo) say that tax rates were high in his constituency. He ought to compare them with the rates in some of the authorities that we represent; he would see the massive differences between one authority and another.

Mr. George Howarth (Knowsley, North and Sefton, East): Does my hon. Friend agree that, if there is to be a retention of the area cost adjustment, it should be based on real costs rather than notional costs? Part of the problem that he is describing is precisely the result of notional costs being used.

Mr. Watts: I agree with my hon. Friend and I shall come to that important issue later.

I want to set out some of the present problems, because we need to think about where we are today. I would also like to consider some of the Government's options and to offer some brief ideas about how we can move forward. It is important to understand the present system. It is not a fair one. It was introduced by the last Tory Government in 1981 to target funds to Tory councils, to allow those councils to set very low council tax rates, and to give the impression that Tory authorities were more efficient and effective than Labour ones.

During that process, we saw millions of pounds being transferred overnight from Labour local authorities to Tory local authorities. In my authority, that involved a #10 million cut overnight—within 24 hours, it had lost #10 million. That led to cuts in basic services, and has meant that, for the past few years, we have had to increase our council tax rates at well above the rate of inflation. It was Robin Hood in reverse: the system took money from the poorest communities and gave it to the richest members of our society.

The system transferred huge amounts of money from Labour authorities to Tory councils, and cut millions of pounds from the budgets of Labour authorities. It introduced a Tory tax on poverty and meant that many local authorities such as mine had to cut their budgets for vital services such as youth clubs, leisure centres, street lighting, roads and parks. Those services are crucial to my community.

I want to talk about the winners and losers. I understand that my hon. Friend the Minister would have major problems if he transferred large amounts of money from one local authority to another. Because of the ineffectiveness of the Opposition, many of those areas are now controlled by Labour councils and I understand the political problems that would arise. The councils would be faced with the double whammy—as my local authority has been—of having to increase council taxes at the same time as cutting public services. That is a difficult task. I am pleased that the Government have not done what the Conservatives did, and will instead introduce a cushioning mechanism to ensure that budgets are not cut overnight as they were before. We shall take no lessons from the Opposition about how any changes should be introduced.

Many hon. Members—even Labour Members—would like to see only minimal change. They argue that, whatever change we make, we lose friends, and that that

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is not worth doing politically. I would like to make it clear that I and other SIGOMA Members who represent many of the heartland areas believe that that is unacceptable. We want a fair and transparent system that allocates resources on the basis of need. There is consensus that we need to look at what base services should be provided and how much those services should cost. We then need to determine how we allocate extra resources when it can be demonstrated that there is a real need for them.

I am pleased that my hon. Friend the Member for Knowsley, North and Sefton, East (Mr. Howarth) made the point that, unfortunately, at present, many of the deprivation factors are not transparent. We do not know why a particular resource is allocated in the way it is; it is not based on any real cost and does not relate to the services that are provided in an area. In many cases, some of those resources are being used to undercut the council tax.

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