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24 Oct 2002 : Column 451continued
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 goodthe best in the countryand use it to reward counties where the results are much lower?
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 establishedI should call it a
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
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.
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
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.
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 overnightwithin 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 whammyas my local authority has beenof 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.
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.