Travel Concessions (Eligibility) Bill [Lords]

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Mr. Clifton-Brown: I am grateful to the Minister for giving way. I fear that he might inadvertently have misrepresented the argument of this side of the Committee. When discretionary schemes become mandatory schemes, the discretionary ones tend to disappear. We saw that with student grants. We are concerned that the Bill, by introducing a mandatory scheme of which we wholly approve, will cause existing discretionary schemes to disappear. We have already heard anecdotal evidence of that from Birmingham and elsewhere. I should be grateful if the Minister would give an assurance that he does not wish discretionary schemes in Birmingham or elsewhere to disappear.

Mr. Spellar: First, I understand that the situation in Birmingham has been or is in the process of being remedied. I believe that that is happening under a number of other authorities. We certainly should not wish to see people becoming worse off as a result of the improvement. However, as has become apparent, local authorities have differences in priorities. Those differences can lead to anomalies between their residents and, inevitably, to comparisons being made. As I said, that goes to the heart of discretion in local Government and of the ability of local authorities to make distinctions.

Chris Grayling: While I accept that the differences between authorities and the differences in funding provided to local authorities is not at the heart of the Bill, my point was that we should ensure that the financial action taken to accompany the Bill should not add to those differences and should not make it more difficult for local authorities to launch schemes in future.

Mr. Spellar: Yes, but authorities have to, and do, make different decisions according to the requirements of their local populations. The Government have to deal with a different dilemma—to decide the extent to which national minimum standards are set and to deal with the financial consequences of that and of ensuring that local councils do not lose money. I appreciate that that is not the immediate purpose of the Bill, but it is an issue that has been underlying the debate.

I am grateful to the hon. Member for Cotswold for explaining the purpose of the amendment. As has been clear throughout the debate, funding is an issue that will arise throughout our deliberations. I have listened to hon. Members, but I feel that I must disappoint them and urge the Committee to reject amendments Nos. 6 and 7. My explanation, in terms of the amendments, will not necessarily relate to all the issues that we have discussed, as we have covered broader issues.

Amendments Nos. 6 and 7 are unnecessary. The Chartered Institute of Public Finance and Accounts already publishes information for each authority on concessionary travel scheme expenditure, along with information on other areas of local authority spend. In addition, amendment No. 7 is defective, because the rate support grant is only one element of the funding that councils receive for their revenue expenditure. It is not, therefore, appropriate to talk about a certain proportion of the grant being used to meet particular expenditure.

Mr. Don Foster: I do not have a reference to hand, but am I correct in saying that, one of the Minister's colleagues in another place said that the mechanism for funding this issue, and the finances arising from measures in the Bill, will come specifically from the rate support grant?

Mr. Spellar: Yes, but a wide range of grants goes to local authorities for a wide range of expenditure. Therefore the percentage formula might not provide an accurate representation.

Amendments Nos. 4 and 5 would add a further unwelcome layer of consultation into the local government finance settlement. As hon. Members are aware, the Government are already consulting local government on the review of grant distribution methodology in 2003-04. We know that local authorities are actively engaged in that discussion. In addition, the Government already consult local government on each year's provisional local government finance settlement.

Finally, amendment no. 3 would effectively hold the Government to ransom by preventing the Act from coming into force until an agreement had been reached with the local government associations on the level of funding. As I am sure the Committee realises, the danger is that that could delay the benefits of the Bill being enjoyed by men aged between 60 and 65. I am sure that that was not the intention, but it is the logical consequence of the amendment. It would gridlock the system.

Chris Grayling: Regarding amendments Nos. 4 and 5, is the Minister saying that the Government will simply tell each authority what it will receive?

Mr. Spellar: We are already involved in widespread discussions on the mechanics of the local government financial settlement. Ultimately, it is for the Government to decide. In the arcane intricacies of local government finance, the Government wish to engage with local authorities associations to achieve the best outcome and to modify the system to take account of circumstances. That is why those complicated negotiations are taking place, and why local authorities are deeply immersed and interested in them.

Mr. Clifton-Brown: It would be very helpful if the Minister were to explain how it will work in practice. He is negotiating with local authorities now on what they will receive. Will an audit system be in place at the end of the year to uncover discrepancies—for example, in the generation of extra traffic—so that local authorities that are disadvantaged will be reimbursed?

Mr. Spellar: It is a regular problem for local government, and not only with regard to transport finance, that when an assessment of anomalies is made an adjustment is proposed to take account of them. However, it has always been recognised that there will be winners and losers at the margins. That is a continuing feature of local government finance, and local authorities are not backward in coming forward in telling the Department of significant problems if such anomalies arise. Those changes then become incorporated into the methodology. We do not think that the suggested mechanisms are the right way to do it, because the process is already being undertaken.

Mr. Don Foster: Will the Minister confirm that in the other place, Lord Falconer made it clear that the entire cost of the implications of the Bill would be borne by central Government; yet he has said today that there will be winners and losers? The implication is that the Government will seek to demonstrate that the total costs have been met in the round, but not for individual authorities. However, all local authorities will want to know that the full cost of implementing the legislation will be met by central Government. I hope that the Minister will explain how.

Mr. Spellar: The mechanism will be that the extra costs will be fed into the rate support grant, at the lower end of the environment protection and cultural services block. All other things being equal, local authorities will broadly receive additional funding in proportion to their current share of the EPCS lower tier.

Several hon. Members rose—

The Chairman: Order. The Minister has not given way.

Mr. Spellar: I give way to the hon. Member for Epsom and Ewell (Chris Grayling).

Chris Grayling: I am grateful. I pick up on a point that the Minister made a moment ago. If the process of consultation is happening, why should he object to amendments Nos. 4 and 5? If it is not happening, and he does not believe that the results of the process should be picked up by central Government—again, why would he object?

12.15 pm

Mr. Spellar: Quite simply, we believe that the amendments are unnecessary because they would create an additional layer of discussion as opposed to the discussion that is taking place already. It is very straightforward. They are unnecessary because, as I said to the hon. Member for Bath, we are committed to the new burdens principle, which requires us to reimburse local authorities the extra costs that they will face. We are working with the local authorities associations as we finalise our estimates of the financial implications for councils. I am aware that the Association of London Government made an estimate of £28 million of additional costs for London authorities. Our officials are engaged in discussion with them on those figures.

Mr. Clifton-Brown: I am still concerned, and I can see that the hon. Member for Bath is too, by the Minister's use of the word ``broadly'', which implies that there will be winners and losers among authorities. If that is to be the case, let us have it clearly on the record so that local authorities know where they stand. Will the Minister say why it is impossible to reimburse local authorities for the actual number of journeys taken, so that they are reimbursed precisely for the costs incurred, as is the case for London boroughs, which are reimbursed for each journey on which they give a concession?

Mr. Spellar: As the hon. Gentleman knows, that is the way in which the rate support grant works in any case. Discussions are taking place about the methodology for the rate support grant, and it is difficult to pick out one particular element. If significant anomalies arise, however, they will be drawn to our attention and taken into account in future settlements. That is the normal procedure for handling such a matter in local government.

Mr. Andrew Turner: Further to the point made by the hon. Member for Bath, who asked for specific reimbursement of additional costs, will the Minister say whether that will benefit the people in the authorities who are already getting additional benefit beyond the minimum laid down by the Government and disbenefit proportionately the people in those authorities who are not getting benefit beyond that minimum? Is the Minister saying, in fact, that he will pay to authorities—broadly or otherwise—only the sum that enables them to pay for the minimum laid down by Government?

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