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5 Dec 2002 : Column 1071—continued

Mr. Pickles: What is it worth?

Mr. Raynsford: I have already given the hon. Gentleman the figures. They are in the statement, which he had for three hours before the debate, and I am astonished that he has not even bothered to discover them.

The hon. Gentleman's suggestion that high-performing authorities are somehow going to be penalised is quite wrong. There is no correlation between the work done by the Audit Commission, which is looking at the performance of authorities, and the needs assessment that informs the distribution. He will see that some high-performing authorities receive very good grant increases, and that some authorities that are performing less well also do so. That is because the two activities are quite separate. I am sorry that he has failed to understand that.

The hon. Gentleman's criticism of the children's education allowance is particularly ill-founded in a year in which we can state that, overall, there is a £200 per pupil average increase. That is in marked contrast to what happened when the Tories were in power. He confused the Chancellor's estimate of council tax increases in the Red Book, based on previous year trends, with what will actually happen, which will be a matter for individual authorities to determine. He also asked about the number of authorities that will get the floor level increase. The answer is clear from the figures that I have already provided, but he ought to be pleased that the floor is there. Without it, many authorities would suffer losses.

I shall pause for a moment to describe one scenario. Westminster city council has faced a real problem, not because of anything to do with our Department but because of the census data, which show a significant fall in the population of that area. Were a floor not in place, that authority would have suffered a serious reduction.

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Is he complaining about our efforts to provide protection for authorities through such a floor? His remarks suggest that the Conservatives have a wholly unsatisfactory understanding of what we are seeking to do. Their approach to local government has been condemned by their own record in government.

Mr. Edward Davey (Kingston and Surbiton): I thank the Minister for his statement, and for his courtesy in providing a particularly early sight of these very complex figures. I begin by welcoming a particular aspect of the statement. The Government have listened to some of the representations that were made. I am glad that Ministers have now checked the map and that they now recognise that Kingston-upon-Thames is not in east London.

Overall, however, the statement is extremely worrying for my constituents and for millions more. Rather than increasing council freedoms, the statement is a control-freak statement. Rather than being generous with Government money, the settlement is generous only with council tax payers' money. Does the Minister not realise that he has utterly failed to deliver on his promise of a fairer, more transparent and simpler system? Is it not true that, under the new system, there will be large council tax rises in the worst-hit areas for several years? How can that be fair?

Despite the Minister's claim that he is reducing ring fencing, most councils will see more special grants next year. He has abolished seven special grants and introduced 16 new ones, but how can feeding that financial fog increase transparency? Is it not true that, by looking solely at the grant system and failing to replace the unfair council tax, and to take budget power from Whitehall, the Government have missed the chance to establish a genuinely simpler system? As the Minister admitted, the Treasury predicts a 7.2 per cent. rise in council tax next year, but do not the Government always underestimate council tax rises—by a massive 3.1 per cent. last year? Is there not a real threat that average council tax rises next year could top 10 per cent.—four times the expected rate of inflation? The Government cannot duck the blame for rocketing council tax. It is Ministers who place councils in a financial straitjacket, with less room to move than Houdini, but they cannot escape the blame.

The Minister claims that his floors and ceilings will protect council tax payers, but he has set the level very low. Does he acknowledge that, at best, such protection will be partial and short-lived? What will happen in year 2 or in year 3, when the changes really kick in? If he is so concerned with protecting the losers, why were the Government not honest enough to announce the floors for years 2 and 3? Not only would that have shown the truth about this statement; councils could have planned for the future. Indeed, through his own local government Bill the Minister will force councils to plan budgets over the longer term, yet in this statement he is refusing to give councils the very information that they need to make those plans. Is he not just a little shamefaced about that hypocrisy?

The hon. Member for Brentwood and Ongar (Mr. Pickles) complained greatly about shifting cash between different authorities: I say XWestminster and Wandsworth" to that. Will the Minister at least concede, however, that huge shifts leave him open to the

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charge of gerrymandering? Does he not realise that, because the grant review was so rushed, that charge will stick? Will he confirm that he has breached Cabinet Office guidelines on good consultation by releasing the consultation's conclusions along with his settlement? Should not the Government have learned from their embarrassing mistakes in last year's settlement, and from the A-level debacle, and delayed the review by one year to allow for a full and independent analysis?

The most disappointing aspect of today's statement is without doubt the Minister's failure to bring clarity and equity to local education authority budgets. In so doing, he has ignored the principal recommendations of every professional group: Ofsted, the Audit Commission, and head teachers and governors associations. Why did he reject their idea that the bulk of education standard spending should be distributed using an activity-led formula? Given that the Government are increasingly telling schools what to do, why has he abandoned the principle of activity-led funding in favour of the discredited historical spend data? Will he explain to the House how schools appear to have lost £250 million between the Chancellor's spending review and this statement?

It was noticeable that the Minister did not bother to boast about increases for social services. Frankly, we are not surprised. Will he confirm that, with increased demand pressures and national insurance costs, the settlement represents at best a standstill for social services? How will that solve bed blocking and help children at risk? The Government may say that it will take time to make up for the lost years of Conservative underfunding, but social services are often life-and-death services. Why have they fared so badly?

The Minister said that the Government were removing the perverse incentives in the formula for fire authorities. When will he publish the new formula?

When they began the settlement process Ministers promised to move a mountain, but they have brought forth a molehill. The Minister can rightly claim that this is a better settlement than any delivered by a Conservative Government, but it will mean council tax hikes and little new cash for the most vulnerable. It will certainly not lead to the rebirth of local democracy.

Mr. Raynsford: I thought that the spokesman for the official Opposition had made a pretty poor fist of his response—until I heard the Liberal Democrat spokesman's effort. I acknowledge the hon. Gentleman's acknowledgements of the representations that he made in respect of his constituency, and I am pleased that he is pleased that we listened to them. I shall make no jibes about geography.

I wholly reject the hon. Gentleman's allegation that the Government have a control-freak tendency. The settlement is part of a process in which we are devolving greater power and responsibility to local authorities, as I am sure he will understand when we discuss the Local Government Bill in Committee later in the Session.

The hon. Gentleman complained about council tax rises, without mentioning that Liberal Democrat councils had the largest increases last year. Liberal Democrat Members should look to their local authorities before they criticise others. He also asked why we were not giving absolute guarantees of the floors

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and ceilings for future years. I have explained that ad nauseam, to him and to other hon. Members. Until we see the full details, including the latest demographic data, it is impossible to set an accurate floor that also allows a reasonable gap between it and the ceiling. The hon. Gentleman must understand that. No responsible Government could do otherwise, but we have said repeatedly that there will be floors and ceilings, that there will be protection for authorities, and that there will be greater certainty. That is an indefinite pledge, and we have said that it will be a continuing part of the system. The Government have made a clear commitment that floors and ceilings will continue to be parts of the system.

The hon. Gentleman complained that the Government had not consulted sufficiently. We consulted before we published the consultation paper. We listened to the consultation, and we are publishing the figures today so that they can be consulted on. The Liberal Democrats have an extraordinary approach: they would love life to be one long continuous consultation—all talk and no action.

Contrary to what the hon. Gentleman said, schools have not lost out. They are gaining substantially, as the settlement gives an extra £200 on average per pupil. It is a travesty for the hon. Gentleman to claim that there are losses.

The hon. Gentleman also spoke about inadequate funding for social services, even though the settlement contains an overall increase of 5.5 per cent. in PSS resources, and an additional £100 million specifically for bed blocking. Extraordinarily, he omitted to mention that, and even criticised the Government for increasing the number of specific grants. That shows that Liberal Democrat Members have only the most rudimentary understanding of the essentials. Their questions are very wide of the mark.

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