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5 Dec 2002 : Column 1074—continued

Several hon. Members rose—

Madam Deputy Speaker (Sylvia Heal): Order. This statement has run for just over half an hour already. I have to protect the important business that follows, so I ask hon. Members to restrict their comments to one point only. In that way, I shall be able to call as many hon. Members as possible.

Andrew Bennett (Denton and Reddish): I thank my right hon. Friend the Minister for the hard work that he and his ministerial team have put into consulting so widely on this matter. I thank him, too, for the extra money that has been made available, and for edging towards fairness. However, he will come before the Select Committee on the Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions tomorrow morning. Will he be able to convince that Committee, or my constituents in the Bull's Head, that this system will be more easily understood? Will voters in local elections be able to determine whether their local authorities are efficient and well managed, or whether the funding system is still hampering their activities?

Mr. Raynsford: I thank my hon. Friend for his kind remarks about our consultation, and about the

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settlements in respect of Stockport. Stockport is to receive a 6.8 per cent. increase, and Tameside one of 8.3 per cent. I am sure that he and his constituents will be extremely pleased about that. My hon. Friend raised the question of whether the system was easy to understand. I have openly accepted that it is complex—but the obverse side of the coin of fairness is complexity. One cannot have both fairness and simplicity: to take account of all the myriad circumstances that have to be considered, it is inevitable that the formula has to be reasonably complex. That is unavoidable if one is to be fair. We could have a simple system, but it would not be fair. I do not think that my hon. Friend would like that.

Mr. David Curry (Skipton and Ripon): We have a rebadged area cost adjustment, but it may well have more frontiers than its predecessors. We have a new, gothic structure in resource equalisation, which might well prove to be as complex as area cost adjustment. How much of the new structure depends on council tax banding and resources? When the Government allocate money to schools, what account has been taken of the size of school balances? Does the Minister think that school balances should not accumulate beyond certain levels, rather than mounting up and sitting Gollum-like in school treasurers' caves after collection?

Mr. Raynsford: The right hon. Gentleman asked a series of questions, but did not mention that Craven, one of the two districts that he represents, is to receive an increase of 12.5 per cent. I am sure that he and his constituents will be delighted by that. On the education question, my hon. Friend the Minister for School Standards will write to the right hon. Gentleman with a detailed response.

Mr. Clive Betts (Sheffield, Attercliffe): I want to ask about area cost adjustment. Many of us have argued that my right hon. Friend should take account of the costs that local authorities actually incur, so why has he decided to use the new earnings survey, which reflects costs in the private sector? Why do authorities in the Merseyside area now qualify, whereas those in south Yorkshire and Tyneside do not?

Mr. Raynsford: My hon. Friend raises an interesting question about area cost adjustment. His authority of Sheffield has received an increase of 6.1 per cent. I am sure that he and his constituents will be very pleased about that. We have reformed the area cost adjustment to ensure that it takes a wider view of areas with especially high costs. Parts of west Yorkshire do qualify, but wages costs are inevitably the driver, and it is not possible for every area to benefit. The settlement is an attempt to recognise that there are additional costs associated with delivering services in high-cost areas, and to do so in a much more sensitive way than the old area cost adjustment mechanism. I think that we have made progress on that.

Mr. Gary Streeter (South-West Devon): Does the Minister agree that when he began his statement, every child in Devon received £200 a year less than the

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national average for education, and that now that he has sat down, that serious discrimination remains untackled? Why did the Minister not look at that serious problem affecting west country children, instead of just loading council tax rises on to their parents?

Mr. Raynsford: Children in Devon and elsewhere in the country have benefited from the very substantial increases in education spending that the Government have made over the past six years, and that we continue to make. On average, there is a £200 increase in the amount per pupil this year, and that significant increase follows previous increases. Obviously, circumstances vary between areas, but Devon county council has received a good above-inflation increase of 4 per cent. I am sure that the hon. Gentleman is delighted that the district of West Devon, which he represents, has received an 11 per cent. increase in grant.

Mr. Martin Salter (Reading, West): I thank my right hon. Friend for recognising the needs of local authorities that are trying to deliver public services in areas of high housing cost such as Reading, Slough and the Thames valley. An increase of 8.8 per cent. for Reading is welcome, but may I draw my right hon. Friend's attention to the need for his Department to give practical help to local authorities desperately trying to boost the amount of affordable and key worker housing in their areas?

Mr. Raynsford: My hon. Friend will be as delighted as we are that Reading is receiving an 8.8 per cent. increase and West Berkshire one of 8 per cent. He may wonder why Reading is getting 8.8 per cent., given that the ceiling is 8 per cent. I should have explained that the capital element is outside the floor and ceiling, which is why some authorities can do even better than the ceiling.

My right hon. Friend the Deputy Prime Minister attaches great importance to affordable housing, and will announce his proposals for community plans to secure effective communities, more provision of affordable housing and the building of decent communities, particularly in areas of need such as the one that my hon. Friend represents.

Mr. Roger Gale (North Thanet): In his statement, the Minister said that he had made detailed changes to personal social services and simplified things so that there is now a single formula for residential and domiciliary care. In Kent, that appears to mean that the Government are to take millions of pounds from social services and give it to Richmond house, so that the Department of Health can give it back to primary care trusts, so that they can give it back to social services—with all the administrative costs deducted. At the end of the day, my constituents will have to pay more for their residential care. Why?

Mr. Raynsford: Kent has received an above-inflation increase of 3.9 per cent., which is a good settlement by any standards. The Government are particularly concerned about bed blocking, which is a serious problem. It is necessary to do something about it. It does not help if people occupy beds in hospitals unnecessarily because of inefficient provision of alternative accommodation. The arrangements that the Government are putting in place

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are designed to ease that problem. A substantial grant is available to local authorities to help them meet their obligations. I hope that the system will achieve what I know the hon. Gentleman wants and what we certainly want—a reduction in bed blocking.

Mr. Bill O'Brien (Normanton): I thank my right hon. Friend for his statement. I am glad that the Department is looking at the index of mass deprivation in connection with distributing resources, particularly in education and social services. He referred to the population figures, and the fact that over the past 10 years we have been using the 1991 census figures, with 1 million people incorrectly included in the formula. That means that authorities in SIGOMA—the special interest group of municipal authorities—have been losing out in funding over the past 10 years. I hope that that injustice to SIGOMA has been recognised. Can my right hon. Friend give an indication of how the Government are approaching the funding gap between what local authorities are spending and what they have been allowed?

Mr. Raynsford: I know that my hon. Friend has been campaigning assiduously for a long time not only for his own authority but for others in the parts of the country that he cares about passionately, which are represented by the SIGOMA group. I hope that there will be a broad welcome for the settlement, not just in Wakefield, which is receiving a substantial 7.9 per cent increase, but in many other areas represented by SIGOMA. On population change, we have rightly chosen to include latest population figures and put in place safeguards to ensure that authorities' budgets are not unreasonably disrupted by very sharp short-term movements. We want to use the most up-to-date data on that, as well as on the spending needs that underpin the basis of the new settlement.

Mr. Desmond Swayne (New Forest, West): Is there not something utterly perverse about the Minister claiming that there is £100 million in the budget to prevent bed blocking, when £100 million is precisely the figure that the Department of Health has in its budget for the revenue that it will raise from fining local authorities?

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