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5.58 pm

Mr. Eric Pickles (Brentwood and Ongar): The right hon. Gentleman spoke for nearly a third of the time allocated to the debate. I make no apology for saying

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that, and I have no complaint about it. Clearly, he was dealing with an important matter and he was his usual courteous self, but I tell the party managers that the amount of time allocated for the debate is inadequate. We have often had to return to the House to get additional time, and additional time should be allocated to something as important as the settlement, bearing in mind that it involves a change in the formula. I make no personal criticism of the Minister as I have a great deal of time for him, even though, on such occasions, he has more front than Woolworth's.

The Minister has done a remarkable job with his homework. He has memorised his tables and each intervention contains a reassuring rebuttal—everything is okay, everything is hunky-dory and the Member of Parliament has nothing to worry about because the settlement is so magnificent. It is the memorising that is impressive and not, sadly, the content. The Minister might well have learned the periodic tables or an Esperanto primer for all the help he is in determining the value of this year's settlement.

The Minister is right about one thing: this is a place where two worlds collide. In the one that he and his compliant friends occupy, a contented local government receives the Government's largesse with open arms and enthusiasm—let us call it planet spin. In the other world, there is loss of grant, slashed services, populations losing tens of millions of pounds and soaring council tax—let us call it planet earth.

Let us judge the Minister by the simple test of rhetoric versus reality. Last December, he chided my hon. Friend the Member for Wealden (Mr. Hendry) for standing up for East Sussex county council. The Minister boasted of a 3.8 per cent. grant increase; the reality is that East Sussex is one of the 13 authorities, now 12, where the grant increase for all services is insufficient to meet the Government's prescribed education increase. East Sussex will lose more than £25 million on top of a loss of £8.5 million since 1997.

During December's announcement, in response to a question from my hon. Friend the Member for South-West Devon (Mr. Streeter), the Minister said that children in Devon had benefited from the education spending increase under the Government and that Devon county council had received a "good" increase. According to the Local Government Association, a good increase means a funding gap next year of £800,000.

Andrew Bennett (Denton and Reddish): Will the hon. Gentleman give way?

Mr. Pickles: In a moment.

Again in December, responding to a question from my hon. Friend the Member for North Thanet (Mr. Gale), the Minister claimed that Kent would also receive a good settlement. Mr. David Lewis, finance director of Kent county council, says that the settlement will have a real effect on Kent's ability to deliver services and on council tax.

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Last week, the Under-Secretary of State, Office of the Deputy Prime Minister, the hon. Member for Shipley (Mr. Leslie), said in answer to my right hon. Friend the Member for Fylde (Mr. Jack):

"There can be very few excuses for excessive council tax rises."

However, his parliamentary colleague, the hon. Member for Burnley (Mr. Pike), said that Lancashire county council would have

"either to cut services or to make an unacceptably high council tax increase."

Andrew Bennett: Will the hon. Gentleman give way?

Mr. Pickles: In a moment.

Today, we heard from the hon. Member for Hendon (Mr. Dismore), who put some reasonable points to the Minister. Again, he said what a marvellous settlement this is and, to paraphrase, that the hon. Gentleman would have done much worse under the Tories, or Lloyd George or Lord Palmerston, had they been here.

I have a contemporaneous note—this will interest the hon. Member for Hendon, I suspect—of the meeting between Barnet council and the Under-Secretary:

"I have now met with Chris Leslie and David Miliband but, apart from tea and sympathy, got nothing. They all acknowledge that Barnet had received the worst settlement and have indicated that they will not use their reserve powers against us if we do not passport the total amount."

It goes on to say something that I also regard as very interesting:

"They have also said that the 7.6 per cent. is just a formula and that the schools have misread his letter. There is no actual money."

Andrew Bennett: I have a great deal of sympathy, of course, for the point that the hon. Gentleman is making and for all those hard-pressed councils, but is he suggesting that they would all get extra money under a Conservative regime, or is he saying that all those people who have done quite well would get further cuts so that their money could be taken away for all the basket cases he is talking about?

Mr. Pickles: What I am saying is that there would be a much fairer and more understandable formula, free from political interference. It would not be a case of rewarding our friends and punishing our enemies. No, it would be a fair formula.

Several hon. Members rose—

Mr. Pickles: I shall give way in a moment. Let us deal with the 12 authorities that experienced the gap in education funding. The Government seem to be confused about whether the Secretary of State will exercise his powers under section 42 of the Education Act 2002 to passport the expenditure.

I am concerned because during last week's Question Time, in reply to a question I asked, the Minister for Local Government and the Regions said that there would be a

"willingness to be flexible where there are genuine pressures."

I think that he said something similar today. Yet a few short questions later, the Under-Secretary of State,

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Office of the Deputy Prime Minister, the hon. Member for Shipley, returned to the same old tired mantra:

"In reality, all councils, including Essex, will get a real-terms increase in grant."—[Official Report, 29 January 2003; Vol. 398, c. 863–69.]

How can Essex be receiving a real-terms increase, when the increase in grant for all its services is insufficient to meet the Government's prescribed increase in education? Essex has a funding gap of £7.5 million, Kent one of £3.7 million, and Hampshire one of £3.1 million.

Sir Paul Beresford (Mole Valley): Will my hon. Friend revise his definition of the Minister for Local Government and the Regions from a mugger to a rogue bank manager, who gives higher-than-inflation interest on one's account, but tucks away bank charges so high that they swallow it and more?

Mr. Pickles: Yes, the right hon. Gentleman has—in his professional capacity as a Minister, not in his personal capacity—the characteristics of a loan shark.

As the Local Government Association's briefing for this debate says:

"If they were to passport the full increase through to schools, this gap and all the other pressures on local services, for example on social services or environmental management, would have to be funded from the council tax increases."

Delegations of councillors visiting the Office of the Deputy Prime Minister have been unable to get a straight answer to the problem of the education gap. Initially, they were told blandly that the FSS was not like the SSA, and that there was no requirement to spend up to the level of the FSS. When it was politely pointed out to Ministers that the Secretary of State for Education and Skills was offering to penalise authorities that did not passport the full amount, blandness was transformed into a blank look.

Ministers should, however, take heart—they are not the only ones who are confused. The whole Government machine is in disarray. The local government world was amazed by the performance of the Minister for School Standards at the Department for Education and Skills councillors' seminar on 29 January at Local Government House, where he appeared not to understand the impact of settlements on authorities penalised by the funding gap. Perhaps the Minister for Local Government and the Regions should tell the House what discussions he has had with the Minister for School Standards—and let me say frankly that I am not referring to the confused briefing discussion that I witnessed in the Lobby after the December statement.

Mrs. Anne Campbell: I find the new formula much fairer than the old one, which was devised under the Conservative Government. I have been pondering on the fair formula that he says the Conservatives would introduce if they took office again. Will he explain which authorities would gain and which would lose under the new fair formula that he presumably has at the back of his mind?

Mr. Pickles: I will go further than that. Here and now I make a pledge, to which I am prepared to be held, that we will change the formula, but we will not do so on the basis of party advantage. Furthermore, I give a clear

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undertaking that we will work towards a general consensus and agreement on funding. I will go even further and say that it might have been possible for the current Government to have obtained consensus on their proposals had they not chosen to adopt such a confrontational attitude. It is an opportunity missed. The reason we have a problem is that people have no confidence now—because of the degree of discretion, they believe the figures to be fiddled. The consensus is broken, and that is damaging to local authorities.

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