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5 Feb 2003 : Column 383—continued

Mr. Edward Davey: Will the hon. Lady give way?

Mrs. Campbell: If the hon. Gentleman will allow me to finish my sentence, I will allow him to intervene, even though I have only 10 minutes.

That large population of visitors is creating difficulties because they cause the city council a great deal of extra expense. That would be a valid point to make, but those difficulties do not mean that there will be a £1.9 million cut in resources.

Mr. Davey: Will the hon. Lady confirm that Cambridge city council has real cost pressures—4 per cent. on the wage bill and 1 per cent. on employers' national insurance contributions? Is she wishing those away, as if they were not real cost pressures?

Mrs. Campbell: I am aware that Cambridge city council has cost pressures. I am also aware that that is

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because of a mistake in the way in which the census figures were calculated in 1990. Cambridge city council found itself being overfunded rather than underfunded for many years, which is now being redressed. We have to nail the absurd notion that the city council was promised 4.64 per cent. and received only 3 per cent.

I do not want to speak for very long but I want to say that, as far as the county council is concerned, the education settlement will mean a real improvement in Cambridgeshire schools, which have suffered from underfunding for many years. Many schools in my constituency run at a deficit, especially those in the more deprived parts of the city, which have more difficulty in attracting pupils than do the schools in the more affluent parts of the city. I know that head teachers, whom I am meeting on Friday, are very grateful indeed—not only for Cambridgeshire's settlement but for the Government's insistence that that settlement is passed on in full to schools.

I believe, too, that social services will benefit hugely from the 13.1 per cent. increase. The care of elderly people is costly in Cambridge; property is expensive; and wages are high because of high accommodation costs. Cambridgeshire has found it difficult to provide good residential accommodation for elderly people for many years, so the 13.1 per cent. increase will be extremely important in raising living standards in the city, and taking away the fear and anxiety experienced by many elderly people in my constituency.

On the whole, therefore, I am pleased with the settlement. I acknowledge the pressures on Cambridge city council, but it does it no good whatsoever for its leader to pretend that he had been promised something which he was certainly not. That is dishonest, and does him no good among Cambridge residents.

7 pm

Sir Paul Beresford (Mole Valley): It must be interesting for you, Mr. Speaker, as someone from north of the border to watch the squabbling south of the border. Thus it ever was, I suspect.

This year, the credibility of the annual divvying-up of revenue support grants reached an all-time low. I have a horrid feeling, however, that the Minister will repeat his behaviour and go past that limit next year. This is the first year of the much-vaunted new fairer, clearer system but, by some incredible feat, the Government managed to fail on both counts. It took some time, but eventually the Minister admitted to the Housing, Planning, Local Government and the Regions Committee that if the system was simple, it would involve a considerable amount of rough justice. There has been plenty of rough this evening, but I am not so sure about justice. The huge diversity and variation in local needs across the country leads to considerable complexity, as the hon. Member for Hammersmith and Fulham (Mr. Coleman) made clear. Without doubt, the new system is as complex as the one that it has replaced, and I am sure that it will become more complex with every year that squabbles continue.

For local authorities, assessment was particularly difficult this year. The data, control totals and methodology tables—DCM for short—were not provided to the councils until midway through the consultation period. That led to exceptional difficulties,

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as the tables are required by councils to check the facts on their allocation. Every year, except this year, they are provided when the allocations are announced. The reason for the delay, according to the Minister, was that the tables were more complicated this year. Who would have guessed? Some councils were upset and had only half the usual period to assess changes and the reasons behind them before the deadline for consultation. Perhaps that is why the Minister saw only 50 councils—he could have seen twice as many if there had been more time.

The old system of allocation was based on verifiable needs indicators, but this year the system is based essentially on subjective principles or, as the Minister put it to the Select Committee, the application of "judgment". It would not be unreasonable to assume that the census data used would have a solid verifiable basis. However, the Select Committee noted:

In other words, they could not be relied on at all.

Over the past few years, two things have led to an increase in local government expenditure. First, there has been an increase in central control, a trend which has continued this year. Local authorities are being told what they should spend on education—we have heard quite a bit about that this evening. They are also being told indirectly what to spend on social services, with the Department of Health looking over their shoulder and so on. No account is taken of the fact that in London and the south-east, revenue support has increased less than the FSS. Furthermore, the proportion of allocated grants—grants allocated by Ministers—has risen dramatically this year, perhaps by 37 per cent., the Select Committee was advised. Those grants used to be known as specific grants. To get round the difficulty of the criticism from the Committee, the Government are now renaming some of them. We have "specific grants", "targeted grants" and so on. But in effect Ministers can allocate funds where they like, to friends, setting targets and setting the responsibility of councils to meet those specifics.

Mr. Raynsford: The hon. Gentleman's party never did that.

Sir Paul Beresford: The Minister questions whether it happened under the Conservatives. He should look back at the figures. I understand that the specific grants or similar grants in Conservative days never rose above 4 per cent. The cover, according to the Minister, is that they are to meet specific needs. The reality is that they are to dictate to the local authorities. If the grant formula is as good as the Minister claims, such action should not be necessary.

The second main trend has been the movement of funds north, predominantly to friends, but of course if friends happen to be adjacent to a Conservative council sometimes the Conservative council can benefit, as we have just heard. But effectively the south-east and London are funding those to the north.

This year the new system exaggerates that movement, and it exaggerates it hugely. If it had not been for the floors and ceilings, the shift would have been dramatically worse, sufficient to be an outright scandal. It is on the edge of that now.

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The underlying scheme itself is a disgraceful manipulation of taxpayers' money for political ends. The result will be that for the same level of service local people in the south-east will be taxed considerably more than those in the north. The council tax under Labour is a stealth tax. Now it is not just a straight stealth tax; it is a geographic stealth tax.

The residents of Surrey will be expected to find an extra 17 per cent.—17 per cent. more from the taxpayers for county services. They are also suffering from the same issues that were raised earlier— [Interruption.]

Mr. Deputy Speaker (Sir Michael Lord): Order. We cannot have continual interruptions from a sedentary position on either side of the House.

Sir Paul Beresford: What the Minister ignores is the liabilities put upon those councils, and particularly upon Surrey, for FSS, passporting, which we have covered, and also the social services requirements. Just to stand still, just to meet the passporting, just to make social services safe, as legally required, they are looking at 17 per cent.

Most of Surrey's district councils will be in a similar situation, with the possible exception of Guildford. There the Liberals will, I guess, plunder the balances, because it is an election year. Mole Valley district council, within my constituency, received a 3.1 per cent. increase, which amounted to £107,000. Again, it has a number of centrally imposed increases. I shall pick two. National insurance will cost Mole Valley £45,000 more. The increased staff costs to handle the new centrally imposed welfare reforms will add £110,000. That means that just those two changes, let alone all the other liabilities upon it, will leave the council with a £48,000 shortfall. It is a little council. It is an efficient council. But it will have to increase its council tax by 15 per cent.

Matthew Green: The hon. Gentleman and I have just completed Committee consideration of the Planning and Compulsory Purchase Bill. Does he agree that there will be an extra burden on those councils which are planning authorities, because they will have to take on extra planning staff to cope with the new statements of development principles on top of their existing work?

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