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Mr. Alan Duncan (Rutland and Melton) (Con): I refer to the Minister's explanation of the way the formula works, and of the floors and ceilings. For a very small county such as Rutland, a formula designed for much larger units invariably throws out some pretty funny figures. Following our exchange of letters today, will he confirm that he will allow the officers of the council to see a suitably appointed Sir Humphrey in his Department to discuss the numbers that have been produced, so that as grown-ups we can resolve a simple matter that requires a small adjustment?
Mr. Raynsford: I am happy to give the hon. Gentleman the assurance that he seeks. I recognise that there are special circumstances in a very small authority such as Rutland. It gets a good overall percentage grant increase of 6.8 per cent. but there are specific issues that he has raised, and I am happy for my officials to discuss them in a sensible and grown-up way.
I have described the changes from the formulaic to the reimbursement regime in relation to council tax benefit and housing benefit. I shall now go on to the census—
Sir Paul Beresford (Mole Valley) (Con) rose—
Mr. Raynsford: I will not give way; I need to make some progress.
The census has also been a cause of concern. A number of authorities made points about data, and in particular data based on the 2001 census. Some were disappointed that we had not been able to incorporate socio-economic data from the census in the settlement proposed. We were simply unable to do so, as not all the data were available in time. Moreover, using those data will be more complicated than merely putting them into the existing formulae.
Re-analysing the expenditure figures using updated socio-economic data will inevitably point to new formulae, because the relative importance of the factors will change. We may need to change the factors in the formulae as a result. The Office of the Deputy Prime Minister will take this work forward in discussion with the local authority associations. The Office for National Statistics has revised its mid-year population estimates, and is continuing work in some areas that may lead to further changes. I have already given a commitment that we will amend the 2003–04 settlement, which was made using the best population figures available. I expect to do so in parallel with the settlement for 2005–06, taking account of the latest available figures, which the ONS will publish in August this year.
We are committed to the new burdens principle. If we ask local authorities to take on a new role, we accept an obligation to ensure that they have the ability to fund their new responsibilities adequately. A great deal of concern has been expressed about the effect on councils of the new licensing role that they are required to undertake from September. We have made it quite clear to local government that when the Secretary of State for Culture, Media and Sport sets the guidance and fees she will do so in a way that ensures that authorities can recover their costs. That will cover the licensing authority's costs associated with the administration, inspection and enforcement. There will also be an independent review of the costs and income after the end of the transitional period.
Mr. Pickles: What about start-up costs?
Mr. Raynsford: There are, of course, issues in the first year, some of which relate to start-up costs and others to the fact that enforcement obligations do not arise. Those issues need to be looked at in the round to try to ensure that there is a genuine settlement that allows authorities over a period of time to recover their full costs—that is what we are seeking to achieve.
After considering points that were made in consultation, I can confirm the basis of grant distribution that I proposed on 11 December following the pre-Budget report. We have considered representations and made corrections to the data used where justified. There have also been changes in individual council allocations to allow for the updating of data, in particular on capital allocations and council tax base. Those updates are made each year. Finally, we have been able to incorporate a small change in population estimates published by the ONS on 27 January relating to naval personnel, which is primarily of interest to Plymouth and Portsmouth.
Simon Hughes (Southwark, North and Bermondsey) (LD): In the period between the provisional settlement and the final one, the Mayor of London, who was elected as an independent, became a Labour mayor. Has there been a change in the settlement for the Greater London Authority, and will the rule that applies elsewhere apply to the GLA—low, single-figure increases only will be acceptable and if the Mayor introduces anything higher he will be capped like anybody else?
Mr. Raynsford: I have already explained to the Liberal Democrats in a previous debate that the
arrangements for the GLA budget are slightly more convoluted than for other authorities, as there is a dialogue between the Mayor and the authority. That is why we did not act immediately when rumours first began about the level of council tax precept. At this stage, however, we understand that the Mayor is proceeding with a proposal for an increase of 9.9 per cent., which is certainly not in low, single figures. I shall write to him, as indeed I have written to all local authorities that have provided indications.In case there is any confusion—this matter was raised earlier by the right hon. Member for Skipton and Ripon (Mr. Curry)—I remind the hon. Member for Southwark, North and Bermondsey (Simon Hughes) that our decision on capping will take into account the circumstances of each individual authority and there will not be a blanket figure. It would be wrong to assume that we are imposing a blanket cap.
Mr. Raynsford: I shall take one more intervention, but then I must make progress.
Mr. Andrew Love (Edmonton) (Lab/Co-op): Will my right hon. Friend reaffirm that message for my local authority, Enfield, which will receive a 6 per cent. grant increase, yet is discussing the possibility of a 7.5 per cent. increase in council tax next year? When added to the GLA precept, that will be four or five times the rate of inflation, and is causing considerable concern among various groups in the area. I therefore urge the Minister to confirm that he will write to Enfield and take action if it exceeds a reasonable increase.
Mr. Raynsford: I am happy to confirm to my hon. Friend that I wrote to the London borough of Enfield on 30 January.
David Taylor (North-West Leicestershire) (Lab/Co-op): Will my right hon. Friend give way?
Mr. Raynsford: I am afraid I cannot, as I wish to make progress. The time for debate is limited and many hon. Members wish to speak.
Given the significant extra investment and the scope for efficiency improvements, our view is that next year local authorities can and should deliver council tax increases in low, single figures. I am pleased to say that the initial indications that I have show that many councils agree with those points and are considering budgets that would be consistent with that objective: some, however, are not. I must therefore make it absolutely clear that we are prepared to use our capping powers on any authority, including police and fire authorities, if that proves necessary. We will decide on the criteria in the light of authorities' budget decisions.
This is another good settlement for local government. We listened to local government's views on the spending pressures that they face, and met them. We provided a real-terms increase in funding for all authorities and helped them to plan ahead by freezing the formula for a period of years and by continuing with the use of floors and ceilings. We adapted the system to provide greater
certainty on school funding and reduced the ring-fencing of Government grant by £750 million. Given that, and the improvements in efficiency that councils are making and will want to make in future, we expect councils to deliver better services at a reasonable cost in council tax. I commend the settlement to the House.
Tony Baldry (Banbury) (Con): On a point of order, Madam Deputy Speaker. Would it be in order for you to advise the House on when the winding-up speeches are going to begin? Given that we have only an hour left, it looks as though this debate may be unique in that we could move straight from the opening speeches to the winding-up speeches without the debate ever touching the Back Benches. Perhaps you and Mr. Speaker could consider how the interests of Back Benchers can be protected against Ministers speaking for 50 minutes in a debate of only two hours.
Andrew Bennett (Denton and Reddish) (Lab): Further to that point of order, Madam Deputy Speaker. Would you not accept that most of the time taken up by the Minister's speech was on interventions, and that if Conservative Members had kept quiet, it would have been a much shorter speech?
Madam Deputy Speaker: Order. The Minister was generous in the number of interventions that he allowed. Mr. Speaker has tried to protect Back Benchers by imposing a 10-minute limit on Back-Bench speeches. We will now see how the debate proceeds.
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