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Mr. Raynsford: Local government cost pressures have reduced in certain areas but, in others, the pressures have increased. The hon. Gentleman will be well aware that there was a 7 per cent. real-terms cut in grants to local authorities during the final four years of the previous Conservative Government, when the pressures on local government were also increasing. In contrast, there has been a real-terms increase of 30 per cent. in grants over the past seven years. It is simply not credible for the Opposition to complain about pressure when the shadow Chancellor says that a Conservative Government would freeze grants to local authorities. He expects those authorities to cope with all the pressures to which the hon. Gentleman referred, but with no extra money. That is the real recipe for large council tax increases.

I said that the Opposition want to divert attention from their record by saying that the grant increases have not matched the demands placed on local government. In one respect—that of rising public expectations—I am happy to plead guilty. The public now expect their local councils to do more, and to do it better. Gone are the days of hopeless resignation when the Conservative
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party was in power. Then, local authorities were starved of resources and the public despaired of any prospect of improvement.

I am more than happy to celebrate the transformation over the past seven years to a climate in which people are no longer prepared to put up with excuses and poor performance. They can see the new schools, the extra teachers, the extra policemen on the beat and the real improvements in public services that this Government are determined to deliver. We make no apology for wanting local authorities to do better. Our comprehensive performance assessment has made a very important contribution to creating a climate in which continuous improvement is expected.

Mr. Hammond: The Minister claims that there has been a continuous improvement. Will he accept the verdict of the local electorate on 10 June as a conclusive and authoritative judgment on whether the people of this country are happy with the Government's performance?

Mr. Raynsford: The hon. Gentleman began his speech by saying that he thought that the electorate should take decisions based on local rather than national issues. I agree with that and openly concede that the Conservative party generally did well in last year's elections. However, I note that it did not do well in areas where Conservative councils had a poor performance record. For example, the Labour party won control in Plymouth, and the Liberal Democrats did the same in Torbay. It is a healthy sign when the electorate identify failing councils and vote on local issues at local elections. We should not try to assume a national swing, with councillors standing or falling according not to their own merits and performance but to their party's performance nationally. The hon. Gentleman tried to make a localist case today, but anyone who cares about localism will agree that we ought to be working for a framework in which local elections reflect the performance of the local council. I hope that he will accept that.

Of course, the cynics on the Opposition Benches, who have derided every initiative that this Government have taken to improve public services, take pleasure in criticising the comprehensive performance assessment. They ought to do their homework and have a quick surf on the internet to see what Conservative councils are saying. Last week, I had fun looking at internet and website references for the Liberal Democrats and I have had the same pleasure over the past few days in relation to Conservative councils.

For example, in Bracknell Forest, council leader Paul Bettison has said:

In West Sussex, council leader Harold Hall has said:

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We are working with local authorities to improve the standards of service that they deliver to their residents but, as I made clear last week, we are also taking great care to ensure that new burdens imposed on local authorities are fully funded. The hon. Member for Runnymede and Weybridge may not have been following last week when I spelled out the working of the new burdens doctrine, so I shall do so again.

All Government Departments are made aware that, when they introduce initiatives that will lead to an increase in costs for local authorities, they must provide the funding to cover those costs. Similar procedures apply in respect of private Members' Bills, many of which, although well intentioned, could also impose new costs. If funding to cover the new costs is not available, the new legislative provisions have to be amended to remove the burden.

For example, in the current year, we have had detailed discussions about the introduction of the new licensing regime, a matter raised by the hon. Gentleman. My right hon. Friend the Secretary of State for Culture, Media and Sport has made it clear that fees will be set at levels that allow full cost recovery by local authorities.

Local government representatives will be aware that we have added funding for initiatives such as local authorities' responsibilities under the Enterprise Act 2002, for which we have provided an extra £5 million above spending plans over the 2002 spending review period. We have also made available an extra £1.8 billion for the changes made to the funding of teachers' pensions.

Mr. Edward Davey: On the new burdens rules, the assessment of the costs of the services being transferred is crucial. Why will the Minister not give the task of estimating the costs to the Audit Commission? Why has he left the job under the control of his and other Departments?

Mr. Raynsford: The hon. Gentleman does not understand that the assessments are reached through discussion and negotiation between Government and the Local Government Association. He will have heard the hon. Member for Runnymede and Weybridge talk about the list that the LGA has drawn up of the new pressures that it anticipates over the spending review period. That list has been submitted to the Government and I was present at a meeting with my right hon. Friend the Chief Secretary to the Treasury when the matter was discussed. We will continue to discuss the matter with the LGA and a further meeting has been arranged. Eventually, we will come to a conclusion about what level is appropriate.

The House will understand that, in any negotiation, the parties involved are likely to overstate their cases, as they know that they may have to give a bit of ground later. That is a proper and appropriate way to proceed.

Mr. Davey: I have in front of me the rules on the new burdens for local authorities. They state that, where possible, Departments should seek independent corroboration of the figures. If the Minister is prepared to go that far, why not a little further? Why does he not pass the matter over to the independent watchdog for local government financial matters? Why does he not
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give the job of deciding the estimates of the costs to be transferred to the Audit Commission? If he did, the House and local government would be very pleased.

Mr. Raynsford: It is a slightly odd debate when I hear from the Conservative Opposition a wish virtually to eliminate, or at least drastically cut, the role of the Audit Commission, and from the Liberal Democrats a desire to give it more work. The hon. Member for Runnymede and Weybridge made a clear statement of his intention to scrap the comprehensive performance assessment, which is a major part of the Audit Commission's work. The two Opposition parties are pursuing directly opposite points of view. We believe that the Government's approach is appropriate and right. It is a serious way, with representatives of local government, to address and resolve the question of extra cost pressures.

Mr. Hammond: Regulatory impact assessments have to be prepared, but local government representatives tell us that hindsight shows that those assessments have consistently understated the costs to local government. It would be a great help if some measure of independent involvement in those assessments could be established. For example, the Countryside and Rights of Way Act 2000 has cost local authorities £18 million a year more than the regulatory impact assessment compiled when the legislation went through the House suggested. That is the sort of problem that local government faces.

Mr. Raynsford: I have two things to say in response to that. First, the hon. Gentleman now argues for additional regulatory work. Earlier, he said that the Opposition would tear up the regulatory burden, but now he wants more regulation. That is classic: the Opposition claim to be non-regulators, but when it suits them they are happy to say that they want more regulation. That is typical of the Conservative party's incoherent approach.

Secondly, the hon. Gentleman will accept that, as with any analysis of this nature, some of the figures will turn out to be not entirely accurate. Some estimates are too low, others too high. That is part of the natural process in any negotiation of this sort. I assure the House that we take the new burdens doctrine very seriously and work to ensure that local authorities have sufficient resources to meet the additional obligations placed on them by Government or by private Members' Bills.

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