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Mr. Bill Wiggin (Leominster) (Con): The Minister's comments in his closing remarks, when he said that he was against universal capping, will sound hollow to my constituents, who have had their council tax capped, their police authority grant capped and their fire authority grant capped. Let me make it crystal clear that I do not want to see council tax rises. I loathe the increased financial burdens that the Government have stealthily piled on to council tax payers. However, the steps that the Government have taken to allow councils to reduce the financial burden are derisory and ineffective.

The Government have capped Herefordshire council by £253,000. That is a sick joke, as it will make virtually no difference to anybody. It cuts just 7p a week off band D council tax, yet it leaves Herefordshire council with even more of a struggle to comply with the increased layers of bureaucracy that the Government have imposed, without receiving adequate Government funding. Herefordshire council is not generously funded against need. It is the most sparsely populated unitary authority in England in which to deliver services so, for example, the cost to the council of the school transport bill is much higher—almost £6 million. Any increase in fuel costs will have a significant impact on the cost in the future.

The council is 36th out of 46 unitary authorities in terms of the level of grant received per head of population through the formula spending share. It is
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£140 below the average throughout all unitary authorities. The grant from the Government is woefully inadequate. The Government have already removed £5.2 million from the budgets of the former Hereford and Worcester county council and Herefordshire district council, at the point of reorganisation in 1998. The annual repayments of reorganisation costs for Herefordshire council totalled £13 million. It is being repaid on an annual basis, amounting to £1.9 million on this year's council tax.

The county lost £1.8 million extra in the formula spending share because of the Government's delay in implementing population data changes following the 2001 census. Herefordshire council has clearly been heavily disadvantaged by the Government's funding. The formula spending share does not come close to adequately reflecting the cost of delivering the increasing demands and financial burdens placed on local authorities by the Government, such as recycling targets, the transfer of licensing responsibility, library standards, benefit regulations and national care home standards, to name but a few.

I think that my hon. Friend the Member for Macclesfield (Sir Nicholas Winterton) mentioned the implementation of electronic government as well.

The Government's own changes to local authority finance last year meant that the council had to increase council tax by 17.5 per cent. to achieve the FSS level of funding—an increase in the burden on the council tax payer from 32 per cent. to 37 per cent. of total expenditure. However, the council has not compensated for Government underfunding by levying much higher levels of council tax. At £959.53, its band D council tax is below the national average for unitary councils. Despite the disadvantages that this Government have imposed on Herefordshire, the council is committed to reducing the levels of council tax over future years, but demands from this Government, who do not care about the constant increases for the individual council tax payer, make that commitment extremely difficult to fulfil.

The council cannot be seen as a profligate authority. The Audit Commission's judgment gave the council the maximum overall score for the use of resources, and its pattern of spend has not moved significantly by comparison with those of other authorities since it was established in 1998. According to the comprehensive performance assessment, the authority is a good authority in terms both of corporate assessment and its service assessment. [Interruption.] Does the Minister wish to intervene? Apparently not.

In the field of education, the council can demonstrate good performance in the outcome for pupils attending its schools. It has consistently maintained the spend on education at FSS level and has passported the required increases to its schools, despite facing the financial burden of the highest cost per pupil for school transport of any education authority—an issue that is, of course, linked to the rural nature of the county. However, despite the fact that there are four upper or single tier authorities that have higher levels of council tax than Herefordshire, but have avoided capping, the
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Government have decided to cut £253,000 from Herefordshire's calculated maximum budget requirements.

The proposed revision of £0.25 million equates to a reduction in band D council tax of £3.80 a year, but the estimated rebilling costs, which I mentioned to the Minister earlier, are more than £100,000, which generates an extra cost of £1.25 per annum at band D. The Government's decision to cut the budget is no more than a pathetic party political move ahead of the 10 June elections.

Sadly, the picture for central Government costs and funding is no better for Hereford and Worcester fire authority and the West Mercia police authority, which have both been neglected by Labour Government funding. They have both been capped and forced to cut front-line services because of the increased demand on local authorities. Hereford and Worcester is the only fire authority to be capped in 2004–05, by £2 million, but the cost to the authority of rebilling council tax payers is approximately £0.5 million, and the estimated cost of associated expenses is another £100,000. All together, that amounts to a £2.6 million reduction of the amount being invested in fire services.

The Government do not fund Hereford and Worcester fire authority fairly, allocating a grant worth only £14.72 per person, compared with the average allocation of £19.50 per person for all other combined fire authorities. Hereford and Worcester fire authority protects 5.3 per cent. of the area covered by all combined fire authorities, but it receives only 2.5 per cent. of the total Government-allocated grant. Under the same financial pressure that it faces from increasing local government bureaucracy imposed by this Labour Government, the authority will now have to struggle even harder to deliver the services on which the local communities depend, which in turn threatens to undermine public confidence in the fire service.

The fire authority has expressed deep concern about the impact of that reduction on its ability to deliver an effective service to the communities. Instead of cutting the amount that the local service must spend on wasteful layers of bureaucracy, the Government are forcing the fire authority to cut the money that it can spend and invest in community safety and well-being.

That will result in a cut in front-line services. No funds will be targeted at investing in a modern fire and rescue service aimed at promoting a much greater sense of safety, security and community well-being. Furthermore, the cuts will result in a loss of 195 jobs in the fire authority, with the loss of 39 per cent. of the posts supporting front-line work, 27 per cent. of the whole-time firefighters and 13 per cent. of retained firefighters. Bringing about, in a period of weeks, a reduction of more than 20 per cent. in the size of the brigade is bound to damage the safe and efficient provision of a fire and rescue service.

Despite being in the top half of forces by size and population, West Mercia police authority was excluded from the additional £340 million of Government grant funding for English local authorities that was announced on 11 December 2003. The support that West Mercia receives from central Government is the fourth lowest amount of grant per head of all shire police forces, while it is also the fourth most economical
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force in terms of cost per head and would need to spend an additional £10.6 million to equal the average of the 31 English shire forces. Nevertheless, the authority has been capped by £517,000. The force has no choice but to bridge the funding gap with council tax increases, because this Government have not provided nearly sufficient funding to accommodate the gross financial burdens that are incessantly imposed on local authorities.

All Herefordshire's local authorities have been inadequately funded by the Government, and they have been capped to score party political points. The underfunding, along with the increased financial burdens placed on local authorities by central Government, has forced the authorities to turn to another source of funding—the council tax payer. That has led to a diminished front-line service.

I deplore the way in which this Government have increased the burden of council tax on my constituents. They have not only increased financial burdens on local authorities, but have not provided nearly sufficient funding to pay for layer upon layer of bureaucracy. Consequently, there has been a cut in front-line services, which is a great shame.

David Taylor (North-West Leicestershire) (Lab/Co-op): Will the hon. Gentleman give examples of the layer upon layer of bureaucracy that he suggests exists in terms of permanent posts, locations, costs and so on?

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