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Mr. Brady: I am grateful to the Minister for giving way. I do not want to be too helpful to him, but he was keen to stress that he has been mean to authorities other than Tory-run authorities in the south of England, and I can bear that out: he has also been mean to Trafford, a Tory-run authority in the north. That is especially important because Trafford has had a worse deal in each of the past four years than the average for metropolitan authorities in the country. Does the right hon. Gentleman agree that it is time for some fairness in this matter and that Trafford's grant should increase by at least as much as other metropolitan authorities? Trafford used to have weak status when it was under Labour control, but that has been improved to fair. We want to make further improvements, but when the previous Labour administration was replaced in June, it left us with terrible financial problems.

Mr. Raynsford: I remind the hon. Gentleman that Trafford is getting a good increase in grant of some 5 per cent. That did not happen in the days when his party was in power. It is extraordinary that Conservative Members, who are only too happy to claim the largesse that they want for local government, have forgotten the record of their Government. When the hon. Gentleman's party was in power, Trafford—also a deprived area in the north—received a 6 per cent. per capita grant increase over four years, which was well below inflation. Since this Government came to power, Trafford has received substantially more, with a 45 per cent. increase on a like-for-like basis. I hope that we shall not hear any more about meanness and that, in future, the hon. Gentleman will use the word "generosity".

Mr. Edward Davey (Kingston and Surbiton) (LD): The Minister has been telling the House how generous the Government have been in their real-terms grant increases. Can he tell the House what the average real-terms increase in council tax has been during the same period?

Mr. Raynsford: The hon. Gentleman knows that council tax has risen significantly, but it has not gone up
 
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by anywhere near as much as the old rates used to go up when the Conservatives were in office. We might explore that later.

There has been a significant increase in council tax, which is why the Government have made it clear, against the Liberal Democrats' advice, that we will cap authorities that impose unreasonable increases. The decision on council tax increases is made by local authorities and the hon. Gentleman would do better to talk to Liberal Democrat councils that seem to have an unhealthy appetite for increasing their council tax. Last year, his party had the unenviable record of the largest increases in council tax of any party—more than the Conservatives and substantially more than Labour. I am afraid that that high-tax tag will hang round the neck of his party.

Shona McIsaac (Cleethorpes) (Lab): I draw my right hon. Friend's attention to the actions of North East Lincolnshire council—it is a coalition of Conservative and Liberal Democrats, so we have the worst of both worlds—which has just sent a letter to the residents of Humberston Fitties chalet park about their rent increases this year. The rent for one large plot in the chalet park is rising from £720 to £1,365. The Liberal Democrats increase not just the council tax, but every rent.

Mr. Raynsford: I am concerned to hear what my hon. Friend said about the very large proposed increase in rent for people living in chalet parks, who are often retired and on fixed incomes. I sincerely hope that North East Lincolnshire council, which has had considerable difficulties and whose performance has not been good recently, will look carefully at how to deliver value-for-money services and not charge unreasonable amounts.

Mr. Michael Fallon (Sevenoaks) (Con): Before the Minister leaves the subject of per capita funding, can he explain why the league tables on per capita funding show that Sevenoaks district council comes bottom, with a 5 per cent. cut over seven years? Why are we being penalised?

Mr. Raynsford: Sevenoaks, as the hon. Gentleman knows, is a relatively well-off area with substantial resources that it can use. One of the characteristics of the hon. Gentleman's Government was that deprived areas suffered severe reductions in their grant and more affluent areas, curiously and perversely, received grant increases. We are ensuring a fairer system. The hon. Gentleman knows that in his area the aggregate of local government finance has risen considerably, because education and social services are delivered not by district councils but by county councils and account for the overwhelming majority of local government costs. Clearly, Kent county council and others in the south have continued to receive substantial, above-inflation increases.

I confirm the plan to amend the settlement for 2003–04. As I made clear to the hon. Member for Beckenham (Mrs. Lait), we will consider the case that she presented.

I turn briefly to the consultation process. We received 299 written representations within the consultation deadlines from the LGA, the Association of London
 
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Government, local authorities, local authority groups and hon. Members. We met delegations from six local authority associations and representative groups to discuss the proposals. The main points made in consultation were as follows. The abolition of ceilings on grant increase was generally welcomed, as was the continuation of a floor or minimum guaranteed grant increase. I have already touched on that in response to an intervention. Most of the bodies welcomed the modifications that we proposed to the incorporation in the formula grant of the social services preserved rights and residential allowance grants. I understand, though, that not everyone can win when grant distribution is changed, and we will ensure that any transitional effects of future transfers continue to be examined carefully with local government.

We faced a dilemma in considering the use of data other than population figures based on the 2001 census. In proposing not to use 2001 census data in the 2005–06 formula spending share calculations, we balanced our desire to use the most up-to-date data against our aim of providing stability in local authority funding. Using new census data in the funding formula is not a simple task. It is technically incorrect to update the census data in the police formula. In other areas, the changes needed to incorporate the 2001 census data would break the formula freeze and could cause large changes to the distribution of FSS. We will look to incorporate 2001 census data in the funding formula once the formula freeze has ended with this settlement. That will allow us to use 2001 census data in 2006–07, assuming that agreement can be reached on an appropriate way of doing so.

After considering the points made in consultation, I have decided to confirm the basis of grant distribution proposed on 2 December. The floor grant increases remain at 4 per cent. for authorities with education and social service responsibilities, 2.5 per cent. for shire districts and fire authorities, and 3.75 per cent. for police authorities. Where justified, we have reflected representations made to us by correcting the data used. The routine updating of data used, in particular on council tax base and capital allocations, will have made mostly small changes to individual council grant figures.

Given our substantial investment in local government and the scope for efficiency gains, there is simply no excuse for excessive council tax increases. This settlement ensures that all properly run authorities can provide a high level of service.

Nick Harvey (North Devon) (LD): The supporting people programme, which the ODPM funds through local government finance, seems to have been something of a success for the Government. Is it not, therefore, a matter of regret to the right hon. Gentleman that the funding will be reduced next year and frozen thereafter? During the consultation that he was involved in, did he consult local government about a change in the way that supporting people funds are allocated? Might it not be a good idea to do so before enacting a change in the formula?

Mr. Raynsford: There has been detailed discussion with those involved in local government and others, because the matter affects voluntary organisations and other bodies involved in providing supporting services to people whose needs go wider than accommodation.
 
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The hon. Gentleman will be aware, as he has obviously looked into this, that the budget for supporting people grew exponentially during the transitional period. Although original estimates were for less than £1 billion, we faced a prospect of £1.8 billion of expenditure last year, with clear indications that, in some cases, value for money was not being achieved and some additional costs had been moved into that area, because it was seen as an opportunity to recover costs that would otherwise not be met. It is therefore right and prudent that we should look at the matter very carefully, as we are doing.

We have set a budget of just over £1.7 billion for supporting people over the coming year. We will continue to consider ways of ensuring that we deliver value for money. The hon. Gentleman's initial comment was right: this is a success story. The programme has ensured more effective help, but I hope that he will agree that the work must be done in a cost-effective way.

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