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Mr. Woolas: I know that my right hon. Friend has taken a close personal interest in that matter, and especially in the Supporting People budget. Several representations have been made on that issue. I may be able to give him some reassurance, because his authority is looking at increases above the floor level, and it is also in receipt of neighbourhood renewal funds and allocations for Supporting People. I look forward to the response from his local authority when it has studied the details of the figures.

Mr. John Redwood (Wokingham) (Con): Given that the Chancellor's figures show that more than 7 per cent. extra will be collected in council tax this year, would not the Minister have been better advised to have listened to the strong representations from local government that it was not a good idea to ring-fence, in a separated grant, the amount of money for schools? Would it not be much easier for authorities to make their own decisions about priorities between schools and social services, which are the two main areas of spending? Is the Minister really saying that schools are always more important than social services? Is he saying that he thinks that councils can keep council tax down when they have their hands tied behind their back by requirements from the Government to spend certain sums in certain areas?

Mr. Woolas: The right hon. Gentleman would have a point were it not for the fact that, as I announced in the statement, we now have a floor for education and social services functions for local authorities. That will be widely welcomed by local authorities across the country and across the political spectrum. I am sure that when the right hon. Gentleman studies the figures for his area,   which show above-inflation increases and—by 2007–08—an average increase in formula grant over 10 years of some 5.2 per cent. in Wokingham and 5.1 per cent. in West Berkshire, he will feel able to welcome the announcement that we have made.

Clive Efford (Eltham) (Lab): My hon. Friend has received many representations about area cost adjustment. What is his attitude to the geographical spread of area cost adjustment in the light of those representations?

Mr. Woolas: The current area cost adjustment, which was introduced in 2003–04, is generally regarded as a considerable improvement on its predecessor, and I pay tribute to my predecessor for that. Of course, the ACA is a national funding formula and any changes to it must be nationally applicable. We have taken the opportunity of the review of the ACA to implement some minor updates, simplifications and improvements. However, I recognise the real concerns felt in different types of local authority areas, and I will look again at the geography of the ACA.

Tony Baldry (Banbury) (Con): Banbury young homelessness project is quite likely to close as a result of the Government's severe cuts to the Supporting People programme in Oxfordshire: a cut of £2.5 million next year, £3.5 million the year after and over the next 15 years to £11 million in year 15—a cumulative cut of £106 million. The consultation paper that the Minister issued in no way mitigates those reductions in the
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Supporting People projects in Oxfordshire. Those are real cuts for vulnerable people—those with learning difficulties, the homeless and others—and the Minister does not seem to be listening to the united representations of all parties and MPs in Oxfordshire, including his colleague the right hon. Member for Oxford, East (Mr. Smith) and the hon. Member for Oxford, West and Abingdon (Dr. Harris). When the Minister considers the Supporting People budget, will he look again at his consultation paper to ensure that counties such as Oxfordshire do not suffer those severe cuts and that valuable projects such as the Banbury young homelessness project can continue?

Mr. Woolas: I am of course aware of the strength of feeling and that an all-party delegation made representations on the issue. It is in part due to that that I very much wanted to be able to make guaranteed minimum allocations—and they are minimum allocations—for 2007–08, to ensure that counties such as the hon. Gentleman's could plan with some certainty. That is of course not the end of the story. The allocations of the 2007–08 Supporting People budget will, as I said in my statement, be subject to both the consultation currently taking place on the overall strategy and further announcements in the course of next year.

Mr. David Clelland (Tyne Bridge) (Lab): I welcome the extra measures that the Minister has announced to assist local authorities with the introduction of new free off-peak bus travel schemes from next April. I thank him for the sympathetic way in which he listened to those of us who lobbied him on the matter over the past few months. Will he assure the House that the measures he has announced today will ensure that no local authority will have either to increase council tax or to cut services in order to introduce the new system, and that no eligible traveller will pay more after its introduction than they do at present?

Mr. Woolas: In the run-up to the settlement, there have been several representations from authorities across the country, including my hon. Friend's transport authority. The measures that I announced today reflect a change in the proposed formula for allocations, especially in areas where there is high usage by pensioners and disabled people. I am sure that my hon. Friend will recognise that the change has been made in response to representations from both sides of the House, and I look forward to pensioners benefiting from free bus travel in his area.

Mr. Desmond Swayne (New Forest, West) (Con): The Minister said that he was keen to look again at the geography of the area cost adjustment. Well, will he look at mine—because he also said that he wanted greater reliance on and greater scope for resource equalisation, which means that my constituents, for whom, in effect, no account is taken of the higher costs associated with Hampshire, are expected to pay for services not in the New Forest but, increasingly, in places such as Durham? That is behind their increasing unwillingness to pay up.

The Minister of Communities and Local Government (Mr. David Miliband): What is wrong with Durham?
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Mr. Woolas: I think the hon. Member for New Forest, West (Mr. Swayne) suspects that they are all poor up north.

In answer to the charge that has been made, the serious point is that resource equalisation is not the method by which the funding formula compensates authorities for the income, and relative income, of people in local authority areas. It is the measure in the formula whereby we take account of the type and spread of houses in the local authority area. When the hon. Gentleman gets the opportunity to look at the figures, he will see that in Hampshire there has been a 2 per cent. and 2.7 per cent. increase and that in his constituency of New Forest—

John Bercow (Buckingham) (Con): West.

Mr. Woolas: East and West—it is all one council. There will be a 4.7 per cent. increase for the council in both years. I hope that the hon. Member for New Forest, West will issue a statement to his local paper welcoming the fairness of the settlement.

Mr. Eric Martlew (Carlisle) (Lab): On the excellent free off-peak bus travel scheme for the over-60s and the disabled, my hon. Friend will realise that the Department's initial draft was not favourable to Carlisle. He has received representations from the chief executive, and I have had conversations with him. Can we take it from the statement today that the problems that we had with the draft have been sorted out and that the good people of Carlisle will all be able to enjoy that service free?

Mr. Woolas: It is, of course, the Government's intention to ensure that that is exactly the case. It is in the nature of grant allocations using formulae that the proof of the pudding is in the eating. That is why I have made the announcement in the manner that I have today, so that all local authorities can join one another—particularly at district level in county schemes, as well as in strategic transport authorities—and the Government to ensure that we achieve what I hope we all want to achieve: free bus travel for pensioners and disabled people outside peak hours.

Dr. John Pugh (Southport) (LD): Can we take another run at the concessionary travel issue, because I am not sure that the House is clear about it? Can the Minister say whether any part of the cost of the Chancellor's pre-election promise of free concessionary travel for pensioners now falls on any council tax payer, or is that completely funded by additional grant?

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