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Mr. Woolas: They would anyway.

David Howarth: Yes, but there is a question of wasting their time. The attempt to hide the assumed council tax in relative shares of spending does not work because the Government ultimately have to publish absolute figures for the total grant and a specific negative amount to represent the total national council tax base. That means that it should be possible to reverse-engineer the formula to return to the assumed council tax levels. The Government should save people the time and effort of working that out and simply publish the figures, which they used to do.

The other, perhaps more serious, problem with the formulae as they are currently presented is that they mix technical assessments with political judgments. Whether a formula successfully predicts the amount of need for a specific service or the cost of providing it in different areas is a technical matter—a sort of exercise in amateur sociology and economics that can be checked against the research. However, the balance of funding between different blocks—hidden in the "basic amounts" in the formula—and, I suspect, different sorts of council, is a political decision. The Minister is right to say that there is no bias in different regions except accidentally at the end, but I stress that the decisions about the balance of funding between different sorts of council are political.

I believe that we should be considering two reports, not one. There should be a technical report that provides evidence for a specific way of predicting need and cost, and a political report that gives the Government's reasons for opting to support particular services and sorts of council.

A Government who even suppressed the assumed council tax level are unlikely to want more openness in the rest of their activities in that field. However, a Government who were committed to a clear and open debate about their priorities would welcome openness.

10.8 pm

Mr. David Amess (Southend, West) (Con): We live in an unjust country. The Government are unjust and I blame local government's powerless state on the Labour leader. Since he took power in 1997, he has shown little or no interest in local government.

What is the point of anyone becoming a councillor nowadays? The centralising Government tell local authorities everything that they should to do. They tell them how much to spend and what they can raise. Central Government direct every facet of local government. What on earth is the purpose of anyone standing for local government?
 
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A deputation from Southend council met the Under-Secretary of State, Office of the Deputy Prime Minister, the hon. Member for Poplar and Canning Town (Jim Fitzpatrick), last month to explain to the Government Southend's serious financial predicament and to try to get more help from him. As the Minister knows, when the national census was conducted, 20,000 people in Southend were left off it. That means funding for 20,000 fewer people. The Minister is always courteous when he meets us and has been sympathetic, but my colleagues and I are not going to shut up and wait until 2011 for something to be done.

Mr. Philip Hollobone (Kettering) (Con): In Northamptonshire, we have the reverse problem. The population will increase massively as a result of the Office of the Deputy Prime Minister's growth area agenda, but the population assumptions in the local government finance settlement are based on historic census data and do not include the projections provided in the growth area assessments.

Mr. Amess: There we are; I was exactly right when I said we live in a very unjust country.

We have a serious situation in Southend, with 20,000 people left off the census. We cannot wait until 2011 for that to be addressed. The Minister also knows that Southend pier has been burnt for the third time, that we are suffering cliff slippage and that Southend, West—the constituency I am proud to represent—has the most people in the country aged between 100 and 112.

Mr. Nicholas Soames (Mid-Sussex) (Con): All good Tories.

Mr. Amess: They certainly are good Conservatives.

All that brings huge financial difficulties. At the meeting with the Minister's colleague, we brought to his attention the fact that Southend had received a 2 per cent. increase while the average across the country was 3 per cent. We also brought to his attention the fact that if the local authority increased local council tax by more than 5 per cent., capping would take place. If we follow the Minister's instructions, Southend will have to make cuts of £11 million—on top of £25 million of cuts over the past five years.

I end with a gentle warning to my hon. Friends. It is normal when one takes a deputation to a Minister asking for more money not to expect any change. But this settlement takes the mickey. Following our delegation—my hon. Friend the Member for Rochford and Southend, East (James Duddridge), members of Southend council and me—the grant was not left alone; it was actually cut further. As a result of our delegation—

Mr. Woolas indicated dissent.

Mr. Amess: The Minister shakes his head, but as a result of our deputation—my hon. Friends must bear this in mind, until we enter office—we have actually had our grant cut by £34,000. That really is taking the mickey. I am desperately disappointed with what the Government have done.
 
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10.13 pm

Mr. Andrew Pelling (Croydon, Central) (Con): I shall keep my remarks short as I know that the Minister wants to reply.

Despite what the Minister had to say, quite a few Opposition Members have spoken on behalf of authorities whose allocation of moneys is on the floor. I should not want to cut across what the hon. Members for Wigan (Mr. Turner) and for Barnsley, Central (Mr. Illsley) had to say, but I assure the House that in London, having a social services grant on the floor does not necessarily mean living a life of luxury. Within my local authority there is, unfortunately, a need to close down an industrial organization that has given jobs to 85 disabled members of the community. There has also been the acceleration of closures of old people's homes. The Minister and my hon. Friend the Member for Mole Valley (Sir Paul Beresford) raised the issue of affordability. That is an important issue, especially within the context of London.

Within my constituency, there was a recent analysis by Barclay's that showed that the real standard of living—when account is taken of the costs of living in London—in Croydon, Central is within the bottom 100 constituencies in England and Wales. The neighbouring constituency of Croydon, North is within the bottom 30. Careful consideration must be given to the allocation of moneys to constituencies in outer London, which are showing great signs of a decline in the quality of public infrastructure. That is recognized by the Mayor of London.

Within Croydon, there are real issues with specific grants that go into the overall revenue settlement; for example, concessionary fares and importantly, for Croydon and Hillingdon, unaccompanied asylum-seeker youngsters.

Briefly, I pay tribute to the London borough of Sutton, which is controlled by the Liberal Democrats. There is a desire there to work on a cross-party basis to lobby on behalf of that borough's interests. The approach taken was a great success for the borough in terms of achieving its position in the area cost adjustment in falling within a west London council definition. Unfortunately, the London borough of Croydon has not fallen within that process. If I had some criticism of the Labour authority in Croydon, it would be its unwillingness to operate in a bipartisan approach to the Minister that involves both the Labour and Conservative parties. That is both before my election to the House and afterwards.

I suppose that, on a party political point, that will not be a problem for me after the coming local elections. However, it is important to take a constructive approach. When it comes to area cost adjustment in terms of west London councils on the provision of education, children's services and other elements within cost adjustment, we find that the boroughs are being funded at a rate of 6 per cent. higher than other boroughs within outer London. It strikes me that that is an unjustifiable effect of the operation of the ACA within the funding formula.

Overall, it will have cost Croydon council £40 million relatively in funding over the three-year fixed period that has been locked in by the Government. There seems also to be a contradiction in funding within London on
 
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schools. The average funding for secondary schools within Croydon is £3,300 per pupil whereas in many London boroughs the funding will be £5,000.

I concede that there have been problems within Croydon, given its fascination for council tax referendums that allowed the opportunity for increases of 2 and 3 per cent. in the run-up to the previous local elections. Obviously, that led to a great deal of trouble for the local authority in increasing its council tax by 27 per cent. immediately after the local council elections. Unfortunately, that will operate as a distinct handicap for the Labour party in trying to retain control of Croydon council at the upcoming elections. The residents of Croydon will easily remember 27 per cent.

Croydon is going through dynamic change. Many of the wards within Croydon have the highest populations of black and ethnic minority communities, and it is important that we serve those communities. The political agenda within London, understandably within the context of the Olympics and London 2012, has been to concentrate resources on the development of the Thames Gateway area.

Funding that comes to London through learning and skills councils also discriminates strongly against southern London. In the review of area cost adjustment for subsequent years, I hope that the Minister will give serious consideration to the need to take account of the real costs of operating in London. Boroughs such as the London borough of Croydon require greater equality of treatment. The director of finance of the London borough of Croydon recently said that we operated within an ACA that put us in a valley of payments, or low point, compared with neighbouring Bromley and Sutton.

Serious consideration should be given to the real dynamic changes that are taking place in Croydon's population. As many other hon. Members said, especially the hon. Member for Hastings and Rye (Michael Jabez Foster), we must realise the problems that are caused when areas with distinct deprivation are not well supported through the overall allocations. That problem applies especially to the London borough of Croydon because its northern parts and some areas of Croydon, Central, which I represent, have many facets and styles that are similar to those of inner-London areas.

Unfortunately, as the Minister will be aware, there was recently a great deal of publicity about the fact that our main station in Croydon has the highest rate of reported crime of any outer-London rail station. That in itself is an indication of the some of the decline that has taken place in the London borough of Croydon, which ought to be addressed through the future allocations of resources to Croydon. When the Minister winds up the debate, I hope that he will provide us with some positive remarks about how the area cost adjustment for Croydon will be reviewed in future years.

10.22 pm

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