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The Minister of State, Department of Health (Ms Rosie Winterton): We do not hold the information in the format requested. Our latest figures show that there has been an overall increase in the prevalence rate of diabetes in Stoke-on-Trent of 11.3 per cent. since 2004.
Joan Walley: I thank the Minister for that reply, but in Stoke-on-Trent the rate is 4.2 per cent., compared with the national average of 3.6 per cent. My constituents are distressed about the fact that the PCT and GPs are taking away blood glucose test strips. Does she agree that it is really important to have a structured education and support system in place, and will she work with the national Diabetes UK association and the all-party group on diabetes to try to find a way of making sure that we do not have health inequalities of that kind in areas such as Stoke-on-Trent?
Ms Winterton: My hon. Friend is right to say that that kind of supported education programme is extremely important. The work done by Diabetes UK, together with some of the regional teams that we have set up through the Departments diabetes national service framework, is making a real difference in many areas of the country. I know that, particularly in her area, diabetes clinics, patient information and the work of the diabetes networks have been effective in putting in place some of the education to which she refers.
The Minister for Local Government (Mr. Phil Woolas): With permission, I should like to make a statement about local authority revenue finance for England in 2007-08. Sensible planning for service delivery needs a stable and predictable funding environment. The quality of councils forward budgets, their relations with stakeholders whose budgets they support, and their ability to set low and sustainable council taxes, will all be promoted by predictable funding.
As I told the House last January, we were then setting out firm proposals for forward financial allocations on a two-year basisincluding the use of projected data for population and council tax base. As 2007-08 is the second year of a multi-year settlement, the policy is not to change the settlement, including the data used in the grant calculations, from that previously announced, other than in exceptional circumstances.
This years announcement therefore contains no surprises for local authorities. I make a virtue of that, because I am convinced of the advantages of multi-year financial planning, and most of what I hear from councils and their delivery partners, such as those in the third sector, supports that view. Todays announcement launches a period of statutory consultation, and I will fully consider any representations made during the consultation period in the light of the policy in relation to multi-year settlements.
Within the framework of stability, I am able to provide adjustments to grant allocations for the voluntary merger of the fire services of Devon and Somerset under a new single combined authority, should that go ahead for 2007-08. Today, I am also updating details of individual specific grant allocations to local authorities for 2007-08.
With the next spending review period, we will move to give three years of grant allocations to local government: for 2008-09, 2009-10 and 2010-11. The stability provided by multi-year settlements will allow local government to publish three-year council tax figures, and we would expect it to take up that opportunity. More widely, such security on funding will enable councils to move forward on providing more flexible, efficient and responsive services to their communities, as was set out in our October 2006 White Paper, Strong and prosperous communities. It will facilitate the move towards new, more inclusive local area agreements that are tailored to meet the needs of individual areas and the drawing together of different stakeholders to provide better, more cost-effective services that seamlessly meet the needs of clients.
Total revenue grants to English local authorities will be £65.7 billion in 2007-08, an increase over 2006-07 of £3.1 billion, or 4.9 per cent. Part of that increase is in specific grants, and it includes dedicated funding for schools and a further £525 million in neighbourhood renewal fund, allocating extra help to the 86 most deprived local authority areas in England. Within that total, formula grant will total £25.6 billion in 2007-08, an increase of 3.7 per cent. That means that by 2007-08, the increase in Government grant for local services since taking office will be 39 per cent. in real
terms. The provisional standard multiplier for national non-domestic rates in 2007-08 will be 44.4p in the pound, and the small business non-domestic rating multiplier will be 44.1p. That means that, once again, businesses and other non-domestic users can look forward to predictable and stable rates.
Grant floorsminimum guaranteed increases from one year to the nextare a permanent part of the system. I need to strike a balance between funding stability and the cost of the floor. This year, I am able to improve floor protection for fire and rescue authorities, while easing the impact of floors on upper-tier and shire district authorities. I can thus today confirm my proposal that, for 2007-08, the floors will be: for authorities with education and social services responsibilities, 2.7 per cent.; for police authorities, 3.6 per cent.; for fire and rescue authorities, 2.7 per cent.; and for shire district authorities, 2.7 per cent. Within each group of authorities, those above the floor will have their grant increase scaled back to pay for that floor.
We have provided a stable and predictable funding basis for local services. We expect local government to respond positively as far as council tax is concerned. We thus expect to see an average council tax increase in England in 2007-08 of less than 5 per cent. We will not allow excessive council tax increases. We have used our reserve capping powers in previous years to deal with excessive increases and we will not hesitate to do so again if that proves necessary.
I am also announcing consultation on alternative notional amounts for Devon and Somerset fire and rescue authority and Somerset county council. That will enable like-for-like comparisons to be made between 2006-07 and 2007-08 budget requirements for capping purposes. This is being issued today for consultation to ensure that, should the proposed merger go ahead for 2007-08, the relevant authorities will know, in advance of setting their budgets, the budget requirement figure for 2006-07 that the Government will use when considering using their capping powers.
The supporting people programme has proved to be a highly successful one that has provided support to more than 1 million vulnerable people each year. In July, I announced almost £1.7 billion of investment in supporting people and I am pleased now to confirm the grant allocations for 2007-08. Additionally, I can announce a further £40 million of administration grant for authorities in 2007-08 to help them to manage that important programme. I am pleased to announce that if authorities generate savings under the programme through their careful management, they will be able to roll forward those savings from 2006-07 to 2007-08, in order to reinvest in the programme.
The Government have provided another significant boost for local authorities, setting out a financial package that is stable, predictable and adequate to meet the pressures that local authorities face, but keeping council tax increases down to acceptable levels. I have placed copies of the tables showing grant allocations and copies of the supporting documentation in the Vote Office and the Library, and full details are being made available to local authorities on our website. I look forward to receiving consultation responses, and I commend the proposals to the House.
Mr. Eric Pickles (Brentwood and Ongar) (Con): I thank the Minister for early sight of his statement and for the supporting documents. I have always considered the Minister for Local Government to be someone who respects the Chamber, so I am sorry that he chose to release the details of the settlement in a press release yesterday. Clearly, the spirit of Jo Moore lives on in his Department.
Since 1997, council tax bills have rocketed. They have gone through the roof, rising by 84 per cent., and that takes the average bill for a band D property to £1,268 this year. A 5 per cent. rise this year will mean an extra £63 on the bill of a typical pensioner couple or a family, and that is equivalent to paying £111 every month of the year. What is the Ministers estimate of the extra burden on the vulnerable? I remember the deep shock felt by households when the average band D bill breached £1,000. It took seven years of this Labour Government for us to reach that oppressive figure. From the figures before us, we can calculateI suppose that that is the advantage of multi-year financial planningwhat bills will be by the end of Labours third term, if there is a 5 per cent. annual increase. The average council tax bill will be £1,500.
The Ministers last major adventure in capping resulted in nearly half the savings going on the cost of rebilling. Will he at least spare himself the embarrassment of capping authorities in cases in which the savings are trivial? Will he confirm that his capping powers will not be applied to the Olympic levy on council tax, and if costs continue to soar, as they did in Montreal, will Londoners be paying the Olympic tax for the next 30 years?
We have long been promised the publication of Sir Michael Lyonss recommendations on local government finance, but a spokesman in the Department is reported in last weeks Municipal Journal as saying:
we have never made a commitment to publish the report at all.
Will the Minister give a clear undertaking that the Government will publish Sir Michaels recommendations well in advance of the debate on this years settlement? One of the key drivers for soaring council tax is the failure of the Government to finance fully the burdens that they impose on local councils from Whitehall. Will the Minister confirm that, on top of the figures given today, the Chancellor will look to meet a target of 3 per cent. cuts from local authority budgets?
The finances of local authorities, particularly those with social services departments, are closely linked with the NHS. Across the country, local hospitals are cutting staff recruitment, abolishing posts and cancelling operations because their budgets are in the red. In July, the Local Government Association and the NHS Confederation published research revealing that seven out of 10 local authorities have been hit by cost-cutting pressures from the NHS. Are there any measures in the settlement to address that problem, or do the Government have their head in the sand, with regard to Labours NHS cuts?
The Chancellor has set in place a landfill tax escalator, and is making municipal waste collection ever more expensive. The costs should be funded under the new burdens principle, but the Department for Environment, Food and Rural Affairs argues that it does not apply,
because of the polluter pays principle. What representations has the Minister made to remedy that injustice? In conclusion, no wonder the Minister thought that this was a good day to baryburybad news. The bad news is that an ordinary family in an ordinary house face the prospect of paying a crippling £1,500 in council tax by the end of Labours third termtruly, a shocking and crippling legacy.
I thank the hon. Member for Brentwood and Ongar (Mr. Pickles) for his comments about my attitude to the House, but I can assure him that the details of the statement were largely announced to the House last year, so there has not been a breach of privilege in the House. If there had been, I would take it very seriously. I thank the hon. Gentleman for his opening remarks but, in response to the questions that he asked, I specifically announced that the Government would not tolerate average tax increases above 5 per cent.that is the same policy that I pursued last year. Last year, he attempted to portray that as an actual increase in everyones council tax of 5 per cent. Of course, that was not the case this year, and it will not be the case next year. I accept his point that an advantage of multi-year statements is that we can predict council tax increases in future, but a disadvantage of that sensible policy from the Governments point of view is that the propaganda and spin that he put on the figures is made worse. Such a practice does nothing other than unnecessarily frighten particularly vulnerable people, so I urge him not to indulge in it. [ Interruption. ] What was wrong about it was that the accusation was made last year. It was not true then, and it will not be true this year.
The hon. Gentleman asked about the Olympics. The £20 levy for the Olympics, which has been agreed between the Government and the Mayor, cannot be changed without the agreement of the Mayor and the Greater London authority. The hon. Gentlemans party was supportive at the time of the bid, and the Prime Minister graciously said so. I accept that it is the job of Her Majestys Opposition to oppose, but sometimes I think Her Majesty should ask for her money back because they have not provided value for money. The hon. Gentlemans worry about the Olympics is therefore not borne out. He asked an important question about the Lyons review, which is due to report to the Chancellor and the Secretary of State by the end of the year, and decisions will be made at that time. The hon. Gentleman described the 3 per cent. efficiency target as a cutI assume that he was referring to the Gershon figure. Local government has a good record on efficiencies, both cashable and non-cashable, and I am pleased to report that our all-party work with the Local Government Association has resulted in improved efficiencies and services.
The hon. Gentleman said that the NHS budgets are in the red, but the NHS budget has not been cut. NHS trusts and hospitals are required to balance their books, and it is amazing that the Opposition should fail to support the concept that public services should
balance their books. Councils must do sothat is quite rightand most of them take a responsible attitude towards the requirement. The increasing work that they do through local partnerships, particularly the new financial arrangements of local area agreements, means that the aligning of financial budgets by the partners is important. The hon. Gentleman therefore made a significant point. As for his point about waste, my Department, the Department for Environment, Food and Rural Affairs and the LGA have important work streams on waste issues, which receive substantial attention in the White Paper that we published on 26 October. In giving a reaffirmation of the new burdens principle, I should point out to the House that those new burdens can only be calculated on a net basis, even though they are sometimes presented on a gross basis.
Mr. Nicholas Brown (Newcastle upon Tyne, East and Wallsend) (Lab): I welcome my hon. Friends statement. May I draw his attention to an anomaly that affects the city of Newcastle upon Tyne? The population figures that the Government use to calculate the citys entitlement to rate support grant seriously understate the real population of the city. This has been the case for a number of years, and the gap between the two figures is widening. Will my hon. Friend meet me and the other Members of Parliament for the city, and also perhaps the leader of the Liberal-controlled local authority and a representative from the opposition party in order to discuss the anomaly and see what can be done to rectify it?
Mr. Woolas: Of course I would be delighted to meet my right hon. Friend, the leader of his council and any other representatives who wish to participate in a discussion of the issue. In the formula announcement that I made last December and confirmed in January, I changed the formula calculation to take into account population projections as well as historical trends, so there was a change in that direction. I am aware that his council and some others are raising the important matter of the population figures. The Government rely on the best data available, which are provided to us by the Office for National Statistics. The ONS constantly reviews the data and has a work stream through the population statistics working group to examine the matter. One can go only so far in future projections to be consistent with the overriding policy of financial stability and predictability.
Tom Brake (Carshalton and Wallington) (LD): I commend the Minister for making the statement available much earlier than is usually the case. I congratulate the Government on moving to a three-year settlement, which will allow local authorities to plan much more effectively. However, it will not have escaped Members attention that the Labour manifesto pledge back in 1997 to abolish universal and crude capping has still not been delivered. We do not have crude and universal capping. What we have is a benevolent Minister who reluctantly uses his reserve capping powers but achieves the same end, and our strong and prosperous communities still have to dance to his tune.
The Minister neatly side-stepped the question from the hon. Member for Brentwood and Ongar (Mr. Pickles) about whether and when Sir Michael Lyons report would be published. I hope he will answer that question
on the record. In relation to the three-year settlements and picking up a point that has just been made, can the Minister confirm that those will be sufficiently flexible so that if a local authority experiences a swift change, such as inward migration, or if the census data prove to be inaccurate, it will be possible during that three-year period to adjust the settlement?
On the 2007-08 announcement, does the Minister not accept that it is his settlement of 2.7 per cent. for many authorities, combined with public sector inflation and the financial impact on local authorities of the cuts in many primary care trusts and many acute trusts, that make inevitable an increase in council tax of double the rate of inflation, hitting the poorestoften our senior citizensthe hardest? Is it not time he stopped punishing local authorities? Instead, he should congratulate them on moving forward with the Gershon savings at a rate that central Government cannot match. He should introduce a local tax based on ability to pay, give local councils control of business rates, allow fair votes for local elections and scrap the hundreds of targets that are imposed on local authorities by his Government.
Mr. Woolas: The 2.7 per cent. floor that the hon. Gentleman mentions benefits his own authority, which is a floor authority. Without the floor, there would be a significant shortfall, and the hon. Gentleman and his colleagues would no doubt lobby me for the floor. I therefore expect a letter of thanks for it, although I doubt whether that will be in the Christmas box for the Woolas office this Christmas.
The Lyons report will be complete by the end of the year. [Hon. Members: Will it be published?] Of course it will be published. [Hon. Members: When?] The hon. Members for Brentwood and Ongar (Mr. Pickles) and for Carshalton and Wallington (Tom Brake) will have to be patient. That approach was used in the past with the Layfield review and other independent reports.
On council tax increases of twice the level of inflation, I repeat that the 5 per cent. figure to which I referred last year and this year is the national average, so it does not mean that council tax will rise by 5 per cent. in every authority. Council tax is set by individual local authorities, which has been the case since its introduction.
On hitting the poorest hardest, the poorest benefit most from the council tax benefit system, which contributes just under 15 per cent. of total council tax revenues. That point is often missed out from the debate for what I assume are entirely honourable reasons.
On the Gershon review, this morning I congratulated local authorities at the conference of the Chartered Institute of Public Finance and Accountancy on their success in reaching their Gershon targets a year early, and I am happy to repeat those congratulations.
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