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Mr. Woolas: I am very grateful to my right hon. Friend for asking that important question. The funding blocks for children’s social services and for young adult’s social services come with floors, while the funding block for elderly social services does not. All the formula grant is covered by floors, and the floor for my right hon. Friend’s authority is 2.7 per cent this year. Without that floor, I estimate that the loss to Wirral would be around £4 million. It is not possible to say—I am more than happy to clarify this matter in writing—what effect the removal of the floor would have on children’s social services and on young adult’s social services.

Sir Nicholas Winterton (Macclesfield) (Con): The Minister is a reasonable guy, and I like him. Will he give me an honest answer to this question? Cheshire is under-resourced in respect of education—it is one of the worst funded authorities in the country—and the same is true of social services. If the Government limit the money that they give to Cheshire, and if Cheshire cannot raise the level of local tax above 5 per cent. in order to provide the services that it requires, how can the local authority provide facilities for, in particular, the elderly and children, when it is under-resourced and limited on what it can raise itself?

Mr. Woolas: I thank the hon. Gentleman for his comments, which I sincerely reciprocate—I genuinely thank him for what he has said. He has raised a difficult issue. Councils led by all political parties have identified that they face pressures, particularly in social care. We work with councils and their representatives to identify the causes of those pressures, and we work out with them, often successfully, what we can do together to address them. The plain fact of the matter is that the public—I am sure that the hon. Gentleman will back me on this point—will not tolerate excessive increases in taxes and particularly in council tax. The Government do not have a solution to the issue set out by the hon. Gentleman. We must square the circle through efficiencies, the improvement of services and better joint working with other public service agencies, which has resulted in significant improvements in Cheshire and elsewhere.

Mr. David Clelland (Tyne Bridge) (Lab): How can the Minister describe as a significant boost a settlement that gives a council such as Gateshead, which is often held up by Ministers as an example of good local government, 2.7 per cent.—some 30 per cent. below the English average—and that gives the north-east a settlement below the English average even though it is widely acknowledged that its needs are higher than that? Under this settlement, what prospect does Tyne and Wear passenger transport authority have of clawing back some of the £7.2 million that it cost us to introduce the Government’s free travel scheme; and how on earth is it supposed to finance that scheme next year, given the inadequate system of local government finance?

Mr. Woolas: I congratulate my hon. Friend on continuing his important campaign on behalf of bus users in Tyne and Wear. As he knows, the Government provided £350 million last year, and £367 million this year, for the concessionary fare scheme. In addition, there has been an uplift across the board in grants provided to local
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authorities. Having looked particularly at regional distribution, I can confirm to my hon. Friend that over the past 10 years the north-east has not been at the bottom of the league on a regional basis as regards the allocation of grant funding. We are in discussions with him about this important matter.

Mr. David Curry (Skipton and Ripon) (Con): The issue of social services is fundamental. The Minister will know that the Prime Minister and the Chancellor have just put together a document about the challenges facing the Government which highlights the problems that arise in a society in which the numbers of elderly people and young people are growing in proportion to the total population. Those are precisely the groups that make the most demands on social services, and where significantly higher statutory demands are laid upon local authorities and the most pressure from budgetary provision is felt. What forecast has the Minister made for the evolution of demand in that sector, and what plans does he have to meet it?

Mr. Woolas: The right hon. Gentleman speaks with great authority and knowledge on these matters, and I believe that he understands the Government’s argument, which is that we have provided extra revenue and capital support for social services—I could read out the substantial figures. The answer to his question is that the Government are proposing, through the White Paper, a partnership approach whereby local authorities are freed up to work more effectively with other partners, especially the health service. Spending on social services has increased year on year above inflation. That is not to say that there are not significant demographic and other pressures on councils and on central Government; that is why it is right and wise of my right hon. Friends the Chancellor and the Prime Minister to deal with that in their reviews.

Mr. Chris Mullin (Sunderland, South) (Lab): What assessment has my hon. Friend made of the impact on local government finance of implementing the single status and equal pay Acts? I have gained the impression that his Department has been in denial about this for some time. Has he now woken up to the size of the problem, and what are his plans?

Mr. Woolas: I can assure my hon. Friend that I am not in denial, and neither is my Department, about the importance of equal pay for equal value, not only in achieving equality and fairness for women workers, especially low-paid workers in local government, but in ensuring the balancing of the books on which we place such importance. Equal pay is very high on our agenda; indeed, this morning I held yet another substantive meeting with the Local Government Association to consider some of the potential solutions.

Mr. Paul Burstow (Sutton and Cheam) (LD): Will the Minister meet council leaders and Members of Parliament from the London borough of Sutton to discuss two matters: first, the effects of cost shunting from the local NHS on to local social services as a result of bed closures and cuts in staffing in the local NHS and tens of millions of pounds of cuts in primary care services; and secondly, the double disadvantage that the poorest of my constituents suffer as a result of not counting within the formula allocation and not
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benefiting from targeted grants because we are regarded as being a leafy suburb but in fact have pockets of deprivation that are not properly met by the grant system?

Mr. Woolas: I shall be more than happy to look at the situation in the hon. Gentleman’s borough, but I must point out again that our policy is a fair one. I acknowledge, as do the Government, that the point about pockets of poverty in relatively well-off areas is an important one. That is one reason why we apply the floors within the formula, of which his authority is a beneficiary.

Dr. Phyllis Starkey (Milton Keynes, South-West) (Lab): While I welcome the stability of the two-year settlement and the fact that population projections will now be included, may I draw the Minister’s attention to the problems faced by authorities such as Milton Keynes council, which has a rapidly increasing rate of population growth but is limited by the damping effect introduced to protect authorities affected by the floor? Will he allow representatives of the council to come with me to make representations to him on its specific problems as a housing growth area, and on the way in which that should be reflected in the formula?

Mr. Woolas: I congratulate my hon. Friend on her persistent campaign to raise the issues affecting Milton Keynes, which she has acknowledged as being problems of success. This is a new issue that we have to deal with. I can assure her that the specific issues facing Milton Keynes are being considered, and that discussions are taking place on possible ways forward, not only for her area but for areas in a similar situation. I do not believe that this settlement specifically addresses the issue that she has raised, but I can give her the assurance that it is high on our agenda.

Mr. Philip Hollobone (Kettering) (Con): As a councillor on Kettering borough council, may I draw the Minister’s attention to the acute pressure on the planning departments in small district authorities, particularly in growth areas? Will he consider lifting the cap on the planning fees that developers have to pay? If a developer makes an application for 5,000 houses, that can occupy all the planning department’s time, yet the recompense that it receives is totally inadequate.

Mr. Woolas: I congratulate the hon. Gentleman on raising this issue, which we have debated before. He has made an important point in a non-partisan way on behalf of his constituency, and the Department is indeed looking into the matter.

Ann Coffey (Stockport) (Lab): My constituency is benefiting from £1.6 million of neighbourhood renewal funding. This is because super-output areas, rather than borough-wide statistics, have been used to target those resources. My constituency is in the relatively wealthy metropolitan borough of Stockport, as my hon. Friend the Minister knows. Will he increase the use of super-output areas to ensure that resources go to all deprived areas, irrespective of the council area in which they are located?

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Mr. Woolas: My hon. Friend makes an important point about super-output areas, which are the sub-ward areas of highest deprivation. I have announced today the allocation of neighbourhood renewal funding, and it is for the local authorities and their partners to allocate that funding to try to meet the floor targets on deprivation that we have set for them. The review of the neighbourhood renewal fund will take place in tandem with the comprehensive spending review, and the issue that my hon. Friend has raised is one of the subjects under consideration in that review.

Mr. Greg Hands (Hammersmith and Fulham) (Con): I want to return to the issue of population change, and to refer the Minister back to the Westminster Hall debate that he and I attended on 1 November. He said that he would write to me after that debate, but will he instead tell me today whether he will look again at the situation in local authorities such as my own, as well as in other London boroughs and places such as Peterborough and Slough? Apart from the change in the trend in population increase in such places, they have faced huge and sudden increases in population since the accession of the 10 new EU member states. Will he look again at the possibility of giving a gateway grant to such local authorities to deal with the one-off effects of those circumstances?

Mr. Woolas: The hon. Gentleman referred to our fruitful debate on this issue in Westminster Hall. I cannot give him the commitment that he is looking for, however. The best data available to the Government are those produced by the Office for National Statistics, and I am obliged—as any Government would be—to use the best data. The work stream that is examining those data is ongoing, as his local authority and the others that he mentioned have requested.

Mr. David Anderson (Blaydon) (Lab): My hon. Friend said in his statement that there would be no surprises for local authorities. Does he agree that his intervention last week in the negotiations on the local government pension scheme was a big surprise for local authority workers? He must have surprised not only the workers, probably scuppering the genuine negotiations, but the Prime Minister, who had said at the Dispatch Box 24 hours earlier that he would do all that he could to help to reach a successful outcome.

Mr. Woolas: I am grateful to my hon. Friend for giving me the opportunity to put it on record that the statement issued last Thursday on the future of the local government pension scheme was influenced by discussions involving trade unions and employers, and that it refers to a consultation on the best way forward. On behalf of members of the scheme, and with regard to the viability of the scheme, I have an obligation to move forward in accordance with the timetable outlined to participants in the tripartite committee for some months and, indeed, years.

Mark Hunter (Cheadle) (LD): In town halls up and down the country, the Minister’s statement today will have disappointed many people, not least because it represents a thoroughly bad deal for local government, which is struggling to provide the services that all our communities need and deserve. It seems to me that the Government are effectively asking councils—

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Mr. Speaker: Order. When a statement is made, it is the practice in the House to put a question. The hon. Gentleman has so far not put a specific question. If he does so, I will allow him to continue.

Mark Hunter: As ever, Mr. Speaker, I am grateful for your guidance. I was just coming to the question. Given that the Government are asking local councils to do more and more with less and less, which services that local councils currently provide does the Minister think they no longer need to provide? Will he give us an answer, instead of giving councils more and more responsibilities to discharge with existing funds?

Mr. Woolas: With respect, if the hon. Gentleman will give the House an undertaking not to distribute a Focus leaflet attacking tax or council tax increases, I will give a straight answer to his question. The fact is that neither Her Majesty’s Treasury nor the council tax payers in his constituency or mine are aware of the mystical tree on which he thinks money grows. Stockport borough council has had an average increase for 10 years of 4.5 per cent. in real terms. Admittedly, that includes the schools budget, but a real terms increase has been provided for other council services. Politics is about making those hard choices, for which he does not seem to think he should take responsibility.

Paddy Tipping (Sherwood) (Lab): The need for a successful conclusion on the local government pension scheme has already been mentioned. Will my hon. Friend give a commitment that he will call in the employers and trade unions to see him, so that he can stress the need for further discussion and compromises on the way forward?

Mr. Woolas: I am grateful to my hon. Friend, who plays a positive role on behalf of his constituents, particularly low-paid workers. I can give him that commitment. As I said a moment ago, the statement to the House refers to a consultation on the future of the local government pension scheme, and meetings are already in the diary to continue discussions on the future of that pension scheme, so that we can move forward with a strong final salary pension fund that is fair to scheme members now and in the future.

Mr. Brian Binley (Northampton, South) (Con): The Minister will know of the problems faced by Northamptonshire county council, as he met an all-party delegation last year. He will know that we cut 600 full-time equivalent jobs, and that we cut deeply into services. This year, we have a £45 million shortfall on a balanced budget because of the support grant that he has announced, which we knew about last year. We can shave the employment structure to the bone, but we are still left with an £18 million shortfall that can only be dealt with by service reductions. How can the Minister reconcile that scenario with his claim that his party is improving local government services?

Mr. Woolas: I am not the only one who says that local government services are improving. The independent Audit Commission and the Local Government Association say the same, backed up by independent research and evidence from respected market research companies and opinion pollsters. I am
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sorry that the hon. Gentleman chooses not to join me in congratulating local government, but I really cannot accept the argument that a shortfall on projected desirable expenditure is a cut. It is not, it never has been, and it never will be.

Mr. Neil Turner (Wigan) (Lab): I welcome the extra £525 million that has gone into the neighbourhood renewal fund. That money is extremely useful and, as I am sure my hon. Friend knows, the excellent Labour-led Wigan city council uses it very well.

In his statement my hon. Friend made no mention of double damping, which was raised by my right hon. Friend the Member for Birkenhead (Mr. Field). I think most people would welcome damping, or at least understand the need for it; what we cannot understand is why there should be additional damping before the final damping in the formula.

Replying to my right hon. Friend the Member for Birkenhead, my hon. Friend said that he could not assess how much the amount would be. The Wigan treasurer estimates that, for Wigan, it will be £8 million, as against the extra £4 million that we have. Will my hon. Friend give careful thought to the issue of double damping and try to resolve it, so that local authorities can address the needs of their social services departments?

Mr. Woolas: My hon. Friend makes an important point. I will of course look at the specific figures relating to his authority and similar authorities that have presented the argument about double damping in a responsible way. As I tried to explain to my right hon. Friend the Member for Birkenhead (Mr. Field)—I am grateful to my hon. Friend for acknowledging this—the social services budget for the elderly is not damped, whereas the budget for children and young adults is. I have been able to make progress on the overall damping. Wigan city council, owing partly to a success on which I am happy to commend it, received a 3.9 per cent. increase this year.

Mr. Andrew Pelling (Croydon, Central) (Con): As the Minister turns his mind to the new three-year settlement, will he consider the position in Croydon? Comparisons with Ealing, which has similar social indicators, show Croydon’s budget to be £40 million adrift of where it should be. What consideration can the Minister give to a fair deal for Croydon in future years?

Mr. Woolas: I hoped that the hon. Gentleman would thank the Government for the local enterprise growth initiative funds that Croydon received this year. That excellent scheme, for which I commend the council, is working very well, but I do not accept the hon. Gentleman’s premise. All local authorities can and do argue that they are special cases. We have to balance the demands on central Government funds. I believe that overall I have distributed the money fairly, and in a way that is perhaps more transparent than has been the case in recent years.

Jane Kennedy (Liverpool, Wavertree) (Lab): When my hon. Friend decided that Liverpool city council should receive a 2.7 per cent. floor uplift, did he take into account a recent report by KPMG which suggests
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43 ways in which the council could save money on the external contracts negotiated by its former chief executive Sir David Henshaw? One of them commits the council to a service charge of £11,000 a year per councillor, to be paid to a company called Liverpool Direct for computers supplied to councillors.

Clearly more savings can be made in Liverpool. Will my hon. Friend examine the report to ensure that he and his officials know the background, and to ensure that Liverpool council tax payers receive the best services that can be provided from the significant resources that the council receives?

Mr. Woolas: I, like my right hon. Friend, want the best for the council tax payers of Liverpool. I am grateful to her for raising the important point about the KPMG survey. Of course, in terms of the allocation of revenue support grant one cannot take into account such specific reports, but Liverpool is subject to the Gershon requirements, as are other authorities, and I would have thought that a consideration of that important report would be a contribution to that agenda in Liverpool.

Robert Neill (Bromley and Chislehurst) (Con): Does the Minister recall that he met with a delegation from the London borough of Bromley in June of this year, and does he accept that during that meeting he appeared to agree with its point that formula grant is only part of the picture and that we would not be able to come to a fair assessment of the treatment of Bromley or any other authority until a comprehensive list of all grant, including specific grant, is published for each local authority? Will the Minister undertake to do that, and what comfort will his settlement give to my constituents in Bromley, as it appears that their formula grant will be nailed to the floor for a fourth successive year?

Mr. Woolas: I hope I am not being churlish or disrespectful, but I say again that it would be nice to get a thank you for the floor, especially as Bromley council is part of the London Councils Association which argued for the floor in the first place. But notwithstanding that, the point that the delegation made was on the pockets of poverty, which a Member has raised. What I have done is to make available all the specific grants that are within the remit of my Department and portfolio today. The Department for Education and Skills today also publishes the dedicated school budget for schools. Surety and predictability of funding are an important part of our policy, and next year I will be able to announce three years of funding.

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