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Mr. Vaizey: My hon. Friend has hit on something there, and I wish to elaborate on the waters of the Thames, because by doing so I shall move on to Hammersmith and Fulham council—I know that the Minister has been given a presentation by it. The source of the Thames is in the area represented by the leader of the Conservative party and meandering down it one finds the constituency that was represented by the Mayor of London and is now represented by my hon. Friend
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the Member for Henley, who is going to be a star in the next Conservative Cabinet, and later Hammersmith and Fulham, which has a Conservative-controlled council, put in by the people of Hammersmith and Fulham after the abject failure of a previous Labour administration.

Mr. Neil Turner: Is what the hon. Gentleman is saying about the waters of the Thames possibly due to the fact that it has been filtered through 15 sets of kidneys?

Mr. Vaizey: I am testing your patience, Mr. Deputy Speaker, and unwittingly the hon. Gentleman has just given me a hook whereby I could spend 10 minutes talking about whether my constituency should have a reservoir or whether it is better to concentrate on effluent reuse in order to supply the people of London with water. However, I shall not be distracted by that temptation, and I am aware that another Conservative Member wishes to speak, which again shows the massive commitment on these Benches to this debate and to local government.

Hammersmith and Fulham council has saved the average council tax payer £700 in three years. It has cut spending by 18 per cent. and it has reduced its debt, yet residents’ satisfaction has increased and council services have improved. There is a serious point to be made: Conservative Members constantly have to put up with Labour spin, if I may use that term in this Chamber, whereby any proposal made by a Conservative is described by Labour Members as a cut—they always ask what we are going to cut—and any proposal that the Government make is described as an efficiency saving, despite the fact that after 11 years we have never seen any example of an efficiency saving.

If people want to see efficiency savings and value for money in practice, they should look at the Conservative councils that have had to operate within this incredibly tight financial framework, but have still managed to reduce the rate of increase in council tax and improve services for council tax payers. In the June elections, I believe that the people of this country will put their faith in Conservative councils as a precursor to putting their faith in a Conservative Government.

6.10 pm

Tim Loughton (East Worthing and Shoreham) (Con): I had not intended to speak in this debate, but I was so moved by the contribution from my hon. Friend the Member for Wantage (Mr. Vaizey) that I wanted to make a few comments—although I cannot claim to be inspired by the waters of the Thames. The water is rather saltier down on the south coast.

The Minister, my hon. Friend the Member for Bromley and Chislehurst (Robert Neill) and other hon. Members have spoken about the need for efficiency savings, smart purchasing and innovation. Too much innovation in local government is stifled by the stranglehold that the central grant system still has on the way in which local government runs. My local councils—Adur council and Worthing council—have been creative in working together in the last few years. Their joint working is so advanced that it is used as a model for many other councils. Without actually merging, Adur district council and Worthing borough council have merged some departments, so we now have a joint rubbish disposal department, which can buy a joint fleet of environmentally friendly,
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state-of-the-art trucks. We have merged the management system and the legal services department to save staff overheads. The councils also have joint IT purchasing agreements with other local councils. This provides a model for how councils can run their operations more cheaply without compromising quality—indeed, they can enhance quality.

We have much to be proud of, and that is why it is so galling that all that good work—to reduce the cost of running local government at the same time as improving services—can be undermined by an obligation, such as concessionary bus fares, that has been imposed on local councils. I should say that I am fully in favour of the concessionary fares. When I mentioned this in a debate last year, I was misinterpreted by irate pensioners who thought that I wanted to curtail their jaunts on buses. I had no such intention. If people want to take more bus journeys, that is fine. They are good for their health and I am fully in favour of that. However, if the Government are to be true to their word and fund the policy fully, the funding allocated between local authorities has to be fair.

I do not dispute that the total sum provided may be the total amount required, but the sum provided to run the scheme in Worthing and Adur falls well short of the actual cost. I will take up the Minister’s earlier invitation to send him details, and I hope that he will meet another delegation. This year, Worthing faces another deficit of £500,000, which is the equivalent of several percentage points on its council tax. The council would much rather have lower council tax and see that money spent on services. That is why the situation is so unfair and galling. In my part of the world, the high pensioner population creates extra demands. We have the highest proportion of over-85s in the country, at some 4.6 per cent., with the resultant extra requirements for expenditure—which we are happy to make.

As a floor council, West Sussex county council is right at the bottom of the pile. Our increase this year is 1.75 per cent., or an extra £1.7 million. If one takes away the school spending, that equates to 4p a week more per resident per week for all services except schools over the next year, and the increase is even less next year. In contrast, Dorset does not have the area cost adjustment and it will get a grant rise of 7.6 per cent. Its demographics are similar to ours.

The Minister asserted in his speech that councils have received above-inflation increases since 1997, but West Sussex is in no such fortunate position. Its rise of 1.75 per cent. compares with a RPI figure of 3 per cent. The same was true last year: our grant increase was 2 per cent. with an RPI of 4.3 per cent. Those low rises are a direct consequence of changes made by Government to the grant system, removing funding from West Sussex and many other south-east authorities for the benefit of authorities in the north and midlands. If we had received an average grant settlement since 2003-04, when the Government changed the grant system, that would have produced an extra £28 million per annum for the county—enough to fund 700 extra social workers or to provide 1,680 residential care placements or more than 600 foster care placements. The impact of general inflation on non-school services alone is more than £10.5 million this year, and we are getting £1.75 million.

On children’s services, the public law fees for child care hearings that have increased will cost the county
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£200,000—an extra cost beyond that funded by the Government in the 2008-09 settlement. All the extra requirements for child protection that we debated in the House last night will impact on our budget. On adult social care, a lot of extra costs simply will not be funded.

In other areas, such as recycling, West Sussex has made great innovations. It has committed £1 billion in total over the next 25 years for a state-of-the-art biological digester plant that will produce compost and dispose of our waste in a very environmentally friendly way. That will all be funded with no additional Government support. We are doing good things in our councils, but I am afraid that is despite rather than because of Government funding.

We welcome the area cost adjustment review that is under way. The most frustrating aspect of the ACA is that we are denied access to the data necessary to check and review the Government’s own calculations. There is too much smoke and mirrors. We need greater transparency in the way that local government is financed and we need to support, rather than undermine, the great innovations introduced by many of our local authorities in quite difficult positions, particularly in Worthing, Adur and West Sussex.

6.16 pm

John Healey: With the leave of the House, I want to respond to some of the points made in the debate. I had not quite expected to be called to speak just at that moment, Mr. Deputy Speaker, but I am grateful to you for calling me. Let me pick up where the hon. Member for East Worthing and Shoreham (Tim Loughton) left off and say that I look forward to any further information that he chooses to send me.

May I also pick up on the point of order made by the hon. Members for Cotswold (Mr. Clifton-Brown) and for Forest of Dean (Mr. Harper)? You pointed a finger in my general direction at that juncture, quite understandably and reasonably, Mr. Deputy Speaker. I am sorry that neither of the hon. Gentlemen is in the House to hear the brief update that I can give. They expressed concern about salt supplies in Gloucestershire. The Government, through the Government office resilience teams, are monitoring the situation very carefully, with the prospect of bad winter weather later in the week in some areas of the country. The Local Government Association is working very closely with us and is brokering an arrangement to ensure that the stocks of salt and grit in different areas can be best used and can be moved when required to the areas where the priorities are most pressing. That mutual aid arrangement involves not just local authorities and local highways authorities but the Highways Agency, which carries stocks of grit and salt. Such arrangements are now relatively common and relatively well proven to deal with a range of problems. Assistance from local government and other agencies, where necessary, is provided to those areas where the problems are greatest.

Such arrangements have worked well in dealing with other problems in the past. We are keeping a close eye on how the salt and grit supplies last, but at this stage I
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have confidence in the arrangements that local government, working with the highways authorities and Highways Agency, can put in place.

Robert Neill: I am grateful to the Minister for giving way. I am sure that all hon. Members will welcome that information and be grateful to him and his officials for taking the trouble to supply it. Have the highway authorities, the Local Government Association or his Department made any assessment of the total quantity of salt available in the country? What arrangements will be made for rural areas, where the danger is that roads may become impassable before the salt can be shipped in?

John Healey: I do not have an audit of salt and grit stocks across the country, and I am not sure that one has been completed. The levels being held will depend on the preparations that local authorities have made, and on the amounts that they have deemed necessary to put on the roads in recent days. The Highways Agency has sufficient stocks that it has been able to make at least a day’s worth available to local highway authorities. That is a valuable contribution to the arrangements that the LGA is helping to broker to ensure that salt and grit are where we expect the greatest pressure to be, or where the priorities seem most pressing. I hope that helps the House.

I turn now to the substance of the debate, beginning with the hon. Member for Bromley and Chislehurst. He said that things had changed since the start of the three-year settlement, and it is certainly true that his party’s promises about local government have changed. [ Interruption. ] We are talking about funding for local government, and what has changed is that a Conservative Government would now make the limit for local government a rise of 1 per cent. in real terms above inflation. That compares with the 2.8 per cent. rise in real terms for the core grant that we are putting in place for next year.

Moreover, if a Conservative Government were elected, the change that I have described would be introduced—and felt by local government—not in some distant future but after only eight weeks. Some £240 million would be taken out of central Government’s core grant to local government. It is really not good enough for the hon. Member for Bromley and Chislehurst to suggest that somehow that could be dealt with through efficiency savings. They cannot be made in such a short space of time, so the Conservative plan can mean only one thing—that the services that people need would be cut.

In many ways, this is a case of back to the future—

Mr. Vaizey: Oh, come on!

John Healey: There is a bit of chuntering on the Opposition Benches, and I am not surprised, as Conservative Members do not like to be reminded that central Government funding for local government in each of the four years up to 1997 did not rise by an amount above the level of inflation, as it has done since 1997. Nor did that funding rise in line with inflation: instead, it fell by 7 per cent. compared with inflation in those four years—a point of which my hon. Friend the Member for Wigan (Mr. Turner) quite rightly reminded the House.

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The hon. Member for Bromley and Chislehurst was challenged by the hon. Member for Falmouth and Camborne (Julia Goldsworthy) about his policies on council tax. I understand why he shifted uncomfortably and chuntered rather vaguely for a while, as the shadow Chancellor is conning the public with his announcements and suggestions about a council tax freeze. For example, he said to the Conservative party conference:

but that was a con, as not all council tax payers’ bills would be frozen, only those in the areas taking part in the scheme. Moreover, how would the freeze be paid for? The Conservative leader has said that the money would be taken from central Government advertising budgets, but he has suggested that those same budgets would pay for other policies.

Mr. Stewart Jackson (Peterborough) (Con): Such as?

John Healey: I am thinking of the proposed changes to the tax on savings, for example.

Mr. Vaizey: One of the Government’s difficulties is that they spend so much time reading Conservative proposals that they never have time to do anything themselves. Does the Minister agree that the Institute of Fiscal Studies has confirmed that the Government are cutting spending by £35 billion? Can he name a single Labour council that has ever cut council tax for its council tax payers?

John Healey: When I spoke earlier, I named three Labour councils that are keeping council tax under control. Hackney, Greenwich and Newham are set to freeze council tax next year. One of those, Hackney, is to freeze council tax for a fourth successive year at a time when it is improving services, not cutting them; too often, cuts are Conservative councils’ method of keeping council tax pressures under control.

Robert Neill: Perhaps the right hon. Gentleman would like to contrast the amount of grant received by those three local authorities with the average grant for Greater London authorities of all complexions. Secondly, will he confirm that regardless of whether something has changed since the last settlement, something has changed for him in the past three hours since he said, “Low tax does not have to mean service cuts”?

John Healey: Low tax does not need to mean service cuts. It does not mean it in Hackney, Newham or Greenwich. The hon. Gentleman asked about the funding formula for those three councils; it is precisely the same funding formula that is applied to other London councils, and to all councils across the country.

I welcome the hon. Member for Wantage (Mr. Vaizey) to this debate on local government. It is good to see him here. He was right to pay tribute to our council leaders. Many councils across the country are well led, and it is important that we make that point, irrespective of party. He described their passion for their areas, and he is quite right. We see in the best of local government a commitment to the very best in public service. I am just disappointed that his contribution to the debate went downhill after that.

I had not heard the hon. Member for Henley (John Howell) speak in this House before. I genuinely welcome
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his experience in local government. I welcome the interest that he and Members of all parties take in the subject and in our debates. I hope that his clear and genuine localist commitment does not disappear during the time that he looks forward to spending in this House. Like the hon. Member for Wantage, I am grateful to the hon. Member for Henley for his exposition of what a corporate charter mark is. It was instructive to Labour Members, as well as to Conservative Members.

The hon. Member for Henley talked about the settlement figures in Oxfordshire and took me to task on the figures for local government generally. The figures speak for themselves when it comes to investment and increased funding from central Government to local government. The distribution of the funding reflects the relative wealth of an area, and its ability to raise revenue locally in light of its council tax base. It also reflects the relative need and deprivation of areas. He complains that Oxfordshire is a floor authority that had a 2 per cent. rise last year, a 1.75 per cent. rise this year and a 1.5 per cent. rise next year, and then complains about the floor. I have to say to him that those rises are a result of the application of a formula that takes into account the relative wealth and needs of an area. Without the floor, which we introduced several years ago, Oxfordshire would be £9 million worse off this year, so I am surprised that he does not welcome, rather than criticise, the floor.

John Howell rose—

John Healey: My hon. Friend the Member for Wigan welcomed the three-year settlement—

Mr. Vaizey: Give way!

John Healey: No, the hon. Member for Henley has had his speech.

I now turn to the contribution of my hon. Friend the Member for Wigan. My hon. Friend was right to say what a significant reform to local government policy the three-year settlement is. Like the hon. Member for Henley, he speaks with great authority about local government; I believe that he served not just as a councillor, but as chair of a finance committee—

Mr. Neil Turner: I was chair of the direct works committee and the best value committee.

John Healey: My hon. Friend was a senior councillor on Wigan council. He made wide-ranging comments about primary care trust funding. He made strong arguments for the economic value of council activity and council investment in housing. I listened with care and interest to his views on the future reform of council tax.

I come to the speech of the hon. Member for North-East Bedfordshire (Alistair Burt). Let me start by reassuring him that I am keeping a close eye on the preparations for 1 April and the new unitary authorities in Bedfordshire. Like him, I want the change to be successful and in the interests of all Bedfordshire residents. If he has a particular concern about the plans for schools, I will happily discuss it with him later, as he asked me to.

The hon. Gentleman was right to remind us that he welcomed the three-year settlement from the Opposition Dispatch Box when I first announced it. He went on to argue that the settlement should be set aside because of the economic downturn, rather than the period of economic
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stability that we have had in the recent decade. I was curious about that, because it is not what local government are saying to us. The association that represents his county council, for instance, the Society of County Council Treasurers and the County Councils Network, said that it

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