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Mr. Byers: The right hon. Gentleman obviously has not had time to read the details of the settlement; otherwise, his comments would have been more gracious. North Yorkshire, which is hardly an urban heartland, will receive an increase in grant of 6.3 per cent. I do not know whether he wants to give some of that back; if so, I am sure that there would be plenty of volunteers who have not got 6.3 per cent.

The right hon. Gentleman should recognise that it is a good settlement for North Yorkshire and his constituents. He should acknowledge that teachers and those who deal with the vulnerable in North Yorkshire have received a good settlement today. They will realise that one of their Members of Parliament has failed to recognise that.

Mr. Bill O'Brien (Normanton): I thank my right hon. Friend for the statement, which announced a generous settlement compared with statements by Tory Ministers in the past. The assistance to education and social services is welcome. A lot has been done, but there is still a lot to do.

Will my right hon. Friend consider the third block of grant, which is used for street lighting, street repairs, footpaths and parks? He should tackle those matters so that we can improve street lighting and replace old street light columns. We must spend some money on those additional services.

I thank my right hon. Friend for his assistance to the special interest group of municipal authorities—SIGOMA—and for the welcome that we received when we requested meetings with him. We have taken steps in the right direction, but I ask my right hon. Friend to consider the third block.

Mr. Byers: I hope that my hon. Friend and his authority, Wakefield, will welcome the fact that today's settlement means an increase for it of some £8.8 million, which will make a genuine difference. He is right to point out the increasing political importance of quality-of-life issues, such as street lighting, the condition of streets and abandoned vehicles. The size of today's settlement will perhaps allow local authorities to commit more resources to those important matters, which mean a lot to them and the communities they represent.

My hon. Friend has been a great champion of SIGOMA. As he knows, we have considered its position carefully. Last year, it received an average increase of only 3.5 per cent.; this year, it will get an average increase of 4.46 per cent., which will make a genuine difference

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to authorities that for too long have been unjustly treated by the unfair funding formula. The changes that we have introduced this year mean that they will get a good settlement and be able to make a real difference to their communities.

Sir Michael Spicer (West Worcestershire): When will the Secretary of State give us the details of the new formula? Does not he realise that vagueness about them does no good?

Mr. Byers: The details will be worked through. I shall try to find consensus about the way forward for funding local government. Worcestershire is a good example of an authority that has suffered from an unfair funding regime for too long. Most of us would agree about that.

I should like to introduce a local government settlement system that will last for decades, whatever political party is in power. The current formula is not right and does not work well; consequently, people suffer. We shall begin the process when the settlement is out of the way. I must consult on this settlement; after that, we shall begin to review and work on a method of doing away with standard spending assessments in order to allocate funds on a proper needs basis.

I am more than happy to talk to people from Worcestershire about how we achieve that. We shall begin the process next spring. When the hon. Member for West Worcestershire (Sir M. Spicer) has had a chance to consider the matter, he will realise that Worcestershire has a good settlement this year. We are not going ahead with scaling back; that will also benefit Worcestershire because it will keep all the money that it gets from the settlement that we have announced this afternoon.

Mr. Peter Kilfoyle (Liverpool, Walton): I welcome the extra money for Liverpool. My right hon. Friend is in danger of becoming the council tax payer's friend, to add to his growing reputation as the rail traveller's friend.

Does the settlement take into account the inefficiencies of authorities such as the Liberal Democrat council in Liverpool? It overspent £529,000 on central services, which cater mainly for officers. They made up the money by taking £529,000 from services that affect my constituents. That has led to 31 redundancies in my constituency alone in the weeks before Christmas for people who work in the parks and cemeteries. Is that the sort of council that should be rewarded as generously as my right hon. Friend has done today?

Mr. Byers: The allocation is for the people of Liverpool, and it reflects the strong case that was put by the Members of Parliament for the Liverpool constituencies. That has been reflected in today's announcement. It is important to see the additional funding for local authorities not as funding on its own but as part of the drive forward to modernisation and reform that we all want. I understand my hon. Friend's anger about the way in which his constituents have been treated by the Liberal Democrat-controlled council in Liverpool. There is never a good time for anyone to lose their job, but the weeks before Christmas must be the worst time of all.

Mr. A. J. Beith (Berwick-upon-Tweed): Taxis.

Mr. Byers: I have to say to the right hon. Gentleman that some people in this House, such as my hon. Friend,

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fought and won political battles against that sort of conduct, so we will take no lessons from Liberal Democrats about policies. Talking about works of fiction, as we were in relation to Harry Potter, a "Focus" leaflet is a good work of fiction for anyone who comes across one.

We have provided the floor—the minimum level—for Liverpool, so it will receive an extra £8 million that it would not have received if we had just applied the funding formula. I hope that money will be used. It is not for the Liberal Democrat council to use on a whim; it is provided to meet the needs of my hon. Friend's constituents.

Mr. Henry Bellingham (North-West Norfolk): Will the Secretary of State help me, because I am slightly perplexed? He mentioned that, over the past five years, £11.4 billion extra had been put into the rate support grant. Will he tell me why my local Labour-controlled council in west Norfolk has, over the last five years, consistently put up the council tax by far more than the rate of inflation? On the basis of today's figures, will he give an assurance that King's Lynn and West Norfolk borough council will not have to put up its council tax by more than the rate of inflation? The right hon. Gentleman was quite complimentary about shire counties. Will he confirm that they will be kept, in future?

Mr. Byers: King's Lynn and West Norfolk will get a grant increase above the rate of inflation through the provisions that we have introduced today. Norfolk county council will get a grant increase of 6.2 per cent.—a generous settlement that will be welcomed by people in Norfolk. It will get even more, I regret to say, than Derbyshire, which shows the even-handedness of our approach to this process. We must ensure that people keep focused on the need to provide quality public services.

I go back to the message that we can provide the funding, but that is just one part of the equation. We all recognise that, in local authority services and elsewhere in public services, just leaving things as they are—or even just putting more money in—will not be enough. Funding must drive change, which must drive reform and modernisation. That must be our key message to local government and other public services.

Ms Karen Buck (Regent's Park and Kensington, North): Is my right hon. Friend aware that this settlement will be received with considerable relief by the London boroughs? They have been struggling with cost pressures, which have led to crippling recruitment and retention problems, with rapidly rising population numbers and with three quarters of the nation's homelessness total?

Will my right hon. Friend provide information on two further aspects of the settlement? First, has he succeeded in achieving the end of the council tax benefit subsidy limitations? Secondly, will he assist us further with the cost of temporary accommodation for Britain's homeless families by asking his right hon. Friend the Secretary of State for Work and Pensions to revise the thresholds and caps for housing benefit, to allow London authorities to address the homelessness crisis and to receive full funding to enable them to do so?

Mr. Byers: The Government are still discussing the council tax benefit subsidy limitation, about which I hope to be more specific when we publish the White Paper.

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My hon. Friend is aware that the Secretary of State for Work and Pensions is already considering housing benefit, on which he will no doubt be able to make a statement at some future time.

My hon. Friend mentions the pressures on London local authorities, of which we are acutely aware. When people have the chance to read the settlement, they will see that, once again, London has a good deal. They will recognise that we have reflected on the pressures and that we have been able to respond positively. I hope that the capital and its local authorities acknowledge that we have ensured that, compared with what happened in the early 1990s, this settlement allows them to meet the real pressures that London authorities experience.

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