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Mr. John Hayes (South Holland and The Deepings): Untypically for a member of his party, the hon. Gentleman is making a persuasive argument. However, will he also point out that the local authorities that suffer from the problems that he has described are also often burdened with additional regulations and certainly with additional demands and statutory requirements? On top of the problems that he has described with the formula funding, that creates real tensions for personal social

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services throughout the country, which, he may be interested to know, were £50 million worse off in the first year of this Government.

Mr. Sanders: That is a helpful, and untypically friendly, contribution from a Conservative Member, and I thank the hon. Gentleman for it. I was going to mention regulation.

The numbers and costs involved in children's social services in particular are beyond local authority control. The Government have to accept that. If a social worker says that a child has to go into care, that cannot be covered by a target. In smaller authorities, especially some of the small unitary authorities, it takes only a handful, or even less, of children going into full-time residential care for them to have a massive social services underspend. Something needs to be done to address that problem within smaller authorities.

Correspondence between south-west social services local authorities and the Government has highlighted many of the problems that authorities face, in particular the huge discrepancy between children's SSA and actual spend; the emerging and rapidly increasing disparity between SSA and spend on younger adults, especially those with learning disabilities; the cross-funding of those essential services by holding down spending on older people's services, with consequent destabilisation of the residential and nursing care markets; and the inevitable negative consequences on health care strategies to provide more care within the community. My constituency has a well above average proportion of residential care homes, so I am well aware of their problems. They are closing almost by the week because the fees do not enable them to carry on trading.

Those problems have been pointed out by the corporate director of social services for Somerset, writing on behalf of another 14 social services authorities, including Torbay and Bath and North-East Somerset, which is represented by my hon. Friend the Member for Bath (Mr. Foster). The corporate director goes on to say:

Hon. Members have reflected that chronic funding problem, but it will get worse. There is a demographic time bomb because older people are living longer. The Government might say that the answer is to cull old people, but I do not think that they would—no party could come to power on that basis. The problem is, however, that they have to do something about the problem. We welcome the fact that older people are living longer, but we have to recognise that that takes more money from the public purse.

Mr. Burstow: My hon. Friend makes an important point about the dilemma that local authorities face when it comes to funding services for older people. Does he find it alarming that councils, because of their financial difficulties, face the prospect of having to allow someone in a care home to die before they can fund a new place?

Mr. Sanders: That is a tragedy and all too common. Indeed, it has even cropped up in my area.

In addition to the demographic time bomb, there is a pensions time bomb. Local authority pensions, like hon. Members' pensions, are an end-of-life deal in which

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people receive a proportion of final salary. That has been underfunded over the years by central Government. They have not recognised the additional costs that have to be met for pensions, which come out of local authority budgets.

The Government impose costs themselves. Best value has been mentioned. The inspection regulation regime is necessary to provide a common standard of service, but if a council is not recompensed for the full costs of implementing that administrative system, the money has to come out of cuts or from increases in council tax. Again, that is where the settlement does not meet actual need.

There is also the whole agenda of corporate government to consider. This year's increased settlement will be swallowed up chasing the extra costs that Government impose. It does nothing to help a council that is disadvantaged by the grant formula to catch up. Funding gaps will have to be filled by increased council tax, cuts in services, asset sales, privatisation, stock transfers, increased charges or borrowing. Councils can use a raft of measures, but most of them are negative. They are not wanted and should be unnecessary.

Most councils will increase their charges—my hon. Friend the Member for Bath has studied those at some length—way above the rate of inflation. They will bear no relationship to the retail prices index. Council tax is part of the problem, together with the formula. It hits the poorest hardest, in particular people on fixed low incomes, who tend to pensioners. Let us change the formula and have one that is based on local needs. Let us scrap the council tax altogether and have a taxation system that is based on the ability to pay—a local income tax.

The Minister is on record as saying that he wants to improve service delivery, and service delivery is the key. The settlement leaves a gaping hole in some local authority budgets. There are spending shortfalls almost across the board. We have highlighted social services, but no doubt it would be as easy to talk about the gross underfunding of transport and highways. The Minister tells local government to stand and deliver while he robs the highways budget. The Secretary of State has admitted that the funding formula is unfair. The Labour party promised five years ago that the problem would be fixed. Sadly, we are still waiting for treatment.

I conclude with a final quote from the right hon. Member for Holborn and St. Pancras. He said:

It would be nice if the Minister endorsed those comments. My question for him is the question that every council tax payer will ask: who is to blame for council tax rises and the cuts to services—Government or local councils?

8.28 pm

Mr. Chris Mole (Ipswich): I am pleased to have the opportunity to speak in the debate. I am not a great lover of tradition, which perhaps makes me ill equipped for

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service in the House, but I suppose that that makes me ready to join the ranks of the modernisers. I gather that the tradition for maiden speeches is to mention in equal parts the subject at hand, the constituency and my predecessor. Fortuitously for me, there are threads that link all of those.

This is the gateway to the only speech in one's parliamentary career in which hon. Members do not seek to make interventions. I am not afraid to take advantage of that tradition. I speak in this debate on the local government finance report as the leader, until recently, of one of two local authorities serving the needs of Ipswich; my predecessor, the late Jamie Cann was the leader of the other before he came to the House. Ipswich has a tradition of being well served by its local authorities; Ipswich borough council has won multiple charter marks and this year Suffolk county council was acknowledged by the Local Government Chronicle as council of the year.

People in my constituency recognise the contribution that their councils make to their quality of life, economic development and as community leaders. Jamie Cann, as leader of Ipswich borough council, made such a contribution throughout the 1980s. At his memorial service, the people of Ipswich feted him as a man of the people, a plain speaker and a hard-working constituency MP, and for his many achievements as leader of the council. Despite the growing restraints on council spending, Jamie found the means to develop leisure facilities for hard-working families and began much of the regeneration that has made our town a more thriving and attractive place; he still found time to save the Regent theatre and the Ipswich Witches speedway club. He will be sadly missed.

The first Labour MP for Ipswich, R. F. Jackson, was also the first Labour councillor and council leader in our town; I was the first Labour councillor to lead our county council. I am sure that R. F. Jackson would have appreciated the way in which Jamie's efforts added to the development of Ipswich, and would understand that councils must have resources to make partnerships work and deliver progress.

Perusing the maiden speeches of my predecessors, I could not detect any agreement on whether the Danes or Vikings first saw the benefit of Ipswich as a natural haven. Recent archaeology has shown that the Stoke Bridge area was an early settlement of the Angles; some local historians therefore see Gippeswic as the birthplace of modern English. It is certain, however, that following the granting of a royal charter by King John more than 800 years ago, the town developed strongly around its port. Such was the commercial prominence of the town that Edward III and the Black Prince gathered 500 ships off Ipswich. I wonder what they would make of the more than 500 boats that bob in Ipswich wet dock, another product of regeneration, with a new marina, new housing and new businesses, and more than £20 million of investment from sources as diverse as Associated British Ports and the East of England development agency's single regeneration budget.

Ipswich has moved on. My predecessors spoke of manufacturing, which is now much reduced, but the arrival of BT, my own former employer in the late 1960s and early 1970s at what is now Adastral park, has had a lasting effect on the town, which has become a primary location for the development of knowledge-based e-business. A manifestation of the growth of that sector is

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the IP-City partnership, which is successfully developing one node of the Ipswich to Cambridge hi-tech corridor. That partnership, along with the Suffolk development agency, in which local councils are major players, is driving the regional economy toward the future. If I can be permitted one glance over my shoulder, it would be to recognise that that sector needs the development of skills that would be better provided if we had a university in the town. Indeed, Members can see in the House of Commons Library a depiction of Cardinal Wolsey on his way to Westminster; he was the last civic leader to try to develop higher education facilities in Ipswich. Unfortunately, the only remaining manifestation is Wolsey's gate, which is largely held up by three reinforced steel joists.

Ipswich is blessed with local councils and councillors who are committed to their role as community leaders and to working in partnership with the private sector and other public agencies to help the town develop in a sustainable way and with due regard for the environment and social inclusion. However, I should like Ministers to note that in promoting partnership working all partners must be able to bring something to the table. Councils such as Ipswich borough and Suffolk county, which are not high spenders, want to provide community leadership in partnership, but they must be able to negotiate with resources to make those partnerships work; that is not getting significantly easier for them.

I welcome the local government finance report as something of a curate's egg. The settlement again allows for a real-terms increase in Government support; as someone who put council budgets together between 1993 and 1997, I can assure the House that it is a welcome turnaround from those dark days. We need to be realistic about the implications for council tax; all parties in the Local Government Association accept that more local spending needs to be financed locally, which has led to significant increases in council taxation over the past ten years. Not to accept that reality would be to prevent our councils from tackling challenges such as the placement of difficult young children—much of the problem stems from the Children Act 1989, which was passed under the previous Government—and the community care of the elderly, which has only recently attracted specific, but as yet not continuing or recurring, Government support.

I welcome unreservedly the increase in education standard spending, as Government estimates finally catch up with the level of spending that Suffolk county council has been making for many years. Our schools welcome the certainty that has kept them part of the LEA family—an LEA that was recently assessed by Ofsted as one of the top six in the country.

That leaves me only to introduce the fourth element of an Ipswich Member's maiden speech, for Hansard shows that it is traditional to congratulate Ipswich Town football club on its recent success. I hope that the club is in the middle of another one—at 8 o'clock, I understand, the score was one-nil. I have no difficulty in congratulating the club, which has played large in my life recently. It played Milan away on the evening of my selection as a candidate, and at home on the night of the by-election, in what turned out to be a notable double victory.

I look forward to future debate in the Chamber. In the present debate, I encourage my hon. Friends to support the Government.

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8.35 pm

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