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24 Oct 2002 : Column 419—continued

Mr. Nick Hawkins (Surrey Heath): With reference to penalising the rural poor, penalising some areas and widening disparities, does the hon. Gentleman agree that in certain areas, especially in my county of Surrey, there will be particular problems where success is penalised? We have one of the most efficient police forces in the country and an extremely successful county council, yet under the Government's proposals, that success will be penalised further, to the advantage of inefficient Labour-run local authorities in inner cities. The Government are helping their friends in the north.

Mr. Foster: The hon. Gentleman has made the case for his constituents well. The redistribution that is taking place is a matter of great concern to many people. The Minister will say, of course, that the floors and ceilings mechanisms will provide a degree of protection, but we have still to hear from the Government how those arrangements will operate and for how long.

Many other examples exist. Gloucestershire is about 130th down the league table of funding for education, yet it looks set to lose about #8.5 million—the equivalent of #100 per pupil. It appears that, as the hon. Gentleman said, the worst-funded authorities are being set up to be the hardest hit. Those that are successful and provide high-quality services will also be penalised.

Mr. David Drew (Stroud) rose—

Mr. Foster: I hope the hon. Gentleman will accept that earlier, in less than 10 minutes, I gave five opportunities for intervention. I know that many other hon. Members want to speak, so if the hon. Gentleman will forgive me, I shall make rapid progress.

Other examples relating to the area cost adjustment show strange anomalies. Kingston, Merton and Sutton councils, for example, could not begin to figure out why they would be so badly hit by the proposals. It turns out that the Government had got their location on the map wrong and thought that they were in east London, when clearly they are not. I am delighted that, following representations, the Minister has acknowledged that there is a problem with the proposals, and I assume that he will agree to rectify them.

Mr. Edward Davey (Kingston and Surbiton): I am grateful to my hon. Friend for making that point. In a private conversation after one of his excellent seminars, the Minister assured me that he was examining the matter. Will my hon. Friend take it from me that our labour market and labour costs in the borough of Kingston, and also in Merton and Sutton, are similar to those in west London? The simplest solution would be to place those three boroughs with the grouping in west London.

Mr. Foster: My hon. Friend has made his point admirably, so to save time I shall delete from my speech the remarks that I intended to make in relation to his

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local authority, and turn to my own to demonstrating how the Government seem to be giving with one hand and taking away with the other.

The Avon and Somerset police authority calculates that under the current proposals it will lose about #5.5 million, or 180 police officers. That contrasts oddly with the additional money—almost exactly the same amount—that it has been given through the crimefighting fund.

Other problems with the current formula are not being addressed. Deprivation, for instance, has not been dealt with as thoroughly as it should have been. As many hon. Members will know, the way in which the Government do their calculations means that pockets of deprivation in particular areas are not covered under the present mechanism, and will not be covered under these proposals.

Councils containing a mixed rural and urban community will often lose out as well. Kent county council is a good example. On the list of the 148 most deprived authorities, it is ranked 99th. It stands to lose between #10 million and #100 million, while other much less deprived authorities will gain.

Other anomalies are not being addressed. Of course we all welcome educational support for children from ethnic minorities, but according to the formula, it will be based on the total number of pupils whose first language is not English. In practice, the total number matters less than the number of languages spoken.

Many organisations and individual councils have expressed concern, including the Rural Services Partnership, the Most Sparsely Populated Councils Group and the f40 group, comprising the lowest-funded local education authorities. That last group is particularly concerned, and urges that the element of funding per pupil be greatly increased. I agree.

The real problem is that we are discussing equalisation arrangements relating to, on average, 80 per cent. of the money that councils will spend. Surely we all acknowledge that if the amount provided by Government were a smaller proportion, we would be less worried. If we want to reconnect the British people with their councils, and make them more interested and more involved in what their councils do, we must make them genuinely believe that their local councils are capable of meeting local needs. That surely means that we should increase the amount of councils' spending money that is raised locally, with a corresponding reduction in local income tax.

Dr. Evan Harris (Oxford, West and Abingdon): Will my hon. Friend give way?

Mr. Foster: No, I want to make progress and finish my speech as quickly as possible.

The review has not even begun to address a number of other issues. One set of anomalies looks set to be replaced by another, and key issues such as local accountability, making the funding of services more transparent and making local taxation more progressive have been omitted from the agenda. The Government's proposals will lead to huge shifts of resources from rural to surburban areas. They are bound to raise the suspicion of pork-barrel politics.

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There is certainly a lack of confidence in the options for change with which we are being presented. They are patch-and-mend proposals. Surely, even at this late stage, some modest changes could be made immediately. Surely the Minister could put off by one year the full-blown implementation of whatever proposals will follow.

The Minister knows of my high regard for the former Secretary of State for Education and Skills, who resigned last night. In terms of personal and political honesty, she knocks spots off many of us. Only a week ago, she told the House clearly that she accepted what Mike Tomlinson had said about the A-level fiasco, namely that there should have been a one-year delay in implementation. Had there been such a delay, many of the problems need not have occurred. She went on to say that one of the reasons why she had not delayed implementation for a year was that she received no representations from any quarter asking her to do so. If things go wrong in a year's time, as I predict they will, I hope that the Minister will acknowledge that at least we on the Liberal Democrat Benches gave him the opportunity to take action and warned him what would happen. One year's delay on the majority of the proposals would make a great deal of sense.

1.20 pm

Andrew Bennett (Denton and Reddish): It is said that to have loved and lost is better than never to have loved at all. I am not sure whether the Minister will feel that having attempted to reform local government finance—and, I am afraid, having failed to do so—is better than not having tried at all. The cynic in me says that what he has done so far is unite almost the whole House in anxiety and worry about the proposals, so that they will be a little less bad than we expected and we will be relieved. However, I hope that he will consider the fundamental problem. I pay tribute to him for the huge effort that he has put into the seminars, the consultation and everything else. That is great, but I think that he is looking at the wrong position. He has considered the distribution of the grant, but I think that he must deal much more fundamentally with local government finance.

The trouble is that local councils have been starved of resources. It is that which starts the problem and explains why local government is now held in disrepute. Social workers are now rationers rather than helpers. There are problems of boredom among young people in almost all our constituencies, but the youth service is terribly underfunded. On recycling, we have the poorest record in Europe, again because of underfunding. Local authority spending is also pretty bad on roads, highways and rights of way. Too many parks are now icons of neglect rather than of civic pride. That has happened because almost all local government finance is now obtained from a grant and there is no opportunity to raise the money locally. It is that inability to raise money locally that people feel to be unfair.

I invite the Minister to come to the Bull's Head in my constituency. It is located just inside Stockport, but Tameside is visible from the front door and Manchester from the side door. If he could visit the Bull's Head and explain to my constituents and those of my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) how the system is now fair, I would

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think that he was wonderful. I am afraid, however, that he will find it very difficult to do so. When he considers the different amounts that people sitting next to each other pay—most in the area will come from band A properties—and sees the disparity between Stockport, Manchester and Tameside, he will understand why there is a feeling that things are not fair. The differences between those three authorities are not huge, but when local people find that people in Wandsworth pay half the amount that they are paying, they begin to think that something is going fundamentally wrong.

People then ask how much is being spent. They find that there are significant differences between the three local schools, which are situated within a mile of each other, but are located in each of the different authority areas. At primary level, #2,206 per pupil is spent in Stockport, #2,360 in Tameside and #2,623 in Manchester. That puzzles people, but when they find that a lot more is spent on schools in Wandsworth, they think that it is fundamentally unfair. At secondary level, the difference between pupils in Manchester and Stockport is more than #800 per pupil. Even worse, if pupils come from Manchester to Stockport for their education, they get mugged at the border because they do not bring that full #800 with them to a Stockport school, but will get only the expenditure in that school. I hope that that little anomaly can be altered.

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