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24 Oct 2002 : Column 448—continued

Mr. Nigel Waterson (Eastbourne): It is always a great pleasure to follow the hon. Member for West Ham (Mr. Banks). Who says the music hall is dead? I thought that I had blundered into some Labour party mayoral hustings.

Mr. Banks: You have.

Mr. Waterson: The hon. Gentleman confirms that. He must be crossing his fingers and hoping against hope that he does not have a monkey running against him.

In Eastbourne, my constituents are facing a council tax calamity of mammoth proportions. In fairness, though, it is not all the Government's fault; the Liberal Democrats have made their contribution. In record time, even by their standards, since taking control of the borough council earlier this year they have produced a black hole in the council's finances and are speaking of an increase of up to 30 per cent. in council tax under their regime. Of course, we must allow for a certain amount of spin in that figure. I assume that they will end up with a figure rather less than 30 per cent. in the coming year and then claim some sort of success.

I shall deal with the likely effect, beyond those effects on my council tax payers, of the Government's proposals. It is impossible to escape the conclusion that the Deputy Prime Minister has got it in for taxpayers in the south-east and, as was said earlier, is trying to give money to his friends in the north. In the immortal words of Kenneth Williams, XInfamy, infamy, they've all got it in for me!" That is the attitude of many councils in the south-east.

We have already had the formula fiddled once, so it no longer recognises sufficiently the number of older people living in East Sussex and in my constituency. Despite that, the new Conservative-controlled county council has made enormous strides in bringing the budget under control after the chaos of the Liberal Democrat years, and has finally scrapped the 800-people waiting list for social services care under the previous regime. Potentially, East Sussex is the worst hit of all county councils, yet it has the third lowest gross domestic product per head among all areas in the UK. It is not full of rich toffs of the sort that the hon. Member for West Ham mentioned in the London context. On any of the proposals, East Sussex will lose between #4 million and #44 million in a full year. In real terms, that equates to some 900 teachers, or it means social services being unable to give care to over 2,000 vulnerable elderly people. That would dwarf the problems that the current county council inherited from the Liberal Democrats when it took control.

As we have heard from speaker after speaker this afternoon, the net result of all this is a massive shift in resources from the south, particularly the south-east, to the north and the midlands. I have a copy of a letter to the Secretary of State for Health from Councillor Keith Glazier.

Mr. Andy Reed (Loughborough) rose—

Mr. Waterson: I am not giving way, as time is short, as the hon. Gentleman knows.

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Councillor Keith Glazier, the lead cabinet member for social services, refers to the promise of 6 per cent. real growth above inflation over the next three years for social services, but even taking the mid-point of all the options set out by the Government, he states:

The changes, however, would affect spending throughout the county. I have also had a letter from the chief constable, Ken Jones, who says that according to the calculations Sussex police face

The force is trying to reach its

Incidentally, that is more or less the figure that the Government inherited in 1997. The chief constable goes on to say

The area cost adjustment has been discussed. East Sussex is relatively close to London, and costs are high compared with those in other parts of the country; so some form of adjustment is obviously necessary. Many Members probably do not know, however, that East Sussex is one of the poorest counties. I have already given the GDP figures, but there are substantial areas of deprivation in my constituency and in the county as a whole. The effect of all the existing pressures—increasing school rolls, increasing numbers of old people and, in some areas, increasing deprivation—on county council expenditure is considerable.

There is, however, a double whammy. We have the highest proportion of people over 85 in the country. That puts enormous pressure on social services, as such people are likely to need residential or other care. Moreover, they are the people who will be asked to pay the mammoth council tax increases. Let us leave aside for a moment the incompetence of the Liberal Democrats in Eastbourne itself, and consider the enormous increases—dwarfing even those increases—that the Government's proposals are likely to bring about. The pressure on social services will be matched by extra pressure on the budgets of vulnerable people who do not have large disposable incomes.

I urge the Minister to address the concerns of my county council, and of many people throughout the county and certainly throughout my constituency, about the disastrous effects that the proposals are likely to have on my council tax payers, and the even more disastrous effects that they are likely to have on the services provided for my constituents.

3.3 pm

Mrs. Anne Campbell (Cambridge): I have considerable sympathy for my right hon. Friend the Minister for Local Government and the Regions, who has had to disentangle the mess left by the Tories when the poll tax was axed 12 years ago. Having said that, I must add that I wish the review could have been completed earlier, although I am very glad that it has been completed now. I was appalled to hear the hon.

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Member for Bath (Mr. Foster) ask for a further year's delay, which in my constituency, and probably in all Cambridgeshire, would almost certainly ensure that the Liberal Democrats remained out of office for many years. It would be extremely unpopular.

The hon. Member for South Cambridgeshire (Mr. Lansley) calculated that Cambridgeshire had lost #100 million under the present Government. On the basis of his calculation, during the years in which the Conservatives failed to reform their system the county would have lost #140 million. If I were the hon. Gentleman, I would keep quiet.

Mr. Lansley: Will the hon. Lady give way?

Mrs. Campbell: No. I have only eight minutes, and the hon. Gentleman has already had an opportunity to speak.

As my hon. Friend the Member for Stafford (Mr. Kidney) pointed out, one of the problems created by the current system is the creation of huge disparities between authorities. That is bound to make people feel that the system is unfair. As the hon. Member for South Cambridgeshire said, we in Cambridgeshire tend to compare ourselves with those in Hertfordshire, with whom we share a boundary. Education funding differences amounting to hundreds of pounds exist between pupils. In Cambridgeshire the funding for each secondary school pupil is #3,225, while in Hertfordshire it is #3,503. In a school with 1,000 pupils, the difference in funding between the two counties is #278,000. Ninety per cent. of that would be enough for six or more teachers to be employed over and above the allocation for a similar school in Cambridgeshire. Hertfordshire has always had a much more generous settlement under the current system, which is difficult—indeed, nigh-on impossible—to justify to parents, teachers and governors in my constituency.

I do not underestimate the difficult task faced by my right hon. and hon. Friends. During a debate on 15 October, I asked whether my right hon. Friend the Minister for Local Government and the Regions considered reducing the disparities between authorities to be one of his criteria for success. He implied that he did not. I urge Ministers to think again. There will be continuing flak if those disparities are not reduced, although it may mean some reshuffling of cards. They are perceived to be extremely unfair, and I think that reducing them should be a priority.

I want to discuss two specific aspects of the proposals, the area cost adjustment and resource equalisation. I shall begin with the area cost adjustment, as I find it easier to understand. Cambridgeshire has argued long and hard that it should be able to benefit, in the grant distribution system, from allowances for higher costs, including wage rates, property and bought-in services. I was pleased to note that the review supports the county council's argument that counties outside the south-east also face high operating costs. It is interesting to compare house prices, for instance. I have a list from the Land Registry of the average prices involved in residential property sales between April and June this year. The average price in Cambridgeshire was #139,678, whereas the averages in Hertfordshire and Bedfordshire were #131,263 and #136,541—both

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lower than the Cambridgeshire average. Unlike Cambridgeshire, Hertfordshire and Bedfordshire receive area cost adjustments. My hon. Friend the Member for Wigan (Mr. Turner) said that house prices should not be a factor. I must tell him that they severely affect recruitment of teachers and other low-paid workers who cannot afford to buy houses in my constituency.

Data taken from the new earnings survey of full-time employees on adult rates in 2001 support the evidence that Cambridgeshire should benefit from the higher costs allowance. Average gross weekly earnings in Cambridgeshire were #453.40 in Cambridgeshire, higher than those in Essex, Oxfordshire and West Sussex. Cambridgeshire and Cheshire are the only counties in the top 10 in relation to average earnings not to receive the area cost adjustment.

The analysis in the consultation paper suggests that Cambridgeshire has been underfunded relative to other counties for the past 11 years, which has had a major impact on services. Cambridgeshire is spending #80 million over standard spending assessment on social services, but there are still significant pressures, especially on the provision of care for elderly people. That is largely because costs are on a par with those of authorities surrounding London. It is more expensive to provide home care and nursing or residential accommodation in Cambridgeshire than in neighbouring authorities, yet they receive significantly more cash per potential client than Cambridgeshire does. Hertfordshire, for instance, receives #2,360 more than Cambridgeshire for every elderly person who might need support. I do not see how that can possibly be fair. The criteria for deciding which authorities receive area cost adjustment should be based on evidence of relative input costs and not on an authority's geographical position in relation to London.

I want also to express my support for education option 2, which is the best approach. It recognises that deprivation includes not only people on income support, but children in families on low incomes who receive the working families tax credit. I believe that both groups are likely to have similar needs, so working families tax credit recipients should not be excluded from the calculation.

I am also attracted by option 5, which was so well expounded by my hon. Friend the Member for Stafford. It was proposed by the f40 group, which comprises the 40 lowest-funded education authorities, and I understand that it would use the same basis for calculating top-ups as option 2, but make the basic allowance per pupil greater and the top-up smaller. I say to the Minister that the great advantage of that option is that it would reduce disparities and therefore the perceived unfairness, so I hope that he will seriously consider it.

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