Local Government (Finance) Special Grant Report (No. 93) (HC 654) on the Neighbourhood Renewal Fund 2002-03

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Chris Ruane: Is the hon. Gentleman aware that Doncaster is in south Yorkshire, which is one of four areas—the others being Cornwall, west Wales and the valleys and Liverpool—that are objective 1 areas? Those areas are the poorest not simply in England or the United Kingdom but in the whole of Europe; they are comparable to southern Greece, southern Italy and southern Spain.

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Mr. Moss: I am not questioning the fact that there are deprived wards in Doncaster or Rotherham or anywhere else in south Yorkshire. Of course there are—just as there are deprived wards in my constituency, North-East Cambridgeshire. I am sure that there are deprived wards in the constituencies of my hon. Friends. The Minister dealt with that issue well and clearly and we understand that point. I am simply asking how the Department arrived at a figure for Doncaster that is similar to that for Leeds, Leicester and Nottingham.

Ms Keeble: I shall not deal with all the areas that the hon. Gentleman mentioned, but I shall give some idea of the scale that we work on with the figures. In Doncaster, some 145,000 people live in the worst 10 per cent. of wards; in Lambeth, the comparative figure is 42,000. That deals with the issue about people's perception of disadvantage, as opposed to the realities shown by the indices. It is important to stick with figures and facts and not with people's prejudices and perceptions.

Mr. Moss: As a council tax payer in Lambeth, I suppose that I should have declared an interest. There are no misconceptions or misperceptions; it is well known that some wards in Lambeth have a high level of deprivation and no one would argue about that. I am simply puzzled that an area the size of Lambeth, with a population of its size, receives a far lower grant than—[Interruption.]

The Chairman: Order. I must ask the Committee to keep the noise levels down. If members of the Committee have something to say, the floor is open to them.

Mr. Moss: I turn now to annex B, paragraph 4, which states:

    ''The NRF is a targeted grant.''—

we have already covered that point—

    ''It is both acceptable, and strongly desirable where service quality is at risk or requires improvement, that NRF funding should be devoted to mainstream services, provided that the funding benefits the most deprived areas.''

I do not take issue with that, but we are simply discussing another way in which to distribute grants and resources to local authorities to meet basic services. I thought that the SSA already performed that function. The Minister said that the SSA was not under discussion today, but it relates to how services are provided by local authorities. The services that we are discussing are not special services, but basic services for deprived areas, such as education, social services and so on. Why have the Government decided to use targets and targeted funding, which must have deprived other local authorities of SSA funding for the basics?

Ms Keeble indicated dissent.

Mr. Moss: The Minister is shaking her head, but the Government have had five years to consider the SSA. When they took office, they said that it was not right. In the week before the general election, the Prime Minister spoke in Cambridge, implying that the area

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cost adjustment was wrong and unfair and that his Government would deal with it in the short term. Five years later, we are still waiting for the reorganisation and redistribution under the SSA. The Government have promised it yet again, but the signs are that it is a mammoth task and they will not deliver by their target date in the autumn. However, we wish them luck.

Resources will go to certain local authorities to help them provide basic services. Why cannot that be done through the SSA, which includes factors for deprivation in the funding formula calculation? Why has the Government gone beyond that and redistributed grant money from some local authorities and directed it primarily to those that it thinks are in greatest need? It is already agreed that specific grants are 15 per cent. too high, and the Government are going to rein them back in. That is an important point for those local authorities that are struggling to make ends meet. They have more responsibilities and less money to achieve the objectives. Also, there are penalties for not meeting certain targets and objectives.

Councils feel that they are being squeezed. The only way open to them to meet the requirements of the Government is to put up council tax. That is why shire county council taxes are going up by 10 per cent. plus, even in Labour areas, as we know from the letter. Many district councils have imposed an increase of well above 10 per cent, rising to 15 per cent. and beyond in some cases. The Government promise more money for local authorities, but when we consider where the money has gone, we find that the majority of councils are suffering and are having to put up council tax by huge amounts. That is yet another stealth tax introduced by the Government.

Annex C, to which the Minister briefly alluded, mentions the monitoring of local authorities in receipt of the special grant. I am not sure why that is included in the annex and why she bothered to mention it in her speech. Local authorities are to report by September, which is six months into the next financial year. The report will be on what they did last year and what they have done and intend to do this year. The Minister said that it was a ''light touch''. I agree; it is such a light touch that it is almost worthless. Why is that provision in the annex? If things went badly wrong, the report would be too late to do anything about it. The annex later states that the Government can recoup this money, but I will believe that when I see it, as we are talking about taking money from local authorities with some of the most deprived wards in the country.

The Minister went to some length to explain that the neighbourhood renewal funds were allocated on the condition that the local authorities met their public service agreement targets. We are concerned that the PSAs may be used as a tool for further centralisation and might be a precursor to the extension of the already bloated inspectorate regime for local government. The regime costs local authorities enormous sums of money that many of them believe

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are completely wasted. We will oppose any further attempts by the Treasury to micro-manage local government in that way.

The third of the annex D PSA targets relates to crime, but it uses indices for domestic burglary rates only. The latest crime figures, which deal with the period up to 31 March 2001, show that throughout England and Wales violent crime is up by 4.3 per cent., robbery by 13 per cent. and criminal damage by 1.5 per cent. The figures also show that in the past three years violence against the person has increased by 20 per cent., robbery by 42 per cent. and all violent crime by 21 per cent. Crime detection rates have fallen to their lowest levels—just 24 per cent.—with conviction rates at 9 per cent.

Rising street crime has become all too visible, with a series of high-profile shootings, muggings and car-jackings. Comparison with the last nine months of 2000-01 shows an increase of 26 per cent. in street crime in England and Wales and 39 per cent. in London. I put it to the Minister that the narrow approach of the PSA targets illustrates how her Government's micro-management is in no way beginning to tackle some of the core problems in our deprived communities.

The target in the first paragraph of annex D is to

    ''reduce to zero the number of LEAs where fewer than x per cent. of pupils achieve the expected standards of literacy and numeracy by 2004 (x to be set in Spring 2002).''

Has the Minister concluded what x will be in the formula? If not, when can we be told that x has been set? Although the PSA targets in annex D are worth while in themselves, they are hardly challenging for many local authorities to achieve. On the crime indices, the Government have selected the wrong one given the rising crime rate figures that I cited.

A considerable amount is being targeted at 88 local authorities with severely deprived areas. We have no problem with that. We could argue about the indices used, but on balance we would accept that they are objective and that the areas are genuinely deprived and need assistance. However, it is yet another good idea thought up by the previous Department, the DETR, now the Department for Transport, Local Government and the Regions, that on the face of it sounds good but has not delivered improvements or improved services, as I showed with quotes from a range of people, including the Government.

It is the Government's responsibility to address whether they are getting effective use of the money that they are putting into such areas. Targeting in that way is taking money, or top slicing, from other councils with similar problems, albeit not on such a grand scale. If the approach is not working, when the Government undertake an assessment in September, it is important that they reassess the circumstances and amend the approach accordingly so that they get value for money in improving deprived areas.

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5.22 pm

Brian Cotter (Weston-super-Mare): First, I apologise to you, Mr. Benton, and to the Minister, as I must leave shortly to meet another Minister. I shall keep my remarks shorter than I might otherwise have done.

I welcome the scheme, which is ring-fenced to achieve its objectives. It is important that local authorities have a strong say in how delivery is achieved. After the Committee, I shall send the Minister a letter in which I shall make some general remarks and point to some of my anxieties.

One point is that the best schemes involve not only local government but local people. A good example in Weston-super-Mare is a deprived estate, Bournville, which has had a locality centre for some years. That initiative has led the way, along with somewhere in Birmingham. It is based on healthy living and deals with high unemployment and other issues. The great success has been how local people's self-esteem has been raised through such initiatives, whereby they have been able to select their own doctors and nurses, for example. I hope that the Government have taken that on board. I recommend that such initiatives be carried out elsewhere. In Weston, we have education action zones, which, similarly, involve local people. I shall make that point separately in a letter to the Minister, in which I shall also mention Bournville estate in my constituency.

I listened to what the Minister had to say, and I take heart from what is being done and planned, but there are still black spots. The constituency of Weston-super-Mare in north Somerset is seen overall to be well off, but the Bourneville estate is one of the worst areas in the country.

Bristol, which is next door, will receive £2.67 million, whereas north Somerset has nothing specific. However, we have the single regeneration budget, the enterprise action zone and other schemes. I agree with other hon. Members that it is important to pull those schemes together. It is a challenge for local government and others to have to bid for different schemes and I think that, unlike the official Opposition, the Minister agrees with me that the regional development agencies will be a step in that direction. The chairman of my local RDA told me that one of his first jobs would be to try to ensure that funding was more rationalised and that different sources of funding were brought together. I hope that we go in that direction, notwithstanding what is before us.

I would be interested to know exactly what the x is going to be as regards literacy. We need to go beneath the figures. When x is announced, I may write again to the Minister, because the area in my constituency that I have drawn to the attention of the Committee has bad literacy problems. We need to deal with black spots throughout the country. Some good targets are set out in annex D, with which I agree, for crime reduction, education and other matters, some of which I are happening in my constituency.

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Again, I apologise to you, Mr. Benton, and to the Minister for having to leave early. My hon. Friend the Member for Mid-Dorset and North Poole (Mrs. Brooke) will stay to hear the Minister's response. However, I shall also be writing to the Minister again, to make further observations.

5.27 pm

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