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Local Authority Funding

Volume 555: debated on Monday 17 December 2012

We have consulted widely with the local government sector and have given close consideration to the wide variety of responses that we received. We will publish the settlement for 2013-14 shortly.

Wigan metropolitan borough has faced cuts of £108 per person, with more to come, despite high levels of deprivation and a high number of people with life-limiting illnesses. West Oxfordshire, on the other hand, has had cuts of £34 per person, despite much lower levels of deprivation and health issues. Does the Minister think that this is fair?

Putting aside the baseline from which councils start, we have to bear it in mind that metropolitan areas such as Manchester have had a city deal worth about £1.5 billion, the new homes bonus, enterprise zones and £25 million in Growing Places funds. Local authorities should look at everything they are doing. There is £60 billion of procurement across local authorities. They can look at integrated shared management services. They should be cracking down on fraud and error, which last year alone cost £200 million.

Will my hon. Friend tell the House in outline how the business rate retention scheme will offer strong financial incentives for councils to go for economic growth?

My hon. Friend is correct. The new scheme that changes local government finance from next year will give them two key advantages. First, they will have the ability to achieve growth in their income if they see economic growth. Secondly, and more importantly for their communities, they will have the opportunity and the incentive to be part of driving local economic growth and to see new businesses come in and more residents in employment.

The Minister will, I hope, know that population is a key factor affecting the total resources allocated. Can he confirm that he will use the population projections based on the 2011 census, not earlier estimates or projections?

Does the Minister accept that too many central initiatives do not reach rural areas, and that if we are to ensure that people in rural areas have access to services, we need to ensure that that is put right?

My hon. Friend is right to highlight the fact that rural areas—I represent a rural area in Norfolk, as he knows—have different issues from metropolitan and urban areas. It is important that those local authorities have the flexibility and the powers, which they now have under the general power of competence, to make decisions about what is right for their local community, bearing in mind its make-up and style.

In the debates on the Local Government Finance Bill, the Government voted down all attempts to have levels of need considered when funding is allocated to local authorities, yet the result of their current policy is that the 10 most deprived authorities in this country face cuts in spending power eight times greater than the 10 least deprived authorities. When the Secretary of State announces next year’s settlement, will he attempt to rectify this injustice or will he, like the Chancellor, make the poorest and the most vulnerable pay the price for the Government’s disastrous economic policy?

I am somewhat surprised at the hon. Lady’s question, bearing in mind that this Government inherited a problem with a number of authorities that had been left on the cliff edge by the previous Government. It is this Government who brought in the transition grant for those authorities. There are still 12 of them left; after the finance settlement we will see what the new position is. It is a disgrace that the Opposition can sit there and comment about the authorities that they left hanging out to dry facing that financial cliff, which this Government have helped to fix.