3. What assessment he has made of the effect on local authorities of recent changes in the proportion of local authority funding that comes from revenue support grants. (903540)

7. What assessment he has made of the effect on local authorities of recent changes in the proportion of local authority funding that comes from revenue support grants. (903545)

Revenue support grant is provided to councils in addition to retained business rates. Authorities now keep nearly £11 billion in business rates, and a share of growth in business rates in their area. This provides a direct financial incentive to help deliver growth, in contrast to the old system.

The Minister likes to talk about these changes in terms of benefiting councils, but the reality on the ground is that many local authorities find themselves losing out. His focus on spending power per dwelling hides the fact that many places have large families living in large occupancy dwellings. Will he explain why Luton borough council is having its spending power cut by a half?

Let us look at the hon. Gentleman’s local authority directly. Average spending power per household in this country is £2,089 whereas in Luton it is £2,211. That is above the average, so I suggest to the residents of Luton that they elect a council that can run things efficiently and effectively.

Despite having higher levels of deprivation, local authorities such as my own are seeing deeper cuts than those in the well-off areas. By 2016, spending per household in the north-east will have fallen by £296 compared with the average of £233. Does the Minister not recognise that that will mean that existing inequalities between the regions will be even worse?

I dispute that directly, because the hon. Lady’s local authority’s spending power is £2,355 per household per year, which is well above the national average of £2,089, so it comes from a much higher position which recognises its local needs.

Will my hon. Friend confirm that despite cuts in central Government funding many Conservative-controlled councils, such as my own North West Leicestershire district council, have continued to freeze or indeed cut council tax?

My hon. Friend makes a good point. Some excellent councils across the country have even cut council tax this year, and the council tax freeze means that those areas have, under this Government over the past four years, seen a real-terms cut in council tax of about 11%.

In the north-west, Cheshire West and Chester council is working with Labour councils such as those in Knowsley, Halton and Wirral to share services in order to reduce costs and improve the services offered to local people. Is working with other councils not one way in which some councils that we have heard about today can improve their services and reduce costs?

My hon. Friend gives a very good example of how authorities can work together, and we are seeing that around the country. Another Labour authority in High Peak is sharing with Conservative-led Staffordshire Moorlands, under an arrangement set up under the Conservative administration. That is another one of many examples of authorities sharing management and sharing chief executives, and saving about £600,000 a year. That is a substantial percentage of the money for those local authorities and this is a good way forward. The transformation network and community budgets show that this can be done.

Newcastle has four times as many looked-after children as Wokingham, but because of the unfair way in which this Government have distributed the cuts, even on the Minister’s own measure of spending power per household, Newcastle will have less funding than Wokingham by the end of this Parliament. How can he tell us that that is fair?

I remind the hon. Gentleman that the 10% most deprived authorities have an average spending power of £3,026 whereas the figure for the least deprived 10% is only £1,952. That demonstrates clearly that the areas with the need actually have the money they need to look after their local requirements.