I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Acts:

European Communities (Finance Act) 2001

Human Reproductive Cloning Act 2001

National Australia Group Europe Act 2001

With permission— [Interruption.]

Order. I will not tolerate shouting. The Minister is putting a statement before the House.

I should like to make a statement about local authority revenue finance in England for 2002–03.

Public services are the clearest symbol of community and solidarity. They are literally what we provide together as a society. For millions of people, public services are social justice made real. The challenge for the Government is to take the action and introduce the measures necessary to raise standards, provide choice and improve quality.

I am pleased to be able to inform the House that this local government settlement will have total support from Government grants and business rates of £47.3 billion. That is an increase over this year of £3.3 billion or 7.4 per cent.—more than three times the underlying rate of inflation. The £47.3 billion will be made up of £19.9 billion in revenue support grant, £16.6 billion in business rates and £10.8 billion in special and specific grants.

Today, I am announcing details of the allocation to individual authorities of the £36.5 billion of revenue support grant and business rates. When taken together with the police grant of £3.8 billion and other minor adjustments, that represents an increase of 4.8 per cent. over this year's allocation.

The money will be going in, but on its own that will not be enough to secure the extensive improvements that the Government want in our public services. This extra funding must drive forward change. It must ensure that our programme of modernisation and reform is implemented.

I know that for some change is never easy, but we need to be clear that reform is not the enemy of good quality public services. Put simply, we cannot leave things as they are—the status quo is not an option, so we must invest in reform and insist on results. Today's statement, coupled with the local government White Paper, which we should publish before Christmas, shows how we intend to apply that approach to local government.

Councils deliver a wide range of services that affect all our lives and are vital in delivering real improvements to our economy and to our quality of life as well. They help us to provide better education services and to sustain a better deal for the more vulnerable members of our society. They are key players in providing a better quality local environment and safer communities.

This year, we introduced a system of minimum and maximum grant increases for those authorities with responsibility for education and social services. We believed that such a policy was necessary because we recognised the unfairness that could be caused by the simple application of the present funding formula, which we regard as unfair. I am pleased to be able to inform the House that this will be the final settlement based on the present funding regime. From 2003, we will introduce a system that is transparent, fair and just.

The introduction of a minimum level ensured that every authority in the scheme received a reasonable level of grant increase, but to pay for that minimum we imposed a maximum on grant increases and scaled back the rises received by authorities between those two levels. That approach was generally well received. This year, therefore, I am extending the scheme to shire districts and to a group of authorities comprising police authorities, fire authorities and the Greater London Authority. I am pleased to be able to announce that I am setting the minimum level for those authorities so that in 2002–03 they will receive a grant increase of at least the rate of inflation at 2.3 per cent. on a like-for-like basis.

I have, however, given special consideration to those authorities with responsibility for education and social services. Last year, the minimum increase for those authorities was set at 3.2 per cent. This year, with inflation at 2.3 per cent., I have had to consider whether we could match last year's figure. That would not be easy, but 3.2 per cent. would give those authorities an income well above the rate of inflation.

Some authorities and local government associations have put forward the case for an even higher increase. Some have suggested an increase of 3.5 per cent.; others 3.75 per cent. I have rejected those proposals. Instead, I want to reflect the value that the Government place on education and social services. Therefore, I shall introduce a minimum increase in grant of 4 per cent. for all authorities that provide those vital services.

The introduction of a minimum increase of 4 per cent. will make a significant difference to a number of authorities. It represents, for example, an extra £3 million for Halton, £2.4 million for Middlesbrough, almost £8 million for Liverpool, £3 million for Nottingham and £3.5 million for Leeds. That money is over and above that which would have been received under a simple application of the formula. However, a minimum level has to be paid for. Some of the cost will be met by placing a ceiling on the grant increases to be received by authorities in each group. Those ceilings will be 7 per cent. for authorities with education and social services responsibilities, up from 6.5 per cent. last year; 4 per cent. for fire and police authorities; and 10 per cent. for shire district councils. However, those ceilings do not fully meet the costs of bringing education or social services councils up to a minimum of 4 per cent.

This year, councils had their increase scaled back to pay for the introduction of a minimum level. Scaling back would mean that some of those authorities, which have raised particular concerns about the level of funding—such as, for example, Birmingham, Oxfordshire, Worcestershire, Kent, Nottinghamshire, Derbyshire and Warwickshire, which today get a good settlement—would see a reduction to provide other authorities with an increase to the minimum level. If we were to maintain the policy of scaling back, Birmingham would lose more than £1 million, Oxfordshire more than £800,000, Worcestershire more than £400,000, Kent more than £2 million, Nottinghamshire more than £650,000. Derbyshire £875,000 and Warwickshire more than £400,000.

I have listened to the views of hon. Members, parents, teachers and those with responsibility for the care of the vulnerable. I believe that it would be unfair to scale back those increases. I have therefore decided to put an extra £41 million into the revenue support grant this year so that there will be no reduction in grant for those getting an increase that is below the maximum. I believe that that will be welcomed by all those with responsibility for providing these vital services.

The other groups of authorities between the minimum and the maximum levels will have their grant increase scaled back to pay for the floor for their group. However, for police authorities and fire authorities, my right hon. Friend the Home Secretary and I will put an additional £5.5 million into revenue support grant to help to ensure that scaling back will be on a reduced scale.

In addition, following representations made on last year's settlement, I also propose to promote capital investment by excepting, from the floor and the ceiling limits, grant increases that result from new capital spending allocations. As a result of this change and by way of example, Salford will get an extra £1.7 million, Hertfordshire an extra £1.4 million, Bristol an extra £900,000 and North Lincolnshire an extra £600,000.

With those grant increases and the stability provided by a minimum level, there is no reason why this year there should be large increases in council tax. I have laid regulations before the House to ensure that taxpayers can see clearly by how much their council tax has changed for each tier of authority that is responsible. From next spring, that will be shown on the front of the council tax bill, not buried away in a leaflet. Our longer-term policies for council tax will be set out in the forthcoming local government White Paper.

The increases in general grant will be matched by further good increases in the grants that we will be providing for specific initiatives. For example, in the next financial year, I can confirm that, as has been previously announced, there will be £300 million for the neighbourhood renewal fund—money that will enable councils with the most deprived areas to tackle the real problems that they face. I can also confirm that £200 million will be available to help local authorities to build care capacity. That will be a significant contribution, allowing them to improve personal social services where we recognise that councils face real pressures at present.

Local authorities are a vital part of our democratic system. People rightly expect a great deal from their council. That is why, since we came to office in 1997, we have increased grant to local authorities by £11.3 billion—a real-terms increase of more than 20 per cent. This stands in stark contrast to the final four years of the Tory Government which saw a real-terms cut in grant of 7 per cent.

I believe that this settlement is an important step in ensuring that local councils can meet the needs and aspirations of the communities that they have been elected to serve. It shows that we value local government and the services that it provides. This settlement provides the means by which local services can be improved.

Public services properly funded to meet the needs of our people; local councils again recognised as a democratic tier of government—that is the way forward for local authorities. It is the approach that is at the heart of today's settlement. As such, I commend it to the House.

First, I thank the Secretary of State for giving me prior sight of his statement. May I also welcome him to the House of Commons? It is very good of him to drop by. I am sure we are all very pleased that the minibus finally found its way off the bridge and down the M1.

Although we might welcome the Secretary of State here today, local authorities and council tax payers will not welcome his statement, and neither will Labour Back Benchers when they realise what it means for local authorities. He tells us that the settlement is generous. He says that there is no reason why we should see large increases in council tax next year, but we have heard that before. Every year, this Labour Government promise a generous settlement for local authorities and every year they say that there is no reason for high council taxes, but every year council tax rises, on average, by three times the rate of inflation. Every year the Labour Government make promises and every year they break them.

Will the Secretary of State confirm that almost a third of the increase in the pension for single pensioners has been taken away by an increase in council tax? Will he confirm that today's settlement will leave many local authorities struggling to maintain services and facing not a 6 or 7 per cent. increase in council tax, but a rise that is well into double figures? Will he also confirm that today's announcement was delayed from last week because of the complaints from local authorities when they saw the figures for money to be top-sliced from their post-16 education budgets?

The Government will claim, of course, that increases in council tax is not their fault, but it is this Government's failure properly to fund social services spending and their imposition of extra burdens every year on local authorities that constantly squeeze council budgets. It is, of course, people who live in Labour or Liberal Democrat-controlled councils who suffer most because those councils have the highest council taxes in England. Will the Secretary of State confirm that 13 of the 20 councils with the highest council tax are Labour controlled? None is Conservative controlled. I understand that the Secretary of State has had other things on his mind recently. The fiasco of his handling of Railtrack meant that he has not— [Interruption.]

Order. We will not dwell on those matters, will we?

No, Mr. Speaker, indeed not, but the right hon. Gentleman simply has not had the time to fight the cause of local government, so council tax payers and those who depend on council services will suffer as a result.

Let us get rid of some of the myths that surround this Government's spending on local government. Myth No. 1 is that the increase announced by the Secretary of State is what all councils will get. It is not. He announced a 7.4 per cent. increase, but that overall figure includes more than £10 billion of special and specific grants. Will he confirm that councils will have to bid for much of that money, with no guarantee of getting anything at the end of the day? Will he also confirm that for many district councils, his announced increase of 4.8 per cent., excluding special grants, is an increase of only 3.5 per cent.?

The right hon. Gentleman says, "I want to reflect the value the Government place on education and social services. I shall introduce a minimum increase in grant of 4 per cent. for all authorities that provide those vital services." Will he confirm that the 4 per cent. increase for education and social services will, on the basis of the past few years, barely cover the teachers' pay award and will leave schools with budget cuts and social services underfunded? Will he also confirm that when Labour came into power it promised a revision of the standard spending assessment and local government finance within a year? Now that revision is promised for 2003–04. Labour is taking six years to do something that it promised to do in one.

Myth No. 2 is that the standard spending assessment reflects what local authorities need to spend; it does not. Councils spend £1 billion more on social services than the Government allow in the SSA. Does the Secretary of State accept that social services are underfunded by £1 billion overall? Does he also accept that money recently announced for the next two years to relieve bed blocking sounds, as one GP told me, like a lot,

Myth No. 4 is that the Government deal fairly with local authorities. They do not—just ask the shire counties. Yet again, the settlement will transfer resources from the shire counties to other authorities. Will the right hon. Gentleman confirm that over the lifetime of the last Parliament, under Labour shire counties lost an estimated £700 million in funding? Will he also confirm that, under Labour, London local authorities have lost £450 million in funding?

Myth No. 5 is that the Government fund any new requirement imposed on local authorities; they do not. Over the past four years or so, the Government have steadily loaded yet more regulations, burdens and costs on to local authorities. Best value costs over £200 million; new regulations on fridge recycling will cost over £50 million; concessionary travel fares will cost £50 million; regional transport plans will cost one shire county half a million pounds alone; and the Railtrack fiasco has cost local authority pension funds almost £100 million. Then there are the extra education plans, the abandoned cars directive, recycling targets and the Homelessness Bill, all of which add to local government's costs. When will the Government get off the back of local councils and let them get on with the job of providing the services that local people want?

The final myth is that it will all get better; it will not. The spectre of revaluation looms, and so does the threat that, if it is around, Labour will use revaluation to increase council tax by stealth yet further in some parts of the country, notably the south-east and London.

The Secretary of State says, "Public services are the clearest symbol of community and solidarity" and that the settlement "shows that we value local government and the services that it provides." It is this Government's attitude to local services that provides the clearest symbol of Labour in power: increased central control, more red tape, freedoms curtailed, and all spin and no substance. Social services will continue to be underfunded and council tax will rise by much more than inflation. This Secretary of State is driving local government, like Railtrack, into the buffers, and council tax payers will pay the price.

I think that the hon. Lady wrote those comments before she had the opportunity to see the details of the settlement. If she had seen it, she would have recognised that an increase of £3.3 billion, or 7.4 per cent., is a significant shift in the Government's funding of local government, particularly when compared with the years of Conservative rule and their relationship with local government.

The hon. Lady spoke of shire counties and the difficulties that they will experience as a result of today's settlement, and we wait with interest to see how shire counties respond. However, I shall share with the House some figures that will reveal that the hon. Lady's case comes straight from the Harry Potter school of fiction. Between 1998–99 and 2002–03, the average increase for shire counties is 4.9 per cent. From 1994–95 to 1997–98, under the Tories, it averaged 1.9 per cent. That is the truth of the situation. Shire counties had their services decimated because of the Conservative Government's approach to local government. The situation is the same for London: there were cuts under the Conservatives, but more money is coming from the Labour Government.

The hon. Member for Maidenhead (Mrs. May) said that council tax increases will reach double figures and she sought to scare pensioners. However, she failed to recognise the fact that, under this Government, pensioners do not rely just on the state pension as they would under the Conservatives, who said that they would do away with all the gimmicks. According to the Conservatives, those gimmicks are the £200 a year winter fuel allowance for pensioners and free television licences for the over-75s. Pensioners know that they are getting more income as a result of measures introduced by this Government. The Conservatives also imposed a massive increase in fuel duty through VAT which hit pensioners; we reduced that to 5 per cent. We will take no lessons from the Conservatives about caring for pensioners—they know full well that they are getting a good deal from Labour and that they would not get that from the Conservatives.

On financial support, the hon. Lady is right to say that we are giving targeted grants to support the raising of standards in schools and help reduce bed blocking in our hospitals. Funds are being provided to help local authorities and schools to tackle those very real pressures. The important message of today's statement is that all of that is over and above the 4 per cent. that we have provided as a minimum for all education and social services.

Opposition Members representing shire counties such as Worcestershire know that we have listened to their concerns— [Interruption.] They may leave the Chamber, but they know that today's settlement and our decisions will be welcomed by parents and head teachers throughout counties like Worcestershire. When people have had the opportunity to digest the statement, they will realise that we have been fair, truthful and honest. The settlement is a real-terms improvement for local authorities, which will make no complaints about it because they will recognise that it is one of the most generous that they have had for years. The additional funding that we are giving local government in today's settlement and the minimum levels for all authorities that we are introducing for the first time mean that there is no reason for large-scale council tax increases, but there is every reason to expect real improvements in local authority services.

Is my right hon. Friend aware that in Derbyshire, Bolsover and areas that used to have a lot of pits but now have none, unemployment is still the order of the day? In my part of Derbyshire, we have got a big job to do if we are to provide jobs for the future. Will the settlement ensure that people can get on with infrastructure projects like junction 29A, which could provide 9,200 jobs in the north of the county? One thing is certain—the settlement is far in excess of those in the 1980s. Five Tory MPs for Derbyshire used to get up on a day like today and demand cuts in the rate support grant for their own county. Those days, thank God, are far behind us. What is the settlement today?

For a number of years, my hon. Friend has been a powerful advocate for Derbyshire and Bolsover. I am pleased to tell him that there will be a 6 per cent. increase for Derbyshire; an extra £21 million will go to Derbyshire county council, which the county will welcome. In addition, it will not lose as a result of scaling back; it will be able to retain £875,000 as part of today's settlement. That is a good settlement and it is good news for parents, teachers and the communities in Derbyshire. I know that for many years Derbyshire has felt that it has not had a fair deal from the local government settlement, but we have done our best for the county today.

My hon. Friend mentions junction 29. I have been made acutely aware of that. I suggest that he waits for the local transport settlement next week, and I hope that he will be as pleased then as he is today.

Will the Secretary of State acknowledge that councils throughout the country will be disappointed that we have had another settlement based on the same outdated, flawed, virtually impenetrable and unfair system? I welcome his belated statement that next year there will be a different system.

Despite all the right hon. Gentleman's talk of setting councils free, will he acknowledge that the settlement represents a tightening of the Government's iron grip on local councils? It increases the level of special and specific grants by 15 per cent., which means that the proportion of Government funding that comes through those grants is 22.8 per cent. Will the Secretary of State also acknowledge that local councils will have to find well over £1 billion of their own money to provide their share of matching funds so that they can access even the standards funds?

Is it not the case that the Liberal Democrats and the Treasury are better than anyone else at predicting council tax rises? Does the Secretary of State accept that in the Red Book, the Treasury shows that council taxes are set to rise next year by 6.8 per cent.? The Minister for Local Government shakes his head, but that is what the Red Book shows. Does the Secretary of State acknowledge that while Government spending is likely to go up by 6.2 per cent., council tax payers will have to increase their spending by 6.8 per cent. and that businesses will contribute by 9.8 per cent.?

On council taxes—a matter that was raised by the hon. Member for Maidenhead (Mrs. May)—will the Secretary of State confirm that based on band D, which the Conservatives always say is the best indicator, the council tax rises of Labour and Liberal Democrat authorities were 6.3 per cent. last year, while those of Tory authorities were a whopping 8.6 per cent.?

Will the right hon. Gentleman nevertheless confirm that social services departments will be bitterly disappointed by the settlement? Although the increase of £684 million may seem generous, when that is set against the more than £1 billion that social services departments are already spending above SSA, it is clear that many of them will fall far short in their ability to deliver high quality services to children, elderly people and other vulnerable groups.

Overall, the settlement is undoubtedly better than we would have expected under a Tory Administration, but it will still mean significantly higher council taxes, an inability to provide services to many of the most vulnerable, and another massive erosion of local democracy.

I begin by agreeing with the hon. Gentleman's figures for band D increases. I understand that in Labour and Liberal Democrat authorities, the rise in council tax was about 6.3 per cent. and that in Conservative authorities it was about 8.6 per cent., which gives the lie to the argument of the hon. Member for Maidenhead (Mrs. May).

On ring fencing, I agree with the hon. Gentleman: this year and in the settlement for next year, there will be a significant rise in ring-fenced funding going to local authorities. There will be extra money going in, but it will reflect the national priorities established by the Government. I believe that we have come to a stage where ring fencing has gone far enough. I would like to think that this will be the final year in which there is an increase in ring fencing. I hope that in subsequent years, it will be reduced as an element of local authority finance.

When hon. Members have the White Paper in a few weeks time, they will see that that is the direction in which we intend to go.

The hon. Gentleman was wrong about the details of the pre-Budget report, which referred to a 6.8 per cent. increase in council tax yield, rather than in council tax charges. The yield is increasing for a number of reasons, but mainly because more dwellings now come within council tax. We estimate that the number will increase by about 130,000 next year. The collection rate for council tax is also improving. It is increasing significantly and the yield will improve as a result.

The hon. Gentleman raised specific concerns about social services. There will be an increase of some £680 million, or 6.5 per cent., in the standard spending assessment and ring-fenced grants. That sum will be seen as a genuine improvement by many people working in social services, to which it will make a very real difference. We do not, however, ignore the growing pressures on social services, which will need to addressed, especially in respect of care for the elderly and for children.

This is the final year in which the arrangements will operate under the present funding regime. I hope that the new regime to which we will move in 2003 will more accurately reflect the needs of individual local authority areas. That simply is not the case with the present funding formula, which is why we have had to introduce a minimum level for authorities, reflecting the unfairness of the present system. This is the last time that we shall do so. In the circumstances of the existing funding regime, we have produced a set of proposals that will be good news for council tax payers and excellent news for people who use council services.

I welcome my right hon. Friend's statement, especially the £3 million extra for Halton borough council, which will be greatly welcomed in the local authority area that I share with my hon. Friend the Member for Halton (Derek Twigg). However, what would happen if the Government were to cut public spending to 35 per cent. of gross domestic product? What would be the impact on the local government settlement announced today, which provides a £3.3 billion increase? Would a cut be made?

That is exactly the implication of the Conservatives' spending position. They shed crocodile tears about the need to provide finances for local authority services, yet we know full well that their objective—it was stated by the shadow Chancellor and by the shadow Home Secretary during the election campaign—and hidden agenda is to make huge cuts in support for local authorities and other areas of public expenditure.

Opposition Members may shake their heads, but that is the reality and they cannot ignore the fact that that is the position of their party. If they want to reduce the percentage of GDP that goes into public spending, the implication is that public services will be affected. They cannot have it both ways. They seek to do so, but the public will see through them.

The good news for Halton is not only the increase that I have announced and our introduction of the minimum level, from which it will benefit, but the rather technical change that we have made in the way in which capital credit approvals are dealt with, from which it will also benefit.

The right hon. Gentleman would do well to seek to repair his own credibility before he starts impugning that of other people. In all his cooing to local government about its freedoms, is he aware that we will this afternoon debate a Bill that will give the Government power to direct education spending? Would not his sweet words be more credible if the Government dropped that part of the Bill and made it clear that they would not attempt to hypothecate any form of spending? Furthermore, does he recognise that social services have a serious backlog of crises and that care homes have been trying to increase their fees because they cannot make money under the present level of funding? Many local authorities do not have the funding to meet those demands, and the consequence is that many old and vulnerable people now face a very uncertain future. That must be dealt with.

In his reforms, will he recognise that there are very serious problems in rural areas, especially in the aftermath of foot and mouth disease, and desist from the constant leaking of money from rural areas into Labour-controlled urban areas?

The right hon. Gentleman obviously has not had time to read the details of the settlement; otherwise, his comments would have been more gracious. North Yorkshire, which is hardly an urban heartland, will receive an increase in grant of 6.3 per cent. I do not know whether he wants to give some of that back; if so, I am sure that there would he plenty of volunteers who have not got 6.3 per cent.

The right hon. Gentleman should recognise that it is a good settlement for North Yorkshire and his constituents. He should acknowledge that teachers and those who deal with the vulnerable in North Yorkshire have received a good settlement today. They will realise that one of their Members of Parliament has failed to recognise that.

I thank my right hon. Friend for the statement, which announced a generous settlement compared with statements by Tory Ministers in the past. The assistance to education and social services is welcome. A lot has been done, but there is still a lot to do.

Will my right hon. Friend consider the third block of grant, which is used for street lighting, street repairs, footpaths and parks? He should tackle those matters so that we can improve street lighting and replace old street light columns. We must spend some money on those additional services.

I thank my right hon. Friend for his assistance to the special interest group of municipal authorities—SIGOMA—and for the welcome that we received when we requested meetings with him. We have taken steps in the right direction, but I ask my right hon. Friend to consider the third block.

I hope that my hon. Friend and his authority, Wakefield, will welcome the fact that today's settlement means an increase for it of some £8.8 million, which will make a genuine difference. He is right to point out the increasing political importance of quality-of-life issues, such as street lighting, the condition of streets and abandoned vehicles. The size of today's settlement will perhaps allow local authorities to commit more resources to those important matters, which mean a lot to them and the communities they represent.

My hon. Friend has been a great champion of SIGOMA. As he knows, we have considered its position carefully. Last year, it received an average increase of only 3.5 per cent.; this year, it will get an average increase of 4.46 per cent., which will make a genuine difference to authorities that for too long have been unjustly treated by the unfair funding formula. The changes that we have introduced this year mean that they will get a good settlement and be able to make a real difference to their communities.

When will the Secretary of State give us the details of the new formula? Does not he realise that vagueness about them does no good?

The details will be worked through. I shall try to find consensus about the way forward for funding local government. Worcestershire is a good example of an authority that has suffered from an unfair funding regime for too long. Most of us would agree about that.

I should like to introduce a local government settlement system that will last for decades, whatever political party is in power. The current formula is not right and does not work well; consequently, people suffer. We shall begin the process when the settlement is out of the way. I must consult on this settlement; after that, we shall begin to review and work on a method of doing away with standard spending assessments in order to allocate funds on a proper needs basis.

I am more than happy to talk to people from Worcestershire about how we achieve that. We shall begin the process next spring. When the hon. Member for West Worcestershire (Sir M. Spicer) has had a chance to consider the matter, he will realise that Worcestershire has a good settlement this year. We are not going ahead with scaling back; that will also benefit Worcestershire because it will keep all the money that it gets from the settlement that we have announced this afternoon.

I welcome the extra money for Liverpool. My right hon. Friend is in danger of becoming the council tax payer's friend, to add to his growing reputation as the rail traveller's friend.

Does the settlement take into account the inefficiencies of authorities such as the Liberal Democrat council in Liverpool? It overspent £529,000 on central services, which cater mainly for officers. They made up the money by taking £529,000 from services that affect my constituents. That has led to 31 redundancies in my constituency alone in the weeks before Christmas for people who work in the parks and cemeteries. Is that the sort of council that should be rewarded as generously as my right hon. Friend has done today?

The allocation is for the people of Liverpool, and it reflects the strong case that was put by the Members of Parliament for the Liverpool constituencies. That has been reflected in today's announcement. It is important to see the additional funding for local authorities not as funding on its own but as part of the drive forward to modernisation and reform that we all want. I understand my hon. Friend's anger about the way in which his constituents have been treated by the Liberal Democrat-controlled council in Liverpool. There is never a good time for anyone to lose their job, but the weeks before Christmas must be the worst time of all.

Taxis.

I have to say to the right hon. Gentleman that some people in this House, such as my hon. Friend, fought and won political battles against that sort of conduct, so we will take no lessons from Liberal Democrats about policies. Talking about works of fiction, as we were in relation to Harry Potter, a "Focus" leaflet is a good work of fiction for anyone who comes across one.

We have provided the floor—the minimum level—for Liverpool, so it will receive an extra £8 million that it would not have received if we had just applied the funding formula. I hope that money will be used. It is not for the Liberal Democrat council to use on a whim; it is provided to meet the needs of my hon. Friend's constituents.

Will the Secretary of State help me, because I am slightly perplexed? He mentioned that, over the past five years, £11.4 billion extra had been put into the rate support grant. Will he tell me why my local Labour-controlled council in west Norfolk has, over the last five years, consistently put up the council tax by far more than the rate of inflation? On the basis of today's figures, will he give an assurance that King's Lynn and West Norfolk borough council will not have to put up its council tax by more than the rate of inflation? The right hon. Gentleman was quite complimentary about shire counties. Will he confirm that they will be kept, in future?

King's Lynn and West Norfolk will get a grant increase above the rate of inflation through the provisions that we have introduced today. Norfolk county council will get a grant increase of 6.2 per cent.—a generous settlement that will be welcomed by people in Norfolk. It will get even more, I regret to say, than Derbyshire, which shows the even-handedness of our approach to this process. We must ensure that people keep focused on the need to provide quality public services.

I go back to the message that we can provide the funding, but that is just one part of the equation. We all recognise that, in local authority services and elsewhere in public services, just leaving things as they are—or even just putting more money in—will not be enough. Funding must drive change, which must drive reform and modernisation. That must be our key message to local government and other public services.

Is my right hon. Friend aware that this settlement will be received with considerable relief by the London boroughs? They have been struggling with cost pressures, which have led to crippling recruitment and retention problems, with rapidly rising population numbers and with three quarters of the nation's homelessness total?

Will my right hon. Friend provide information on two further aspects of the settlement? First, has he succeeded in achieving the end of the council tax benefit subsidy limitations? Secondly, will he assist us further with the cost of temporary accommodation for Britain's homeless families by asking his right hon. Friend the Secretary of State for Work and Pensions to revise the thresholds and caps for housing benefit, to allow London authorities to address the homelessness crisis and to receive full funding to enable them to do so?

The Government are still discussing the council tax benefit subsidy limitation, about which I hope to be more specific when we publish the White Paper. My hon. Friend is aware that the Secretary of State for Work and Pensions is already considering housing benefit, on which he will no doubt be able to make a statement at some future time.

My hon. Friend mentions the pressures on London local authorities, of which we are acutely aware. When people have the chance to read the settlement, they will see that, once again, London has a good deal. They will recognise that we have reflected on the pressures and that we have been able to respond positively. I hope that the capital and its local authorities acknowledge that we have ensured that, compared with what happened in the early 1990s, this settlement allows them to meet the real pressures that London authorities experience.

Will not a 7.4 per cent. increase overall mean above 7.4 per cent. for some authorities, but significantly below for others? Will not local authorities such as mine, whose acute social needs are not recognised by the standard spending assessment, again find it difficult to make ends meet? They may again be forced to raise council tax above the rate of inflation, because the unfair SSA system disadvantages communities such as mine and, in particular, unitary authorities.

If the Secretary of State reads the social service performance league table, he will find at the bottom a disproportionate number of unitary authorities and seaside resort unitary authorities. There is something wrong with the grant, not the performance of those local authorities.

The hon. Gentleman makes a good case for changing the formula; it is one reason why we shall do so. Indeed, he gives the example of pressures on seaside towns. Such areas perhaps have more pensioners in their population, which puts increased demands on local authority services. That is one reason why I hope that we can devise a formula based on the needs of a particular local authority. The current system has little, if anything, to do with the needs of a local authority area, so if we can move to such a changed system, we shall achieve real benefits. I understand the pressures to which he refers and I believe that we can accommodate them, certainly by April 2003.

Does my right hon. Friend accept that there is considerable relief in Sheffield that the debilitating cycle of cuts, cuts, cuts in local government public services is coming to an end and being reversed? Will he take steps to ensure that those increases go into public services, and not for the wrong priorities of some councils—for example, the recent 30 per cent. pay increase for the chief executive and senior executives in Sheffield, offered by the Liberal Democrat council?

Sheffield is to receive a £16 million increase as a result of the settlement I have announced today. The priorities are for each local authority to determine, but the important point, as I said in my statement, is that local government is an important tier of democratic government. It is for Sheffield's council tax payers to judge whether they are getting a good deal from their Liberal Democrat-controlled council. No doubt they will reflect on their chief executive's pay increase and they also know that a Labour central Government have allocated an extra £16 million to Sheffield, so they will no doubt ask their Liberal Democrat-controlled local council, "What benefit are you giving us as a result of Labour's £16 million increase?"

Does the Secretary of State recall that, days before the 1997 general election, the Prime Minister promised reform of the area cost adjustment for the 1998 financial year? That means that this is the fifth local government finance settlement in which reform has not been included.

Does the Secretary of State also recall that, last year, Cambridgeshire, which is badly affected by the area cost adjustment, lost out again because of the application of floors and ceilings and the re-evaluation of data for the area cost adjustment? Is any such penalty being paid by Cambridgeshire in this settlement, and will he commit himself to thoroughgoing reform of the area cost adjustment, including recognition of relative costs in SSA changes?

I think the hon. Gentleman will concede that this year's 5.2 per cent. grant increase is good for Cambridgeshire. He will also be pleased to know—he tried to make a point about this—that the authority will receive the increase in full: there will be no scaling back to pay for the minimum level.

As for the area cost adjustment, according to my recollection the Prime Minister said in 1997 that we would begin the process of reviewing it, although the hon. Gentleman may correct me. In any event, changes are now to be introduced. I look forward to being here in a year's time to build bridges, to produce the local government settlement and to ensure that the new system is fair and just. It may even benefit Cambridgeshire.

I welcome the 4.3 per cent.—8 million—increase for Wigan, but I note that Westminster has been given a £13 million increase, raising its grant to £204.7 million. As Westminster's population is about two thirds the size of Wigan's, does this not emphasise the need for a radical overhaul of the whole SSA system to allow authorities such as mine a proper share of the cake—the very generous increase that my right hon. Friend has provided this year?

I am pleased to learn that Wigan will welcome the extra £8 million. I think it is a good settlement.

Westminster will receive a 7 per cent. increase, owing to the way in which the formula works. Real pressures affect authorities such as Westminster, as my hon. Friend the Member for Regent's Park and Kensington, North (Ms Buck) will know—her constituency includes part of the Westminster local authority area—and those pressures must be reflected in the needs assessment.

When we embark on the introduction of a new formula it will not be easy to reach a consensus, but I think we should at least try to do so.

Which part of the revenue support grant is intended to cover the expense incurred as a result of last year's floods in the Vale of York? There were extensive floods in Rawcliffe, Thirsk and other parts of the area.

Does the Secretary of State intend the new formula to plug an existing gap? Will the budget anticipate, for the first time, the movement of people who have reached retirement age to counties such as North Yorkshire? At present, no expenditure projection is made to take those elderly people into account.

The Department for Environment, Food and Rural Affairs has already made an allocation to deal with the financial consequences of last year's floods.

The hon. Lady mentioned elderly people who move to a different local authority area. I am more than happy to consider how we can accommodate that situation in the time lag between the count taken to identify those who have moved—elderly people, or perhaps school pupils—and the influence on the final allocation, but the Office for National Statistics is often involved, and must be given plenty of time to ensure that the figures are accurate. We cannot afford to announce a settlement and then, a week or two later, find that the figures must be reviewed, inaccurate figures having been used owing to the pressure of time. I want to get the figures right before we make the settlement.

A 5.4 per cent. increase for a shire country such as Nottinghamshire represents an improvement, but a new system will be in place in 2003–04. My right hon. Friend described it as "transparent, fair and just". One way of judging whether it meets that standard will be to observe, in 2003–04, whether Nottinghamshire's schools get the same sort of deal as those in Herefordshire and Hertfordshire. Should we not be moving towards a fair funding formula for schoolchildren?

I am sure that my right hon. Friend the Secretary of State for Education and Skills has heard my hon. Friend's comments— [(Interruption.] She heard them before she left—she is doing something about them already.

Nottinghamshire not only will receive more than £20 million extra because of today's settlement, but will be able to keep all the increase because this year we are not operating the policy of scaling back. If we had not changed that policy, more than £650,000 would have been removed from the allocation. There are significant benefits from that change, and there is a real-terms improvement in funding for Nottinghamshire.

My hon. Friend would undoubtedly say that the Government will have to take into account in the new local authority funding formula the pressures on schools, care for the elderly, services for children and many other factors that particularly affect shire counties. Although this is the final year of the current regime, I like to think that within the constraints under which we have been operating, and with the additional money that I have been able to find, we have been able to produce a fair settlement that will lead to real improvements. Nevertheless, I still believe that we can do much better. The real challenge is to ensure that, in next year's settlement, we meet the needs of Nottinghamshire and other councils.

The Secretary of State may be aware that South Gloucestershire unitary authority is at the bottom of the league table on education SSA funding per pupil, and I assume that nothing in his statement will lift us from that position. My constituents are very keen to move to any new system, on the basis that we can go in only one direction. Will he therefore comment on the arrangements for the transition between this year's settlement and that for next year? Specifically, will there be damping? I appreciate that there might be damping to avoid big losses for the losers, but will there be damping on gains, or will authorities receive them immediately?

The hon. Gentleman is right: when we move to the new system we clearly will have to consider transitional arrangements. My worry is that, when I have conversations with colleagues, everyone seems to think that they will be a winner, which is why they want the funding formula to be changed. However, there will be losers—such is the nature of the regime. We have to ensure that we have transitional arrangements in place so that the changes can be introduced over time.

The hon. Gentleman specifically mentioned the position of South Gloucestershire unitary authority. This year, its grant increase is 6.2 per cent. and its education SSA increase is 6.6 per cent. I hope that will make a very real difference to his area. It is one of the best settlements that the authority has had, and, compared with the settlement for other authorities, it is certainly a generous one.

If we are looking for someone to fight the cause of local government, as the hon. Member for Maidenhead (Mrs. May) put it, we certainly would not be looking in her direction. In the many years in which they were in power, the Conservative Government did nothing but undermine and undervalue local government.

I, too, welcome my right hon. Friend's statement, particularly his promise to reform local government finance. May I, however, caution him to watch his civil servants very carefully? Every re-organisation of local government finance that I have experienced has promised to be fairer and more open and to make more resources available; if he manages to pull it off this time, he will deserve the gratitude of us all.

I suspect that, as in all such statements, the devil is in the detail. As I have not yet had an opportunity to study the detail, will my right hon. Friend tell us whether the very serious problems that have been raised with him by social security authorities in north-east England are dealt with by today's statement, and whether the very serious difficulties facing them will be avoided?

When my hon. Friend has an opportunity to look at the settlement, he will see not only the extra £5.8 million for Gateshead, but that increases across the north generally will help to meet the pressures that are coming from social services authorities. With the constraints of the current funding formula, we have not been as generous as I perhaps should have liked and there will be some disappointment in some quarters. However, with the minimum level that we have been able to introduce, we have been able to ensure that there will be a reasonable increase for all social services authorities not only in the north-east but across the country. That will make a real difference.

Additionally, the £100 million that has been provided to social services to help with bed blocking for the remainder of this year will increase next year to £200 million. Authorities in the north-east will also benefit from that proposal.

I am mindful of the caution expressed by my hon. Friend about the review. All I can say to him is that I will be more than happy to be judged by him and my colleagues on whether the system is fair and just.

I am grateful to the Secretary of State for the prominence he gave to Worcestershire in his statement, which I am sure is a tribute to the effective lobbying by the county's head teachers and governors on education funding.

I wish to press the right hon. Gentleman on the council tax benefit subsidy limitation. It appears that the SSA for Worcestershire will rise by 6.2 per cent.—on the face of it, a good figure—and the general grant by 6.1 per cent. Does not that mean that the council tax will have to go up by more than 6.2 per cent. to keep pace with the SSA? As the actual unadjusted figures show a 1 per cent. increase in SSA and a 1 per cent. cut in general grant, a still bigger increase may be necessary after the details have been worked through. What will happen to council tax benefit subsidy limitation?

I understand that in the hour of questions on the statement hon. Members have not had the opportunity to consider the figures in detail, but when people—including parents and teachers—in Worcestershire and elsewhere have had that opportunity they will see that the new arrangements are a move in the right direction. They do not solve all the pressures and problems in Worcestershire and elsewhere, but they are an improvement on what we have seen over several years.

We are still discussing the council tax benefit subsidy limitation, and I would like to think that I might be able to say something about it when we publish our local government White Paper in a few weeks' time—not long to wait. There is no reason why authorities such as Worcestershire should need to put up council taxes by more than 6.5 per cent. or 6.2 per cent. The issue is the level of grant, and people will see that the grant from the Government to Worcestershire and many other shire counties has been far more generous not only this year, but for the past two or three years. If the shire counties recall the early 1990s when their grants were cut by the Conservatives, they will recognise that Labour is their friend in government and the Conservatives certainly were not.

I, too, welcome the general increases in my right hon. Friend's announcement. I especially welcome the additional resources that will be available for personal and social care packages, which have been a particular problem in Sefton and Knowsley.

I join others in welcoming the changes that my right hon. Friend intends to make in the funding formula to leave behind the Alice through the looking glass formula and introduce one based on the real needs of constituencies such as mine. I look forward to my right hon. Friend making that announcement from the Dispatch Box in a year or so's time.

I thank my hon. Friend. Knowsley will get an increase of some £5.9 million, which will be well received. He is right to point out the needs of local authorities such as Knowsley that still face great pressures from high long-term unemployment, which need to be tackled. When people examine how we have been able to allocate the funding, they will recognise that within the constraints under which we operate this is a good deal for all local authorities. We have been able to introduce a minimum level for every type of local authority, including fire and police authorities. Everybody will get an increase of at least the rate of inflation and many authorities, including Knowsley, will receive increases significantly above the rate of inflation.

rose —

Order. We must move on.

On a point of order, Mr. Speaker. You will be aware that yesterday European Standing Committee B had to abandon its work because of a technicality. Unfortunately, it was considering the European arrest warrant system, which is not only an important constitutional change but will affect everybody in the United Kingdom. It now appears that a decision will be taken in Brussels at the end of this week without the House of Commons having had an opportunity to scrutinise that far-reaching change. I would be grateful if you could tell me whether you have received notice that the Government wish to make a statement about the implications of those changes, or whether any attempt has been made to offer an alternative time to scrutinise that important point.

We have heard nothing about that matter. I sympathise with the point that the hon. Lady makes and the difficulties that she has outlined. I suggest that she takes up the matter with the Leader of the House—perhaps at this week's business questions, which take place on the Floor of the House.

Further to that point of order, Mr. Speaker. Yesterday's shambles is a serious constitutional matter. A unanimous decision was required in the Justice and Home Affairs Council, and the imposition of a scrutiny reserve on the recommendation of the European Scrutiny Committee is therefore extremely important. Furthermore, the Scrutiny Committee also decided that this matter should be taken on the Floor of the House. Will you, Mr. Speaker, be good enough to ensure that the Leader of the House comes to the House to explain the situation, and that a proper debate takes place on the Floor of the House?

Ministers will have heard what the hon. Gentleman has had to say on this matter.

Further to my point of order yesterday, Mr. Speaker, which can be found at column 76 of yesterday's Official Report . I seek a ruling following your most helpful statement last week that hon. Members should ask direct questions and expect direct answers. I do not know whether you have had an opportunity to read yesterday's Official Report , but we did not get a direct answer to any of the questions that were raised. Madam Deputy Speaker gave a most helpful ruling, when she said:

"The Minister must relate his remarks to the motion on the Order Paper."—[ Official Report , 3 December 2001: Vol. 376, c. 76.]

In my view, he failed to do so.

The hon. Lady has put that matter on the record.

I beg to move,

The right hon. Member for Norwich, South (Mr. Clarke), who is the Labour party chairman and the Minister without Portfolio, owned up to the decline last week. He told the BBC that, although there had been improvements in some parts of the NHS,

The reality is that people are being forced into paying for treatment in the private sector by this Government, because they are told that they will have to wait, in pain, for months before they can be treated. If they thought that six months would mean six months, they might be prepared to wait, but they have no guarantee about that. Six months can run into 12 months, and a cancelled operation may push the treatment even further away.

Patients have nothing that they can depend on, so they turn to the private sector. Some of my constituents have spent their life savings on treatment. For example, Mr. Hickson, a widower from Timperley, could wait no longer for his hip replacement, and spent everything that he had saved for his retirement on private treatment.

Another constituent, Mrs. Mary Kyng, was in severe pain following a fracture and needed a hip replacement. She was told, not that she would be operated on in seven months, but that she faced a seven-month wait before she could have an operation, and that that would be "at the earliest". After enduring pain for several weeks, when she could not get up and down her stairs or care for herself properly, she was desperate for treatment, so she took out a loan to cover the cost of a private operation. She has now had her operation but says that she will be paying off her debts out of her state pension until she is 75. When I wrote to the Secretary of State on her behalf, asking whether she could receive some form of compensation from the NHS, I was told that seeking private medical care was "a personal decision". My constituent is paying the price for the Government's failures.

Another constituent wrote to me recently asking whether he could go to Germany for his knee replacement operation. He was told that he would have to wait a minimum of 12 months to have the operation done here, but he has been informed by the hospital in Germany at which his nephew is an orthopaedic surgeon that he could have the operation there as early as this week but would need the NHS to cover the clinical costs.

It should be possible for patients to seek treatment either in the private sector or overseas if the NHS has failed to treat them within a reasonable time. Although the recent ruling in the European Court regarding patients' rights brought that closer to reality, in practice patients are being prevented from seeking treatment elsewhere because they have to wait for health trusts to authorise it. A lucky few on the south coast can benefit from Government pilot schemes, but that does nothing for my constituents or for those of most right hon. and hon. Members up and down the country.

Health trusts will argue that they can provide the treatment but for patients there must be some guarantee. They should be given a time when they know they will be treated, rather than a vain hope.

The Government set great store by targets. They have put pressure on hospitals, health trusts and health authorities to make waiting lists appear shorter, sometimes by distorting clinical priorities. In some cases, patients with life-threatening conditions are denied urgent operations so that those with less serious but more easily treatable illnesses can jump the queue. Hospital managers have been discovered removing patients' names from official waiting lists so that their hospital appears to be meeting Government targets.

We need honesty, transparency and treatment according to clinical priorities, not priorities set in an arbitrary fashion by the Secretary of State. This June, he said:

My Bill would do two things. First, it would give Ministers the power to fix a maximum waiting time for all treatments. It might be 12 months at first, reducing to six months in due course. It would be approved by affirmative resolution in the House. That would achieve transparency and accountability. Crucially, patients would have a right to treatment within the guaranteed time; they could rely on more than just a ministerial aspiration.

Secondly, my Bill would give clinicians the power to specify a maximum safe waiting time for a patient on clinical grounds. If the new maximum waiting time was too long for a particular patient, if the condition would deteriorate through waiting or if there was a real danger that a patient would die on the waiting list, the consultant could recommend a maximum safe time.

I am pleased to have the right hon. Member for Birkenhead (Mr. Field) as one of the distinguished sponsors of my Bill. He has given a great deal of thought to the matter and has led the way with his proposal for what he described as "NHS International", whereby British NHS patients could seek treatment overseas. Indeed, hospitals in Europe, reading his original articles on NHS international, believed that the scheme was up and running. Inquiries flooded in from European hospitals asking how soon they could treat NHS patients trapped on long waiting lists. I am sure that I am not the only Member who received inquiries from constituents who saw a ray of hope in the proposed scheme.

The right hon. Gentleman has expressed fears that the private sector may be more expensive than overseas hospitals. I believe that if my proposals were adopted, the result would be an increase in competition to which private sector prices would respond. In any case, at a time when the health budget has been underspent, the cost would appear to be less of a problem than the structural and capacity constraints of the NHS.

Power in the NHS has to shift from the bureaucrats to the patients. Patients must have a right to be treated within a guaranteed time, and that time must be based on clinical, not political, priorities. If the NHS fails to treat a patient within that time limit, it must foot the bill for overseas or private treatment.

The Government have pilot schemes for overseas treatment and allow a limited number of people to receive treatment in private hospitals, but they are not moving quickly enough and they are not going far enough. To relieve the burden on the NHS requires radical solutions now. My Bill could ease the anguish and suffering of tens of thousands of people who are waiting for treatment, and I commend it to the House.

Question put and agreed to.

Bill ordered to be brought in by Mr. Graham Brady, Mr. Frank Field, Dr. Ian Gibson, Miss Julie Kirkbride, Mrs. Marion Roe, Dr. Richard Taylor, Mr. Nicholas Winterton and Mr. John Burnett.

Health (Patients' Rights)

Mr. Graham Brady accordingly presented a Bill to require the National Health Service to provide a patient with treatment in a private hospital or in a hospital outside the United Kingdom in certain circumstances; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 18 January, and to be printed [Bill 61].

Before I call the Secretary of State, I inform the House that Mr. Speaker has selected the amendment in the name of the Leader of the Opposition.

4.51 pm

I beg to move, That the Bill be now read a Second time.

It is pleasing that the Second Reading of a Bill that continues our challenge to raise standards takes place on the same day that the United Kingdom achieved its best ever performance on international comparisons of achievement for 15-year-olds. I know that the whole House will congratulate our teachers and young students, who, in the words of The Sun , showed: The Times , UK pupils were "near top" in world-class tests.

In reading literacy, our country came seventh. Only two countries significantly exceeded our score. In maths, we were eighth, and again, only two countries achieved significantly better results. In science, we were fourth out of 32, with only Korea significantly exceeding our score. It has always been the Government's aspiration that our country should have a world-class education service. That is what has guided us. Today's Organisation for Economic Co-operation and Development results show that we are on the way to achieving that, and I thank all teachers and all who work in our schools for making it possible.

Today, we have also received the latest Ofsted report into literacy and numeracy. As hon. Members will know, last year, the results of the key stage 2 tests faltered, staggered or stood still—whichever verb one wants to use. However, over the lifetime of the literacy and numeracy strategy, we have seen an 18-point increase in literacy and a 17-point increase in numeracy. Some of the largest increases in progress were achieved in our poorest local authorities in schools where children had under-achieved for decades.

The hon. Member for Ashford (Mr. Green) was kind enough to give his speech to the BBC in advance of giving it to the House. I noticed that he commented that the Ofsted report was "damning". I have no objections to high standards and high aspirations. I do not mind how he judges his performance, but I question his use of the word "damning", especially as Her Majesty's chief inspector of schools, Mike Tomlinson, said today of his own report:

Does the right hon. Lady also agree with the chief inspector of schools that the main reason that, in his words, there are problems this year is the shortage of teachers? Does she accept any responsibility for that?

I am not sure that the chief inspector said that that was the main reason. If I remember correctly, he said on the "Today" programme this morning that it was puzzling that the results had stood still. He went on to say that we cannot expect year-on-year improvement and that, in a strategy of such scope and importance, there were bound to be times when things stood still. He added that teacher shortages and teacher instability could be one of the factors that had an effect.

That is exactly the reason why, in previous years, this Government have taken measures in legislation and elsewhere to introduce training salaries and golden hellos, and the effects of that legislation are now coming through. That is why we had an eight percentage point increase in the number of people entering initial teacher training this year, and it is why we have 12,000 more teachers in our schools than we had four years ago.

The most interesting comment made by the hon. Member for Ashford—certainly in the official Opposition amendment—relates to the Conservative party's new-found love of local democracy. The amendment tabled by the Liberal Democrats also refers to local democracy. The hon. Member for Harrogate and Knaresborough (Mr. Willis), who speaks for the Liberal Democrats, has always wanted to put power into the hands of local authorities, rather than those of schools or parents, so I can take that point from him because it has been his consistent approach throughout the many years that I have known him. However, such an approach by the hon. Member for Ashford represents a U-turn of great proportions: gone are the free schools, and power has gone back to local authorities.

The Bill is intended to build on the excellent work that schools, governing bodies and all those who serve our children have achieved in the past four years in taking forward the standards agenda. Almost four years ago, my right hon. Friend the Secretary of State for the Home Department, the former Secretary of State for Education and Employment, introduced the first major legislative programme to kick-start our drive to raise standards in schools, and much has been achieved since then.

Four years ago, almost one in three of our infants were taught in classes of more than 30, so 485,000 youngsters started their education in classes that were too large for them to be given the individual attention that they needed. The House will know that that figure has fallen to 0.5 per cent., so that fewer than 8,000 of our infants are now taught in classes of more than 30. As well as the success of the national literacy and numeracy strategy, the amount of money spent on capital projects in our schools has trebled. For the first time, there has been sustained and significant investment in the buildings in which our teachers teach and our pupils learn.

We have already begun to provide major investment in the teaching profession, ensuring that we can reward our good teachers for teaching well, increasing their support in terms of classroom assistants and strengthening their professional development for the first time for a long time. All that and our other achievements, such as those in the tests for seven-year-olds and 11-year-olds and at GCSE and NVQ levels, represent a huge tribute to the head teachers and their staff, to the support staff and the governing bodies and to all those who work in our schools. They have achieved a great deal. On that issue, if on nothing else, I know that I speak for the whole House in paying tribute to the work that they do on our behalf for our children.

I hope that I shall also find agreement in saying that, against that background of significant progress during the past four years, there is still a considerable way to go. Some schools are still not good enough. Some children do not get the start in life that they need. The Bill is intended to build on existing legislation to provide new ways to tackle failure and to create more flexibility for our good schools. Such legislation would not have been possible four years ago.

It is crucial that we give schools more freedom and flexibility against a background of an accountable profession. We must know that teachers can use that freedom in the best interests of their children and judged against an evidence base. We now have the most accountable of all public services, which we did not have four years ago, and teaching is the most publicly accountable of all the professions. We know more than we ever did about the performance of every school in the country. Against that background of a hugely accountable profession and service, now is the time to say that, in that framework of accountability, we should devolve and trust those people who are well able to get on with the job that they need to do.

rose —

I must have said something that sparked off some interest.

Much of the accountability that the Secretary of State mentions is the result of the many reforms that were introduced under Conservative Governments, such as the publication of examination results, but will she help us on one issue: when will she publish key stage 1 test results, school by school?

I have always given credit where it is due. Ofsted and performance tables were clearly introduced under the previous Government. That was the right thing to do, we were right to keep them and we were right to reform them. For example, next year, we shall have the first value added key stage 3 results. I am happy to recognise what was done in the past. We have built on that.

We have no plans to change the publication of results except, next year, to introduce value added for key stage 3. In 2004–05, we shall be able to extend that to other age ranges.