Inadequate Grant Spells Council Tax Pain

24.11.03

Last week in Parliament saw the announcement of the Government's Local Government Finance Settlement.

Local MP Edward Davey who is also Liberal Democrat Shadow Spokesperson for the Office of the Deputy Prime Minster criticized the Governments inadequate grant for Kingston.

The settlement was not good news for local councils with a funding gap of £500 million at the heart of the statement; which means that authorities will be forced either to hike Council Tax or to slash services.

Edward Davey commented:

"Yet again, the Government's inadequate grant for Kingston Council spells pain for local council taxpayers.
"Kingston seems to get punished even though we have a low spending, relatively efficient authority, compared to most other councils.

"With council tax such an unfair tax, Ministers should be scrapping the tax, not making things worse."

Here is the full text of Edward Davey's Statement.

Can I thank the Minister for that statement, and for early sight of these complex numbers? And can I join him in welcoming the Rt. Hon Gentleman for Skipton and Ripon to his new position?

Mr. Speaker, the Minister says his statement is a good news story for local government.

Does he remember saying the very same thing last year? Does he recall the effect of his statement then was a schools funding crisis and record council tax rises?

Mr Speaker, didn't the Minister give the game away during his statement, when he kept warning councils on their budgets? Getting his retaliation in first?

For the truth is, Mr Speaker, this isn't a good news story. Government still hasn't sorted out the financing of local authorities.

At the heart of this statement, there's a massive funding gap. Even if the Minister's claim of £300 million extra turns out to be new money, will he accept that would still leave a funding gap of £500 million?

Will he confirm that to fill that gap, authorities will be forced either to hike council tax or slash services?

As for council tax, will the Minister concede he's already assuming an average council tax rise of 7.3% - nearly 3 times inflation? How can he wash his hands of council tax rises, when his own plans have an above inflation tax rise built in?

Worse still, with the massive funding gap, isn't there a danger of another year of double digit council tax rises? How can he square that with his stated view that council tax was at "the limit of acceptability"?

Given all that, Mr Speaker, it is surely incumbent on the Minister to be much clearer on his intentions for capping councils.

At least we know that the Rt Hon Member for Skipton and Ripon supports widespread capping - that's what he did in office.

How does the Minister square his capping threats with Labour's opposition to capping, when in Opposition? Why did he change his mind?

Back in May this year he promised not to cap councils rated "excellent" by the Audit Commission? Why by August had he changed his mind again?

If he does cap authorities, will he tell them which old people's homes to shut or which teachers to sack? Will he tell police authorities how many officers to cut?

Mr. Speaker, the Government are in a mess on council tax, because they've made this unfair Tory tax even worse. So isn't the real answer on council tax to scrap it, not cap it?

Mr. Speaker, when it comes to public services, this statement has many hidden problems.

On education, the Government has gone even further down the road of micro-managing every one of England's 21,397 schools.

Given almost every penny of government support for schools is now ring-fenced, how does the Minister expect LEAs to manage the £300 million overhang from this year's settlement? How are they expected to deal with the LEA's own demand-led spending on SEN and school transport?
Take rural schools. With 2,700 rural schools having fewer than 100 pupils, doesn't this straitjacket settlement imply a massive closure programme, and yet another attack on the countryside?

On social services, will the Minister confirm that the settlement will not meet in full the massive cost pressures for authorities on services like fostering and elderly care homes?

For shire district councils, this statement looks particularly bad - with the grant for their core services increasing by less than inflation. Something that, in Opposition, the Minister called a cut.
Will he confirm there's a real terms cut for services like recycling, cleaner streets and better lighting? Will he therefore tell the House what has happened to the Government's so-called liveability agenda?

Mr.Speaker, I do welcome the Minister's assurance that the costs of the new licensing system will be fully covered by fees, but can he tell the House what meetings are planned with the LGA to deliver on that?

Mr. Speaker, the Minister may revel in having the poll tax promoter as Conservative leader, and the council capping champ as Tory Local Government Spokesman.

Yet he must recognise that debating points about the past, won't help the council tax payers of today. He knows the council tax is set to soar again. He knows this statement will do nothing to stem the country's unrest and unease about the spiteful council tax.