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Local Government Funding (Poole)

I can assure the hon. Lady, notwithstanding representations that she has made with local colleagues, as well as representations by the local authority, that there is an ongoing assessment of the area cost adjustment and all the factors involved. In reaching the local government financial settlement for each area, the Department bases its calculations on all the evidence presented by its own sources and, indeed, by local authority sources. As I said in response to the hon. Member for Poole, a dialogue is under way. There is continual assessment and reassessment, and any evidence or information that is presented is taken into account and assessed. Conclusions are reached by civil servants, and final submissions are made to Ministers, who make announcements to the House. We are open to representations and so on. Some people may think that certain factors are not taken into account, but I can assure the hon. Lady that all representations are considered very seriously. We have worked closely with the Local Government Association to look at the pressures that councils will face in the next two years, and the ways in which central and local government can manage those pressures. We accept that there are pressures on councils, especially waste management and social services, which is why we have provided an extra £305 million in 2006–07 and £508 million in 2007–08 in formula grant above what was previously planned. We are satisfied that the settlement following the spending review 2004, coupled with the significant extra investment that we have made in recent years, is sufficient to fund all the cost pressures that local authorities face in delivering services over the next two years. We have agreed to work jointly with local government in a number of areas. We will work with the Local Government Association to take account of pressures, and we will focus on pay, adult social care and waste in the context of the 2007 comprehensive spending review. We will introduce a strengthened new burdens procedure, and we have reaffirmed our commitment to discuss new burdens with local government as well as the measures to mitigate them. I understand the concerns of people in Poole, particularly of pensioners on fixed incomes and others on low incomes who are worried that the settlement may impose another large increase in council tax for the next two years. There is no need for them to be anxious but, given the average 3.4 per cent. increase in formula grant until 2007–08 that Poole has received since 1997, residents are right to express dismay at the persistently high council tax increases imposed on them and the proposed increase for the forthcoming year. Given the Government’s significant extra investment in public services and the scope for efficiency improvements, it is unacceptable for local authorities to set large increases in council tax. The average council tax increases in both 2006–07 and 2007–08, as we have said, should be less than 5 per cent. We have made it clear that we are prepared to use our powers to cap any excessive council tax increases, and we have done so in the past two years. In conclusion, I can assure the hon. Member for Poole, his colleagues and his constituents that I understand fully the points he has raised today. We have provided a good settlement overall, and, given the significant investment in local services, we believe local authorities can and should deliver council tax rises below 5 per cent. in 2006–07 and 2007–08. I will alert my hon. Friend the Minister of State to matters raised in this debate before his visit to Poole next month. Question put and agreed to.