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Local Government Funding (Poole)

Rather than caveats, I prefer to say ““explanation””. It is to do with the change in funding capital. That is what makes the difference. By looking just at the pure cash terms increase, one does not compare what the grant is for one year with what it is for another year. That may be a helpful comparison, and I will put that in writing to the hon. Gentleman, but the council has had that information. I have to say that I did not recognise some of the figures that the hon. Gentleman mentioned, but I will admit—I think everyone in the House would—that local government finance is a pretty complex subject. I studied for the Chartered Institute of Public Finance and Accountancy exam for two years, and I was somewhat relieved when I was no longer a CIPFA student. Taking formula grant and schools funding together, in 2002-03, Poole received a total of £68.4 million formula grant and had a population estimated at 140,492. That is equivalent to a per head figure of £486. In 2007-08, Poole will receive £23.2 million of formula grant and provisionally £64.5 million of dedicated schools grants and it has a population projected at 137,644, making a total of £637 per head. I appreciate that all councils everywhere wish that their grant increases were greater, but those figures hardly square with the picture being painted by Poole council that somehow it is being deprived of funding to which it is entitled. Local government agrees that stability is important. The floor damping system is in place to guarantee a minimum year-on-year grant increase and curb the volatility of grant levels that some local authorities saw in the past. Poole is protected by that floor. It may be helpful if I say something about the way in which local government grant is formulated. The formula grant settlement is designed so that more grant will go to those authorities with a greater need to spend on services—for example, they may have high deprivation levels—and a low tax base, than to those authorities that have a small need to spend on services and a high tax base. I appreciate, as the hon. Member for Poole said, that Poole has pockets of deprivation—all areas have pockets of deprivation. That is why the deprivation index will take into account the level of deprivation in an area. There are areas of the country that have a higher level of deprivation than Poole. In Poole’s campaign, it has drawn funding comparisons with areas such as Manchester, Leicester, Middlesbrough and Bournemouth. All those areas have significantly higher deprivation indicators than Poole and therefore would expect to receive more money to deliver their services. One of the deprivation indicators used in the formula is the percentage of people aged 18 to 64 who are, or whose partner is, in receipt of income support, income-based jobseeker’s allowance or the guarantee element of pensions credit. That takes into account the points that the hon. Gentleman made about the higher number of pensioners in Poole. The areas with which Poole has chosen to draw comparisons in its campaign have high levels of deprivation. I am surprised that they were chosen and not others. Manchester has a level of deprivation of 18.3 per cent. The figure is 17.2 per cent. for Middlesbrough, 13.6 per cent. for Leicester and 8.9 per cent. for Bournemouth. Poole’s deprivation figure is 5.8 per cent. I am sure that it is grateful that that is well below the national average of 8.5 per cent. According to those figures, it is not correct to claim that the settlement is unfair. The hon. Gentleman’s council could have chosen to make comparisons with other unitary authorities such as Wokingham, Rutland or Windsor and Maidenhead, but Poole chose not to make those comparisons because it does not suit its campaign. It would be fair to look at the relative funding and relative need in other areas to get a broad comparison, not just choose areas that suit the council’s case. Poole’s relative ability to pay council tax is higher than that in many other areas. That is expressed in terms of the council tax base—roughly, the number of band D, two- adult equivalent households per head. Poole’s tax base is higher than average, at 0.41 compared to 0.36 for England and for Torbay, as I think the hon. Gentleman mentioned. So Poole has a lower-than-average level of deprivation and a higher-than-average tax base, and that is based on the principles of the 1981 formula, which has been updated. It is therefore expected that Poole will meet a higher-than-average proportion of its expenditure from council tax. The hon. Member for Mid-Dorset and North Poole (Annette Brooke) mentioned that Poole has benefited from other Government grants. It disappoints me sometimes that councils that have benefited in other ways from Government grants fail to acknowledge that. I was grateful for the hon. Lady’s recognition that Poole had benefited in that respect. The hon. Lady and the hon. Member for Poole asked for more transparency in the system. I have already drawn attention to the complexity of local government funding. We are awaiting Sir Michael Lyons’ report; we hope to see it relatively soon. It may show us a way forward. We need to consider that possibility. I have provided some understanding and some transparency this evening. Perhaps, in the future, the system will be less complex—we will have to see what is in Sir Michael’s report. The hon. Member for Poole mentioned the fact that a greater proportion of Poole’s expenditure comes from council tax than Government grant. Given the increase in Government grant from the formula that has been given to Poole, I hope that this does not lead Poole council to consider a higher than expected council tax increase for local residents. Investment has been made in Poole council and councils everywhere, and local residents would be somewhat dismayed if the council tax increase were too high. There is one other point that I want to make, and I hope that the hon. Gentleman will take it in the spirit in which it is intended. The campaign against the formula seems rather late in the day. He has said that his councillors are out every Saturday in the high street collecting names at their street stalls for a petition. Given that local elections are looming, I wonder whether the campaign’s timing has more to do with that. I hope that I am wrong.