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Local Government: Finance

My Lords, I declare an interest as the other half of the ““Likely Lads”” from Newcastle City Council, on which I am a councillor. I thank my noble friend for repeating the Statement from the other place. There has been some listening to local government and, indeed, the settlement is, I think, a little better at first glance than what we had feared. I declare an interest also as vice-president of the Local Government Association. On the issue of front-loading, it wanted a limit on loss of spending power of 8 per cent, and the Secretary of State has agreed on 8.9 per cent. The word ““progressive”” was used. I have three questions on which I should like a response. First, is this not a progressive settlement in the sense that there has not now been a reallocation of grant from poorer to richer councils? Secondly, reference was made to the grant of £650 million to keep council tax increases at zero in the next financial year, but there is a question about that sum being built into the baseline for many years to come. If council tax is raised by 2.5 per cent, it is always in the baseline for the future. However, if the Government give the equivalent of 2.5 per cent, will that stay in the baseline? That matters. Thirdly, for further clarity on the capitalisation limit and the cost of redundancy, it is probable that the capitalisation limit will not prove sufficient. If it is not, councils will be required to reduce revenue and spending in the next financial year, which will in turn produce further cuts and redundancies. My noble friend referred to other ways in which that might be done; I was wondering what those other ways were.