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Local Government Finance Bill

My Lords, I feel that this amendment is actually extremely important. I draw the Minister’s attention to a report by the Institute for Fiscal Studies, which has confirmed that councils in the north of England are having to cut spending at almost three times the rate of councils in the south. In absolute terms of course, many councils in the north receive more revenue support per head than councils in the south, and will go on doing so, but then their needs in many places are also greater. The principles of resource equalisation continue to matter greatly, if we are to meet need fairly across the country.

This problem of deeper cuts in the north would have occurred had a Labour Government been elected in 2010, not least because Labour had plans to dismantle working neighbourhoods funding, worth several million pounds a year to many councils. However, I support the aim behind Amendment 7, because it maintains the principle of allocating spending against need and against the availability of resources, which I fear is increasingly in danger of being lost sight of, given recent settlements.

I hope that the Minister will be able to accept the amendment, or at least indicate agreement to its spirit: to ensure that resource distribution reflects the principles of need and equalisation. If the Government do not give that commitment, it implies that they are no longer in favour of resource equalisation.