Local Government Finance

It might help the hon. Gentleman if he took half a day to come with me to some of the Mole Valley villages, which have deprivation to match anything he has in Wigan. In addition, he should think back to when we had an Office of the Deputy Prime Minister and the funding formula changed dramatically. That change reduced the grant to Surrey county council and the local district councils dramatically. The year-on-year loss to Surrey county council was £39 million, and that loss was reflected by the other councils. The hon. Gentleman should reflect on the fact that the money moved with the change in the formula, but that does not mean that the formula is right. I accept that there are differences in needs from authority to authority, and that this must be reflected in the allocation. But even the Audit Commission a few years ago commented on the fact that there had been a huge shift of grant from London and the south-east to the north and predominantly—at that stage—Labour authorities. The needs indices calculations are opaque. They are much more unintelligibly dense and complex than pre-1997. Pre-1997, shadow Ministers claimed that they would make the formula more transparent. I note, with some trepidation, that my own Front-Bench team says the same. Of course, it is always a balance. The more transparent and less complex a formula, the more there is rough justice. The fairer the assessment system—taking into account detailed needs—the more complex the formula. However, recent Government formulae have been designed to justify grant movement north despite increasing pressures from population, increased school rolls and increasing Government bureaucratic red tape in London and the south-east. I hope that we will have a new Conservative Government, who will have a massive reorganisation on their hands. It is overdue.