Local Government Finance
4th February 2009
During a debate on the 2009-10 local government settlement, David Burrowes welcomes the review of the Area Cost Adjustment to better reflect the cost of providing services in London, but argues the need for changes to come into effect before the end of the three-year cycle.
Mr. David Burrowes (Enfield, Southgate) (Con): I am grateful to the Minister for giving way, and I apologise for not being present for the opening of his statement. The concerns expressed by my hon. Friend the Member for Wimbledon (Stephen Hammond) also affect the borough of Enfield. It too is an outer-London borough that welcomes the review of the area cost adjustment, but we need to see the reality of that review before we get to the end of the three-year cycle. Ideally, Enfield council would like to make reductions in council tax, but the fact that the dampening effect takes £5 million out of its hands means that that money cannot be passed on to the taxpayer.
John Healey: I am not sure that the hon. Gentleman’s description of damping is quite correct. He might like to recall that it was we who introduced the damping floor into the local government settlement in about 2000. Before that, authorities such as his would face big reductions year on year. They faced volatility that was difficult for them to manage, and that certainly made it difficult for them to plan ahead. If his authority benefits from the floor, I have to say to him that without that floor, his authority would be entitled to a good deal less support for council spending and council services.
