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Lord Kingsland: This group of amendments is concerned with one issue only, and that is objective recklessness in Clause 1. We appear to have launched ourselves into Clause 2. What the noble Baroness has said will be extremely important when the Committee comes to debate Clause 2, but I respectfully suggest to noble Lords that, having heard the noble Baroness, we should wait until we get to that clause so that we can put her words into the context of the amendments we have tabled to it. If not, we are in danger of discussing government amendments to a text that we ourselves intend to amend, but have not yet discussed the details of those amendments.
This may be an appropriate moment to bring this part of the debate to a close. I thank the noble Baroness for what she said on Amendment No. 9. I listened carefully to what she said on Amendment No. 8. The noble and learned Lord, Lord Bingham, has defined recklessness in the context of the Criminal Damage Act 1971. If I have understood the noble Baroness correctly, she has said that, for the kind of offence in the Bill, particularly when talking about terrorism in its generality rather than in relation to a certain act, the way in which the noble and learned Lord formulated the definition of recklessness for the Criminal Damage Act 1971 might not be appropriate for the offences as defined in this Bill.
I understand exactly what the noble Baroness has said. I shall look at the issue before deciding what to do about this amendment on Report. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Kingsland moved Amendment No. 9:
On Question, amendment agreed to.
Lord Bassam of Brighton: This may be an appropriate moment to resume the House in order to take the Statement on the local government finance settlement. I therefore beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.
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Local Government Finance
6.56 pm
The Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister (Baroness Andrews): My Lords, with the leave of the House, I shall repeat a Statement about local authority revenue finance for England in 2006–07 and 2007–08 made earlier today in another place by my honourable friend the Minister of State for Local Government. The Statement is as follows:
"Sensible planning for service delivery needs a stable and predictable funding environment. Freezes on grant distribution changes have helped. But the time has come to go further and give councils firm forward financial allocations. There is no reason why councils cannot now provide similar certainty for their local taxpayers when setting their council tax for 2006–07 by providing an indicative council tax for 2007–08.
"To give councils as complete a picture as possible of forward financial allocations, I am announcing today for the two years 2006–07 and 2007–08 allocations of formula grant and grant for the Supporting People programme. The Government will also publish by local authority a table of allocations of all the major revenue grants that can be allocated in advance, including the Neighbourhood Renewal Fund, which gives indicative allocations of £525 million for 2006–07 and £525 million for 2007–08 for the 86 most deprived local authority areas in England. By the end of this week we expect that the vast majority of individual specific grant allocations will be announced to local authorities. The only grants that cannot be announced at this stage will either be performance-led or data-driven in their nature.
"My right honourable friend the Minister for Schools will shortly announce the provisional allocations to authorities of Dedicated Schools Grant; noble Lords should bear in mind that these allocations need to be added to those I am announcing today to give a fuller picture of the above-inflation funding going to authorities with education and social services responsibilities.
"With the next spending review period we will move to give three years of grant allocations to local government. It is also high time we overhauled the system we use to distribute the formula grant. For over 20 years successive governments have used a system based on notional figures for spending and local taxation. In the 1990s, the government described the old Standard Spending Assessments as,
'intended to represent the amount which it would be appropriate for the receiving authority to calculate as its budget requirement'.
But we no longer take that view. The formula is simply a means of distributing government grant. Notional spending and taxation figures are nonetheless still being misunderstood and misused for a variety of purposes, such as spending or tax
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targets, for which they were neither intended nor suitable. Such notional figures get in the way of sensible budget setting, because councils treat them as targets or going rates, and get in the way of a more mature relationship with local government on doing business together. I propose a system that deals in an honest currency—cash grant—not fanciful assumptions about spending.
"I accept that most responses to consultation were against our consultation proposals along these lines. However, the arguments supporting this position were not strong. Many stated that the new system would be more complex or use more judgment than the existing system; neither is the case. The new system will retain the strengths of the old. It will continue to take account of the relative needs of an area, and the relative ability of councils' areas to raise council tax. There will be an element of grant that is distributed on a 'per head' basis, and there will be a grant floor.
"Total revenue grants to English local authorities will be £62.1 billion in 2006–07 and £65.1 billion in 2007–08, increases over the previous year of 4.5 per cent and 5 per cent respectively. Part of that increase is dedicated funding for schools, leaving formula grant for other services that will total £24.8 billion in 2006–07 and £25.6 billion in 2007–08, increases of 3 per cent and 8.8 per cent respectively. This means that by 2007–08 the increase in government grants for local services, since taking office, will be 39 per cent in real terms.
"We have been working with local government over the past three years on possible changes to grant distribution formulae. We consulted publicly over the summer and I am publishing the summary of consultation responses today. Following that consultation, we propose a number of changes. The main drivers behind these are: updating, in particular by using 2001 census data in place of that from 1991; making the system more forward-looking by using projections of population and council tax base; and adapting to policy change.
"The new formulae for personal social services for children and younger adults are based on extensive research and have a solid evidence base. This makes it clear that there will need to be substantial change to reflect the evidence on service provision and the very different social and demographic environment of the 2001 census. The grant system also takes account of councils' widely varying ability to raise council tax, depending on the council tax valuations of housing in their area. We propose to increase this resource equalisation because doing so will make the system fairer for those authorities with relatively low ability to raise council tax locally. I propose to adjust the grant distribution system to reflect the introduction of free off-peak bus travel for the over-60s and the disabled from next April. I shall do so by increasing in the district level environmental, protective and cultural services formula the weightings given to factors that reflect support for the disabled and the needs of areas where take-up is likely to be highest.
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"Grant floors—minimum guaranteed increases from one year to the next—are a permanent part of the system. Given the importance we attach to stability and predictability of grant, we shall be phasing in the larger changes this year with more than usual care. The changes to children's and younger adults' social services will be phased in with specific formula floors. Additionally, we propose grant floors for groups of authorities as follows. For 2006–07 the floors will be: 2 per cent for authorities with education and social services responsibilities, but this figure excludes the increase in schools funding, which will give all such authorities above-inflation increases in grant; 3.2 per cent for police authorities; 1.5 per cent for fire and rescue authorities, with this figure masking the help we give by phasing in recovery of the modernisation grant paid in 2004–05; and 3 per cent for shire district authorities.
"For 2007–08, the grant floors will be: 2.7 per cent for authorities with education and social services responsibilities; 3.7 per cent for police authorities; 2.7 per cent for fire and rescue authorities; and 2.7 per cent for shire district authorities. Within each group of authorities, those above the floor will have their grant increase scaled back to pay for the floor. The proposed floor levels will mean a fairly narrow range of grant increases in 2006–07, with police authorities, in particular, all receiving approximately the average increase. For 2007–08 all authorities receive a grant increase at least in line with inflation, and more formula change will come through for most authorities.
"I would now like to turn to the Supporting People programme, introduced in 2003 and now successfully providing support to over 1.2 million vulnerable people. I am pleased to announce a two-year settlement for this programme. The Supporting People grant allocation for 2006–07 will be £1.685 billion, which is a significant investment. I have also announced guaranteed minimum allocations for 2007–08 to enable authorities to plan their expenditure. Further, I am pleased to announce that authorities will be able to roll forward any savings from 2005–06 to 2006–07 in order to reinvest in the programme. This announcement brings stability to the sector and will enable authorities to work with support providers and voluntary sector and community groups to plan for the future. Building on the success of Supporting People, I recently launched a consultation on how the programme can be further improved and, following this consultation, I will announce next summer full allocations for 2007–08.
"This settlement is good news for councils and council tax payers. We have been working closely with local authorities this year to identify the extent of the pressures they face up to 2007–08, and consider these actions necessary to mitigate those pressures. I am pleased to announce extra formula grant for the two years over and above previous plans of £305 million and £508 million for local government. We have also agreed with local
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government that we will jointly move forward on a number of fronts aimed at addressing the real pressures that councils face. This includes a continued commitment to the new burdens procedure, working with local government to assess the costs and savings of implementing new policies and funding the net costs. We will be strengthening the mechanisms to enforce the new burdens procedure. Further, I announced to this House on Friday our agreement that cost pressures arising from reinstatement of the 85-year rule in the local government pension scheme will not fall on taxpayers.
"We are also aware of authorities' concerns over the costs of the new licensing scheme. I am pleased that we have been able to reassure the Local Government Association on this issue. My honourable friend the Minister for Creative Industries and Tourism has today reaffirmed the Government's undertaking that costs to local authorities from meeting their requirements under the new Licensing Act will be fully met by fees within the national fee regime, provided that they are incurred legitimately and efficiently. Local authorities will also benefit from the extra money coming in to local authority budgets through the Local Authority Business Growth Incentive scheme, and from the new top-up grants for police and fire and rescue pensions. These will help budget planning and, ultimately, the council tax payer.
"We have provided a stable and predictable funding basis for local services. We expect local government to respond positively so far as council tax is concerned. Therefore, we expect to see average council tax increases of less than 5 per cent in each of the next two years. There is, following today's announcement, no excuse for excessive increases. Local government should be under no illusions: if there are excessive increases, we will take capping action, as we have over the past two years.
"I am also announcing consultation on alternative notional amounts. The draft alternative notional amounts report sets out the proposed notional adjustments to local authorities' 2005–06 budget requirements, to help enable like-for-like comparisons with 2006–07 budget requirements for capping purposes. This is being issued today for consultation, to ensure that authorities know in advance of setting their budgets the budget requirement figure for 2005–06 that the Government will use when considering using capping powers.
"The Government have provided another significant boost to local authorities with a financial package that is stable, predictable and adequate to meet the pressures local authorities face over the next two years while keeping council tax increases down to acceptable levels. I have placed copies of tables showing grant allocations and supporting documentation in the Vote Office and the Library of the House; full details are being made available for
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local authorities on our website. I look forward to receiving consultation responses and commend these proposals to the House".
My Lords, that concludes the Statement.
7.9 pm
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