Local Government Finance

I appreciate my right hon. Friend's remarks—although I am a little taken aback by them. I hope that this year, unlike previous years, he will not have cause to revise his observations. At the centre of the settlement is the implementation of changes to the social services formulae that were decided in 2005, introduced in 2006 and double-damped for the following two years. We are moving to a situation whereby we allow those formulae, which represent our best assessments of relative needs, to reflect the settlements that we give. That is a fairer settlement, based on the principle of the analysis that we have carried out. Let me say to hon. Members on both sides of the House that although this is clearly the right thing to do, the general system of floors damping means that it will take not just this spending review but probably the next as well, before the formula is fully unwound. In that way, we can avoid the extreme changes and volatility that characterised the finance system before this Government introduced the system of floors.