Local Government Finance

I know Leeds well, although not as well as my hon. Friend. It has been successful in many areas in the past 10 years. We have carefully considered the methodology and the figures that we use. However, if one sets a threshold and criteria, some authorities will meet the criteria and others will not. Some authorities will come close to fulfilling the criteria and others will not. My hon. Friend's authority is one of 22, including mine, that have been eligible for money from the previous neighbourhood renewal fund but that are not eligible for payments from the working neighbourhoods fund. However, he knows that, to ensure that there is no cliff edge in funding, we will provide transitional funding of 60 per cent. for next year and 40 per cent. the following year. He should also bear it in mind that, by removing the strings that are attached to much funding for local councils, there is scope for them to make decisions about what they want to do to regenerate, improve the economy and make progress in areas such as some of those in his constituency. Today, I have published on the Department's website the confirmed allocations for next year from the working neighbourhoods fund. Twenty-two authorities will get transitional rather than full funding, and 65 authorities will get the full funding. In the next three years, our support, drawn for the first time from both the disadvantaged areas grant of the Department for Work and Pensions and our regeneration funding, will total approximately £1.5 billion, designed to concentrate our support on areas where deprivation continues to be most deep seated and difficult to dislodge. Also today, I have published on the Department's website the results of the refreshed consultation on the supporting people distribution formula, which closed last month. Following consideration of the responses, I am today confirming final allocations for next year. I am conscious that other hon. Members who want to speak, so I turn to the local authority business growth incentive. Earlier this year, in the light of new legal challenges, I announced that the Department intended to reconsider all aspects of the approach used to distribute the resources available for year 3 of the scheme. We have also looked again at payments that were made previously for years 1 and 2. I have today laid a written ministerial statement confirming that, in order to avoid the additional delay and uncertainty likely to be caused by further legal challenge, we intend to reward authorities on the basis of a wider set of rateable value change codes than was used previously, in years 1 and 2. The statement also discusses year 3 payments. It confirms our determination to achieve the policy aim of providing incentives to encourage business growth for local authorities. However, the inclination of a small number of authorities to pursue legal action has created greater complexity, uncertainty and delay. Given that, I consider that it will be necessary to retain a portion of year 3 funding, as a contingency in this final year of the current scheme. I will make further announcements providing more detail on payments for all three years as soon as possible. Finally on announcements, following the comprehensive spending review in October last year, we announced that a third round of local area agreement reward grant would be available. I can now confirm that the total amount available will be at least £340 million, plus an additional £50 million available in reward grant for more deprived areas, via the working neighbourhoods fund. In conclusion, the settlement does what it says on the tin. It builds on 10 years of continued real-terms investment; it covers three years; it is tight, fair and affordable; and it reflects many of the arguments that were put to us by local government. It is now for local government to deliver.