Local Government Finance

The hon. Lady makes a valid point and it is compounded by the Department's announcement earlier this year that it will no longer commit to a hypothecation back to local government of the revenue raised through that system. The hon. Lady is perfectly right; and the Government are making it worse. It seems to us that that is hardly a localising settlement. There is a lack of transparency in the methodology. Secondly, there is a failure to grasp key issues such as changing demographics. Pressures on adult social care, and increasingly on children and young people, were rehearsed last year by my hon. Friend the Member for Brentwood and Ongar (Mr. Pickles)—and they are getting worse. As a consequence of medical advances, more people are living longer, which often requires more complex interventions. We are also aware of the need for much earlier intervention to help young people with particular difficulties. All those raise significant burdens for the responsible authorities, but they are not adequately recognised in the settlement. What we have seen, then, is failure to tackle the demographic time bomb in respect of adult care and young people, failure to make the system more transparent and, indeed, a shifting of ground on some key issues. All that in the present context inevitably gives rise to a suspicion, particularly when the methodology lacks transparency, that indices of deprivation can be changed or altered conveniently so that certain parts of the country suddenly become more deprived than they were, which does not fit with people's experience across the piece. If the Government really want the public to trust the system of local government finance, which I do not think they do at the moment, they would have to put it beyond suspicion that the system can be tinkered with to advantage one's friends and disadvantage one's opponents. That is a serious missed opportunity that should have been examined further when we moved towards three-year settlements. It will obviously be down to others to sort that out.