Shropshire (Structural Change) Order 2008

I hope the Minister will forgive me if I introduce another topic that I ought to have introduced much earlier, but I am still picking up the threads of local government. Local finance is a subject that has always interested me intensely. I have always said that if you control the finance and manpower in a local authority you control everything and do not need to be on all the other service committees. For a long time, I did precisely that. Partly as a result of what the Minister said, and partly because we need to be clear on this for the sake of the new authorities, we ought to press the issue of the financial arrangements under which these new authorities are to operate. They have all been created on the presumption that there will be an efficiency gain from a financial point of view. In the case of Shropshire, £9 million per annum will be saved. The key question is how that £9 million is to be treated, given that so much of the money now comes from central government. Will the £9 million be deducted from the assessed expenditure level of the authorities within Shropshire so that when the new authority comes into being it will effectively have to be working to a lower budget? If one was highly optimistic, one would ask the question the other way round and ask whether the assessment of financial resources for the first year of the new authority will be on the basis of the existing level of expenditure, which would give the new authority a wonderful opportunity to show what could be done with the little bit of extra resource that it has saved because it is its proposal. Or is there going to be some other compromise arrangement? One is very advantageous for the Government—and given the financial situation of the Government, I can see the temptation for them to go for it, but that would not be a very honourable way to proceed. I suppose one could accept a compromise because the Government could rationally argue that they have given the new authority the opportunity to do this and therefore can claim part of the gain. The really wonderful thing to do would be to say that they will calculate the financial resources on the historical basis of what has been spent there and will see what use the new authority makes of the extra resources—which it still has to make as a result of rationalisation. I know this question is introducing a new topic, and I know it is late, but psychologically what the Minister says in response to it will be very important for all these new authorities.