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Council Tax

Part of the debate – in the House of Commons at 5:39 pm on 15th June 1995.

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Photo of Mr Irvine Patnick Mr Irvine Patnick , Sheffield, Hallam 5:39 pm, 15th June 1995

On 25 May last year, when the House debated council tax in Sheffield, I, as a Whip, was not able to take part officially. Despite that stricture, however, I was heard, and Hansard records my participation.

During that debate, my hon. Friend the Minister congratulated Sheffield on establishing a more secure financial base. The united pleas of Sheffield city council and others—including the Sheffield Members of Parliament—resulted in a £3 million increase in the amount originally proposed for the city. Each year, I have made representations to ensure that Sheffield is given its proper chunk of the nation's cake, crumbs and all.

I do not propose to make party-political points about why Sheffield is in its present position, or to apportion blame for its past mistakes. Many Sheffield residents, however, have taken to comparing the city with Manchester for the purposes of standard spending assessments. As the Minister knows, Manchester has more ethnic minorities, more one-parent families and more people on income support. All those factors determine standard spending assessments.

Manchester does not have the same physical characteristics as Sheffield, which makes any direct comparison impossible; but many people continue to measure Sheffield against Manchester. When I first entered local government some time ago, a rivalry existed between Sheffield and Leeds: indeed, it still exists. At that time, Sheffield compared itself with Leeds, but now that it obtains more from the Government than Leeds it has sought another city on which to base its arguments and has chosen Manchester.

The Government have responded in many positive ways, making a Minister responsible for Sheffield, approving the city's bid for a single regeneration budget and allowing credit approvals for part of the Sheffield inner ring road. Many other instances debunk the myth that the Government do not care about Sheffield. I am grateful to Ministers for meeting me on many occasions, and also for meeting an all-party delegation from Sheffield, of which I was a leading member. Ministers at the Department for Education have also listened to claims relating to Sheffield's circumstances.

However, my hon. Friend the Minister will not be surprised to learn that, on several counts, I am disappointed by the decision for Sheffield. I am sorry that its request for redetermination was not accepted. The expenditure limits contained in its SSA allowed for the cost of supertram, which greatly concerns not only Sheffield city council but Barnsley, Doncaster, Rotherham and all the other south Yorkshire authorities.

It was always understood—at least by south Yorkshire authorities, and by me—that no financial burden would be placed on local taxpayers. Thanks to supertram, the city council's share of the passenger transport authority's levy has risen by £1.69 million: the 1995–96 figure represents an increase of 8.7 per cent. Just under £1.5 million of that relates to the city's share of the capital financing costs of supertram, which increased by 51 per cent. over the previous year. Furthermore, the effects of supertram road works have influenced the city's traffic count for SSA purposes. Against all predictions, there was a 9 per cent. reduction in traffic flow last year. Sheffield estimates a loss of just under £1 million in the city highway maintenance allowance for 1995–96; I trust that that will be rectified next year, if not this year.

Oddly, not much traffic was passing the census points selected. In fact, all the traffic had been diverted owing to the construction of the supertram route. That is nonsensical.

Difficulties were experienced during 1994–95 in achieving a renegotiation of the council's debt repayment profile with the banks. That was due to factors outside the council's control, resulting in a judgment in the Credit Suisse v. Allerdale district council case. The implications of the judgment have compounded the wary attitude of financial institutions towards complex financial dealings with local authorities. That originally resulted from the interest swap case involving the London borough of Hammersmith and Fulham.

Sheffield city council is near to completing new arrangements with the bank and the Housing Corporation in respect of its housing partnership funding, and believes that that will facilitate further progress in other debt rescheduling. The delay, however, prevented the council from taking advantage of comprehensive rescheduling at an earlier date, which it had hoped to do. The rescheduling had been estimated to involve over £20 million this year alone.

Sheffield acknowledges, and is grateful for, the assistance of the Minister for Local Government, Housing and Urban Regeneration and the district auditor in answering points raised by the banks and giving reassurance about the propriety of Sheffield's existing and proposed arrangements. The council has also identified several elements of the SSA which were omitted from the 1993 SSA review, and brought them to the Minister's attention. Those elements, which disadvantage Sheffield, are the social index, the children's social service SSA, the area cost adjustment and the treatment of capital financing.

I urge the Minister to re-examine Sheffield's pleas for reconsideration. Its request is based on the Supertram effect on the SSA, the Allerdale case and points—some of which I have outlined—that were made when the Sheffield delegation met Ministers to discuss elements of the SSA that were not reformed in the 1993 review. Action on any or all off those matters will assist Sheffield greatly.

I hope to receive a positive response that will enable Sheffield to continue the reorganisation of its financial base in line with its plans for improved efficiency and better financial management. It has shown its ability to put its affairs on to a more even footing; it now requires further consideration and assistance from the Minister. I give notice that I intend to press hard for a revision of the SSA on Supertram, further help with the rescheduling of Sheffield's debt and changes in the SSA to favour Sheffield.