I add Mr. Darvill on his lucid explanation of the subject and pay tribute to Mr. Kidney, who has led the F40 group magnificently both in this place and outside. We have made our point and eagerly await the Government's response.

There is always a temptation to think that anyone who takes an interest in local government finance is mad, bad or merely sad. However, its importance cannot be underestimated, given the impact that it has on our lives as Members of Parliament through the various ways in which our local councils operate. I shall lay my cards on the table from the outset. I come not to praise the current system, but to bury it. It is unfair, opaque, and fails in its key task of providing the right level of services in the appropriate way. Radical reform is necessary, and I welcome the Government's Green Paper. Like my hon. Friend the Member for Stafford, I look forward to a White Paper soon after the election to ensure that we drive the change through and achieve radical reform.

We can dissect the problems of local government finance in many ways, but I will concentrate on three areas that clearly demonstrate where it has gone wrong. First, my hon. Friend the Member for Stafford mentioned cost adjustment, which is the Tories' payola and nothing less than a way of bribing certain local authorities to continue with what has happened in the past. If one wants to annoy any head teacher or councillor in an area that is tangential to an area in which cost adjustment applies, or in one of the metropolitan boroughs, one must only mention cost adjustment and a blue touch paper is lit; the issue causes incredible anger and dispute and something must be done about it.

Secondly, for all the complications and differences in local government finance, the same services are effectively being provided nationwide. There may be some cost differences across the country, but they are often exaggerated. If we are providing common services, they should be funded in common ways. A need for commonality of funding exists and we should either be levelling up to a mean, or jointly accepting that a common system can be achieved, barring the exceptions that I shall mention.

The third area may have been brought to Ministers' attention by the sheer idiocy of what is happening. Like my hon. Friends, I shall use the experiences of my local authority to highlight the anomalies in the system. Our fire and rescue service in Gloucestershire has done what it should have done--reduced the number of emergency calls by checking calls and ensuring that people are not abusing the emergency services, as well as the number of retirements--so it has achieved a wonderful 1.4 per cent. increase in our standard spending assessment. After some nifty lobbying on my part, I managed to reduce that to a 1.3 per cent. increase. Ministers were apoplectic when they were asked why that had happened. That anomaly, and other anomalies that every hon. Member can think of, bring home the reason why we must change the system.

Why have we failed to change the system in the past? We all agree on the need for reform, but not necessarily on a mutual goal. There has been conflict between the metropolitan boroughs and counties, among the various layers of local government and between those in an area of cost adjustment that have something to defend and those outside the area who are trying to get in, or who are saying that the system is unfair and should be changed. We sometimes underestimate the impact of the different layers of local government. It pleased me that the Green Paper mentioned parish and town councils. As a town councillor, I was happy to see that the first level of government--which should not be regarded as the lowest level--was mentioned because it has a role to play in reforming the system.

However, what brings home the need to engineer that reform is the state of the major services--education and social services. My hon. Friend the Member for Stafford mentioned that the Chancellor had channelled funding into schools in a different way, and we have certainly seen the advantages of having a common system. However, many problems exist in the social services of most authorities and they are related to funding and unfairness in the system, which we must do something about. To a certain extent, those problems could be dealt with outside the area of funding and its need to be linked with health, housing and other issues. However, that strategy will not be sufficient on its own and we must see what the funding arrangements are to ensure that services are receiving funding, particularly those for older people and children. One anomaly in the system that needs to be addressed is the radically different way in which children's services are funded in different parts of the country.

I shall deal with a few other matters in passing. The formula is far too complicated and as a result no one understands the nuances of the resulting change. Importantly, that situation militates against local initiatives and improvements. I have confidence in local government, albeit in perhaps a different form. Those of us with three-tier authorities are desperate to move to a two-tier system that bolsters town and parish councils and recognises that unitary authorities can deliver services with clarity. However, that is an argument for another day. It is galling to discover that the funding arrangements do not take account of particular problems. In the past six months, my county has been hit by two crises: flooding, which caused enormous problems, and foot and mouth disease. There must be a degree of finesse, in that funding must form part of the way in which we deal with those problems. Unfortunately, there is no way to do that at the moment.

What can we do? The Government must face up to the need for radical reform. My hon. Friend the Member for Stafford referred to the F40 group. Its highly creditable campaign, which the Government have regarded positively, has introduced many ideas, but we must push the rationale for reform. That is only one service and we must remember that we are reforming across the board, but its arguments for raising lower-funded authorities to an arithmetic mean and establishing common, service-based funding deserve close attention. Such initiatives could be linked to changes in the council tax regime. Re-banding, for example, should play a part in the changes in local government finance that we are discussing. We need to lower the banding for some residents in band A. Those of us who campaigned for fairness for dwellers in park homes will regard that as an important issue. Moreover, we should ensure greater fairness as regards those in band H--I am not having a go at them as individuals--who are not paying the proper amount towards local government funding.

Establishing floors and ceilings is a move in the right direction. I am confident that the Government now know how to do so, but they must grasp the nettle of reform and ensure that the various services are able to continue by providing appropriate funding.

Another reason why reform has failed is the London effect. Given that the constituency of my hon. Friend the Member for Upminster, who secured this Adjournment debate, is in the London borough of Havering, he is doubtless able to argue far more fiercely than I could for the need to recognise London's impact. I accept entirely that London is a special case, although we may not choose to describe it as such. We must recognise that the poorer London boroughs must not be disadvantaged by the new system. Indeed, if there is to be proper reform, some dampening might be necessary for a time to ensure that certain authorities are not unduly hammered. Some parts of the country will doubtless express a degree of schadenfreude, saying that it is about time that the south-east got its come-uppance. However, we should not argue that case too fiercely, because that is not the way to achieve an acceptable level of reform. We must recognise that there will be cost implications in the interim, until we move to a funding system that is fairer and more transparent.

We recognise that the task will not be easy and that many other elements in the Green Paper are also worthy of note. It is a strength of the document that it is thin: it is straightforward and not over-complicated. Pages 12 and 13 set out the SSA system clearly and comprehensively and have enabled me to come nearer to understanding it than ever before. I wish that the hideously complicated system were that simple in reality.

We must also examine such topics as the fairer use of capital investment and links to business rate changes. I would like the funding stream to be localised so that businesses can put money directly into their local communities. Such a link between a business and the local community is a symbolic, but important, gesture.

I hope that the Government recognise the need for urgent reform, and will get on and make the progress that some of us wanted earlier. The case is now proven, and all that remains is delivery.