The local government minister said that the more than doubling of central funding for local government since devolution showed the Welsh government "commitment to local government".
But Local Government Minister Bob Neill accused Labour of having "a mindset that does down local government".
Minister of State for Communities and Local Government Grant Shapps said the retail guru would meet all the winning bidders and, along with his department, offer advice.
Responding to the debate on behalf of the Welsh government, Local Government Minister Carl Sargeant told AMs South Wales Police would see the greatest of the cuts.
Local Government Minister Derek Mackay said the Scottish government had made clear that there would be no reorganisation of local government in the foreseeable future.
On the issue of merging local authorities, the first minister reassured AMs that his government had no intention of proposing widespread amalgamation.
Local Government minister Carl Sargeant responded to the debate on behalf of the Welsh Government and said that he was happy to talk about what the government was doing to ensure value for money within local government.
Shadow local government minister Lord McKenzie of Luton said the changes could cause "great hardship to many".
Communities and Local Government Minister Shahid Malik said issues of liability and maintenance around smoke alarms in rented properties were complex.
On 30 June 2010, during the bill's second reading debate in the Lords, local government minister Baroness Hanham accused Labour of wanting to carry out a "destructive" reorganisation while in office.
It appears that the Minister is now prepared to wrest control of whole areas from local government and put them on a wholly different footing - waste, social services, trading standards for example, run regionally or even as a single national service.
The speech - the first of a new annual series by the deputy prime minister - comes as the coalition is considering far reaching proposals from the former Conservative minister Lord Heseltine to greatly increase the amount of government spending local authorities across England can control.
Hazel Blears, secretary of state for Communities and Local Government, said she rejected Mr Griffin's charge that the prime minister's use of the phrase represents an endorsement of BNP policy.
Hilary Armstrong, the local-government minister, is herself a symbol of change.
Opening the debate, Communities and Local Government Minister Baroness Hanham said that local retention of business rates would "for the first time in a generation, allow local areas to share in the proceeds of growth".
Those attending the meeting included local government minister Brandon Lewis, leaders and chief executives of Somerset County, Sedgemoor District and Taunton Deane Borough councils.
However Communities and Local Government Minister Andrew Stunnell said that "thousands" of new social houses were being built, despite financial cuts to the housing sector.
An emergency meeting was held earlier this week with the local government minister Brandon Lewis, leaders and chief executives of Somerset County, Sedgemoor District and Taunton Deane Borough councils.
Education Minister Leighton Andrews says the creation of Wales' 22 councils during a local government shake-up in the mid-1990s was a mistake that contributed to unsatisfactory standards in schools 10 years later.
Responding to the debate, the minister for local government and communities stated that he was "rightly proud of the government's work in treating PTSD".
John Swinney (Leader of the SNP, North Tayside) led with a question to Jack McConnell about whether the First Minister had already dismissed the idea of a local income tax ahead of his local government finance review.
BBC: NEWS | Programmes | BBC Parliament | Scotland: First Minister's Questions (11/03/04)
The Local Government Minister Carl Sargeant AM responded by stressing the importance of transparency as well as empowerment, and argued that as councillors are elected to raise revenue locally, then it is only right that council tax is determined by each local authority.
However, in a debate in the parliament's local government committee, Communities Minister, Wendy Alexander, urged rejection of the amendment, saying it was unnecessary as the fears of critics of repeal were covered by the bill's use of the phrase "stable family life".
Local Government Minister Carl Sargeant says that tackling poverty "requires a range of organisations to work together".
BBC: Communities First: Employment support funding announced
But Hilary Armstrong, the local government minister, has been appalled to discover that more than 90% of councils have chosen the cabinet system, often without doing much consulting.
She will raise the issue in plenary at the Senedd, and said she wants the Local Government Minister to "get a grip, because it is spiralling out of control".
But Communities and Local Government Minister Grant Shapps rejected the opposition's charges and accused Labour of leaving the coalition a "toxic legacy of debt" under their "scorched earth policy".
At the moment, local authorities can only evict tenants convicted of riot-related crimes that occurred within that area but communities and local government minister Baroness Hanham said this could change.
The government of the day would get a kicking at local elections and the prime minister would then try to distract media attention by carrying out a reshuffle.
"I also want to know why is it that when a council is found to be in need of special measures even then local government leaders are so loath to act, " the minister said.
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