I beg to move,
That the Rate Support Grant (Increase) (Scotland) Order 1972, dated 7th February 1972, a copy of which was laid before this House on 14th February, be approved.
I would suggest that with this order we take my next Motion,
That the Rate Support Grant (Increase) (Scotland) (No. 2) Order 1972, dated 7th February 1972, a copy of which was laid before this House on 14th February, be approved.
House of Commons Paper No. 76 explains the considerations leading—[Interruption.]
Order. I would ask hon. Members to withdraw as quickly and quietly as possible. Meanwhile, if it is for the convenience of the House the two orders can be taken together. Is that agreed?
No one can accuse me of not trying.
House of Commons Paper No. 76 explains the considerations leading to the provisions of this order. I also draw the attention of the House to the No. 2 order laid before the House on the same day as the first and the provisions of which are explained in House of Commons Paper No. 77. They both serve similar purposes, and I am sure that they will be acceptable to both sides of the House in so far as each order is intended to prevent the value of rate support grant from being eroded by subsequent unforeseen rises in the level of prices and wages.
Each order increases the rate support grant paid by the Scottish Office in aid of local authority reckonable expenditure which would otherwise fall to be met out of rates. Reckonable expenditure includes the cost of providing all local authorities services other than trading services and expenditure carried on housing revenue account, and this is about 80 per cent. of the present expenditure of local authorities on revenue account.
Hon. Members may recall that about a year ago, on 15th March, my right hon. Friend introduced two rate support grant orders. One was to increase the amount of grant for the second rate support grant period 1969–70 and 1970–71, and the other was to provide grant for the third grant period; that is, 1971–72 and 1972–73. These two orders provide grant on estimates of the expenditure of the authorities which were agreed with the local authority associations towards the end of 1971 on the basis of prices ruling in November of that year. Since that date there have inevitably been wage and salary awards and price changes affecting local authority expenditure, and they call for an adjustment of the estimates.
The powers under which the Secretary of State pays the rate support grant to local authorities come from the Local Government (Scotland) Act, 1966. Under Section 4 the Secretary of State may redetermine the rate of support grant when he is satisfied that since the grant was last determined for any particular year there has been an increase in the level of costs, prices or remuneration and that the effect of the increase on the reckonable expenditure of the local authorities is substantial.
Under the general powers in Section 4, the Secretary of State can vary the grant settlement only to take account of the effects of cost increases. He cannot vary the main settlement to take account of changes in expenditure which are the result of policy decisions, whether by central government or by local government. My right hon. Friend is satisfied that there have been cost increases, and that the effects are substantial, and he has therefore decided that there should be increases to the grants payable for 1970–71, 1971–72 and 1972–73.
Perhaps I should say a word about the Rate Support Grant (Scotland) (Increase) Order, 1972. This increases the grant for 1970–71, the second year of the last grant period. This was originally fixed at November, 1968, prices by an order made at the beginning of 1969 and adjusted by the 1970 increase order to the price level of November, 1969, and then by last year's increase order to that of November, 1970. These orders have brought up the amount of grant provided for 1970–71 from its original figure, which was £214 million, to £227 million, and then to £251 million, and the present order makes the third and final increase to £255 million. All these successive sums represent 65½ per cent. of the reckonable expenditure of local authorities for that year as originally estimated but with adjustments to the eventual out-turn price.
As hon. Members will have observed from Appendix I to the report, the largest item is the cost of increased police pay and allowances, including a general pay award which took effect from September, 1970, and the additional costs arising from implementation of a reduced working week from April, 1970. There were also, as hon. Members will know, awards to chief constables and assistant chief constables, and other pay awards, including just under £1 million for teachers, part of a general award from 1st April, 1971, of which the main effect fell into subsequent financial years.
The cost of loan charges, after rising fast for some years, began in 1970–71 to level out, but there was nevertheless an estimated increase of £½ million in the cost of local authority borrowing. A number of other minor cost and price changes were estimated to add some £2 million to the total of the reckonable expenditure of authorities, and, after taking account of offsetting increases in income which tend to follow expenditure, the estimated increase is £6·07 million.
In accordance with the original grant settlement, this attracts Exchequer grant at the rate of 65·5 per cent., making a grant increase of £4 million. Of this increase, £1·4 million is absorbed by specific grants, mainly the police grant, and £2·6 million is accordingly payable as rate support grant. Three-quarters of the additional rate support grant will be distributed as needs element and the remainder as resources element.
I come to the Rate Support Grant (Increase) (Scotland) (No. 2) Order, 1972. This increases the grant provided for both years of the present grant period by the order which the House approved in March last year. The total increase of grant over the two years 1971–73 is approximately £40 million. My right hon. Friend has also taken the opportunity to include in this increase order some changes in the distribution formula for the needs element of the grant which have been agreed with the local authority associations after a joint review of the working of the present formula. The last time the formula was changed was in 1970.
I wish particularly to acknowledge and bring to the attention of the House the valuable help we get from the local authority side, both from those devoted few who take part in the committee work and from the many who supply the complicated statistical returns without which the annual pricing of this large block of expenditure would be a rather hit or miss affair.
The additional grant is at the prescribed percentage rates, 66 per cent. for 1971–72 and 66½ per cent. for 1972–73, of the estimated increase of expenditure. The estimate of cost increases is the product of detailed joint examination and analysis of local authority expenditure and of the effects of different pay awards and price changes after study by officials of the Scottish Departments concerned and representatives of the local authority associations.
Hon. Members will also have noticed in Appendix I of the report on this order the broad composition of the price increases, about which it might be helpful if I were to comment. This is a pattern which has appeared before in this type of order. Staff costs amount to more than half of the total. There was a major award of nearly 9 per cent. for school teachers, and the full effect of this, with the award to further education teachers, has an effect of just over £9 million. The police award, to which I have referred, increased costs by about £3½ million, and there was a general award to professional, administrative, technical and clerical staffs which was calculated to have a full effect of 9.1 per cent. from the beginning of July, 1971, and adds over £2 million to the estimate of reckonable expenditure.
Including other lesser awards, the total cost is put at over £18 million in each of the two years, and there are consequential increases in view of the higher wages and salaries which are reflected in higher employers' contributions in respect of graduated pensions and superannuation.
Hon. Members may also recall the Pensions (Increase) Act, 1971, which provided for the pensions of retired public servants to be adjusted in relation to past price changes, a Measure which I think I am right in saying was generally welcomed as being fair and necessary. However, it adds £¾ million annually to the estimates of reckonable expenditure. Increases in cost of other than wages and salaries are estimated to add £14½ million in 1971–72 and £15½ million in 1972–73, and these amounts cover many different changes.
It might be helpful if I were to give a few examples. For 1972–73 the cost of textbooks and library books is estimated to increase by £350,000; clothing and uniform costs by £80,000; road maintenance materials by £400,000; while the cost of heating, lighting and cleaning properties used for the different services is estimated to increase by over £2 million.
Against the gross increase of £35 million and £38 million for the two years may be offset some increases of income arising mainly where some of the increased costs fall on recoverable expenditure. Hon. Members will find the amounts offset against the increases for each year at the bottom of Appendix I of the report on the order and detailed against individual services in Appendix II.
They are agreed figures. They have been agreed in consultation with the local authority associations and are made up of a number of complex calculations.
Hon. Members may remember that these amounts include substantial savings in estimated loan charges as a result of the fall of nearly 2 per cent. in interest rate on new borrowing between 1st December, 1970, and 1st December, 1971, a welcome change after trends in recent years.
Lastly, they include the savings arising as a result of the Education (Milk) Act, 1971, that Act having specifically provided for the resulting savings to be allowed for in any re-determination of grant for the current grant period. In estimating the savings of £2¼ million for the two years of the grant period we have, in agreement with the local authority associations, made generous assumptions about the possible number of primary schoolchildren over 7 who will get free milk on medical grounds. The resulting net cost increases are £29 million and £30 million for 1971–72 and 1972–73 respectively. These, in turn, add £19 million and £20 million to the aggregate Exchequer grant, of which £16 million and £17 million goes into the rate support grant.
Approximately three-quarters of the additional grant is to be distributed as needs element, approximately one-quarter as resources element, but we have at the same time taken the opportunity to make small increases in the domestic element of grant. These derive not from cost changes but from up-dating our estimates of total domestic rateable values and, therefore, of the amounts of grant necessary to give households the prescribed reductions of the rate poundage—that is, of II p in the pound for 1971–72 and 12p in the pound for 1972–73.
I propose to refer briefly to the changes in the formulae which govern the primary distribution of the general needs element distribution to county and city authorities, which I mentioned earlier. This is the largest of the grant elements. It takes approximately three-quarters of the total rate support grant, and, because its distribution can have a very significant effect on local rate poundages, the working of the distribution formulae is kept under review by my right hon. Friend's departments and the local authority associations in consultation with each other.
The grant is distributed, as hon. Members will know, according to population as increased by weightings representative of the various objective factors which affect the costs of providing local services. In other words, the factors are geography and population, which are out-with the direct control of the authorities themselves. The weightings are spelt out in detail in the schedule to the order, but when I say that the total weighted population is some three times the actual population hon. Members will recognise that the weightings are the predominant influence in grant distribution.
For 1972–73 the changes in weightings are, first, the dropping of the weightings for part-time evening and further education; second, some increase in the weighting for variation of the population; and, third, some reductions of the weightings which reflect the distribution of county populations as between landward and burgh areas. Briefly, the further education weighting included in the calculation of education units is dropped because it did not reflect the incidence of expenditure on this service. The weighting for population changes is stepped up because of evidence that the associated additional burdens on rate fund expenditure were not adequately compensated by the scope of weighting formula prescribed. The weighting for the ratio of landward to total population is scaled down, because that seemed to introduce an element of over-compensation to some authorities.
The distribution changes have the unanimous support of the local authority associations. Their effects on the whole will be marginal, but the City of Glasgow, because of its large size and rapidly falling population, will gain considerably from the increase in the variation weightings, and the justice of this has been generally recognised by other authorities in the consultations that we have had.
In presenting the orders to the House I have laid some stress on the fact that the problems of cost increases and of improving grant distribution have been tackled in association with the local authorities. It is absolutely essential that there should be this co-operation. I think it gratifying also that over six years of work together under two different Administrations on the problems of reckonable expenditure and the rate support grant the machinery has been considerably strengthened. As was said in the Green Paper on local government finance, it is the Government's intention to find means to make possible the same kind of joint approach to influence decisions in the whole field of local government expenditure.
I have tried to give as much information as I can in introducing the orders, and I hope that the House will approve them.
I compliment the Under-Secretary of State on an excellent reading of his brief. I say that with complete impartiality because I was in trouble with his predecessor when I paid him the same compliment. It is evidence, I think, that many of us find this a difficult subject to understand, especially if, as I do, we are inclined to leave a study of it till the last minute. It is undeniably a complicated matter.
I shall not use the word "generosity" tonight, though I have no doubt we shall be hearing it in the morning, but I suppose that if any Minister says that Glasgow will benefit from something there must be some value in it, and as he said that it has had the unanimous agreement, if not approval, of other local authorities I presume that there is some justice in the recognition of the extra burdens which are being added in Glasgow as a result of declining population. I think that that is the substance of it. Obviously, everyone will welcome—however regrettable the need may be—the pay increases and the increases in the police and public service pensions.
I hope that I shall be in order now in taking up one other matter. In fact, this is so complicated a business generally that I am hoping that it will be difficult to detect when I am out of order. The Minister seems to emphasise an inability to use the Act and the machinery under it to make provision for the additional burdens thrown on many authorities by the advancing of public works programmes with a view to making some impact on the level of unemployment.
Is it not possible to use this machinery to make adjustments on the basis of the needs element? If it is possible to take account of other changes, why not this also? Or do we need amending legislation to enable the Government to do what should be done in common justice? It is unreasonable to expect local authorities and their ratepayers to take on additional burdens in this way without some provision being made. The Minister will be aware of the detailed representations which have been made by many local authorities on this score. Has consideration been given to them in the context of these orders, or can steps be taken to do justice to the valid points which the local authorities have made?
In the Secretary of State's Report on the Rate Support Grant (Increase) (No. 2) Order, we are told that the savings under the Education (Milk) Act, 1971, are £1,020,000 in 1971–72 and £1,230,000 in the following year. I find this curious. I cannot see how the Government can make any sensible estimate whatever of the operation of that Act. As a result of its imposition on the local authorities—I say "imposition" because it was imposed against the will and desire of every local authority in Scotland—some very curious results are emerging.
For instance, under the provision for exemption on medical grounds we are finding a fluctuation, with some counties giving no free milk on medical grounds while others are giving as much as 40 per cent. But, of course, the examination is still continuing. The Government must recognise clearly, as must every medical officer of health in Scotland, that this is a ludicrous position. It is just not medically conceivable that in one county not a single child should require milk and in another county 40 per cent. of children should require milk.
We cannot say that the health differentiation between, say, Sutherland and Lanarkshire is different by a factor of 40. Indeed, since it is actually zero in some counties, the health factor in Scottish children has to be assumed to be varying by a factor of infinity. As soon as other medical officers recognise this the whole situation will change. There is no known reason why the 40 per cent. of children should have the milk, and medical officers are going to start applying the extension which is applied to the 40 per cent. The only thing that is preventing every child in Scotland from getting free school milk as of right on medical grounds is that the medical officers of health cannot yet quite believe that this Government are as stupid as they are. Medical officers of health are saying, for example, "Yes, we quite see that every child should and could get milk under this if they require it, as they do require it. But, clearly, the Government could not mean this." Some of the medical officers of health are trying to interpret the situation for the Government, and they have not yet seen that they can all give every child free milk.
So in a curious way, in trying to behave in a responsible way, unlike the Government, the medical officers of health are now themselves preventing the mass issuing of free milk in Scotland. Since they are very reasonable and tolerant people, when they realise that in some counties no children are receiving milk and in other counties the figure is 40 per cent. and perhaps more, they will ask why they should deprive the schoolchildren in their county of free milk and will begin, as I hope and as they should, to give it to every child.
I can see that the hon. Member for Perth and East Perthshire (Mr. MacArthur) is aching to intervene and defend his Government's reactionary policy, but it is to the Minister that I am addressing my remarks.
I am very interested in the argument which the hon. Member is advancing, and I appreciate the difficulties that he describes. They are, of course, entirely new because when the Labour Government abolished free milk in secondary school there was no exemption of any kind on medical grounds, and it would be well for the hon. Member and his hon. Friends to remember that.
In the first place there was a very obvious difference in the medical advice that was given; for example by Dr. Yudkin a nutritional expert. The hon. Member should look up the medical evidence before he interrupts. Secondly, I hope he has read some of the information given by the director of education in Perthshire who, because of the decisions taken by the Government, was concerned that rural schools would not get supplies of milk because of the problems of supplying a small amount of milk to them.
It is a good job the Liberal Members are not here, or the hon. Gentleman might be attacking them.
The other great omission is that, while the Minister referred to the saving made by the monstrous proposal to take free milk away from children, he has not referred to the income that will accrue to local education authorities in Scotland as a result of that great gesture towards education policies, the Education (Scotland) Act on fee-paying that the Government passed last year. Why are they not expecting any authority to apply it? They laboured it through Committee sitting after Committee sitting for five months, holding our noses grimly to the grindstone, while another industrial crisis was developing. We heard no mention tonight of the money that will come to the local authorities as a result of the Act. Is it because no local authorities wish to apply it? I understand that there are now three schools in Edinburgh that might apply it if the Secretary of State for Scotland were so misguided as to give one judgment against the wishes of the Glasgow Corporation and one judgment for the tiny majority in the Edinburgh Corporation. I cannot believe that he would be so foolish as to do that. It is curious that the Government have recognised that that Act was a sterile exercise and that no real revenue will come into the local authorities as a result.
My third point is that raised by my hon. Friend the Member for Glasgow Provan (Mr. Hugh D. Brown) on the public works programmes. If the Government had been seized of the seriousness of the industrial and economic position they have placed us in, they would have tried to ram through the right kind of public works. In some desperation, they have now tried to distribute money as fast as they can, turning their policies on Government expenditure upside down. That is one way of trying to reduce unemployment. It could have been done by extending the amount of grant given to local authorities, putting it on a 100 per cent. grant basis. I thought we might have seen special provision here to deal with the situation in which the Government have placed Scotland. I thought we might have seen special aid in the rate support grant to bring forward the right kind of public expenditure programmes to deal with the mess they have led us into.
With those few uncontroversial remarks, I conclude.
I apologise to the Minister for having been absent for part of his speech. But I heard him say that the order makes no allowance for central or local government policy changes. I hope I quote him correctly.
Having regard to that, I begin with one or two comments on the social work allocation. I was rather aggrieved that in our previous debate, on provision for the chronically sick and disabled, questions relating to Scotland were not answered.
In our last rate support grant debate I raised the question of home help provision under the Social Work Act (Scotland), and was told that there was a 25 per cent. increase in rate support grant for social work, which would enable many local authorities to increase their number of home helps. But it was only by checking that figure that I discovered that an increase of 25 per cent. over two or three years amounted to £5 million, and since there are 55 social work authorities in Scotland not much benefit results. Costs have escalated to such a degree that I think, without the benefit of a cost analysis from the local authorities, that these increases are too small. The Department has not paid due regard to severe increases particularly in the administration of social work departments.
Not one social work department in Scotland is fully staffed. If we are to carry out the social work policy as laid down by my party and the present Government, the first priority is to have regard to the severe shortage of trained social workers. I have been making representations not only to Glasgow but to the training college in Edinburgh, which I hope to visit next week, about the position. I hope that the Under-Secretary will give us an assurance that efforts will be made to recruit more staff, particularly social workers. The fact that this is urgent can best be exemplified by reference to the recent crisis in my constituency when 770 disabled people were in severe difficulties because of the fuel crisis and because the social work department in Glasgow was inadequately staffed to deal with it. It was only the voluntary social workers plus some clergymen in my area who saved the situation.
The allowance for libraries is totally insufficient. There is a need to make libraries accessible to disabled people, which is a costly operation for many libraries. Many periphery housing estates are devoid of proper library facilities. In one large housing estate in Glasgow there is always a queue of young people who wish to use the library and because it is far too small they cannot make proper use of it. We should try to expand the library facilities, particularly for young people and people who have retired early through redundancy and voluntary retirement. I hope that the Under-Secretary will pay regard to this point.
I wish to deal with the projected assessments for town and country planning in Appendix II of the No. 2 Order. The projected increase for 1971–72 is from £8·42 million to £8·49 million. The figure given for 1972–73 is £9·35 million. The end column in the table refers to a forecast "as further increased" to £9·34 million. I am not clear about that.
The Minister has been having discussions with the Glasgow local authority about a change in its attitude towards planning matters. The authority proposed 29 very costly developments projects and it has dealt with only eight. Therefore, 21 compulsory development area schemes vital to Glasgow's planning needs in clearing slums are left in abeyance. The local authority entered into negotiation, through the district valuer, with many organisations, firms and individuals to purchase ground, perhaps a few years in advance of its needs. But the good reason for that was that the cost of ground was escalating.
The memorandum which the Minister submitted to the Glasgow local authority was excellent in what it said about the environment and the planning of a city for the twenty-first century. I said elsewhere that I fully supported that part of the memorandum. However, we must consider the costs involved in any plan to change the whole structure of an area like Glasgow, and the figures mentioned are totally inadequate for Glasgow's needs. We have the privilege in Glasgow of seeing the rebuilding of a great city within our lifetime; whether we should also have the privilege of paying for it is another matter.
I am sure that I carry all other Glasgow Members with me when I say that Glasgow already has a tremendous rate burden in the cost of other services, and that must be borne in mind when the Minister's memo is considered and when all the good things in it are implemented, and the resources allocated to planning will have to be reconsidered. Planning is vital if we are to attract new industry to Glasgow and central Scotland, and Glasgow's structural image will have to be changed if we are to attract middle management and executive levels to Glasgow.
We are dealing with considerable sums of money. An indication of the frailty of our ability to make exact forecasts of the support needed by local authorities is to be found in paragraph 2 of the order:
For the amount prescribed by the Rate Support Grant (Scotland) Order 1969, as amended by the Rate Support Grant (Increase) (Scotland) Order 1970 and the Rate Support Grant (Increase) (Scotland) Order 1971 for the purposes of rate support grant for the year 1970–71 …
Here we are having our third go at it.
That shows how frail are our efforts to estimate accurately and how important it is to get things right at the start. Once we fix reckonable expenditure and the rate support grant, the increases which we may make are limited by the 1966 legislation to meeting unforeseeable increases in costs of materials, wages and so on and we may not take account of increases or developments of services or new services.
To some extent, therefore, we do not get a true picture of local authority expenditure. My hon. Friend the Member for Glasgow, Gorbals (Mr. McElhone) should ask the Vote Office for two House of Commons papers, for 1964 and 1965, and in the Appropriation Accounts for 1970 and 1971, now available, he will see exactly what local authorities spent and the extent to which calculations were wrong in the original order and the increase order for 1970 and 1971. He will find that what was actually spent was 3·3 per cent., above the last increase order.
The Government suggested in the main order, in February of last year, that there was an inbuilt growth of about 5 per cent. If a local authority exceeds that it comes from the ratepayers. There may be justifiable reasons why the amount should exceed that, but there will be no support from the Government.
If we examine carefully the position in 1970–71 we get the true picture of what happened when the Government began to save money. It will come as a surprise to many hon. Members to be told that in that year the Government handed back to the Treasury over £3 million in money allocated for roads but not spent. I have all the figures here. The Scottish Office managed to hand back £5,078. The Scottish Development Department handed back £3·664 million. The figure for housing was £1·9 million. £129,000 was surrendered in terms of rate support grants to local revenues. The sum from the health services of Scotland was £1·18 million. In that year—believe it or believe it not—on social work in Scotland there was an under-spending of nearly £81,000.
Over £10 million was handed back. Fancy the Scottish Office handing back to the Treasury money that it had available! No wonder the Secretary of State is busy trying to fill up the holes he created by encouraging local authorities to spend more money. The Secretary of State will appreciate that he can get them to spend more money, but it will not be covered by these grants. It cannot be covered by these grants. We shall have to wait until we have another main rate support order before this can be covered. In the meantime local authorities are borrowing money and trying to meet their commitments and the expenses that he wants them to incur because he is not giving them 100 per cent. grants.
The problem arises only because of the Government's failure to give local authorities 100 per cent. grants, and the local authorities will have to pay for it. Eventually they might get it back, but all that will come in the next tangle about reckon-able expenditure. I was delighted to hear about the agreement with local authorities. I loved the answer that the Minister gave his hon. Friend the Member for Galloway (Mr. Brewis) when he said that the local authorities agreed. The local authorities did nothing of the kind. The Government told them to strike reckonable expenditure, and after the reckonable expenditure and the rate support grant were calculated the Government decided to reduce it by £1 million for 1971–72 and by £2½ million for 1972–73. They told the local authorities they were sure they could save £3½ million out of about £760 million reckonable expenditure.
In 1970–71 there were retrospective wage and salary increases, with which I do not quarrel but let us look at 1971–72. There will be another order next year. We have increased costs, salaries and so on from £852·03 million to £911·57 million. The cost to local authorities of these services has risen by about £72·91 million—an increase of about 8 per cent. This is cutting prices at a stroke!
We are not finished yet because there is the cost of heating and lighting and it will be interesting to see how the Government finance the recent settlement. There has been bungling there and no doubt the Government's ideas will not be shared by one hon. Member opposite and there will be another resignation from the Scottish Office—this time the "Parliamentary Private ill-mannered Secretary". [Interruption.] We want no hooliganism from the Tory benches tonight.
Local authorities have to meet about £62 million extra expenditure and of that the Government will help with £33·26 million leaving a considerable amount to be met from the rates. This brings us back to the decision in the main order last year to reduce the amount of central Government help from 1 per cent. to ½ per cent. This has had its effect on the rate burden on industry and particularly domestic ratepayers to whom the 1 per cent. went in the past.
Will the Under-Secretary tell us how the hopes of the Secretary of State were realised? Last year in dealing with the main order he was issuing suggestions to local authorities to take the opportunity to develop services beyond what could be afforded by rate and taxpayers. Then he said it was too early to make estimates. Surely it is not too early now to tell us what local authorities are raising this year in rates as compared with last year? Is the hon. Gentleman satisfied on that matter?
My hon. Friend the Member for Renfrew, West (Mr. Buchan) raised a valid point about school milk. In the two years, over £2 million is being saved on this as a result of direct Government action. But no figure is given for the saving which the Government are making on school meals, although the heading for the education item states that it includes milk and meals. We would like that figure tonight. I hope that the hon. Gentleman will break it up to show the saving on school meals in the current year and what the saving is estimated to be next year, bearing in mind that the cost of school meals is to go up next September.
These are not complicated matters. Accepting, as we do, that reckonable expenditure is being sought and that the Government have tied up the formula in respect of the increases they can meet, the rest follows. But there is one complex formula which almost defies the brain to understand at this time of night, and that is the distribution formula. It is interesting that the hon. Gentleman is taking credit for this. He did not tell us that Glasgow was benefiting from the distribution formula. Perhaps he will quantify it for this year and next year. In March last year, we pointed out that by using the power under the 1966 Act we were able to provide Glasgow with additional money, so that Glasgow must have received over £1,500,000. The Secretary of State said then that this was not the way to deal with Glasgow's finances, but it is a good way to do justice to a city carrying very heavy burdens, particularly at a time when its population is falling.
I gather that this fact was in the Government's mind when they changed the distribution formula to take account of the continuing burdens of local authorities, mainly in urban areas, where there was falling population and where hitherto advantage had been given by a weighting for population as compared with more sparsely populated areas. If any of my hon. Friends want to study the Government's formula for weighted population and so on between now and next year, they might be able to understand it by then—but no doubt the Government will have changed it again by then. It is certainly a complicated formula. I always thought that the Government came to a conclusion about the figures they wanted and worked back from there to the formula to get their desired answer. I have never been persuaded otherwise.
Quite a lot arises out of these calculations. Appendix 3 deals with the effect of specific grants to local authorities and these enter into the calculations because they are deducted from the calculated rate support grant. Whereas there is an increase in the specific grant for the police, for example, of £2·31 million in the current year and £2·40 million next year, when we come to rate rebates we find there is an increase of £300,000 this year and £500,000 next.
Why is the expenditure on rate rebates going up? Are more people claiming rate rebates because they are poor under this Government, or are rates going up? The whole purpose of the order last year was to stabilise rates. I do not think the increase will be sufficient; next year we shall have another increase order.
Then there is the item "Other". Those grants rise by £310,000 this year and £370,000 next year. Under that heading are included civil defence, about £200,000, urban re-development and housing improvement. With all the pressures the Government are putting on local authorities one would have expected far greater expenditure here. Was an expenditure limit laid down by the Secretary of State, in spite of all the pressures put on local authorities? There is something wrong somewhere if all we get in 1972–73 is the carry forward of £0·31 to £0·37. I presume only a £60,000 increase in costs is expected next year. That does not match either the need in Scotland or the claim of the Government. That increase also covers clean air, youth employment, sheltered workshops, Sheriff courthouses and other matters. This suggests a holding back at a time when the Secretary of State wants local authorities to go ahead.
When does the Secretary of State expect the next increase order, and will it cover another 8 or 9 per cent. increase in costs, bearing in mind the teachers? I am sure that Parliamentary Private Secretary will be shouting his head off demanding that the teachers be treated as a special case, especially those in his constituency and those who are not well-qualified. This will affect the Government's credibility.
In last year's report there were a number of errors, but this year there is only one mistake. It is said that last year we discussed this matter on 16th March, whereas we did so on 15th March. Admittedly it was after midnight, but the parliamentary date is still 15th March. I expect accuracy from the Scottish Office, but there have been changes since certain hon. Members left it. In fact, we had a page of corrections last year. I am happy to see an improvement this year.
From the point of view of estimating and the outlook for local authorities and ratepayers, we do not have much confidence in feeling that we have seen an end of price increases and in the burdens thereby falling on local authorities. The Government must remember that so long as the percentage remains fixed, if we increase expenditure it automatically leaves a greater amount to be met by the ratepayers, and they are tied from one revaluation year to the next on a relatively fixed valuation basis. This must, therefore, mean increased rates. With that in mind, I trust that adequate answers will be given to the important questions that my hon. Friends have asked.
With the leave of the House, I will reply to the points raised in this interesting debate.
We were treated to what I hope the right hon. Member for Kilmarnock (Mr. Ross) will not mind my describing as a piece of real vintage Willie Ross tonight. He complained that the date 16th March had been given instead of 15th March, though he admitted that the difference was in terms of parliamentary rather than "real" time.
I read the details of the order and went to the Library to search through the deliberations for 16th March, but I could find nothing relating to this subject. It was a simple error, but there is no reason why we should not get these things right.
—and perhaps the right hon. Gentleman will consider that British Summer Time had something to do with it; but fortunately that need not worry us in future.
Turning to the points made in the debate, if estimates made in previous times have not turned out to be exactly and completely accurate, I accept that that is a normal feature of budgeting and forecasting in all kinds of economic activities. The right hon. Member for Kilmarnock probably will not mind my remarking that if we had an excess in 1970–71 over expenditure for the rate support grant of about 3 per cent.—he used the figure of 3·3 per cent.—then perhaps the order which he introduced in 1969 was too restrictive.
One can be wrong at either end of this calculation. From business experience generally, hon. Members will no doubt agree that it is accepted as normal estimating and forecasting in business that one may be 5 per cent. out in either direction.
The hon. Member for Glasgow, Provan (Mr. Hugh D. Brown) and others asked about the additional special works programme. This matter has been raised with me by several local authorities, and notably by that of Glasgow. It is a perfectly reasonable matter to raise. We have not altered the rate support grant in this respect because the legislation laying down the system of rate support does not allow for alterations to be made to take account of changes in local or central Government policy.
Thus, we have not made an alteration to reflect the extra works programme because it is not open to us to do so under the Statute. However, we have shown our appreciation of the problem and good intentions by, for example, introducing special extra grants for road improvements, and previously these would not have been eligible for grant.
Indeed, and my right hon. Friend and I have also had letters from the Treasurer of Glasgow Corporation to the same effect, but I have given the answer which I think is a perfectly complete answer—first, that it is not open to me to alter the rate support grant, and secondly, that money to a greater extent has in fact been given than would have been available under that means. I think, therefore, that within the slightly imperfect machinery that is available to us we have not done badly by those local authorities which have responded so well to the Government's request to help the unemployment situation with extra works. I am grateful to them for what they have done, and I do not think it will result in an undue burden on the ratepayers. The hon. Member for Renfrew, West (Mr. Buchan) asked some questions about school milk and the rate support grant order. When the figures on this subject were being negotiated with the local authority associations, the medical certification of children had not, in fact, been completed. On the information available at that time it was agreed between the Departments and the local authorities that it seemed likely that about 35,000 children, amounting to 8 per cent. of the over-sevens in the primary schools, were likely to be granted certificates. I accept that that overall figure conceals wide variations between different authorities. This was touched upon by the hon. Member.
This is a relatively much higher estimate than the estimate for England and Wales, but it was based on the Scottish facts as known at that time. There was no attempt to impose any limit—
—on the number of children receiving free school milk on medical grounds by means of a financial limit and this calculation was made on the basis of the best information available at the time the calculations were made.
The hon. Gentleman must know that that is nonsense. It is a purely arbitary figure pulled out of the hat. He must know that it has no relation to the medical situation.
It is not enough for the hon. Member just to make an unsupported and wild statement like that. This was negotiated on the basis of the best available information and that is all one can do.
The figures are available up to November.
As the hon. Gentleman himself said, examination is still going on. Certification is entirely a matter for medical opinion. It is not up to me tonight to go into the merits of this policy; that is for my right hon. Friend and others to do. All the order seeks to do is to reflect the facts of the situation, and if the situation changes it is possible to alter the provision next year, and my hon. Friend the Member for Perth and East Perthshire (Mr. MacArthur) was absolutely right in observing that when the previous Administration, which the hon. Gentleman supported, cut out free school milk altogether from secondary education, they did not provide any exemptions at all on medical grounds. I should be interested to know whether he believes it to be the case that not one secondary school child needs milk on medical grounds, because I find that difficult to believe.
On the question of fee-paying schools, the hon. Gentleman asked whether the order takes account of the decision to reimpose school fees in Edinburgh.
I am coming to that. Fees were not reimposed by the end of the negotiations on this order. Again, I emphasise that the negotiations on this order deal with the facts as they were at the time. It is not up to my Department in negotiating the order to take account of policies of that sort. It has to deal with facts, and the facts as available are the basis of the discussions.
One way to intervene is to come in and stop an hon. Member from saying what he wants to say, and the right hon. Gentleman is adept in doing that. I was about to explain that Edinburgh Corporation's proposal to charge fees in three schools as from 1st September, 1972, was submitted to my right hon. Friend on 27th January and he is still considering whether to approve it. If it is approved, the power given by Section 3 of the Education (Scotland) Act, 1971, to vary rate support grant will be exercised in any subsequent increase order. That is the answer to the point raised by the right hon. Gentleman.
The hon. Member for Glasgow, Gorbals (Mr. McElhone) asked about the grants available for planning with special reference to Glasgow's comprehensive development areas. I was grateful to the hon. Member and interested in his remarks about the memorandum which we put forward to Glasgow concerning future planning standards in the city. As the hon. Member knows, we are embarking on a detailed study of future standards with the corporation and I am very glad about that. Glasgow, of course, receives direct grant on its planning expenditure. The small increase in the cost of planning is due to the cost being largely loan charges which, as I indicated earlier this evening, have gone down during the period covered by the No. 2 order.
The hon. Member for Gorbals also asked about home helps. I quite agree that more needs to be done concerning the provision of home helps. The problem is lack of staff as much as lack of money. In 1970–71, the last year for which figures are available, social work money was slightly under-spent from what it might have been. This indicates, I think, that the difficulties are on the whole not lack of money but rather lack of staff and lack of facilities in other respects.
The hon. Member also had some interesting points about the provision of social workers. As he will know, the Social Work Services Group is sponsoring training of social workers. Here again the problem is not lack of money but lack of trained personnel. Last year's rate support grant was, I think, generally agreed to have been generous. Tonight's order increases spending on social work by no less than 6 per cent.
I note with interest that the hon. Member's plea for more money for libraries, but I should stress that local authorities are not allocated money for individual services and that notional allocations, which are based on the local authorities' estimates for libraries in particular, are very small in comparison with expenditure as a whole. Local authorities can, of course, decide whether to spend more if that is the priority on which they particularly want to spend more. Even the notional allocations, however, have doubled between 1970–71 and 1972–73, but it is interesting to note that the figure is only 0·15 per cent. of reckon-able expenditure. This shows that the figure is very small in relation to the whole.
It is my opinion that, particularly in my constituency, there are many women who would be prepared to work as home helps, because their husbands are unemployed and also because so many women are registered as unemployed. I do not accept that there is plenty of money but a shortage of people for the home help service. May I therefore have an assurance from the Under-Secretary that if on checking with the Department of Employment and the employment exchanges in Glasgow I find that sufficient women come forward to the Glasgow local authority to become home helps, he will reassess the position under the order and give Glasgow extra money?
I thank the hon. Gentleman for his well-known deep interest in this subject. If he will contact the Department of Employment and the local authority social work department, I shall be glad to receive from him any representations he may like to make and I will try to be helpful where there are difficulties.
The right hon. Gentleman asked what account was taken of free school meals in the calculation affecting school meals. The proportion of free meals to paid meals which is reflected in the main order was determined last year. An increase order can be made in respect of unforeseen increases in costs but not for increases in the amount of the service provided. Therefore, what changes can be made are rather limited.
The right hon. Gentleman also asked about the probable out-turn of actual rate demands this year, which we have been awaiting as the assessments are worked through. It appears that the likely increase in rate uptake this year will probably be about 15 per cent. over last year. Any increase in rates is something to be worried about and to be deplored; and 15 per cent. is a figure which rather disturbs me. However, I must compare this with the performance in similar revaluation years. I am glad to be able to tell the House that in this year's revaluation we have achieved a considerable improvement on previous revalution years. In the 1961 revaluation year rates rose by about 19 per cent. In the 1966 revaluation year rates rose by 18 per cent.
The fact that this year the increase has been contained to 15 per cent. reflects great credit on the local authorities, which responded well to our repeated appeals to restrict their increased demands on the rates.
The right hon. Gentleman also asked about a further increase order. He will remember that it has never been the practice to give an undertaking in advance about further increase orders. The movement of wages and prices will be kept under review during the year and my right hon. Friend will consider in due course whether the effect on reckonable expenditure is likely to be substantial.
The right hon. Gentleman also asked how much the formula changes will be worth to Glasgow. The further change proposed in the No. 2 order will, 1 calculate, be worth approximately £1 million of extra needs element per year to Glasgow, although the net gain will be smaller than that because of some loss in the resources element which compensates for it.
The right hon. Gentleman also asked why rate rebate expenditure was rising. The cost of rate rebates depends on the average domestic rate payment. When rates rise, the percentage increase in rebates is bound to be rather higher. The increase does no more than cover the original estimated uptake of rebates at a somewhat higher cost.
I hope that I have managed to answer all the points which were raised. I am grateful for the obvious interest hon. Members on both sides have taken in this important order. I believe that this is a fair settlement of an annual problem—certainly a problem which comes up quite often—in which we try to reflect the inevitable changes in local authority expenditures in the Government's rate support grant.
I am sure that it will be the wish of the House to pass these orders and thereby to provide for the local authorities another year of successful work with full support from central Government funds through the rate support grant, and I commend the orders to the House.