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Part of the debate – in the House of Commons at 5:11 pm on 26th July 1983.

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Photo of Mr Patrick Jenkin Mr Patrick Jenkin , Wanstead and Woodford 5:11 pm, 26th July 1983

That is interesting. I am not surprised that the right hon. Gentleman changed the subject to British Aerospace from local government. He has now made his position clear; he is no longer adhering to the canons of public expenditure to which every Labour Chancellor, certainly since I have been in the House, has sought to pay regard.

We regard local authority spending as public expenditure, as do the public and ratepayers, and intense pressure is being brought on my hon. Friends and the Government to do something about it. We have had some limited success in checking the growth of current spending by local authorities, and I gave some of the figures when I spoke last month in the debate on the Loyal Address.

It is salutary to remember that current expenditure by local authorities in England rose by 74 per cent. between 1978–79 and 1982–83, that it was somewhat higher than the rise in prices over the same period and that it occurred at a time when the Government were seeking reductions in real expenditure. That is why we have had to do certain unpalatable things, to which I have referred.

As I have said, there is no reason for any local authority to have been taken by surprise. Nevertheless, some of them disregarded the warnings and are now budgeting for expenditure over and above the guidelines. They now know the exact amount of grant that will be withheld from them unless in the coming months, as happened in the earlier year, they manage to reduce expenditure below what they have budgeted for, and I hope that many of them will take the opportunity to do that.

Perhaps one should look at the figures in more detail, and I will give a few of the more striking ones. Local authority budgets for the current year indicate that, in aggregate, targets will be overshot by lo less than £770 million, almost £¾ billion. How much of that is attributable to the GLC, ILEA and the metropolitan counties? The answer is £470 million of the overspend; 61 per cent. of the total is attributable to those eight authorities, all of them Labour-controlled. It is not as if this performance by those authorities is an exception—;a flash in the pan—;because if we look at the pattern of spending between 1978–79 and 1982–83 we find that those authorities alone almost doubled their expenditure, and they have become a grievous burden on the British people that can no longer be tolerated.

Lest Labour Members should think that we alone take this view, I point out that at the Labour party's local government conference in February, at which it discussed the restructuring of local authorities, there was no commitment to retain the metropolitan authorities. The right hon. Member for Gorton was extraordinarily silent about that, and many members of the press drew the clear implication that if Labour had won the election the metropolitan counties would have been abolished along with the shire counties, which he proposed.

To come back to spending, 23 of the top 25 overspending authorities, all of which are effectively controlled by Labour, account for 82 per cent. of the total budgeted overspend this year. These authorities have been egged on year after year by the Labour Front Bench in blithe disregard of the businesses that have been wiped out and the jobs that have been lost because of the high rates which have been imposed on commerce and industry.

The ordinary ratepayer and business man have declared, "Enough is enough". Successive Governments of all parties have asserted the right to set overall levels of spending compatible with their social and economic objectives. They have expected local authorities to accept these broad objectives. Most local authorities have done so, and I recognise the valiant efforts that many are making to keep within the Government's guidelines.

Those authorities are doing a great many things to achieve that, and I will give a few examples. My hon. Friend the Member for 13irmingham, Selly Oak (Mr. Beaumont-Dark) mentioned the west midlands. He will know that in the metropolitan borough of Dudley outside consultants were brought in and identified savings of over £16 million to be achieved over five years. The savings derive mainly from the removal of unnecessary tiers of management, the simplification of procedures and working practices, the obtaining of better purchasing terms and reducing manning levels to reflect activity levels more accurately.

The second LAMSAC report on value for money, published in February this year, contained 56 examples, and the saving of £4½ million, and a further potential saving of £6½ million. The Government continue to encourage privatisation as a means of reducing costs. Many excellent examples showing modest but worthwhile savings were given in an interesting survey by Sandra Hardingham in the Local Government Chronicle last month. For example, in Calderdale the privatisation of daily office cleaning is expected to save over £23,000 a year. In Gloucester, there will be an annual saving of £24,000 from the privatisation of horticulture. I am glad to say that even Labour-controlled Middlesbrough is making use of private services in architecture and engineering.

Equally important has been the challenge of privatisation to in-house services. When faced with the possibility of privatisation, it was found, remarkably and suddenly, that costs could be cut quite sharply. The survey found that 18 local authorities got better deals in their refuse collection. Aylesbury district council found that it could save £100,000 a year.

Consider the question of manpower. The Department of the Environment is setting an important example in cutting manpower. Between April 1979 and April 1983, staff was reduced massively from 50,400 to 36,400. I pay tribute to my predecessors and to the staffs which have worked with them in achieving that reduction. If we allow for those who left because of a change in status, the net reduction is 13,000, or over a quarter of the Department's 1979 staff. We are not asking local government to make manpower cuts on anything like that scale, but surely it could do better than it is. After some limited reductions in manpower over the past three years, local authority manpower is beginning to creep up again. That is a tendency that must be checked. Cost-saving initiatives are especially important.