I shall not delay the House because many other hon. Members wish to take part in this important debate.
I took strong exception to the reference by the Secretary of State to "reckless and wanton extravagance" by local government. That does not represent the true facts. Indeed, throughout local government there is frustration because authorities cannot meet the needs of their local communities.
Having spent many years in local government, I am well aware of the hours that councillors spend in determining the budget that they can pass on to their ratepayers. They must balance the needs of the community against what the ratepayers will consider reasonable, and I have never witnessed any degree of irresponsibility in local government.
Many services which are vital to communities are not being adequately provided because of the inability of authorities to meet the revenue implications, and the responsibility lies solely with the Government. Consider, for example, the urgent need for homes for the elderly. In my county of Lancashire the provision is utterly insufficient, with many people being forced into private nursing homes that they cannot afford.
Burnley borough council has two important priority areas, housing and employment. Housing presents major problems for all areas of Britain and I appreciate that our problems in Burnley are repeated throughout the country. We have an urgent need for sheltered accommodation for the elderly. Councils cannot provide that type of accommodation because they cannot obtain the capital, and the revenue implications are too great.
Many council houses are waiting for improvement. In Burnley, it will take 15 years to improve the pre-war council housing stock. Because we were a mining area in the 1920s, many houses built at that time had outside toilets and bathrooms. That state of affairs cannot be considered suitable in 1984. We must bring those properties up to the standard that is considered reasonable today. It will be at least the year 2000 before we in Burnley are able to complete that work.
Two years ago the Government had a bonanza with improvement grants, encouraging councils to spend as much as possible and urging people to apply for grants. I have said in the House before that that was one of the best actions of the Tory Government in trying to improve the nation's housing stock. Now, however, councils throughout Britain have either to call a halt to applications for improvement grant or introduce methods to regulate the giving of grants. People waiting for grants must lay the blame squarely on the Government.
In Burnley, we have £15 million worth of grant applications in the pipeline. We have called a halt to new applications for improvement grants. This year we have available for grant purposes about £3·8 million. Many people will wait years before being able to improve their homes. I fear that we are rapidly approaching a time when the housing stock will deteriorate rather than be improved, and there will be a housing crisis in a few years' time. It will cost a great deal more to solve that problem than it would to provide the necessary capital today.
Burnley, like many other areas of deprivation, is trying to keep industry and attract new industry. That is a priority for the Burnley council, and it is prepared to spend money from rates to do so. We are not ashamed of the fact that Burnley is the highest-rated authority in Lancashire, because we do not believe that that is wrong. Burnley council has always tried to fix rates at a reasonable level for domestic ratepayers and industrialists. We accept that the level of rates is an important factor to consider when encouraging people and industries to remain in the borough.
I have invited the Parliamentary Under-Secretary of State to look at the building next to the town hall. The building, which is council-owned, is being converted in an ambitious project into a multi-purpose arts centre to provide much-needed amenities. The project will cost £1·7 million. If the council is unable to proceed with the project, because of the measures announced by the Secretary of State for the Environment, the blame will lie at the Government's door. Because of the revenue implications of the project, we were anxious for the Parliamentary Under-Secretary of State to look at the project, note why it was needed and what we intended to do. If the hon. Gentleman had gone to Burnley, he would have found that the Burnley council is not reckless or wanton but is trying to meet the community's needs.
Burnley council is only touching on some of the problems that must be urgently tackled. On many occasions, we have chased the Department of the Environment with questions about grant-related expenditure assessment. We discussed the matter with the Under-Secretary of State. Any grant-related expenditure scheme must be fair and understood, but that is not the case with the present scheme. We are not convinced about the reasons why the factor E7 for the housing revenue account varies from one local authority to another. The housing factor for Burnley varies considerably from the housing factor for Blackburn and many other authorities If the figure were altered, Burnley's rating system would be considerably changed. This year, Burnley's grant -related expenditure assessment is £5,472,000. Once local authority spending increases beyond that level, local ratepayers face a greater percentage of expenditure costs because the state meets a lower percentage. That affects their rates.
We welcome the fact that, because the Burnley local authority spends less than £10 million—I referred to this when the House debated the Lords amendments to the Rates Bill — it is excluded from the rate-capping proposals. Burnley spends 56 per cent. above its grant-related expenditure assessment, and will not be affected by ratecapping, but because Blackburn's population is larger, it will be so caught, even though it spends only 20 per cent. above its GREA. On one factor used by the Government, Burnley could be considered to be a big, overspender, but on its cash targets it is only a marginal. overspender. Lancashire county council is in the reverse' position to Burnley, because it spends less than the grant-related expenditure assessment figure but more than its cash targets. The system needs to be rethought and to be more fair.
Local government tries to tackle the problems faced by the community. The Government's measures are regressive, and the blame for the problems building up in local government and faced by people generally must he laid at their door.