I congratulate the hon. Member for Neath (Mr. Hain) on his success in raising the question of Welsh Office funding for West Glamorgan. His speech focused on local authority spending. On Tuesday, my right hon. Friend the Secretary of State for Wales announced a provisional local government finance settlement for 1992–93 that proposed a level of total standard spending in Wales of £2,639 million. That is an increase of £206 million, or 8·5 per cent. on 1991–92, and is the appropriate level of spending for the coming year, taking account of all relevant considerations. My right hon. Friend also proposed a level of aggregate external finance of about £2,383 million—an increase of 6·7 per cent. on the current year.

The settlement must be seen in the context of the Government's success in bringing down inflation. It is a realistic settlement, and one that provides local authorities in Wales with a firm foundation on which to budget prudently for the coming year. It builds on the settlement for the current year, which increased total standard spending by 8 per cent. on budgets, and increased aggregate external finance by 11·2 per cent.

The level of expenditure per Welsh charge payer for which the settlement allows is £1,207. If local authorities budget in line with our plans for 1992–93, charge payers should, on average, contribute just £118 per head of that through the community charge, before taking into account various benefits and relief. The settlement for the current year, 1991–92, provided for an increase of more than £31 million in West Glamorgan county council's standard spending assessment to £263·5 million; a rise of 15·1 per cent. on the level for 1990–91. That was the highest percentage increase in Wales, bar one county—Gwent—and represents an increase of almost 7 per cent. on the unnecessarily high budget set by the authority for 1990–91, which was £14 million over SSA. That decision resulted in a community charge for standard spending of £28 more than would have been necessary if the authority had spent in line with the Government's plans, and that placed an unnecessary burden on its charge payers.

This year, the authority is receiving an increase in grant support towards its expenditure of £18·5 million. Again, that is the second highest percentage increase in Wales. Charge payers in the county have also benefited directly from the £140 reduction in community charge liability which was announced by my right hon. Friend the Chancellor in his Budget. The aggregate increase in standard spending assessments for 1991–92 over 1990–91 for the four district councils within West Glamorgan is £8·9 million, a rise of 20·7 per cent. The aggregate increase in grant for those authorities in support of that spending is £5·9 million, which represents a rise of 16·7 per cent. over 1990–91. The increase in SSA for the hon. Gentleman's Constituency is 16·6 per cent. over 1990–91, despite a slight decrease in population.

While Port Talbot, Lliw Valley and Neath set community charges in line with the settlement, it is unfortunate that Swansea city council chose to budget for a charge of £57, no less than 52 per cent. above the settlement level of £38. That placed a quite unnecessary burden on its charge payers.

The levels of expenditure and support that I have just described were sufficient to enable the authorities concerned to meet both inflationary and service pressures in providing an appropriate level of service. The provisional settlement announced by my right hon. Friend on Tuesday will build on the foundation that has been laid.

It would not be appropriate or possible to consider how the proposed settlement for 1992–93 will affect individual local authorities. My Department and the local authority associations in Wales are considering the grant distribution arrangements for the coming year and will make recommendations to the Welsh Consultative Council on Local Government Finance in due course. With the exception of certain specific and supplementary grants towards current expenditure, Government support towards local government spending in Wales under the settlement is unhypothecated. That means that, while the Government provide the appropriate level of resources, it is for individual authorities to make their own expenditure decisions in the light of their assessment of local expenditure requirements and priorities. That is entirely appropriate and accords with the wishes of the local authorities. It is against that background that the funding of specific services such as those mentioned by the hon. Gentleman must be considered.

The hon. Member for Neath talked at some length about the position of the elderly and, in particular, about their travel arrangements. I share the hon. Gentleman's concern about the mobility of our senior citizens and I note his view that they should be allowed to travel free of charge on local buses. Of course, the Transport Act 1985 gives local authorities powers to fund travel concession schemes for various groups of people, including persons of pensionable age. The local authority may determine the nature of the concession and its level.

It is right that this is a matter for local authorities as they are in the best position to determine the type of concession which best suits the needs of their areas. Costs are an important factor in this. In West Glamorgan, for example, senior citizens may apply for a pass which entitles them to a third off normal single or return fares. The cost of this concession to the charge payer in the current financial year is estimated to be some £810,000, of which £402,000 will be met by the district councils.

However, the provision of free travel would not merely increase those costs by a factor of three to £2·4 million. I understand that that is the correct figure, but it would generate much higher usage, as more people would take advantage of the concession. This would result in higher claims from the bus companies and extra costs to the council.

But there are points other than costs to bear in mind. The scheme run in West Glamorgan imposes no time restrictions on senior citizens who use it. This means that pass holders may travel at any time, including at peak hours. This is helpful to the pass holders and makes for economic and easy administration of the scheme. A penalty of free travel which the hon. Gentleman advocates would be the need to restrict The Times at which concession holders could travel in order to ensure that adequate capacity is available on the buses for those who need to travel. The hon. Gentleman mentioned that restriction.