Local Government Finance

Oral Answers to Questions — Wales – in the House of Commons at 12:00 am on 28th November 1994.

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Photo of Alun Michael Alun Michael , Cardiff South and Penarth 12:00 am, 28th November 1994

To ask the Secretary of State for Wales what steps he intends to take to ensure that local authorities in Wales are able to meet their financial obligations in 1995–96.

Photo of John Redwood John Redwood Secretary of State for Wales

I shall announce my proposals for 1995–96 total standard spending and aggregate Exchequer finance for local government tomorrow after the Budget statement of my right hon. and learned Friend the Chancellor of the Exchequer.

Photo of Alun Michael Alun Michael , Cardiff South and Penarth

Does not the Secretary of State realise that we shall be looking for an assurance that he will do better next year than he did this year, when he tightened the screw so tightly on the three counties of Glamorgan that a crisis exists on the streets of south Wales, not only because of the high level of crime but because of police underfunding to the tune of about £2.5 million? Having accepted that his capping criteria apply to the police as much as to any other local government services, does he realise that it is his responsibility to put matters right? Will he agree to meet the Home Office and to find some way of putting matters right in the South Wales police area?

Photo of John Redwood John Redwood Secretary of State for Wales

It is south Wales local government that has let the police down. The hon. Gentleman might be surprised when we introduce proposals that will do much better by the police than those introduced by local government. Since 1991–92, spending on local government has increased by about a quarter, allowing for functional changes. That is a big cash increase, giving local government plenty of scope. Its priorities, however, are not the same as those of many people in south Wales, which is why they feel let down by Labour local government.

Photo of Mr Alex Carlile Mr Alex Carlile , Montgomery

Does the Secretary of State accept that, despite sound financial management, Powys county council and possibly other local authorities have had great difficulty in meeting their financial obligations in relation to care in the community? Does he further accept that the people who are most likely to suffer from that difficulty are those in the most vulnerable group, who will need some nursing care, even when the programme is complete? Will he ensure that care in the community is taken fully into account in his financial settlement for the coming year?

Photo of John Redwood John Redwood Secretary of State for Wales

Of course, that will be taken fully into account, as it has been in recent settlements, with large increases in money from the DSS general transfer and from the general grant to reflect the personal social services element in local authority spending. I look to local government to have some discipline in that spending. The other day, I was disturbed to read a copy of a letter from Tom Davies, the director of education and cultural services for South Glamorgan county council. Written on county notepaper, it was addressed to all Labour governors and it suggested that perhaps ballots were not a good idea for grant-maintained schools.

Expenditure on that sort of thing should be stamped out and Opposition Members should get in control of their party when it goes about that sort of activity.

Photo of Mr Ron Davies Mr Ron Davies , Caerphilly

May I take the Secretary of State back to his earlier reply when he seemed to imply that he proposes to ring-fence police expenditure? Will he confirm that that is his intention? If it is, will he reflect on the fact that, by ring-fencing one area of expenditure, of necessity he will put a squeeze on other areas of expenditure? In the current year, care in the community has been underfunded by £38 million. That is why we have mentally ill people walking the streets. Do the Government have that sort of attitude and do they want to create that sort of society?

Photo of John Redwood John Redwood Secretary of State for Wales

The hon. Gentleman has got his facts wrong again. Care in the community funding is up massively, as it should be, because it is an important new policy. The hon. Gentleman will have to wait for the proposals on spending generally and on the police. I still believe, however, that south Wales Labour authorities have let the police down.

Photo of Mr Dafydd Wigley Mr Dafydd Wigley Leader and Party President, Plaid Cymru

This autumn, the Secretary of State transferred over to local government certain responsibilities in relation to loans and to some grants which were previously exercised by the Welsh Development Agency. What assurance will he give that every local authority in Wales exercising those powers will have additional money available to provide the grants, additional loan sanctions, where loans are necessary, and increased money to cover the interest on such loans? Will he give a categorical assurance that that will be the case next year, otherwise our work to attract industry will be seriously undermined?

Photo of John Redwood John Redwood Secretary of State for Wales

Of course extra provision and extra money are being made available, as I promised the House. That will be reflected in next year's settlement in the way that the hon. Gentleman wants. During the period when we were not making payments in the mid-Wales area, unemployment fell from 6.7 per cent. in May to 6.2 per cent. in October. The hon. Gentleman will be relieved to know that no damage was done, but I will honour the promise that money will be made available for the grants.

Photo of Mr Wyn Roberts Mr Wyn Roberts , Conwy

I, too, have seen a copy of the letter from South Glamorgan's director of education and cultural services. My right hon. Friend will appreciate that, apart from not being a legitimate expense, the action proposed by the director was to thwart parental balance for grant-maintained schools. Does my right hon. Friend think that action was right?

Photo of John Redwood John Redwood Secretary of State for Wales

I am disturbed about a number of aspects of that letter—not least those that my right hon. Friend mentioned. I am worried that well-known Labour governors were identified and a letter circulated to them by someone who, as a director of education, should be neutral. Labour is always saying that there should not be political appointments to such bodies. Now we know that a director of education with a Labour authority is circulating a letter to Labour governors—and Labour governors alone.