I beg to move,
That the Local Government Finance Report (England) 1995–96 (House of Commons Paper No. 161), which was laid before this House on 30th January, be approved.
I understand that with this it will be convenient to discuss the following motions:
That the Special Grant Report (No. 12) (House of Commons Paper No. 162), which was laid before this House on 30th January, be approved.
That the Limitation of Council Tax and Precepts (Relevant Notional Amounts) Report (England) 1995–96 (House of Commons Paper No. 163), which was laid before this House on 30th January, be approved.
Our proposals this year are rigorous, as they need to be if local government is to play its part in fighting inflation and to increase prosperity and jobs in commerce and industry. They are also, inevitably, more complex this year because of the establishment of the new police authorities. We have worked with local government to minimise any turbulence resulting from that change, and I am particularly grateful for the practical help that local authority associations continue to give, even where we may differ on the political judgments that have to be made.
On 1 September, I issued my settlement proposals for consultation. They included the total provision for local authority spending, the central support for that expenditure and my proposals for calculating standard spending assessments. I also announced provisional capping criteria. My right hon. and learned Friend the Home Secretary announced his proposals for police grant on the same day. Since then, my colleagues and I have met many delegations from local authorities and received many written representations.
We considered carefully all the points that were made during the consultation. My final decisions in respect of grants and notional amounts are embodied in the reports before the House. Of course, final decisions on capping criteria are taken after local authorities have decided their budgets.
Local authorities account for about a quarter of Government spending. Any Government who are serious about controlling public expenditure must, therefore, take real account of what councils spend.
I announced on 1 December my proposal for total standing spending for England for 1995–96 of £43.51 billion. I hope that the House will recognise just how large that figure is and how important, therefore, it is in the general consideration of the health of the economy. It included the English element of police grant, which is distributed on a formula basis in England and Wales. In the light of consultation—the details of which I shall come to later—we have decided to adjust slightly the balance of police funding between England and Wales, with the result that the final TSS figure for England for 1995–96 will be £43.507 billion. That represents an increase of £843 million—or 2 per cent.—compared with last year's figure. It includes £647.6 million transitional community care special grant.
Leaving aside the increase in provision for community care, my proposals still amount to an increase of just under 1 per cent. in provision year on year. The total aggregate external finance for England will be £34.686 billion. The revenue support grant element of that total will be £18.314 billion.
We have had to make tough decisions on all areas of public spending this year, and this settlement is no exception, but I believe that, seen against the background of low inflation, low pay settlements and the scope for efficiency, the provision is fair and realistic.
How can the settlement be fair to school children, parents and teachers in Bolsover and in other parts of Derbyshire, when the level per pupil in Surrey is £272 higher than in Derbyshire and when the figure in Hertfordshire is £248 higher than in Derbyshire? That means that if teachers get more than a 1.5 per cent. pay increase, there will be reductions in staff and schools will suffer even more. On top of that, the Minister told Derbyshire that, if it spends more than £550 million, it will be capped, so there is no way out for the children, parents and teachers and others who use its services. Why does not the Secretary of State change the criteria and stop favouring people in the south? Why does he not look after those in the north as well?
Spending per pupil has increased by nearly 50 per cent. in real terms since 1979. We are spending considerably more on every child than we did then.
The figures are decided according to a formula that is discussed in detail and thrashed out with local authority organisations. At the very time when the hon. Gentleman asks for more money for Derbyshire, other counties are asking for more for themselves; but they admit that a common formula that is as objective as humanly possible cannot direct money towards specific councils. Every county would like more money, but I fear that they cannot give good enough reasons.
The hon. Member for Bolsover (Mr. Skinner) asked a perfectly respectable question, and I want to answer it fully.
Derbyshire has a considerable advantage as, unlike many other counties, it does not have a long history of lean administration. Its budget includes many areas in which other counties have already found ways of saving money. Derbyshire, perhaps of all counties, will be able to examine its overheads and expenditure carefully with the aim of helping school children directly. I am sure that the hon. Gentleman will want to assist his council.
You acknowledge in correspondence that Solihull loses out as a result of the changes in education standard spending assessment methodology. In the light of what you have just said—
I am happy to say that I have a piece of paper relating to every authority in the country, as many hon. Members may ask direct questions and all of them will be serious.
I examined Solihull's position very carefully. I do the same in regard to every authority, particularly those whose case hon. Members wish to put to me. As I have said, about 100 different groups have asked me specific questions. I cannot see any aspect of the objective methodology bearing on Solihull that gives me cause to investigate whether it could immediately be altered. However, the small but nevertheless important amount that is available for education in Solihull gives rise to considerable concern. I have told Solihull authority and a number of other Conservative and Labour-controlled authorities that I shall carefully consider their fears about the methodology when we decide with local authority associations what changes I can make in the coming year. I cannot do so at the moment because there is nothing to suggest that the methodology has been improperly applied. If it had been, I could have a look at it, but I cannot look a0t a particular authority on its own.
I should like to make some progress and thereafter give way as much as I can. I am trying to make a fairly short speech to allow time for hon. Members to ask questions. I know that that is unusual for me, but I shall try to answer as many points as I can.
I have said that the settlement will allow most authorities to increase their spending year on year. [Interruption.] It will allow them to increase their spending, but the difficulty is that most of them would like to increase it by more. That is a difficult issue.
It should first look at the efficiency of its services. The fact that the hon. Lady thinks that there are only two options—to put up the price or reduce the service—shows that she has not considered the issue. I do not want to go too far along this line, but I may have to give some painful examples.
Does my right hon. Friend agree that a great many complaints from authorities about underfunding are nothing more than a cynical attempt to dodge responsibility for their failure to manage resources properly? Does he further agree that one of the worst examples of this is Labour-Liberal controlled Suffolk county council? Since taking control in May 1993, that group has splurged £10 million of resources on such loony left fripperies as the appointment of an equal opportunities officer, the payment of councilors—
Order. I appeal to all hon. Members to be brief. I have already had to announce a 10-minute restriction on speeches. There is now a one-minute restriction on interventions.
I am tempted to take a particular path. As I drove home at the weekend, I noticed that Suffolk county council had put up a series of new yellow signs, which are extensive in their vulgarity and cost. Upon the signs, the council had put the name of the village and underneath it put another notice stating "village" in case people did not know that they were passing through one. There is no doubt that Suffolk county council has shown by its actions that it has spent money that could more easily and properly have been spent on police and education.
The Audit Commission regularly finds ways in which local authorities can save money through efficiency. The best authorities are quick to follow its recommendations. In particular, I hope that all authorities will pay heed to the report on white collar pay in local government, and ensure that unnecessary bureaucracy is weeded out.
Does the Secretary of State agree that any increase in something that is already sadly deficient is not sufficient? In Newham, which, as he knows, is statistically the most deprived borough in the country, we are £10 million short through the lack of an interest payment on the standard spending assessment that has been approved by the Government. We have £7 million less for housing and we could receive another £25 million if Newham were an inner-London authority. Will he tell his friends in the Treasury, who presumably produced the formula, that that is unjust and is not up to the standards, as he knows, of even the Old Testament, let alone the new? Will he tell them to sin less next year?
I listened with great care to Newham's case on whether it should be an inner or outer-London authority. I hope that the hon. Gentleman will agree that I listened with concern and, as far as one is allowed in what I suppose is inelegantly referred to as a quasi-judicial position, with sympathy in an attempt to see whether I could meet its wish. The hon. Gentleman's position, however, is not entirely supported. Other Labour boroughs in London have made it clear that they would be extremely annoyed if past action by Newham council were rewarded at the expense of more efficient local councils.
There are some prime examples in London of where savings can be achieved. I note, for example, that the average number of non-manual staff in central services is 3.46 per 1,000 in inner-London boroughs, but 7.7 per 1,000 in the London borough of Tower Hamlets. Savings could be made there and applied to what is accepted as a less than adequate education service.
On the question of efficient versus inefficient councils, is there not a case for reconsidering the scrapping of capping, so that taxes increase in local authorities that are inefficient, clearly showing that responsibility lies with those authorities, rather than with central Government?
I find that view extremely attractive for this reason: the capping mechanism was introduced because, in some areas, people were unable to pay the high costs of administrations, which, in all fairness, were mainly Labour controlled. They found themselves in terrible difficulty. As a resident of then Labour-controlled Ealing, I was one of those people who saw exactly what happened when people were suddenly faced with enormous bills. Tower Hamlets supports 7.7 non-manual staff in central services per 1,000. If we compare that with, for example, Wandsworth, which supports fewer than two per 1,000 of those staff, we understand why Tower Hamlets charges its often poor residents large sums of money. A real problem exists. The capping regime operates to protect those people. I have come down on that matter, not least because, if we add it all up, local government spends so high a proportion of what the nation makes that the Government may be blamed, and it would have a serious effect on the Government economic's policy.
The Secretary of State consistently insists that the methodology that he adopts for the fixing of grant is fair. He will be aware that the council tax for a band A property in St. Helens is £652, and that it is £245 for a Band A property in Westminster. Does he ascribe that huge difference to the efficiency of Westminster and to the enormous grants that it received, or does he ascribe it to the inefficiency of St. Helens council? If he ascribes it to the latter, will he get that piece of paper out, stand at the Dispatch Box, and tell me so?
The standard spending assessments are worked out as clearly as possible according to criteria that we have discussed long and loud with local authorities. If St. Helens spent as far below its SSA as Westminster, it would have an even lower council tax. It has a high council tax because it is a high spender. St. Helens should learn from Westminster's efficiency. [Interruption.] The hon. Member for Holborn and St. Pancras (Mr. Dobson) is laughing. He wants to laugh because he does not want us to be reminded of the efficiency of his borough of Camden. Camden has the second highest external debt per capita in the country. Its total debt has increased by 14 per cent. in the past five years. A recent district auditor's first report revealed that Camden had a debt of £50 million rather than a surplus of £18 million, which its internal addition had suggested. The hon. Member for Holborn and St. Pancras has the effrontery to giggle despite representing a Labour-controlled authority with such a record.
The Secretary of State talks about Camden having a £50 million debt. Will he refer to his Department's documents rather than articles in The Daily Telegraph? Will he confirm that Camden is in dispute with him and his officials about debts owed to it of £38 million on the housing revenue account because it says that it is not being treated in the same way as other councils? Will he confirm that Camden has commenced legal proceedings against the Department but has stayed them until Ministers have had an opportunity to respond?
I will confirm that in 1991 Camden forgot a loan repayment of more than £24 million, which meant that, in many cases, rents rose by a third. I shall quote from someone who is not noted in his professional life for doing other than supporting a range of Labour authorities. I shall do so although I deprecate some of the attacks made on people by turning their perfectly proper professional behaviour into a political issue. Andrew Arden said:
the standards applicable to dealing in vast sums of money have been found wanting: it is as if pockets of what I can only describe of entrenched amateurism have been allowed to prevail.
Camden could save at least £2 million every year if its staff working hours were increased to the local government norm. Camden's members services unit,
which is open only to Labour members of Camden council, costs £143,000 a year. For every £5 spent on housing repairs in Camden, £1 is lost in administrative costs. That compares to an average of 30p in inner-London boroughs as a whole, and that average is pushed up by authorities such as Camden. Just in case it has been missed, I should say that Camden's grant to the Camden lesbian centre in 1994–95 will be £44,228. No wonder the hon. Member for Holborn and St. Pancras giggles. The only people in Camden who do not giggle are those who have to pay the bill for such incompetence. Those who think that the Labour party would make a Government should remember what has happened to Camden under Labour's control.
Will the Secretary of State confirm that he and his officials are in dispute with the borough of Camden about whether the Department owes Camden £38 million?
When the hon. Gentleman confirms publicly each and every one of the facts—not disputes—that I have just given and dissociates himself from his council, I will be happy to look at his point.
I must get on. There is an equal amount of objection on both sides of the Chamber.
I have given only one or two examples culled at random from what could have been a much larger list. We can do without the ritual parade every time we ask authorities to take the same tough decisions on their costs as the Government are taking and that the private sector always has taken. During the recession, private companies made cuts and they have now emerged leaner and fitter to lead Britain into a new export-led recovery.
Local government must ensure that it reduces overmanning, takes out tiers of management and uses contracting out as a means of better service delivery. Many efficient authorities are already taking such measures and, in my criticisms of particular authorities, I hope that local government in general will recognise that I honour the many local authority officers and members who have done increasingly well in meeting the needs of their areas in a lean and fit way.
I congratulate my right hon. Friend on his excellent speech so far. Does he share my disgust and fury at the antics of Liberal-controlled Devon county council? It is spreading terror among 300 teaching staff by telling them that they are all to be sacked because of the Government's rate settlement and it is making old people fear that they will be put out on the street in the cold. In fact—I should like the Secretary of State to confirm this—the amount that Devon will receive next year is more than this year and the education grant is twice as high as the national average. Will he tell Devon county council that it should get rid of some of its 30,000 staff. It has more staff than the entire bureaucracy of Brussels. Will he ensure that it does something—
The increase in Devon's education SSA is about twice as high as the average for the counties. Its staff numbers have increased by more than 2 per cent. In one year. A county in that position should not frighten people. It should look at its own internal arrangements and find ways of saving money so that it can be spent on the front line—on those who really need it.
It is important to take this seriously. I have with me the telephone directory of Cornwall county council—I am not just dealing with inner London. It is a pretty big list and its tone sums up what we need to look at carefully. For example, on the page that says, "Chief Executives Office" it lists numbers for the chief executive, assistant chief executive, assistant chief executive and a third assistant chief executive. I then see two secretarial staff, five support staff, three press and public relations staff—[Interruption.]
I think that Opposition Members may have been trying to ensure that I address the Chair directly. I apologise if I did not do so. It enables me to say directly to you, Mr. Deputy Speaker, that there are also five members of staff whose only job is to deal with the local government review and to send out various documents to frighten people about what might happen if they were to lost control of Cornwall. Many local authorities have spent large sums of money advertising themselves.
I have to be careful because another case from Cleveland is now in the courts. The House has passed legislation and debated its results yet some authorities have spent vast sums of ratepayers' money not only on advertising their superiority over others but on frightening people against possible changes. They then fight in the courts even beyond the point at which, when the judgment is read, anyone spending his own money would feel that the case against him had been proven.
I am grateful to the Secretary of State for his courtesy in giving way. He will be aware that Warwickshire recently received a very good auditors' report and that the only time that it has been poll tax capped recently was when it was under Conservative control. However, parents in Warwickshire are facing larger classes for their children and the sacking of 200 teachers in the county. This issue has united Conservative, Liberal Democrat and Labour councillors in condemning the Government for the way in which they have calculated the SSA. Warwickshire spends 9 per cent. more on education than allowed for in the Government's education SSA. If it is to comply with the Government's requirements, Warwickshire will have to cut £10 million from its education budget. That is not acceptable. What is the Secretary of State's message to the angry parents of Warwickshire who do not want larger classes or a decline in education standards?
Whatever Warwickshire councillors say, they have not been able to convince any other county that the methodology is wrong and that Warwickshire should have a special arrangement. The hon. Gentleman is saying that because Warwickshire has not found a way to deal with these matters as effectively as other counties it should have a special arrangement. The system does not allow for that—perfectly properly—whether Warwickshire is run by the Conservatives, the Liberals or Labour. Were it to do so, there would be no objectivity.
I know Warwickshire and I know many of the people who have come to put their case to me. I believe that Warwickshire will need to examine its spending pattern carefully. It needs to get its priorities right and aim money where it is most needed. Many counties are providing extremely good education without any more resources than those that Warwickshire has.
Is my right hon. Friend aware that Lancashire has 13 per cent. surplus places in its secondary schools, many of which are in Labour areas so the county council is scared stiff to touch them? However, were it to remove them, there would be more money to spend on other schools. Moreover, Lancashire spends £93 more for a resident in a county home than for one in a private home. No one wishes the county homes to close but we can ask that they should be as efficiently run as private sector homes. If they were, there would be a cool £10.8 million to spend on schools, home care services or some other purpose.
My hon. Friend has been patient in trying to intervene. Lancashire has one of the highest proportions of staff per head in England, which suggests that there are ways for it to make improvements in addition to those that she has suggested.
It is very easy for county councils and district councils to tell the electorate that they can do nothing but cut the education budget or any other services of great importance. It is important for the House to remind people that if the priorities are right, if money is put where it is most needed and if central spending is reduced, in most cases substantial savings can be found.
I shall give way in a moment to my hon. Friend the Member for Stratford-on-Avon (Mr. Howarth). The areas where the difficulties are greatest are those where there has been a tradition of prudence and care and where councils feel that they are coming to the end of what they can do. I have examined those areas particularly carefully, but very few of those with a tradition of prudence and care are represented by the Labour party.
Warwickshire is asking not for special treatment but for a fair deal. Our frustration is that year after year after year our representations appear to be ignored. It is no surprise that in a zero-sum game other local authorities are not interested in easing Warwickshire's position. If we care about the quality of our democracy, we should be strengthening the independence and scope of elected local government for which a strong mechanism of accountability now exists through the council tax. Does my right hon. Friend agree that our future quality of life, as well as our economic competitiveness, depends to a large extent on whether we invest in our schools? I therefore very much regret the Government's proposals for capping and SSAs—certainly as they bite in Warwickshire—which run counter to these purposes.
I agree that education is at the heart of the nation's needs. That is why we have increased spending per pupil by nearly 50 per cent. in real terms since 1979. The difficulty, however, is that if the total spending is part of the total assessment of Government spending, when one local authority spends significantly in excess of what is available to other local authorities, it has a direct effect on us all because of its playback into the nation's economy.
Other honourable Members have to take into account the fact that Warwickshire is spending 4 per cent. above its SSA on education. It will have an increase of 1.2 per cent., which is above the average for all counties. I was concerned about Warwickshire's claim, which is based not on the particularity of Warwickshire but on the belief that the way in which the system works does not give adequate representation to factors that might colour our assessment. Because of that, I shall look closely with the local authority associations at Warwickshire's concerns next year. I have listened carefully to my hon. Friend the Member for Stratford-on-Avon and they lead me back to the comments made by my hon. Friend the Member for Meriden (Mr. Mills). One or two other authorities have believed consistently that the mechanisms seem to have failed their particular problems, and I shall reconsider their cases carefully.
Is not my right hon. Friend right to say that every one of us has concerns about the current methodology? The right way to decide next year's determination is with local authority associations and the silliest way is to take the advice of the right hon. Member for Yeovil (Mr. Ashdown), who said that this was an extremely important debate but who has not even bothered to turn up. He was encouraging some Somerset Members of Parliament to vote against the motion. Will my right hon. Friend confirm that were the House not to approve it, there would be no funds available for local government and no ability to pay and local authorities would not be able to make a rate determination or issue demands? Would not that cost the whole of local government a considerable sum of money?
I confirm all that my right hon. Friend says. I am sorry that the right hon. Member for Yeovil (Mr. Ashdown) is not here. I had thought, from all the letters that he had written to Members of Parliament of his own party and others, that he may have found it possible to come to this important debate. Is the matter important only in his constituency and not in the House?
I wonder whether the right hon. Member for Yeovil has noticed that if there was a redetermination, it would be unlikely that Somerset would have benefited more. Indeed, the likelihood would have been that other counties would have noticed that Somerset had received a 2.5 per cent. increase in its education standard spending assessment, which is well over twice the county average; that in personal social services, it had a 2 per cent. increase, which is considerably more than the county average; and that in other services it had a 4.6 per cent. increase.
It appears to me that in all the measurements, Somerset has done significantly better than many other counties. Yet the right hon. Member for Yeovil has rushed immediately to frighten people. The attempt by Liberal Democrats to frighten people as part and parcel of their party-politicking is the worst aspect of a party which has little to commend itself in general.
I will not enter into the argument in which the right hon. Gentleman has just engaged. May I invite him back to the subject of north-west England for a moment? He will consider, as I do, that there is plenty of scope for savings in cities such as Liverpool and that there is certainly scope for greater efficiency. However, does not he also recognise that the formula and the way in which it has been calculated is a great cause of concern? After all, if the European Union grants a city such as Liverpool objective 1 status, it is slightly bizarre that the city should be a long way down the league table of local authorities as listed for deprivation. Therefore, will he specifically look at its SSA for social services and the need of children? He will have received representations this year and last, and I hope that he will look at those seriously because children are at risk and will suffer deeply if that specific aspect is not addressed.
I have, of course, looked very carefully at what the hon. Gentleman has said. I tried to look across to see whether there was something about the new method which was deleterious to Liverpool, for the reasons that the hon. Gentleman has outlined. As far as one can compare the last years of the previous system before 1979 and the years since, the gap between what Liverpool gained with what the authorities which are often compared with it gained was significantly larger. So that problem has been delineated before.
There are difficulties in places where the population is falling, for example. I have looked at the matter carefully. Many of the things that we have taken into account this time have been helpful. I think that the hon. Gentleman would agree that the use of unemployment as one of the elements to consider has been helpful. That is something for which the associations asked and which was denied them by previous Governments. I am pleased that we have brought in that element. I shall look again, but, after all, Liverpool is third in the north-west as I understand it. It has significant resources, but I shall be happy to look specifically at the points that the hon. Gentleman makes.
I must continue for a moment. I shall allow hon. Members to intervene, but another paragraph would be helpful.
The hon. Member for Liverpool, Mossley Hill (Mr. Alton) has reminded us that we have to strike a balance between the proper responsibility of central Government to the economy of the country as a whole, including the control of inflation, and the proper duty of local government to decide how much it wants to spend to meet local needs. That is the knotty problem on which I tried to help my hon. Friends and hon. Members who represent Warwickshire.
Before I move on from aggregate spending figures, let me say a word about the total provision for education and personal social services, on which hon. Members have raised points. Provision for spending on education is set to rise by 1.1 per cent. That comes on top of a 2.4 per cent. increase for 1994–95. In real terms, as I have said, spending per pupil has risen by almost 50 per cent. since 1979. It is remarkable that that has happened. It would be wrong to ignore it. It is against that background that we have fixed the figures for this year.
It will be up to local education authorities and schools to deploy their resources to maximum effect to give priority to front-line services. If I had had the opportunity earlier, I would have made the point about the tone of the Cornwall telephone directory. The proportion of people who are admitted to be in administration—clerks and the like—as compared with people out in the field is on a scale which no private industry could support.
My right hon. Friend will be aware of the difficulties in Bedfordshire. Will he confirm that it is utterly untrue to say that central Government has ordered Bedfordshire to make a 4 per cent. cut in school budgets throughout the county? That is absolutely mischievous and misleading and will he condemn it?
Not only is it absolutely untrue, but I am afraid that it is typical of the thought process of authorities not uninfluenced by the Liberal Democrats. I can sum up the thought process in the words of a Liberal opponent of mine—he was perfectly reasonable in every other way—who, when I asked why he had put out a leaflet which he knew was utterly untrue, said, "Well, all's fair in politics, isn't it?" That is the sadness of local authorities which put out documents which they know to be untrue. I must say that the Labour party has a much better reputation for that than the Liberal Democrats, whose idea of truth is very different from what we find in the rest of the political scene.
In response to the comments that the Secretary of State has just made, may I say that I, too, deprecate anybody who puts out a document containing information that he knows to be incorrect. Will the Secretary of State confirm that, notwithstanding all the comments that he has made about the increases in education spending since 1979, the standard spending assessments per pupil are to be reduced this coming year compared with last year? Yes or no?
The hon. Gentleman knows perfectly well that the total amount of money available for a local authority increases. If a local education authority decided that it should spend less on education or more on administration, it would spend less per pupil. But there is no reason why the hon. Gentleman's local authority or any other authority could not spend more on pupils and less on administration. It is difficult to understand how the hon. Gentleman can condemn the practice in general when the Liberal Democrats do it on every occasion. I remember what they did in Tower Hamlets; and they should still be hanging their heads in shame.
I have read out the figures. There can be no such statement. The facts are that Somerset's SSA has gone up by much more than the county average for England. It cannot be presented as a cut, because it is an increase. I am sure that the hon. Member for Bath will wish immediately to renew communications with the public. In it, I hope that he will not only put right the fact that Somerset's SSA is not being cut, but ensure that no resident of Somerset misses the fact that the number of Somerset staff has increased by 3.4 per cent. in a year.
No private company could have managed such an increase while staying in business. The hon. Member for Bath should be ashamed of what Somerset Liberal Democrats have done and of the non-existence of the leader of the Liberal Democrats, who has made such a fuss. Perhaps the right hon. Gentleman is afraid.
If the leader of the Liberal Democrats cares to come to the House, I shall give way to him so that he can explain why he has written to members of my party to ask them to vote for him when he has not even bothered to turn up for the debate. I am ashamed of the right hon. Gentleman.
We have heard much about the funding of the community care reforms over the past few months. I believe that the figures speak for themselves.
The hon. Member for Greenwich (Mr. Raynsford) accepts that. Next year, local authorities will have £1.8 billion in recognition of their new responsibilities. That is an increase of 44 per cent. over the figure for the current year. As I have said, in 1995–96 there will be a ring-fenced grant totalling £648 million for authorities to spend on community care—[Interruption.] Opposition Members may feel that that information is to he yawned at, but most of the people involved in community care know that we have carried through our determination to enhance the powers and responsibilities of local authorities by giving them the new duties and the means to carry them through.
I am grateful to the Secretary of State. It seems that the Government are running rather scared from the west country woolly hats at the moment. I felt quite sorry for the Secretary of State earlier when he looked like a Christian being thrown to the lions. However, if he is going to start cherry-picking among local authorities, my sympathy will run out. What has he got to say about Westminster? He has praised that council so far, but according to the Evening Standard tonight, the council did not collect £30 million in service charges in respect of flats and properties that it had sold. What has the Secretary of State got to say about that in terms of the misappropriation of resources?
What I say about the figures that I have given is that I take them from the published figures and the facts as set out by the auditors. As far as I understand it, the figure referred to by the hon. Member for Newham, North-West emanates largely from the Labour party in Westminster. I would want to look more carefully at the figures before I confirmed or denied what the hon. Gentleman has said.
However, I can tell the hon. Member for Newham, North-West that, no matter what party it comes from, if there is evidence of impropriety or improper behaviour I would condemn it. I only wish that that was a more general view on both sides of the House.
We are increasing aggregate external finance at a lower rate than total standard spending because we believe that it is right that local taxpayers should fund a slightly higher proportion of the cost of local services. However, the level of council tax is a decision for each authority and will depend—
The hon. Gentleman has asked me to give way "on that point" on several occasions. I want to make more progress and more than three lines of my speech would be reasonable.
The level of council tax is a decision for each authority and it will depend on the level of service that councils choose to provide, the improvements that they can make to efficiency and effectiveness and how well they can collect what they are owed. I am therefore not about to start predicting council tax levels.
I will not make such predictions because I have tried to learn from the Labour party. Last year—[Interruption.] The Opposition Front Bench spokesman should not make comments from a sedentary position because I am going to tell him what I have learnt. Last year, Labour predicted that—[Interruption.] The point may be short, but it is worth listening to. Last year, the Labour party predicted that council taxes would rise by 6 per cent. They actually increased by only 2.2 per cent. The Labour party was wrong.
Indeed, Labour was wrong just as, in three successive years, the former shadow Environment spokesman was wrong when he said that the number of teachers had fallen. He was only slightly wrong. He should have said that the number had risen. That is the difference. The trouble is that the Labour party constantly cries, "Fear!" and "Danger!"
I am grateful to the Secretary of State. Is he aware that, under his criteria, the city of Newcastle upon Tyne will be forced to cut £5 million from its budget while, at the same time, reducing band D council tax by £70? Is he further aware that the local newspaper has conducted a survey of residents in the area which showed that, by a margin of 20:1, the people of Newcastle would prefer to keep the council tax at its present level and avoid any cuts? Why cannot the Secretary of State accommodate the electorate of Newcastle?
The people of Newcastle have an authority which has consistently spent very highly. If it intends to take more from the population than is reasonable, that will have an effect on the total spending on local government in the nation. That has a real impact on the economy. There is no way in which Newcastle can avoid being part of the United Kingdom economy. We try to achieve a reasonable balance.
My right hon. Friend referred to teaching numbers. Will he confirm that Devon county council increased its staff levels last year by 2.4 per cent., or 718 people? If it can increase its staff by that amount, and in view of the settlement that it is now receiving, will my right hon. Friend confirm that there is no reason why a single teacher should be dismissed in Devon?
My hon. Friend is being too kind to his local authority. He should tell his authority to answer a simple question. Does it think that education is important and, if it thinks that it is, will it put its additional resources into education and reduce spending on the unnecessary extra staff which it has decided, under the new administration, to add to its payroll? Unless the authority can say yes to that, the people of Devon will receive the bad deal which they are being offered at the moment under the guise of blaming the Government. It is right that my hon. Friend the Member for Teignbridge (Mr. Nicholls) should press that point strongly.
I should come to a conclusion quickly. However, before I do so, I should warn the House that there will be attempts to suggest that the system is unfortunately not as it should be. The Opposition spokesman, the hon. Member for Holborn and St. Pancras, will, now that he is so widely recognised as an expert on local government finance, put forward the view that the SSA system benefits Conservative-controlled councils rather than Labour-controlled councils.
Before the hon. Member for Holborn and St. Pancras rises, I want to give the House the opportunity to take the following fact on board. Of the 50 councils with the highest SSA per head, only three are Conservative controlled—[Interruption.] At any opportunity, the hon. Member for Holborn and St. Pancras suggests that we somehow fiddle the figures to help ourselves, but that is manifestly not true. The House is aware of the facts.
If hon. Members listen carefully to the speech of the hon. Member for Holborn and St. Pancras, they will no doubt hear him refer to phoney mathematics. The phoney mathematics involves comparing the outturn figures at the end of the year with the SSA additions for the beginning of the year. In all my time in the Department of the Environment and before that, I have not heard an Opposition Member make a speech on the subject in which the phrase "phoney mathematics" did not appear.
In a moment.
I must warn the House that there will be another "phoney" reference and that is the reference to phoney facts. The Opposition spokesman will suggest that one does not get the same deal in St. Helens as one gets in Westminster. In fact, one gets a better deal. First, there are better services which are provided better and, secondly if the councils spent at the same level, a higher proportion would be covered by the grant.
There is one fact that we will not hear in the speech of the hon. Member for Holborn and St. Pancras because, unfortunately, he has been unable to find it. Every local authority in the Association of County Councils and the Association of Metropolitan Authorities was asked to provide examples of the way in which councils had to sack people—
Ah, so those Labour-dominated authorities provided the information entirely of their own volition with no intention of passing the results to the hon. Member for Holborn and St. Pancras. I understand why they did not pass the results on. Having written to all the authorities asking for examples of the number of compulsory redundancies which they had to make as a result of the appalling policies of the Government, there was no reply. No examples could be found. The authorities could not manage to come up with the information. The hon. Member for Holborn and St. Pancras will not he able to give that fact, although he longed to do so. I hope that we shall look carefully at that matter.
Nottingham city council has tried to respond to what the Government have said in the past. In the past three years, it has saved £15 million. However, under the assessment, it would need an extra £3.3 million just to keep level with inflation. Savings were made in the past, and the Government tried to heap savings on top of them.
Savings cannot be made in one period and then ignored for the rest. Nottingham is spending 8.8 per cent. above its standard spending assessment. As in any business, the programme of being more and more efficient has to take place. I know that matters are difficult in Nottingham city council, because it has a bad example in Nottinghamshire county council. Nottingham councillors recognise that, because it is part of the embarrassing relationship between those two bodies. If both tried to save, the citizens of Nottinghamshire would benefit immensely.
I must now refer to the distribution of grant. We have a system whose sole aim is to ensure that available resources are divided fairly, according to needs, so that each authority is placed on an equal footing. We try to work those out—
On a point of order, Mr. Deputy Speaker. At the start of the debate you had to announce that a 10-minute limit will be imposed on hon. Members, with the exception of the Front-Bench spokesmen. The Secretary of State has spoken for an hour, and he has deliberately provoked interventions in order to prevent hon. Members from speaking. Do you deprecate that behaviour, Mr. Deputy Speaker? Can you offer us any protection from this deliberate filibuster?
Order. The Chair observes that Members are honourable Members. Presumably, they are capable of controlling their bodies as to whether or not they rise to intervene. Many hon. Members have been rising to intervene. If hon. Members would resume their seats, the Secretary of State might come to a conclusion.
It is a little harsh to say that I have been speaking for an hour. Several hon. Members have had an opportunity to put their points of view.
There are those who want more money for their local authority. The only way in which that can be done is either by taking money from other local authorities or by increasing the total amount. That is why we shall look with considerable care at the comments of the hon. Member for Holborn and St. Pancras. He must tell us, if he does not like the settlement, how much more he would spend, where it would come from, what taxes he would raise in order to deliver it, and whether the hon. Member for Dunfermline, East (Mr. Brown) has given his permission for that statement. I hope that the hon. Gentleman will give way to my right hon. and hon. Friends if they wish to remind him of that fact and, perhaps, ask again for his point of view.
To all councillors and hon. Members who ask, "Why does the system not give my authority more resources?", I say that, if we had a system which is as objective as we can work out with the local authority associations, it would not allow me to change the sum of the resources for an aggrieved authority or tilt that system toward a particular local council. I have seen that problem particularly when dealing with Newham, where there is an issue about the way in which spending is categorised between different groups of local authorities. I cannot make the point strongly enough that we can change the distribution methodology only when a different objective formula is justified. If the hon. Gentleman has some points that he would like to put into the formula, as his predecessors had, for they had several suggestions, I shall be very willing to consider them.
Last year, we carried out a thorough review of the distribution methodology and incorporated many changes. We needed a period of stability thereafter. We have made some changes, particularly to accommodate the police arrangements. There is more up-to-date information on pupil numbers, which makes the methodology much more up to date, as many people would agree.
We have also had to make a change in the SSA for the fire service, to take account of calls to incidents such as road accidents, and to recognise that maritime authorities have less scope for drawing reinforcements from neighbouring fire brigades. We have considered once more area cost adjustments, and we have responded to local government representations on the deemed debt of the former Greater London council and the levy of the London Pensions Fund Authority, which has helped inner London councils considerably. Detailed discussions with local authorities have led to that.
Since then, during the consultation period, we have received a number of representations from authorities about the data that we propose to use in the calculation of SSAs. Some of those representations brought to light errors that we have been able to correct. In particular, we have been able to improve data on pupil numbers, and we have tried to find ways of dealing with imperfections relating to pensions in the police SSA. We shall continue to discuss the SSA methodology with local authority associations.
I undertake that, if right hon. and hon. Members are able to produce examples of a different way of doing all that, particularly suggestions in regard to weighting, I shall be happy to consider them. I want to try to have a system that is increasingly able to meet changing circumstances such as those mentioned by the hon. Member for Liverpool, Mossley Hill (Mr. Alton), who spoke of certain difficulties in Liverpool. Hon. Friends from Devon raised other matters.
I said in December that I would continue to pay a special grant to compensate authorities that have lost more than 4 per cent. of SSA as a result of the incorporation of the new census data and the changes stemming—
The House should hear the comments of the hon. Member for Greenwich. He said, "That is a backhander." It is what local authority associations have universally ask me to do. It is a pretty wide backhander if we give it to every local authority. The hon. Gentleman should be ashamed of himself for saying that.
This is a fair arrangement, phasing out transitional support so that grant can be redistributed elsewhere. I propose also to pay a special grant to police authorities whose combined SSA and entitlement to police grant next year will be reduced by more than 2 per cent. as a result of the move to the new police funding formula. Perhaps the hon. Member for Greenwich would say that that universally asked-for change is a backhander. Special grant report No. 12 will establish those grants for 1995–96. Some £261 million of special grant will be distributed to local authorities in that way.
The capping of local authority budgets—I come to the last point that I want to make—[HON. MEMBERS: "Hear, hear."] Opposition Members have asked me to give way. I have no means of orchestrating the Labour party, nor does anyone else. The hon. Member for Nuneaton (Mr. Olner) rose, but he was unable to intervene. He cannot complain because other hon. Members had an opportunity to put their points of view.
I have considered carefully the representations that Ministers in my Department and in other Departments have received from a range of authorities. In the light of those representations, I have decided to make one change to the intended capping criteria announced in December.
Last year I announced in a similar debate an adjustment that benefited authorities that had been the subject of a substantial reduction in SSA as a result of the SSA review implemented in last year's settlement and which, under the initial criteria, would have been required to reduce their budgets in cash terms. I propose to make a similar change this year. It will apply to any authority whose SSA was reduced as a consequence of the 1993 review by more than 10 per cent. as measured for the purpose of SSA reduction grant. The effect, as last year, is that any such authority will be required to freeze its budget rather than to reduce it in cash terms.
I also announced in December my proposals for the calculation of notional amounts for authorities whose boundaries or functions will change from 1 April. They provide the base from which I shall measure increases in budgets in determining whether those increases are excessive. In addition, I announced provisional criteria which made allowance for that expenditure on care in the community which is being met this year by the special transitional grant.
Apart from the changes which I have described, my intentions as regards capping criteria remain as I described them in December. The House will recognise that capping is an essential tool for retaining the effective control of overall spending required by the Government—indeed, any Government's—economic strategy. I understand that there are even suggestions that capping would form part of a Labour Government strategy. We will not hesitate to use our capping powers should it prove necessary.
This .year's settlement will give local authorities some difficult decisions to make, but, in the interests of the national economy, local government—like central Government—must restrain spending and make each pound it spends go further. The settlement also demonstrates the Government's continuing commitment to a fair distribution of available resources, on a basis which uses up-to-date information and objective formulae. I commend the settlement and these reports to the House.
Now that the 70 minutes of sermonising are over, we should return to the real world. I remind the House that, in this coming year, real council tax payers in England will end up paying more and getting less. There may be a few councils where the council tax will not go up, and there may be one or two where services will not be cut, but, taken overall, nearly every council tax payer in this coming year will pay more and get less because the Government are cutting the grant.
It is not just the Labour party which is saying that. The Minister of State—using elegant phraseology to which I could not possibly aspire—is reported as saying:
We have all been stuffed by the Treasury".
Councillor Rita Taylor, the Tory chair of the Association of District Councils' finance panel, said:
the public are going to have to pay more … Conservatives in local government are in despair at this settlement".
The general situation has not changed much since the Minister made his statement at the beginning of December. From the Government's figures, we can expect the average council tax increase over the whole country
to be about 6 per cent. It will be lower in some areas and higher in others, but even including that average increase, and using again the Government's figures, the money available for councils will be £1.5 billion short of what is being spent on services this year. That does not allow for any forthcoming pay increases, the additional cost of about 100,000 extra children starting school, the needs of more old people, better services for the disabled and other demands.
The hon. Gentleman says that the settlement is inadequate. Therefore, the Labour party would either give more grant or would allow capping to be relaxed and council taxes to go up. Which is it to be? By how much would revenue support grant go up? By how much would the hon. Gentleman be willing to see council taxes rise? There is no alternative to one of those two options, or perhaps both.
We are not hear to discuss what a future Labour Government might do. We are here to deal with a proposition that the Government are putting forward today. It is fairly unlikely that the Labour party will be in charge of the country within the forthcoming financial year, although I hope that we are. We look forward to dealing with the problems and making the best of the opportunities. We are discussing the Government's proposals tonight, and it is up to them to defend them.
The Government's figures suggest that, during the next three years, council tax payers will have to find an extra £2.8 billion in council tax. That is equivalent to 1.5p on the standard rate of income tax. They will have to find that not just next year, but the year after and the year after that. People can expect to pay more and get less.
Ministers try to give the impression—God knows the Secretary of State has taken enough time in doing So tonight—that the formula is objective and is as "fair as humanly possible", as the Secretary of State said. However, the standard spending assessment is based on the Government's assessments of need, and one does not need to be a member of the Royal Statistical Society to see that that cannot be right.
Never mind how the Government arrive at their criteria for deprivation—what one should do is judge them by the outcome. According to the Government's social index of need, Westminster is more deprived than Brent, Lambeth or Southwark; Runnymede is more deprived than Oldham or Liverpool; Hove is more deprived than Hartlepool; Salisbury is more deprived than Knowsley; Windsor—I know that it is going through a bad time at the moment—is more deprived than Bury, Langbaurgh, Ipswich, Thurrock or Darlington. I do not think that anybody believes that that is right.
The system is a party political racket, and everybody knows it. It has been designed to help Tory areas and to help keep Tories in power. A supreme example is the special fiddled funding for Westminster. Westminster used to be the Tory flagship, but scandals are turning it into the Tory ship of shame. If the Conservatives think that Westminster is their flagship, they should remember that their last flagship was the poll tax, and Westminster will sink them like the poll tax did.
Time and time again, the Government have rigged the grant to help Westminster, first to keep down the poll tax and then to keep down the council tax. The Secretary of State may say that there was no rigging. Let me read from a note prepared for Lady Porter, the leader of Westminster city council, on 9 May 1989. The note compliments the Secretary of State—he was not the Secretary of State at the time—and says that he is the "most alert" of Ministers to political nuances, and that he would be particularly conscious—
On a point of order, Mr. Deputy Speaker. I hesitate to raise this point of order, but I thought that we were speaking today about the revenue support settlement for the coming year, not for some years ago. If all that the Opposition can rely on is something which happened years ago, it shows that they are fairly bankrupt of ideas.
Order. I must draw the attention of all hon. Members to the fact that the motion is concerned with the revenue support grant and the Local Government Finance Report (England) 1995–96. Anything may be used in evidence, but that obviously is the primary purpose of the debate.
You will be familiar, Mr. Deputy Speaker, with the fact that one of the reasons why Westminster is in such a good seam at the moment is that skulduggery and fiddling in the past have allowed the council to build up enormous balances. In many cases, those balances exceed the amounts of expenditure which some councils can look forward to in the coming year.
I now return to the report, written when Westminster started building up those balances. It was reported to Lady Porter that the Secretary of State—then the Minister of State—would be particularly conscious that, with safety nets, a number of high-spending Labour London boroughs would appear to get off the hook with community charges "lower than Westminster". The Tories then set about making sure that those community charges "lower than Westminster" did not come about.
Westminster will have to be given very large sums of money this year to make up for the millions of pounds that have been lost within the council through corruption and incompetence. That is not just a matter for Westminster, because the extra funds which are constantly found for that council and which, it is proposed, should be given to Westminster in this settlement, are taken from the funds available to councils elsewhere. That is in not just the rest of London, but the rest of the country. Every other council gets less so that Westminster can get more.
At a previous Question Time, my hon. Friend the Member for St. Helens, North (Mr. Evans) drew attention to the rather unfair treatment of St. Helens compared with Westminster, despite the fact that they have about the same population. My hon. Friend will give further details if he manages to catch your eye, Mr. Deputy Speaker. St. Helens receives £104 million in grant from the Government while Westminster receives £194 million. The grant per head for St. Helens is £578 and the grant per head for Westminster is £1,024.
It could be argued that, as St. Helens is not in central London, those figures are not strictly comparable. As the Secretary of State seems to be obsessed with the London borough of Camden, let us compare Camden with Westminster. Both boroughs are roughly the same size, geographically and in terms of population, and are adjacent to one another. Virtually the only difference is that more rich people live in Westminster than in Camden. One would think, therefore, that Camden would get more money than Westminster, but that is not so. Westminster receives £194 million whereas Camden receives £178 million. Westminster will have got nearly £16 million more in this settlement. It got £21 million more in the year that is coming to an end and £20 million more the year before that. However, that clearly does not have a direct effect on performance because, as the Secretary of State's officials can confirm, the Audit Commission's indicators show that Camden is better run than Westminster.
How has the grant been rigged to benefit Westminster at the expense of everywhere else in England? Some time ago, Westminster received £7.2 million to spend on flood defences. It spent £700,000 and therefore had a kick-back of £6.3 million. It was also given £2.2 million to give a grant to the English National Opera and the English National Ballet. It gave £200,000 and kept £2 million for itself. That is £8 million to start off with, which others should have received in a fair system. However, the swindling is much more systematic than that. The special weighting for tourists was doubled at one stage to £5.3 million. The standard spending assessment for Westminster includes a £54 million allowance for the extra cost of visitors.
Another special factor is at work in Westminster, which, for some reason, is not allowed for in the SSA. In the current year, Westminster receives more than £20 million in income from parking charges, and that sum is expected to be more than £30 million in the forthcoming year. One would expect a Government who are so concerned with public spending to abate or to reduce Westminster's grant to reflect that massive income, which is not available to other councils. Instead, Westminster is allowed to keep every bit of it. It is a racket: extra money for visitors is not offset by the money that visitors bring in. Moreover, it has all been done as part of a political swindle.
Why was that necessary? First, it was to keep the poll tax down; secondly, it was to keep the council tax down—
Thirdly, it is to make up for money lost by that Tory council deliberately by fraud, incompetence and corruption. Everyone in the country now knows that Westminster council is being done by the district auditor for the "homes for votes" scandal in which £21 million has been lost, but there has been a more recent revelation.
The Secretary of State said that he did not deal with figures unless they came from the auditor. These figures are from the auditor—Westminster's internal auditor—who says that the council lost £30 million by not collecting service charges, management charges and the cost of repairs to flats and houses that it sold. That cannot simply be forgotten, as it did not happen by accident. It was deliberate, and the papers show that the council ignored legal advice and kept the facts from committees and the public. That is why the Labour party is calling for a special audit of Westminster city council. I now challenge the Secretary of State to order a special audit of—
In case the hon. Gentleman does not understand, the money that Westminster city council has not collected is having to be made up by Government grants. Therefore, grants are not available to people in his area or in areas represented by my hon. Friends.
Will the Secretary of State establish a special audit to root out corruption in Westminster, or do the Tories reserve special audits for Labour councils?
The auditor is, at this very moment, dealing with a number of the issues that the hon. Gentleman has mentioned. The hon. Gentleman is entirely wrong to say that any of those makes any difference whatever to the distribution of grant, either this year or in previous years. So he should not mislead the House. Moreover, the House will have noticed that he has now been speaking for 15 minutes but has dealt with nothing except the past arrangements of Westminster city council and has given no answers about scandals in Camden, the lists of which were public, not spread about by leaked documentation. The hon. Gentleman should be ashamed of himself.
How can the Secretary of State say that the scandalous waste of public funds in Westminster has not affected the funds that it receives from central Government? He says that he did not know about it. If he and his officials did not know about it, they would not know why there were such gaps in the accounts, which had to be made up in this settlement. That is why we are concerned about what is going on.
If the Secretary of State wants to bandy about figures for Westminster and Camden, let me give him a few. The Audit Commission selected 12 indicators at the middle of last year. On those, Camden far out-performs Westminster. There are 12 indicators and 12 inner London boroughs. Camden comes top in four of those indicators and is either first or second best in seven out of 12. Westminster comes top in only one and either first or second best in just three of the 12. Camden has the best educational results in inner London, even before they are adjusted for deprivation. When deprivation is taken into account, Camden is second best in the whole of England, and Westminster is 99th. I hope that the Secretary of State is proud of that. When it comes to handing out mandatory awards to students, 99 per cent. of students in Camden got mandatory awards on the due date, whereas no students in Westminster got mandatory awards on the due date. So I hope that the Secretary of State will shut up for the time being.
Is the Secretary of State satisfied with the present arrangements, powers and resources of the Audit Commission and the district auditor, or does he agree with the Labour party that the present system is letting everyone down and that the Audit Commission and the district auditor need to be strengthened to eliminate fraud and corruption wherever it arises?
As the hon. Gentleman has obviously not listened to anything anyone has said, I shall repeat Rt. I am opposed to impropriety of any kind, wherever it comes from, and will seek to ensure that it is rooted out. I note that it has occurred in a number of boroughs and, in those circumstances, no one has been more ready to support those who have been found innocent and oppose those who have been found guilty. The hon. Gentleman seems not to remember that it is a principle of English law that a man or organisation is not found guilty until he or it is proved guilty. He thinks that he can fling about any statement in the House because he is protected by the privileges of the House. I wish that he earned those privileges.
I have never said anything in the House that I am not willing to repeat outside it. In commenting on Westminster city council in the House today, I have only repeated what I have said on television and on radio.
I may seem to have spent a lot of time discussing the Westminster city council, but the Government's treatment of it shows how unfair and party political is the system. Only four places in Britain—Hackney, Tower Hamlets, the Scilly Isles and the City of London—receive a higher proportion of Government support than Westminster. The rest of us get less so that Westminster can get more.
I shall give some examples of the reduction in council tax that would occur in other areas if those areas received the same level of external Government help as Westminster. The Camden council tax would be reduced by £261, the Croydon council tax would be reduced by £73, the Enfield tax would be reduced by £274 and the Bristol tax would be reduced by £258. That is nothing compared with many other councils. If they received the same level of external Government support as Westminster, council tax payers in Bury and Oldharn would not pay anything at all—they would get a refund every year. The same thing would apply in Redbridge, Plymouth, Dartmouth, Langbaurgh, Gloucester, Dover, Stockton-on-Tees, Southampton, Northampton, Carlisle, Watford and York. I do not understand how anyone could think that that is not a racket.
The hon. Gentleman does not understand how people would not think that it is a racket, but why does not the Association of County Councils think that it is a racket? It thinks that there is a reasonable level, as does the Association of Metropolitan Authorities and all of the other people and organisations which are involved in the process. The decisions are arrived at after full discussion with local authorities. The only other person who does not agree with it is the hon. Gentleman's predecessor on the Opposition Front Bench.
Furthermore, independent authorities such as Mr. Tony Travers have said that what the hon. Gentleman says is simply not true. The only people who think as the hon.
Gentleman does are those who have done so little homework that they do not understand how the system works to the benefit of the whole country.
I have done enough homework to recognise what the Minister means. When he says that decisions are taken in consultation with local authorities, he really means that he decides after he has consulted with them—and he usually ignores what they have said.
The results reveal the true integrity and fairness of the system. Under the settlement, people will pay more this year and receive less: council tax will rise and services will be cut. I do not have time to list all of those services because I want to keep my contribution short.
My hon. Friend did not mention wonderful Wolverhampton in his list of authorities which would benefit in the way that he outlined. Wolverhampton is an exemplary authority—the Secretary of State would confirm that if he got to his feet—but in the coming year, in order to stand still, we shall have to find an extra £7 million by either increasing charges or reducing our services because the Secretary of State has not honoured his commitment to the wonderful people of Wolverhampton. They will bear the pain in the next financial year as a result of the Government's failure to recognise the needs of local government.
I apologise to my hon. Friend for not mentioning Wolverhampton in my list of places which would receive a refund if their councils were as well supplied with Government funds as Westminster. However, we do not have time to list them all. He reiterates what Labour Members have said: in most cases, people will pay more and receive less.
I shall give some examples of what is happening to council services. As more children are living in poverty today than at any time in the past 30 years, school meals should be becoming more important. In 1979, when the Government came to power, 63 per cent. of children took school meals; now the figure is only 43 per cent. The reason is that the price of school meals has increased from 20p all over the country to 120p in some areas, while at the same time nutritional standards have been abandoned.
Will the Secretary of State confirm whether there will be further rises in the price of school meals in the coming year? Will nutritional standards fall further? We asked him those questions when he delivered his statement in December but he did not answer. If he cannot be bothered to answer now, it is clear that he does not care.
Apparently, some Tories claim that the size of school classes does not matter—which is strange as nearly all of them send their children out of the regular school system to be educated. They send their children to the fee-paying schools which have smaller class sizes. [Interruption.] I do not know why Government Members are getting excited because I do not know anyone on the Opposition Benches who sends his or her children to a fee-paying school.
Let us assume, therefore, that the children of Tories benefit from smaller class sizes. Most people think that it would be a good idea if all of our children could enjoy the educational benefits of smaller class sizes. According to the Government's own figures, in the past 10 years there has been a 9 per cent. increase in class sizes in primary schools and secondary school class sizes are rising as well. There are reports of that occurring all over the country. I ask the Secretary of State: will there be further increases in school class sizes? Does he know? Does he care? I can assure him that parents care, but they are faced with paying more and getting less.
Youth clubs are another part of the education service which is increasingly neglected. Those clubs do not constitute a statutory provision and they are closing all over the country. Government Members then ask why there is an increase in juvenile crime. In London, and in many other parts of the country, the youth clubs which used to keep children occupied have been closed. I thought that the right hon. Gentleman, with his religious leanings, would recall the old saying, "The devil makes work for idle hands." The closure of youth clubs has certainly led to other problems.
No, I shall certainly not give way. As to clubs at the other end of the age spectrum—
I shall not give way to the hon. Gentleman, who is just standing there, because I can remember his abominable behaviour on previous occasions.
Will the hon. Gentleman reconsider what he has just said? He made a direct assertion about my hon. Friend the Member for Suffolk, South, but he will not give way to him. Will the hon. Gentleman have the courtesy to give way to someone whom he has insulted?
I can cast my mind back to the occasion when the hon. Member for Suffolk, South made assertions about the veracity of my hon. Friend the Member for Dunfermline, East (Mr. Brown). That led to Madam Speaker having to make a statement about the whole matter—so I will not give way to the hon. Gentleman.
The Chair deprecates personal comments even if they are not ruled out by "Erskine May". I think that this whole debate has become a little too excited; but how hon. Members conduct themselves in entirely up to them.
In 1979, luncheon clubs provided meals for 15 million old people. In the last year for which figures are available, they provided meals for only 7 million people. Those clubs provide old people not just with a meal but with a chance to get out and enjoy a bit of company—to stir out of their homes, in which some of them feel imprisoned because they are fearful of going out. Will more or fewer pensioners be having meals in luncheon clubs as a result of today's announcement?
As for care in the community, there are all sorts of calculations about NHS funding, local council funding, voluntary sector funding and private sector funding. I admit that the system is byzantine in its complexity, but the evidence of people's eyes and of our advice services and post bags show that the figures speak for themselves—sad figures, stumbling around the streets with no one to look after them. People have come to us because their neighbours cannot help being a nuisance when they are in a crisis, but there is no one to look after them; there are no acute or secure beds to cope with them. From the inner cities to the shire counties, care in the community is not working properly—and we all know it.
I shall continue with a few more examples of what seems likely to happen. No doubt the Government will refer to them as anecdotes. These days, the definition of an anecdote is a reality that gives the lie to Government statistics. The Government claim that the threats to services are exaggerated by councils. There may be some truth in that; there may be exaggeration by teachers and by pensioner groups. For every spoonful of hyperbole on the part of local people, we get a bucketful of litotes from Ministers. [HON. MEMBERS: "Of what?"] For Conservative Members who have not had the benefit of a classical education, I shall try again. For every ounce of exaggeration by local people, we get a ton of complacent understatement from Ministers.
In Warwickshire, there is a threat to schools. Yesterday, I encountered someone in a meeting to do with the green side of my environmental duties. Towards the end of our discussions, he suddenly said, "I hope you are going to oppose what is happening to schools in Warwickshire, because we are faced with a possible loss of one teacher from every primary school and every secondary school. That will harm the education of my children and of the children of my neighbours." Does the Secretary of State deny that that is likely to happen?
No, I want to get on with my speech so as to allow some of my hon. Friends to speak up for their communities.
Shropshire faces a £1 million reduction in spending on the elderly. It faces a reduction of nearly £500,000 in spending on people with learning difficulties, and a loss of more than £500,000 for spending on services to children in families—including the council's efforts to prevent child abuse. Last night I, like all hon. Members who attended the debate, heard about the nationwide concern over the funding of the police service and the attendant threat to the fight against crime.
I am grateful to my hon. Friend for referring to Shropshire. Can he confirm that the immense problems that we face there stem not just from this year's settlement but from a succession of four bad settlements which have meant that services have been consistently threatened for four years? There is near-universal agreement in the county that the only way services can be maintained is by going through the capping limit.
I understand that. We are not making a party political point because, as we understand it, all the members of Shropshire county council—Tory, Liberal and Labour alike—believe that the capping limit is too low to allow them to provide the services that they believe their people deserve.
If we can believe what we read, the Tory members of the county council have been making representations to the Secretary of State, presumably to the same effect—although I hope that they have been more successful than some others who have made representations. I have checked on what happened to the seven Tory-controlled councils—there are so few of them these days—which have made representations to the Secretary of State or to one of his Ministers. They include Solihull, about which the Secretary of State was looking so concerned. Solihull went to ask for more; it ended up with £51,000 less. Castle Point went and came out with less. Likewise Dartford, Ribble Valley, Rushmoor, Thanet, and above all Brent, which went and lost £500,000 as a result of its representations. And that is what happens to Tory councils.
Even more seriously, last year the fire service in South Yorkshire was so short of funds that it had to capitalise fire fighters' pension lump sums. In ordinary language, it took out a mortgage to find the money to pay the lump sums to fire fighters retiring from the service. The Government accepted that South Yorkshire was skint enough to have to do that. This year one might have expected the council to get a bit more from the Government to ease matters a little, but it got less: a cut of £1.4 million from a total budget of only £32 million. For the past two years, that fire brigade has not been able to afford new uniforms or new tyres for the fire engines. It needs to replace the fire engine tyres: worn tyres are not exactly a good idea.
The chief fire officer says that the authority cannot cope. I have to tell the Secretary of State—I had hoped that the Government machine would warn him of this—that the Home Office inspector has said that South Yorkshire cannot meet its minimum standards of fire cover on its current budget. So the people of South Yorkshire will have to pay more for less fire cover. I understand that the same applies on Merseyside, which has a £4.7 million shortfall. The authority fears that it will be in breach of its statutory duty.
While we are in South Yorkshire, let me mention Barnsley, which is apparently far less deprived than Runnymede and similar places. Over the past few years, Barnsley has lost 20 pits. In their desperate efforts to get the pit closure programme through the House, the Government promised to set up enterprise zones in the areas most deprived as a result of pit closures, yet they are so slovenly and useless that not one of those enterprise zones is yet in operation. The one in Barnsley certainly is not, and Barnsley has been capped on its standard spending assessment. It faces the prospect of having to close day centres for the mentally handicapped, for instance. Even if it can avoid that, it may have to withdraw one of those little, kindly forms of gentleness that make life better for people who are in a bad way. Until now, when people have gone to the centres for the mentally handicapped in Barnsley they have been given a little pay—£4 or £5 a week—to give them a bit of self-respect and spending money. Under this settlement, it seems likely that, even if the centre can be kept open, that little bit of self-respect will have to be withdrawn.
I think that the Barnsley experience epitomises what is happening in Britain under this Government. Taxes increase and vulnerable people suffer. Vital services such as the fire brigade suffer; our children's schooling suffers. Old people suffer while the rich get richer. The operators of privatised buses line their pockets at everybody else's expense. Tory Ministers receive their pay-offs by joining the boards of industries that they privatised, or boards of city firms that have made a fortune out of privatisation. All this is happening while corruption in Westminster continues to be subsidised by the taxpayer and the council tax payer in the rest of England. We are all sick of it. We do not want to pay more to get less.
The hon. Member for Holborn and St. Pancras (Mr. Dobson) made a disappointing speech. Smear, hyperbole and shroud waving are no substitutes for policy. It is little short of a travesty to suggest that changes in standard spending assessment have been fiddled. I well know that the changes have been brought about by local authority associations. I have in mind especially those recommendations that related to unemployment and social deprivation, which were fought hard, but accepted. The hon. Member for Holborn and St. Pancras was so uncertain of his argument—the House will draw its own conclusions—that he did not dare allow a Conservative Back-Bench Member to intervene in his speech.
My right hon. Friend the Secretary of State was right when he said that we are dealing with a tough settlement. It is one of the toughest local government settlements that I have seen, but no settlement can be judged on the basis of one year. Last year's settlement was extremely good for local authorities. It was much better than it appeared to be at the time. There was no justification for the extravagant claims which were made, such as serious reductions in service. The net fall in the number of people employed by local authorities was slightly more than 1 per cent. Taking into consideration schools that opted for grant-maintained status and the effects of compulsory competitive tendering, we see that last year's settlement was about neutral.
The fact that this year's settlement would be tough has been well flagged in the specialist press. It is well known that directors of finance and leaders of councils, being prudent men, have taken note of reports that the settlement would be a difficult one. They have had much more than three quarters of a year to prepare for it.
Unlike the hon. Gentleman, I do not have unlimited time. I have only 10 minutes. If possible, I shall give way to the hon. Gentleman towards the end of my speech.
We have seen the usual parade of amputated stumps. Young people and the elderly have been used as battering rams. When my hon. Friend the Member for South Hams (Mr. Steen) talked about parents and elderly people being in terror, Opposition Members broke into laughter. I do not believe that that happened because they are callous. They laughed because they know the truth; they know, for example, that no teachers will be made redundant.
Cuts in teacher numbers will not be made. I know that, as do Opposition Members and the media. The only people who do not know that there will be no such cuts are frightened people. Opposition Members may not have had to deal with people coming into advice bureaux shaking with fear because the local authority is threatening to take away home care from their elderly parents. There are also parents who are worried about their young child returning from school with a letter from the local authority suggesting that teachers will be made redundant. I believe firmly in the professionalism and independence of local authority officers. If, however, the majority party of a council decides that a letter should be sent to the people of the area, I do not accept that it should be sent in the name of a local authority officer.
I believe that head teachers are entitled to protest. They are entitled to say what they think about the level of service within their responsibility. If, however, schools are short of resources, they are not entitled to use school notepaper to draw attention to what they regard as shortages, thereby depriving schools of equally valuable resources.
What does my hon. Friend say about a leaflet that was issued by the education officer of Kent county council to parents throughout the county, at a cost of £4,000? There were claims within it that various cuts would be made, despite the fact that Government funding for Kent has increased by 2 per cent. overall.
My hon. Friend had the courtesy to show me the leaflet. I believe that the officer concerned stepped over the mark. That officer has mistaken a majority view in the council for a view that should be passed on to the public. As I have said, I firmly believe that local authority officers have high standards. If, however, they are to retain their independence, they must retain party political independence.
Surely it is a bit rich for the hon. Gentleman to give us lessons in the use of local authority funding. When he was leader of Bradford council—this happened on the casting vote of the lord mayor—he took £13 million out of the council's budget and set the pubs of Bradford running.
The hon. Gentleman has given me the opportunity to remind him that, during my time, spending on or in schools increased, as did the number of teachers.
The reduction in teaching numbers came when the hon. Gentleman was leader of the council. I hope that the hon. Gentleman will have an opportunity to apologise for that.
The most extravagant claims have been made about secondary schools. I am pleased that such schools in my constituency have been free from them. One of the reasons is that Brentwood and Ongar is the only constituency in which all secondary schools have opted out of the local authority's control. They are free, therefore, from political bias. I have little doubt that the shroud waving of Opposition Members will encourage others to join Brentwood and Ongar.
Parents in my constituency enjoy schools that are free from dogma. Mr. Leo McKinstry's description of a Labour administration
mean-minded cocktail of political correctness, bureaucracy, intervention and abuse of public money
when talking about Islington could well fit Essex county council, which is controlled by the Labour party and the Liberal Democrats.
My constituents have been the victims of a combination of fuzzy dogma and incompetence. The county council is damaging them over a relatively small sum. They have been denied care in the community services. Beds in local hospitals are being blocked. Children are worried about the future of their elderly parents. It should not, and need not, have happened. It has, however, because the county council has decided to use the elderly as a battering ram.
No one ever thought that care in the community would be a cheap option. We always knew that it would be expensive. That is why the sum made available by the Government to Essex county council for care in the community was increased last year by £32 million. There will be an extra £18 million this year. Since 1990, the grant for care in the community to the county council has risen by 95 per cent.
My constituents have been the victims of poor decision making. There has been a transfer of about £500,000 from the care in the community budget to support inappropriate services, and the charging policy has been turned completely on its head, to the tune of £1.25 million. That is almost the exact sum that the county council chooses to take away from elderly people.
The county council has decided to end the policy of selling old persons' homes. I have some experience of this because I visited Brooks house. Before the election, I saw an old, rundown building where the staff offered excellent care. Unfortunately, it was not a place where elderly people should see out their last years. When it came to the surroundings, there was no dignity and no respect. The sale was fought hard by the Liberal Democrats; indeed, it has ended that policy. I had the pleasure of opening Brooks house last year under the new regime. What I saw there was respect for the elderly people, the same staff running it and a better organisation. Under the new regime, it is a lot cheaper and a lot better in the private sector. Essex county council could buy considerably more care under that process if it would follow the example of putting the care of those old persons into the private sector.
I firmly believe that it is within the power of Essex county council to use its not inconsiderable balance of £28 million to put care back where it is needed—into the hands of the elderly in my constituency.
The hon. Member for Brentwood and Ongar (Mr. Pickles) will forgive me, I hope, if I do not follow all the points in his speech, although I wish to refer to some of them.
It was refreshing to hear a voice from local government talking about the motion, because in your absence, Madam Speaker, the debate became a shambles. I have attended many of these debates. It was no fault of your deputy, Madam Speaker. The fault lay in the fact that the Secretary of State quite deliberately allowed interventions over and over again from Conservative Members. I know that a Secretary of State or a Minister gives way to interventions, but not repeatedly like that.
I have taken these motions many times in the House. I have proposed them from the Front Bench. One allows a few interventions, but one does not base one's speech on interventions. One should try to explain to the House what the motion is about. That the Secretary of State signally failed to do by talking about street signs in Suffolk and lesbian centres in Camden, by criticising the fact that the right hon. Member for Yeovil (Mr. Ashdown) was not in the Chamber—all that sort of silly arguing. I wish that a video of the debate would be sent to every councillor, especially Conservative councillors, who, like us, are concerned with the community. They are caring people, just as Labour and Liberal councillors are caring people. They are colleagues of ours in a different sphere. To be treated in that way in what is probably the most important debate for local government was nothing but a disgrace.
The motion has been described as harsh. I would go further and say that it is intolerable, because local authorities will find not only that their services have diminished but that they will be unable to provide some services at all because of lack of money—not from malice, not from putting people in fear, but simply because they have run out of money for those particular services.
I am an honorary—I stress that word—vice-president of the Association of County Councils. It is opposed to the motion and finds it deplorable. I also represent a Cheshire constituency. I hasten to tell the Minister that it is not a Labour-controlled authority but an alliance between Conservatives and Liberal Democrats and they oppose the motion because of its injustice.
Let us take two Departments in central Government—the Department for Education and the Department of Social Security. I understand that the figures for this year—limited though they are—are 4.1 per cent. for education and 3.7 per cent. for social services. The actual figure this October, with all the changes in police orders, and so on, is 0.5 per cent. for each of those services in local government. That shows the disgraceful discrepancy between the way in which central Government treat themselves and the way in which they treat what should be their partner—local government.
I have another criticism, and I agree with my hon. Friend the Member for Bolsover (Mr. Skinner), whose intervention was on this subject. One reason why there are discrepancies between Cheshire, Derbyshire, Cleveland and Tyneside is that an area cost adjustment is built into the system. That adjustment is supposed to compensate for the fact that it is more expensive to pay staff in London and the south-east than in the rest of the country. That might have happened at one time, but I challenge that assumption now on national wage bargaining. Even if there is some truth in it, it does not excuse the enormous advantage that counties and boroughs in the south-east have over the rest of the country. There is no way in which that can be excused. I do not think that it is a coincidence that most of the Conservative seats in the country are in the south-east.
I wish briefly to look at one service, because the motion covers a vast subject—social services, to which the hon. Member for Brentwood and Ongar rightly referred. It is central Government and local government at the sharp end. It is where the Government come into contact with the most distressed people in our society: the old, the sick, especially the mentally sick, and children, right at the centre of their lives. As Members of Parliament, we all know that. We see it in our surgeries and we gladly pass on those cases to the county or borough social services department. Alas, when we do that in future, many of those services will not be able to be provided, because the departments will not have the money after the settlement.
The ACC estimated the cost of such social services. There is a shortfall in the amount that departments are to be given under the motion—I have the figures, but will not go into them, as that would waste time—of £261 million. The people who will suffer are the old, the sick and children in need of care.
A couple of years ago, Cheshire county council introduced a system of charging for care. Now, I understand, more than one third of councils are forced to charge for care. As a result of the settlement, I guarantee that the percentage of councils that are forced to do that will be 100 per cent., because there is a built-in system whereby 9 per cent. is assumed to come from charges. We are talking about the most vulnerable section of the community. It is likely to come from the poorest—those not with low means but, in many cases, no means. There is no way in which a caring—even an uncaring—county council can recover those sums.
What will that mean, then, in human terms? We have debated the figures—they are major figures—but it comes down to human terms. One of the few ideas that the Government had was to implement the community care scheme. Everybody agreed to it—the Association of County Councils and every shire county. It is a far more humane system. The national health service has benefited from it, quite rightly, because people are better off in the community. Previously, people were institutionalised, either long term in a hospital or in some other institution. The community care scheme should have been the Government's flagship, but the transfer from the NHS has not been followed up and matched by a fair transfer of finance among the authorities.
What is happening now? We see it in our streets. In the community, local authorities have the responsibility of care; they would willingly provide that care, but they do not have the money to do so. The Secretary of State may say that that is because of waste or inefficiency, but that is not what the Audit Commission says. It is not what his own inspectors say when they examine how the community carries out the schemes.
We must look at the subject in human terms, in terms, for example, of the people who suffer from schizophrenia. There have been some dreadful, tragic cases, for the person concerned and for his or her family, and sometimes the family of the victims. The money will not be available to provide the care needed.
We must think of special needs teachers. I am sure that my hon. Friend the Member for Ellesmere Port and Neston (Mr. Miller) would have raised that matter had he not been upstairs in a Select Committee. We must think of children who need to be put in care as a result of sexual or other physical abuse: places will not be provided, as they were in the past. We must think of meals on wheels, and other services for elderly people. Those, too, will be cut.
Finally, we must think of the carers who save the country millions of pounds more than the revenue support grant, through the love and care that they devote to, for example, sufferers from Alzheimer's disease for 24 hours a day, 365 days a year. At present, councils can provide places that allow those carers some respite, but they may not be able to do so in the future.
Many Conservative Members are as caring as Opposition Members. When they vote tonight, let them remember that.
I hope that the right hon. Member for Halton (Mr. Oakes) will not be offended if I do not follow his speech. It was an excellent speech, although I could not agree with all of it, but I am constrained by the time limit.
The right hon. Gentleman's speech was a marked and welcome contrast to that of the hon. Member for Holborn and St. Pancras (Mr. Dobson), which was boorish, ignorant, graceless and thoroughly uninformed. At least it had the virtue of being entirely consistent with every other speech that I have ever heard the hon. Gentleman make, and we should also give him credit for coming here to make it: that is more than can be said for the right hon. Member for Yeovil (Mr. Ashdown), who has played a significant part in the misrepresentation of the current settlement. Despite the steps that he has taken to misrepresent what is going on in the west country, the right hon. Gentleman could not even come to the House today. I find that remarkable, and think that it should be noted.
It is in the nature of politics that politicians, whether they are Labour, Liberal or Conservative, seek to put the best possible construction on their actions. Sometimes, the public feel that that amounts to dishonesty; I do not think that it does. Obviously, any political party will try to set out its stall as well as it can. However, what has happened in Devon in recent weeks goes far beyond that. The Liberal administration there has not merely put the best possible gloss on its own policies and the worst possible gloss on those of the Conservative Government; it has engaged in a campaign of deceit, disinformation and downright lying. I have a fairly thick skin in political terms—I need to—but that campaign is so appalling that even I have been surprised at not only what the Liberals have done but at the extent to which, so far, they have got away with it.
What the Liberals have done in Devon, and the way in which they have presented the position, is wicked, because it obscures the debate. If the Government had produced a settlement for Devon that was not fair, the Liberals' behaviour and the fact that it can be rubbished so easily would actually make it harder to bring Ministers to account—if, indeed, they had to be brought to account.
We Members of Parliament make the mistake of thinking that, because we all understand—to a greater or lesser extent—the way in which local government is financed and the way in which it works, our constituents will understand it as well. Most of them do not. What parents know, certainly those in Devon, is that their children have only one opportunity of being educated. If the Conservatives sort out Devon's education service when they are returned to power there, it will not help someone who has already gone through the school system.
My hon. Friend the Member for South Hams (Mr. Steen) used a phrase for which he was derided; he should not have been. Let me use the phrase again. What terrifies parents is that they do not know the minutiae of local government funding. They do not understand that a local education authority has certain functions to perform, and has discretion to set its own priorities; what they know is that they are being told by their councilors—their councillors would not lie to them, would they? Would they hell!—that there will be massive cuts in the classroom. Teachers will be made redundant, and parents are outraged about that.
Let me draw attention to one of the most unfortunate aspects of all this. If my hon. Friend the Minister cannot deal with it today, I put down a marker: I shall pursue the matter in correspondence. What the Liberals in the west country are saying has been given some credibility by the fact that local government officers are prepared to sign letters that are no more than the crudest party political propaganda. Those same officers are also prepared to speak on television programmes, doing the Liberals' dirty work for them. It is almost as though my hon. Friend the Minister had a tricky television interview coming up, and persuaded his departmental permanent secretary to do it for him.
We may wonder why professional council officers allow themselves to be traduced in that way. We can imagine the pressure that they must have felt themselves to be under, to allow their professional expertise to be employed and their cloak of apparent honesty to be thrown over the shoulders of the Liberals.
What are the Liberals up to? Any lie must be told in a big way. They have held briefings, and I have observed the results from telephone calls, letters and visits that I have received. People have been told that Devon county council will receive less money this year: that is the first thing that they have been told. Is that true? It is false. Last year, the police authority was maintained within the council, but it is now maintained separately. If we compare like with like, we find that there has been a 7.8 per cent. overall increase rather than a decrease.
Parents are being asked—in a sense, this is the chief criterion—whether Devon is performing better than the average, in an average way or worse than the average, and they find that it is performing far worse than the average. I have discovered from meetings that they have even been told that Devon is the worst-funded county in the United Kingdom. The truth is, however, that it has received the fifth largest standard spending assessment increase. As for educational SSA, it has received double the national average. At the mention of annual capital guidelines, parents' eyes will glaze over, but hon. Members understand the significance of those guidelines. They specify what local education authorities can spend. Devon does not receive as much as it used to and it never will, but it receives about half as much again as the national average.
No; time is short. My hon. Friend can make his own speech in his own way.
The Liberals say that an increase that is less than the increase they want is really a cut. They think that, if they say that long enough, someone will believe them. Once they have convinced parents that the cuts have been imposed by the Government—almost suggesting that my right hon. Friend the Secretary of State has said that there must be cuts in the provision of a particular school—we suddenly discover the existence of reserves. How did I find out about the reserves? A headmaster in my constituency telephoned me. He said, "Have a look at the papers. They have squirrelled away £17 million." When I said, "If there is £17 million there, why do you not take the matter up with the council?" he said, "It is more than my job is worth." There is a climate of fear in Devon. The headmaster will not even take the matter up with his own Member of Parliament.
What was the attitude of the Liberal county council to the reserves? On day one it denied that they existed; on day two it said that it was scandalous to suggest that they amounted to £17 million—there was only £16.8 million. We now discover from a written parliamentary answer to my hon. Friend the Member for Lancaster (Dame E. Kellett-Bowman) that there may be as much as £51 million.
The fact is—and parents in Devon needed to know this—that a local education authority can set its own agenda. It is entitled to decide its own priorities, and the priority of Devon county council is to threaten to cut the number of teachers, when in the past year it has increased staff numbers by a huge 718. Then it has the nerve to turn around and say that, because of Government action, it will have to cut pupil numbers. That is utterly dishonest. Here is a body that employs more people than the European Union, and it says that it must cut the number of teachers.
The LEA has a question to answer: where do its priorities lie? Is it concerned about core functions at county hall, or about services in county schools? I do not expect parents to accept uncritically everything that my hon. Friend the Minister will say; not do I expect them to accept uncritically anything that a Conservative Member of Parliament says. All that I will say to parents in Devon is this. Democracy is a two-way street, and citizens have a responsibility to see what is being done in their names. Yes, by all means send in the letters in their hundreds and question Conservative Members of Parliament about what they are doing, but also question the LEA, which has the funds to set its own priorities if it wishes. Ultimately, if parents question both Members of Parliament and the LEA, they should get the truth, but that process has not yet started in Devon. I should like to think that, as a result of tonight's debate, it will.
As I intend to touch on a number of education matters, it is important for me to declare my interest as an adviser to two teacher associations. I assure the hon. Member for Teignbridge (Mr. Nicholls) that I shall shortly deal with his points.
It is becoming increasingly clear that the Government have no love for local government. They do not like it, and they do not trust it. Therefore, they have set out systematically to destroy it, and they are doing that by reducing its powers, often giving them to remote, undemocratic quangos. In addition, as we have noticed in the debate, the Government are attempting to starve local government to death, and with it many of the much-needed and valued services that it provides. For evidence, we need only look at the settlement.
We all know the figures as they have been discussed already, but perhaps the best source of information is the press release issued by the Department of the Environment on 29 November last year. It states that, net of community care, the settlement represents a cash decrease of 0.4 per cent. As all hon. Members know, when inflation is taken into account, that means a significant cut in the amount of money being made available to local government. I do not need to refer to more up-to-date information, because figures contained in recent announcements are almost identical to those in that press release.
Despite all the delegations that came to plead with the Secretary of State and the Minister, very little has changed. Little notice has been taken of the people in those delegations, all of whom care about local government. The present cuts are on top of cuts in previous years. The Government are calling for local government fat to be removed, but the fat was removed many years ago. The flesh has now gone, and the bones will soon be bleached white.
The hon. Member for Brentwood and Ongar (Mr. Pickles) spoke about savings that were outlined in the Audit Commission report. He will correct me if I am wrong, but I think that the report suggested about £540 million. I am sure he accepts that those savings were intended to be made over seven years, and that more than 50 per cent. of the report's recommendations have already been enacted.
The hon. Gentleman talks of fat in local government. Is he aware that, in my area, North Yorkshire county council received a 1 per cent. increase in this year's allocation but is complaining about drastic cuts? It wants to reduce the number of fire engines in Scarborough, although we all know what happened last year to the Richmond hotel. The council owns 13,000 acres of farmland in North Yorkshire, which is worth £10 million. There is no thought of selling that. Local authorities must be made to face difficult decisions. That council should be forced to decide whether it wants to provide fire engines or farmland.
I am grateful to the hon. Gentleman for his intervention, because it gives me the opportunity to remind him that the sale of assets does not immediately make available to the local authority the whole of the proceeds. The Government limits the amount that can be spent. I hope the hon. Gentleman agrees that, when assets are sold, the most useful use for the proceeds is to create new assets for the local authority.
The purpose of the cuts is clear. There will be cuts in the fire service, community care, library services, housing and roads, but the worst cuts will be in the education and youth services. The cuts in education will be across the board, but especially important is what will happen in the classroom. Those cuts are real. As many hon. Members know, even the Secretary of State for Education, in her letter to the Chancellor of the Duchy of Lancaster, warned of the possibility of problems in education because of this settlement.
Why is the Liberal Democrat administration in Devon threatening massive cuts in the education budget, even though the administration has a surfeit of more than 700 people? Perhaps that is fat. How has the administration at Exeter managed to achieve more than double the average increase in the education SSA?
I shall be happy to deal with that when I reach that topic in my speech. I wish to set the national scene, and I shall then reply to the points that hon. Members have raised.
Within the settlement, the Government expect local education authorities to manage with less money per pupil. Of the 117 LEAs, only four have avoided a real-terms cut in their SSA. Across England, the cut is the equivalent of £50 per primary pupil and nearly £200 per secondary pupil. Altogether, that represents a cut of £750 million.
The Secretary of State said that local government must get its priorities right, but one must question the Government's priorities, because they say that there must be significant cuts in the amount spent on each pupil. That is based on the Secretary of State's figures.
I appreciate that the hon. Gentleman is making general points, but perhaps I could make a specific one. In Devon and Somerset, Liberal administrations or Liberal-supported coalitions have increased the number of employees. There have been significant increases in the amount that those administrations receive from the Government, but they have written to schools telling them that there will be staff cuts. Those matters do not hang together, and the right hon. Member for Yeovil (Mr. Ashdown) is not here to defend the words that he put in letters to Conservative Members. Many of us are beginning to wonder whether the Liberals are being honest on this.
The Secretary of State is repeating interventions that have already been made, to which I have promised to respond. He is taking up precious time. He knows that, because of the unfairness of the area cost adjustment, all the LEAs in the south-west are placed at a considerable disadvantage. On average, they have £130 per pupil less to spend in the classroom.
I said that I would reply to some specific points. Some hon. Members spoke about Somerset. Based on information provided by the Department for Education, in real terms the SSA per primary pupil in Somerset will be cut by £46. The cut for secondary pupils will be £147. The overall shortfall for the Somerset budget as calculated by the county treasurer is £20.4 million, of which £12.4 million is in the education budget generally and £9 million is in the schools budget in particular.
Although a number of Conservative councillors in Somerset initially disagreed, I understand that they have now accepted those figures from the county treasurer. The Devon figures show a cut of £46 per primary pupil and £178 per secondary pupil in real terms in the SSA in this settlement.
No, I am not giving way again.
Many people fail to understand that marginal increases fail to take into account the increased number of pupils.
Right across England, local education authorities are expected to do more and more, with less and less. As one head teacher put it recently:
We are running a medium sized business on peanuts and goodwill".
As all right hon. and hon. Members know, standard spending assessment cuts will be compounded by the results of the teachers' pay award. Unless the Government fund that centrally, even less cash will be available for use in the classroom.
The Prime Minister told us that education was one of his Government's top priorities. Today, the Secretary of State for the Environment told us that education was at the heart of the needs of the nation. The settlement, however, shows that neither the Secretary of State nor the Prime Minister are putting our money as taxpayers where their mouths are. They would rather put their party before this country's future. Instead of investing in education, they want to cut money from it, giving themselves room for tax cut bribes before the next election. But they have been rumbled.
The nation knows that every right hon. and hon. Member who votes for the settlement tonight—that includes the right hon. Member for Bridgwater (Mr. King)—is voting for teachers to be sacked, for rising class sizes, for less money for books and equipment in our schools, and for less money for much-needed repair and maintenance. Worst of all, they are voting to ensure that no real possibility exists of the much-needed expansion of nursery education.
Conservative central Government have admitted that the settlement is tight for education and for all other local government services. The Secretary of State called it a "tough" settlement. It is far worse than that—it is a deplorable settlement. Anyone who cares about local government and the services it provides should vote against it tonight.
Will the hon. Gentleman answer one question?
I do not want to follow the line that the hon. Member for Bath (Mr. Foster) elocuted in his speech, because it is not worth following.
I praise one of my councils—Derbyshire Dales district council. Its standard spending assessment was some £6,069,000, and it is estimated that it will spend some £6,007,000. Basically, that results in a reduction of 8.1 per cent. for the council tax payer in Derbyshire Dales.
I am grateful that that council has managed to achieve that within what I accept has been a tight settlement. I praise all members of Derbyshire Dales for their prudent running of the local authority. They have reduced the community tax, and, at the same time, total council expenditure contains growth of 3.4 per cent. and inflation of 3.3 per cent. They deserve praise for the way in which they have run a prudent and efficient system.
Yet again, Derbyshire county council has been using its usual tactics to frighten everyone about the implications of its spending settlement. I say "its usual tactics", and I have slight evidence for that. I was looking through some papers this morning, and I came across a report from the county treasurer. It states:
Taking the above factors into account, the County Treasurer anticipated the County Council operating in circumstances where the cost of maintaining services based on a realistic estimate of pay and price increases, amounted to £470 million, whilst the Secretary of State's assumption on Derbyshire's level of spending was £435 million, a reduction of £35 million.
He said that that £35 million would mean the cutting of one of the following:
2500 teachers, the entire regular police force, maintaining County roads and supporting public transport, residential and support services for children, and elderly and physically handicapped people.
That report was presented on 16 December 1987.
The problem is that, year in and year out, we hear such arguments from local authorities about the way in which they run their services. They then tell us that they should be allowed to continue in their present form. My right hon. Friend has in front of him the Derbyshire review. I do not believe that Derbyshire county council is an efficient service provider, and I hope that he will carefully take that into account when he considers his response to that review.
I accept that much of the money is spent on education. The hon. Member for Holborn and St. Pancras (Mr. Dobson) mentioned school meals. We know about school meals in Derbyshire because, in the past 14 years, Labour-controlled Derbyshire county council has spent more than £100 million on subsidising school meals. If that £100 million had gone into schools and education, the council would be in a far better state to provide services.
Providing those services would have been better than subsidising my children to go to those schools and to have cheap meals. What nonsense. How stupid and ridiculous. Yet the hon. Gentleman sought to defend that argument. I find that unbelievable.
Will my hon. Friend confirm that Derbyshire council has an abysmal record in the amount of money that it holds back for central administration? Will he confirm that, if it was as efficient as Nottinghamshire council, which itself is not very efficient, it would have another £70 to spend per child in schools? That would be better than spending the money on its bureaucrats in county hall.
That fact has come out of the research that we have done. Derbyshire county council may score high on spending, but its allocation on schools is the lowest of any shire county. It spends more on central administration than any other county. I am not proud of that record, because I would prefer money to go into schools.
Until a few years ago, there was no option in the state system. All schools were run by the local education authority. Back in 1988, I was pleased to be parliamentary private secretary to my right hon. Friend the Member for Mitcham and Morden (Dame A. Rumbold). We took the Education Reform Act 1988 through the House, which allowed schools to become grant-maintained.
Now, there is another option for education. I welcome that option, because it makes Derbyshire county council be careful about some of the nonsensical decisions that it has taken in the past. We had the crazy situation in which all school notepaper was taken back to county offices to be overprinted with "Derbyshire supports nuclear-free zones." It has become a bit better in recent times.
I should like to share with the House some of the experiences of schools that have gone grant-maintained. The head teacher of Belper high school said recently:
The school has benefited from enhanced funding because although we are linked to the Derbyshire formula the element for central costs can be spent specifically to meet our own needs. Independence enables us to manage our finances far more effectively because we have full control. We received an emergency grant from the DFE to replace our twenty-year-old boilers. Queries are always answered promptly and clearly by the DFE which has made the task of management much easier.
Dr. Dupey, the head of Ecclesbourne school, said:
The last four years have been the most professionally fulfilling of nearly two decades of headship. Not only have we been able to put right most of the physical deficiencies of the School's site and buildings, we have been able to assign a much higher proportion of what was our share of the resources allocated to Derbyshire for education to the business of teaching and learning. The effort wasted on petty politics and bureaucracy has also been significantly reduced, leaving more time, energy and enthusiasm to devote to the needs of our students.
Does my hon. Friend agree that that is probably the reason why the leader of the Labour party has chosen a grant-maintained school for his child? He knows that the money will be spent on the child and not on the bureaucracy.
I am not sure whether my right hon. Friend knows this, but it is even worse than that. As I understand it, only one school in the country has opted out of the national pay negotiations. I shall not give my right hon. Friend any prizes for guessing which school that is.
We have a further alternative in the education system. That is a positive step.
I would rather not give way, because I have a great deal to say.
I could speak on this subject for a long time, but time is short. There are alternatives for education.
I am particularly concerned about the area cost adjustment. Some of us wonder whether the Department of the Environment has got the formula right. It should be looked at. It might mean that some London boroughs will have to lose money. The hon. Member for Holborn and St. Pancras (Mr. Dobson) did the House a disservice by spending 25 minutes talking about London. Many hon. Members are much more interested in what is happening in the rest of the country than in history lessons about Westminster. Will my right hon. Friend consider carefully the area cost adjustment?
When my right hon. Friend the Prime Minister was Chief Secretary, he talked about the pay review bodies reporting after local authority budgets had been set. That does put local authorities in an awkward position, in that they do not know what the pay settlements will be in the coming year. It should be looked at. It is not fair that they should find out what the pay review bodies say after they have set their budget. That is not the most efficient way to move forward.
I have no doubt that we will hear the same bleating as we have heard over the past few months—some of which may be genuine. Scaring parents is deplorable and does no credit to the people involved. Year after year, we hear the same excuses. I urge my right hon. Friend the Secretary of State to use every opportunity to expose what the Labour party and the Liberal Democrats are trying to do, and to explain what the outcome will be.
The only point on which I agree with the hon. Member for West Derbyshire (Mr. McLoughlin) is his concern about the area cost adjustment.
This year's revenue support grant settlement is a great disappointment to Durham county council, which provides services in my constituency. It appears to have been severely punished under the capping regime for having adopted a cautious and realistic approach to past spending.
For a long time, the county council has sought changes to the area cost adjustment, but it has been ignored. It is the county council's contention, and mine, that the area cost adjustment is fundamentally flawed. It is now three times higher than five years ago and it has grown six times faster than local authority resources generally in that period. Some local authorities may need to be compensated for labour cost variations, but it is difficult to understand the size and distribution of the compensation—or perhaps that was explained to us earlier. It could have something to do with the political control of certain councils in the south of England, but perhaps I am being cynical.
The settlement is divorced from reality. The three major employment groups are teachers, the police and firefighters, who are all on nationally agreed wage scales. Durham county council, like many other authorities outside south-east England, has been deprived of its fair share of SSA.
The capping limit has been increased since last year's settlement, but it is well below last year's level for Durham county council. I appreciate that some factors have changed in the calculation of SSAs. Nevertheless, the county will have to save £14.5 million this year to set a budget at the capping limit. If it is to save that money, it will have to make cuts, including in administration, to maintain services to the community. It is inevitable that services will suffer. Specific decisions have not yet been taken, but, without doubt, some appalling cuts will be made. That is not scaremongering. Libraries will close.
Durham county council has given schools funding of £1.5 million to take into account the increase in pupil numbers. The Government have ignored that cost and have failed to provide any extra funds to pay for the cost of the teachers' pay settlement in 1995–96. That will have dire consequences on school budgets.
Road maintenance schemes will be cut by £500,000 and public transport support will have to be cut. Economic development, to which the council has attached great priority in recent years because the Government closed the mines and the steelworks in the north, will be severely cut.
I accept that the money transferred to social services under the special transitional grant is sizeable, but it is inadequate to meet needs, particularly the growing number of private nursing home places. Consequently, those services will come under significant pressure and will face cuts. Community care in Durham is under threat.
Cuts are not being made for the first time—far from it. In 1991–92 the council had to cut £1 million; in 1992–93 it had to cut £4.2 million; in 1993–94 it had to cut £6.9 million and in 1994–95 it will have to cut £10 million. It cannot go on.
I hope that the hon. Gentleman will forgive me if I do not do so; I have a lot to say.
Durham county council's education committee has been instructed by the policy resources committee to cut £2.125 million from its budget. No final decision has been made, but the cuts may include a reduction in education welfare posts, an increase in outdoor education charges, cuts in swimming provision, cuts in child guidance and an increase in school meal prices. The hon. Member for West Derbyshire may disagree, but many children need subsidised or free meals because it is often the only decent meal that they get during the day. Cuts will be made in resources for local education authority initiatives and in the GEST—grants for education support and training—programme.
School budgets will have to be cut because the Government have reduced the SSA calculations in Durham by £95 per primary school child and £195 for each secondary school pupil. As I have already said, the Government have made no provision for teachers' pay increases.
That scandal means that the council has no alternative but to reflect those cuts in school budgets. In addition to failing to fund teachers' pay increases, the Government have failed to recognise the increase in the number of students or to take account of inflation. Schools will have to deal with those factors themselves.
What does that mean to individual schools? The head teacher of Durham Johnston school told me that if his funding is cut by 4 per cent., which seems likely, he will have to find £120,000 from his budget. Apart from staffing, which accounts for 80 per cent. of his budget, he will have to cut repairs and maintenance to his school, he
will have to stop purchasing any new furniture or replacing computers. He will have to reduce ground maintenance and cut a large percentage from the allocation to subject departments to buy books and equipment. Mr. Dunford, the head teacher, wrote to me and said:
This school now has just over 1,400 pupils, including a Sixth Form of 280. It is, as you know, popular and over-subscribed. In short, it is not the sort or school which we were led to believe would have financial problems under the LMS formula. But there are no safe havens now—all schools are facing a very difficult financial year. If this were to be an isolated school year, the situation would look bad, but what concerns me even more is that we are told that the Department of the Environment intends to follow the same policy in local government finance for the next two years. If we are asked to prune our budget by a similar amount in 1996 and 1997, I do not believe that it will be possible to educate all children full-time up to the age of 16. We will not be able to afford the staff to be able to do so.
I believe that the situation is reaching a crisis point".
That reveals a desperate situation. Those are the words of one of the country's most respected head teachers—I am not exaggerating as I believe he is vice-president of the Secondary Heads Association and serves on many national bodies. If a head teacher of his renown is saying such things, we are certainly in a deplorable state.
Even the Secretary of State for Education wrote to her Cabinet colleagues recently about the effect that the teachers' pay award would have on school budgets. She recognised that schools were in an impossible position. She has already urged the Prime Minister to cut any recommendations of the independent—or so-called independent—teachers' pay review body to 1.5 per cent. She recognises that local education authorities cannot pay any more. Once again, teachers are going to be punished thanks to the inadequacy of this year's local government finance settlement. The independent review body should recommend a fair pay settlement and the Government should fund it fully.
The revenue settlement this year clearly shows the Government's lack of commitment to state education and, in particular, to teachers. If the Government had any real commitment to the state system, they would ensure that schools were well resourced and teachers were well rewarded for their work, but all that we get from them is rhetoric. In the meantime, however, millions of children go on suffering in our schools.
I shall read my speech very quickly and I shall not take any interventions.
I do not dissent too much from the speeches made by right hon. and hon. Members who are in the Conservative parliamentary party and I am grateful to the Minister of State, the hon. Member for Skipton and Ripon (Mr. Curry), for seeing representatives of Norfolk county council on 4 January. His hon. Friend, the Under-Secretary, Department of the Environment, the hon. Member for Hertfordshire, West (Mr. Jones), wrote to me on 27 January about that meeting. His letter states:
At the meeting the council representatives asked for a higher spending limit for Norfolk and spelt out their particular concerns on the reduction in Education SSA, on the Area Cost Adjustment, and on personal social services. These views will of course be taken into account by the Secretary of State prior to making his decisions on the 1995/96 Local Government Finance (England) Report and the Special Report.
My hon. Friend the Member for West Derbyshire (Mr. McLoughlin) spoke about the area cost adjustment and reflected the considerable concern that exists in many counties, irrespective of party control, about the unfair way in which it works.
The result of Norfolk county council representatives' meeting with the Minister of State was that, between the announcement on 1 December of Norfolk's revenue support grant settlement and today's debate, Norfolk's grant was cut by £210,000 by the right hon. Gentleman on the Front Bench.
Norfolk has consistently spent well below the average for English counties. Suffolk is represented by my hon. Friend the Member for Suffolk, South (Mr. Yeo), who intervened on a fellow Member—the Secretary of State—who represents another Suffolk constituency, to complain about the Lib-Lab way in which Suffolk was being run. Curiously enough, despite knowing the bad way in which it is being run, the Secretary of State has given Suffolk an increase of £300,000 since 1 December.
Surrey's grant goes up by £2.69 million. I accept that it is a big county and has high expenditure but the increase goes down very badly with my constituents in Norfolk, bearing in mind the fact that, in 1992–93, Norfolk county council spent £584.54 per head on county-provided services whereas the average figure for English counties in the same period was £613.78. The county council has a spending limit set by the Government of £424.4 million. The county treasurer calculates that this represents a shortfall of £20 million on projected expenditure in 1995–96.
As several right hon. and hon. Members have said, local authorities want to spend more. Most people, including Conservatives, seek local government service because they want to promote improved services for their communities but county treasurers cannot always have as much as they want.
Norfolk has a long history of strict economy when budgeting and it has every reason tonight to expect as many of its parliamentary representatives as possible to impress on the Government, as have other right hon. and hon. Members, that enough is enough."— [Official Report, 20 January 1986; Vol. 90, c. 93.]
I quote further:
Norfolk has been a sensible, moderate, low-spending authority".—[Official Report, 25 July 1985; Vol. 83, c. 1331.]
Those are the words of the then Secretary of State for the Environment, which I cited in my speech on 20 January 1986. The Secretary of State who spoke appreciatively of Norfolk when he announced the 1986–87 RSG settlement on 25 July 1985 was the then right hon. Member for Wanstead and Woodford, now Lord Jenkin.
On the night of 20 January I also said:
Socialists and Liberals have never controlled Norfolk county council, and they never will, because I am confident that, recognising the strength of feeling among Conservative Members, the Government will introduce a more equitable system next year."—[Official Report, 20 January 1986: Vol.90, c.95.]
In fact, my predictions were doubly wrong: the Government did not introduce a more equitable system and nor have they done so for Norfolk today. My prediction about the election result was wrong because in 1993, for the first time in the history of my county, we were lumbered with a Lib-Lab alliance to run our affairs. I partly blame the Government for that result.
The overall increase allowed for in funding essential county services in Norfolk is 0.5 per cent. If the Government had said on 28 November that they were going to limit the increase in their contribution to the European Union budget to 0.5 per cent., I would still be a member of the parliamentary party because I would have voted for that. However, we are giving money to the European Union but are making our own local authorities impose cuts.
People who say that there will be no cuts are wrong—of course there will. One cannot increase overall expenditure by a mere 0.5 per cent. at a time of 2 per cent. inflation without making cuts. Let us not be mealy-mouthed about that. If the European Union can have the money, so can Norfolk. I want it spent on schools in Great Yarmouth and on highway maintenance in my villages, not on subsidies for tobacco growers in Greece and olive growers in Italy.
This afternoon, the Secretary of State for the Environment talked about the difficult decisions faced by the Government in restraining and reducing their own spending. In fact, the Department of Health—
Someone is interrupting although I said that I would not accept interventions. He is saying that my constituency has assisted area status but we got precious little money back from Europe for that.
The Department of Health's budget, quite rightly, goes up by 3.8 per cent. this year. The Department of Education's budget rightly goes up by 4.1 per cent. Very difficult decisions have to be taken by right hon. Gentlemen on the Front Bench to limit central Government expenditure—4.1 per cent. on education and 3.8 per cent. on health—but, at the same time, they are telling local authorities, which have to run such services locally, that they will receive an increase of only 0.5 per cent.
On that famous night of 20 January 1986, to which I referred, 29 Conservative Back Benchers voted against the Government. None of them lost the Whip; some of them were ex-Cabinet Ministers—Lord Pym, Lord Prior and Lord Gilmour—and some of are in the Government now. The hon. Member for Chichester (Mr. Nelson) voted against the Government in 1986; he is now Minister of State in the Treasury. He should know that if the settlement was not good enough when it was much higher in 1986, this year's settlement is not good enough.
My right hon. and learned Friend the Member for Grantham (Mr. Hogg) is now a Minister of State in the Foreign Office and I accept entirely that he cannot be expected to worry about revenue support grants, but he voted against the Government that night. Look how these people get on when they vote against the Government.
Notably, my hon. Friend the Under-Secretary of State for the Environment, the Member for Hertfordshire, West, wrote to me-I quoted from his letter—and told me that Norfolk could manage and that the settlement was fair and equitable. It was not fair and equitable to him when he voted against the Government on 20 January 1986. Now, as Under-Secretary for the Environment, he is telling me that 0.5 per cent is—
I am drawing attention to the fact that right hon. and hon. Members on the Front Bench say one thing when they are where I am, yet when they have a chance to put into effect what they said when they were on the Back Benches, they conveniently forget it. If that is not relevant to my contention that Norfolk has been treated badly, I do not know what is. However, I defer to your judgment, Mr. Deputy Speaker, and as the clock shows that my time is up, I shall conclude with three quarters of my condemnation of the Government happily left unsaid.
I shall speak about the problems faced by the city of Newcastle upon Tyne, although similar problems face the metropolitan borough of Gateshead, which, as a recent written answer to a question asked my hon. Friend the Member for Coventry, North-East (Mr. Ainsworth) showed, has the unenviable record of being eighth out the 10 authorities that have lost the largest sum through the changes to the education standard spending assessment formula.
Tyne and Wear fire and civil defence authority is facing a £1.8 million cut in its budget, which will result in a loss of jobs and will affect our emergency services, with consequent threats to life and limb. In that context, I draw the House's attention to early-day motion 489, which 27 hon. Members and I have signed.
Hon. Members have drawn attention to the fact that the settlement is harsh. I must remind them that it is harsh not on Labour councils, which no doubt is the intention, but on the people who will lose their services and the many who will lose their jobs.
Newcastle's SSA is £224 million. The provisional capping criteria allow the city to spend 0.5 per cent., when, as the hon. Member for Great Yarmouth (Mr. Carttiss) has just reminded us, inflation is 2.5 per cent. If the capping criteria are unchanged, Newcastle will have to cut £5 million from its budget of £239 million to meet the cap limit.
Cuts of £5 million require a £2.3 million net cut in education, a £750,000 net cut in social services and a £650,000 net cut in leisure services. Two million pounds will be taken from schools, which will result in the loss of the music service, £100,000 will be taken from libraries, which will result in branch closures, £300,000 will be taken from child care services, which will result in the closure of nursery and welfare rights projects, the number of social workers and occupational therapists will be reduced and residential homes for the elderly, respite day provision and day centres will close.
Those cuts will be made despite the fact that in the past five years £40 million—almost 20 per cent. of the budget—has already been cut, resulting in 1,500 redundancies, the loss of 2,500 jobs and a loss of services. I say to Conservative Members who accuse us of spreading scare stories that since 1989 pupil-teacher ratios in Newcastle have risen from 14.4:1 to 16:1 in the secondary sector, eight homes for the elderly, three residential homes for children and two day centres have closed, the library book fund has been cut by 28 per cent., branch library opening hours have been reduced by 13 per cent. and the arts budget has been cut by 15 per cent.
All that has happened despite Government recognition, under city challenge and other initiatives, that the city needs more, not less, help. How can it possibly make sense that a day nursery in Scotswood in my constituency faces possible closure, when the policies of the same Government made that place the centre of the city challenge area? If the Government's present policies persist, Newcastle will face a further three years of cuts worth £20 million, resulting in the loss of another 1,000 jobs.
None of that is desirable and none of it is wanted by the people of Newcastle. The stark reality is that none of it is necessary. When the Government's revenue support grant to the city is added to other income and to council tax income, the total is sufficient to maintain services at current levels and to avoid the painful cuts to which I have referred. The nonsense of the capping criteria is such that the council cannot spend at that level and is therefore obliged to cut council tax by £70 in band D, rather than maintain jobs and services.
That was explained to the people of the city by the local evening newspaper, the Evening Chronicle. In a survey of opinion, it reported that people were in favour of maintaining the council tax at its current level to avoid cuts by a ratio of 20:1. That opinion has been further confirmed in the city today, where a huge demonstration against Government-imposed cuts has taken place.
If Newcastle were allowed to freeze its council tax and set a budget at that level, there would be no net service cuts in the city. If Newcastle were given the inner-London capping criteria, the cuts would be reduced by £1.7 million and council tax would fall by £50 in band D and 'by £33 in band A. If the city were given the same support as Westminster, it would be able to improve services and give council tax payers money back.
If the capping criteria are not changed, Newcastle will be forced to consider for the first time the possibility of setting a budget above the provisional cap, just as Shropshire and other councils are. Like Shropshire, the appeal to the Secretary of State to recognise Newcastle's problems was supported by Tory and Liberal Democrat councillors from the city.
All those facts are a vindication of Labour's policies to decentralise power and give it back to local communities. When the people of Newcastle, or anywhere else, are prepared to pay for a service in their own communities, based on their knowledge of the needs of their community, why should some Minister in an ivory tower in London tell them that they cannot make those decisions and that they will have to cut taxes, despite the consequences and their own wishes? It is a clear example of the erosion of local democracy under this Government and it emphasises the importance of Labour's policies to restore to the people of the regions, the nations and the localities of Britain the power to pursue their policies according to their priorities and at their pace. All those who believe in local democracy should join us in the Lobby and vote against the motion.
Somerset has already featured in the debate and it has been a source of considerable controversy, especially locally, where the Liberal Democrats have been at their campaigning best in sending out petitions, organising letters and shouting and screaming about the education budget that they, of course, have decided to impose on the county. Indeed, the Somerset county council policy and resources committee aims to secure a reduction of £12.5 million in the education budget. The right hon. Member for Yeovil (Mr. Ashdown) has written to all Somerset Conservative Members of Parliament urging them to vote against the settlement. I am always prepared to consider representations from any source, but it is a pity that the right hon. Gentleman did not stick his head into the Chamber for just a few minutes to listen to the debate when he is urging us to vote against the settlement.
Did my hon. Friend notice that, although we were promised clearly by the Liberal Democrat spokesman, the hon. Member for Bath (Mr. Foster), that he would explain how Somerset could increase the number of people it employed by more than 3 per cent. and how it could receive significant extra sums this year, but that that meant there had to be a cut in the education budget, he did not manage to get to that point in his extremely long speech? Does my hon. Friend know the answer?
My right hon. Friend the Secretary of State has already provided the answer to that point, although I hope to develop it later.
Because of the way in which Somerset's local management formula works on schools, the budget will be very harsh if the county council persists in its course of action. That would be extremely disappointing for many people because Somerset county council has been doing very well in the education league and, over recent years, it has brought its pupil-teacher ratio up to the national average.
There is no doubt that this year's settlement is difficult, but we must ask whether Somerset county council's response is legitimate in those circumstances. Together with my Conservative colleagues in Somerset, my right hon. Friend the Member for Bridgwater (Mr. King) and my hon. Friends the Members for Wells (Mr. Heathcoat-Amory) and for Taunton (Mr. Nicholson), I have examined the county council's proposals. We agree that alternative strategies could he followed which would protect Somerset's education budget from the kind of unjustified pressure that will be placed on it if the Liberal Democrats have their way.
We are supported in our view by the very experienced Conservative leadership on the county council, including the well-respected former chairman of the education committee, Councillor Bea Roberts. As part of our scrutiny of the county council's budget, we uncovered underspending in this year's budget.
I suppose that we should not be surprised that, since the Liberal Democrats took control two years ago, meetings allowances and travelling expenses have escalated, as has already been pointed out. A recent Audit Commission report shows that the size of the council's legal staff is well above average and record sums have been spent on legal costs.
However, Somerset has had no difficulty finding the funds to protect its anti-hunting crusade. One moment it takes steps to remove travellers from its land at Podimore in my constituency and the next moment it invites them back to spend a month-long Christmas holiday there, to the fury of local landowners who have suffered damage and threats to their livestock.
We now have a tight settlement, but the council's so-called community initiatives, which involve the establishment of information points or offices in 13 Somerset towns, seem to be more important than protecting teachers' jobs. There is no question of cutting those initiatives.
Some of the things that I have mentioned may involve only small amounts of money, but they all add up. At no stage is there a suggestion that an audit of expenditure should take place to discover whether further savings can be found. We believe that such an audit should be carried out as a matter of urgency.
However, larger sums can also be identified. For example, the county's capital fund could produce over £2 million with some judicious postponement of planned projects until the funding improves. In addition, revenue balances could be utilised and, if I am not mistaken, those balances are net of cap. Perhaps my hon. Friend the Minister will confirm that when he replies.
The county council has informed me that those balances amount to £9 million. However, I understand that the Department of the Environment estimated a substantial cash balance of £36.4 million on I April 1994. Can my hon. Friend the Minister confirm his Department's view of the state of Somerset's cash balances, given the different figures that are now being bandied about?
What is so typical of the Liberal Democrats is that they refuse point blank to discuss or consider any alternative ideas. I can only conclude that their strategy is to put party advantage first and children's education second. That is already clear. The weakness of the Liberal Democrats' argument is shown not just by the fact that the right hon. Member for Yeovil could not take part in what he regarded as a very important debate, but in the fact that the hon. Member for Bath (Mr. Foster) would not give way to my right hon. Friend the Member for Bridgwater. The weakness of the argument can he exposed very easily and it is exposed by our very experienced county councillors who have drawn up their alternative budget.
My right hon. Friend the Secretary of State has already stated that the settlement proposes an increase in spending. However, local Liberal Democrat-inspired petitions talk about the "massive cut" in funding from central Government. How can an overall increase in SSA for Somerset of 1.4 per cent. compared to the overall county average of 0.6 per cent. be considered a massive cut? It is absolute nonsense.
Will my hon. Friend thank the chief executive of Somerset county council for passing on to me, and to my two colleagues in Cornwall, some remarkably helpful information which I have with me in the Chamber? That information supports my hon. Friend's point and it reveals the lie about massive cuts. Cornwall county council's total spend per head of population is £589.60, which is £18 higher than the county average. How on earth can that be portrayed as a cut? We are talking about priorities which are being set by Liberal Democrat councillors.
I agree entirely with my hon. Friend. The information with which he has been provided shows that Wiltshire's provisional SSA provision per head is below that of Somerset, but I understand that Wiltshire is making no cuts in its education budget. That supports the argument of the Conservative leaders on Somerset county council.
With regard to education, the SSA is up by 2.5 per cent. in Somerset compared with an average of 1.1 per cent. across the counties. It seems that Liberal Democrats do not care about children or teachers; they care only about securing political advantage by any means at their disposal.
As my hon. Friend the Minister is aware, my right hon. and hon. Friends in Somerset and I, together with the right hon. Member for Yeovil, have joined county councillors of all persuasions to press for a modernisation of the area cost adjustment formula which appears weighted against the south-west, mainly through outdated criteria.
I give the people of Somerset an assurance that we shall continue to press our case on that score. In supporting the motion tonight, I urge my right hon. Friend the Secretary of State to see that the current reviews of methodology are given a sense of urgency. We met the Minister last summer about that. Progress must now be made to bring the matter to a conclusion to ensure that we do not have to return to this argument next year.
I welcome the opportunity to participate in the debate and I make no apology for returning to a theme that I have pursued for the past four or five years—the continuing disgraceful treatment that the people of St. Helens receive from the Government in the annual revenue support grant settlements.
Local government finance is a difficult and complex subject, but it directly affects every man, woman and child in my constituency. When they receive neither justice nor fairness, they have a right to expect a Member of Parliament to speak out on their behalf in the Chamber. St. Helens has consistently been treated unfairly by the system, although, at the same time, the council has striven to improve the delivery of service to the public.
Staffing in St. Helens council has been reduced by 11 per cent. since 1992, and overall spending has been reduced by £13 million over the past two years, but the system continues to discriminate against the council. In 1995–96, the council faces further cuts of more than £7 million to avoid capping, but council tax payers face an increase of more than 14 per cent. due to losses in revenue support grant. It will be impossible for St. Helens to fund any increase in teachers' salaries in the coming months.
The Government frequently imply that, in some way, the problems of St. Helens are due to inefficiency on the part of the Labour council. Indeed, in an intervention, the Secretary of State hinted as much again tonight. Is St. Helens council inefficient'? It is not, according to the district auditor who, on several occasions in the past few years, has praised the council. Indeed, last year he gave it a glowing report.
The district auditor's report for 1993–94, which was produced in December, praised the council's work in relation to the implementation of the citizens charter, the quality of children's services, the financial management of schools within the borough, progress in implementing care in the community, and progress on issues that the district auditor raised in previous reports. He finished his comments by saying:
We are pleased to confirm that the Authority has made good progress towards implementing the recommendations made in these reports, consequently there are no issues we would wish to draw to members' attention.
The auditor's reports make it absolutely clear that St. Helens is a well-run, efficiently managed council. However, that cannot be said about the London borough of Westminster, whose previous auditor's report three years ago was a devastating exposé of maladministration and corruption, with senior councillors and officers threatened with a £21 million surcharge, which is still hanging over them. There have been no further auditor's reports on Westminster over the past couple of years, so God alone knows what the current position is. It is sufficient to draw attention to the front page of today's edition of The Guardian. It is revealed that, according to documents which have been leaked,
Thousands of people who bought council flats in the Conservative run city of Westminster have been given unlimited free repairs to their homes for life, under a deal revealed in a confidential report by the council's own auditors.
Incredibly, the Government do not accept that Westminster council is corrupt and inefficient. Indeed, Tory Members claims that the reasons for Westminster's low council tax are its efficiency and enterprise. I ask hon. Members to consider the reply to me by the Under-Secretary of State for the Environment on 18 January. He said that the average council tax for a band D property in St. Helens
is £652 and for Westminster £245. If St. Helens were to spend at the same rate as Westminster relative to standard spending assessment, the band D council tax in St. Helens would be £224—even lower than in Westminster."—[Official Report, 18 January 1995; Vol. 252, c. 698.]
Even the Prime Minister, in reply to a question that I put to him on 3 May 1994, referred to
some of the reasons why Westminster is so efficient".—[Official Report, 3 May 1994; Vol. 242, c. 589.]
However, the Under-Secretary of State for the Environment, in answer to my supplementary question, said:
To describe St. Helens and Westminster as broadly similar authorities is ridiculous".—[Official Report,18 January 1995; Vol. 252, c. 698.]
I decided to investigate further the two metropolitan boroughs, Westminster and St. Helens, which have exactly the same statutory duties placed upon them by Her Majesty's Government. I used the citizens charter for the information, because it requires local authorities to publish their performance indicators. I discovered that 96 per cent. of housing repair jobs in St. Helens are completed within target times, whereas in Westminster the figure is 7 per cent. In St. Helens, 5 per cent. of tenants owe 13 weeks' rent or more, and in Westminster the figure is 10 per cent.
Management costs per dwelling per week in St. Helens are £4, and in Westminster they are £21. In St. Helens 14 per cent. of benefits claims are processed within 14 days, and in Westminster it is 66 per cent. In St. Helens, 92 per cent. of housing benefits claims are processed within 14 days, and in Westminster the figure is 76 per cent. The gross cost of administration per claimant in St. Helens is £64 and in Westminster it is £226. As for the council tax, the percentage of net yield collected in St. Helens is 100 per cent., and in Westminster it is 91 per cent. The net cost of collection per dwelling is £16 in St. Helens and £25 in Westminster.
No one could seriously dispute that, on that information, which has been supplied by the authorities themselves, St. Helens is far more efficient than Westminster.
On many occasions I have drawn attention to the huge differences between the Government's SSAs for St. Helens and those for Westminster in respect of education and social services. Tonight, because of the time constraints, I shall refer to only one example, and that is children in care. The SSA for St. Helens is £30,000 per child per annum. In Westminster, it is £50,000 per child per annum. It is nonsense that Westminster should receive £20,000 more per child.
Another interesting matter is highways and street lighting. Incredibly, the boroughs are rather similar. St. Helens has a greater length of roads, whereas Westminster has more traffic flow and more visitors. I do not know whether the Minister is aware of the effect of extra traffic and visitors in respect of maintenance costs. According to Her Majesty's Government, it is significant. The SSA per 1 km of road in St. Helens is £8,004, and in Westminster it is £28,895. Extra traffic can add considerably to maintenance costs, but surely not to the extent of £20,000 per 1 km of road.
How much strain do visitors to Westminster place on the council's finances? It is no less than £3.7 million. That shows just how much additional SSA is paid to Westminster in respect of highways and for "visitor nights".
St. Helens and Westminster serve similar populations. The resident population of St. Helens is more than 180,000, and that of Westminster is 189,000, but how much do those authorities need to spend on services such as leisure, libraries, parks, car parking and refuse collection? The amount that is allowed to St. Helens for those services is £27.2 million. The figure for Westminster is nearly £109 million.
I shall put the matter into perspective. When Westminster spends £1 on services, it is required to ask for only 3p from the—
Like many other hon. Members, in particular those who have had some local government experience, I do not deny that it is a tough, tight settlement. Nevertheless, it is entirely defensible and entirely manageable. Indeed, it would be totally hypocritical if I argued with the Treasury that Government spending should he kept down, as I have done consistently, and then ignored £43.5 billion out of total Government expenditure of £262 billion at the first whiff of grapeshot. Indeed, I appreciate that the 1.5 per cent. increase for Hereford and Worcester overall is a tough settlement. The settlement for education is 2.3 per cent. Nevertheless, it is an increase, and 2.3 per cent. is only marginally less than the rate of inflation.
It is entirely unjustified for somebody like Russ Clayton, the chairman of the county council, to try to scaremonger among parents in the county by arguing that there will be significant reductions in services before he knows how many pupils he will have to educate, before he knows what the teachers' pay settlement will be and before he even knows the final details of the SSA education settlement.
We were talking about the distribution mechanism of SSA. I suppose that nothing is perfect, and everybody will have their own point of view on the matter. Nevertheless, it is worth saying that a recent study by Rita Hare of the Chartered Institute of Public Finance and Accountancy and Tony Travers of the London School of Economics stated that no overseas country appears to have a full grant system which goes so far in its attempt to achieve full equalisation. I was going to say—in an awful pun—that that means that what the hon. Member for Holborn and St. Pancras (Mr. Dobson) said was an absolute travesty. I believe that reforms are continuing to be made to the SSA mechanism, and it is as fair as we can get, although I have one or two things to say about matters which I believe should be reformed.
That there is room for economies in a service that nationally spends £43.5 billion is beyond doubt. For instance, my district council—I was happy to recommend that it was capped to protect local council tax payers from its profligacy—spends no less than £10.5 million; fully 25 per cent. above its SSA. If one bears in mind what neighbouring authorities of a similar type spend on their SSA, it shows the excessive expenditure of the council.
What is more, the council—despite the fact that it is spending £1 million more than its capping limit—has had to take money out of its reserves. No specific attempt has been made by the district council to cut back and make the long-term economies which would mean that services are protected and the council tax thereby reduced.
It is significant that, from 1987 to 1993, non-manual costs of local government rose by 85 per cent. It is equally significant that the Audit Commission has suggested—the House should not forget that the vast majority of costs in local government are staff costs—that few authorities have a consistent or coherent approach to crucial questions such as how many staff they need, how much they should be paid and how they can get the best from their staff.
I have four points about the mechanism this year. First, although I was in favour of having my district council capped to protect local council tax payers, I do not believe that that is desirable in the long term. It is a matter of some regret that now only 20 per cent. of local expenditure is raised locally.
It may well be less. It is unfortunate because it breaks the link of accountability between the local electorate and the council. I know that a debate is going on within the Department at present, but I hope that the sins of the profligate should be visited upon the profligate. There is a case within the limits for either a relaxation of the existing capping limit or giving the Minister discretion. That should depend on the efforts of the capped authorities to order their affairs more sensibly.
In addition, I am concerned about the use of the social and economic index as it affects councils like mine, which have a significant amount of deprivation in towns with populations of less than 100,000, but which otherwise cover rural areas. The index also affects towns such as mine, which have a small ethnic minority population. The use of the social and economic index means that those towns are deprived of £1.04 million out of a £10 million budget. The Government should be looking at how those indices work.
My second concern relates to area cost adjustments. I do not regard it as acceptable that Hereford and Worcester county council should be given £104 less on primary and £139 less on secondary education than a county such as Oxfordshire. I defy anybody to believe that the costs of living in Oxfordshire are significantly greater than those of Hereford and Worcester. Those figures alone show that ACAs are in urgent need of review, and I hope that that is done as quickly as possible.
My third concern is the way in which councils use their own assets. Not enough councils have used private finance—purely for ideological reasons which they will later regret—particularly in housing, to introduce more capital into their coffers which they would then be able to spend to their tenants' advantage. The net receipt for my district council—I hope it will read the debate in Hansard—if it transferred its housing stock to housing associations would be no less than £51.2 million. At a stroke, the council would eliminate its debt, and would have about £12.8 million to spend on capital improvements for the benefit of the people of the area. That also takes into account what the council regards as the fixed part of its expenditure—some £4 million out of £10.5 million. A significant proportion of that is payments on debt charges for capital projects on which it has—possibly unwisely—embarked in the past. The Minister will see that there is significant potential for councils such as mine if they are prepared—with the acquiesence of their council tax payers—to effect large-scale transfers of their housing budgets.
My final point concerns the teachers' pay review body. Obviously it is important that teachers are properly rewarded to attract good-quality people into the profession. We all agree with that. But equally, I happen to believe that pay determination is best done locally and according to local labour markets. From talking to teachers, I know that if the implication of them not taking an extra 1 per cent. or 2 per cent. in their wage packets was that they would be able to keep on staff who would otherwise be made voluntarily or compulsorily redundant, they would—on the basis of what was needed locally—be prepared to forgo that increase.
The fact is that, since 1990, teachers' pay has increased by 36 per cent. against a national average of 23 per cent. This year the teachers' pay review body may give an increase that is entirely unrealistic. I suggest that that be used merely as a guideline, so that teachers' pay is locally determined—
As I have only 10 minutes, I do not intend to accept interventions. The Secretary of State, having gone on for 70 minutes in a most blatant abuse of the House, effectively prevented other Members from making points. We clashed last year, during debates on what I called the "blatant fiddle" of the revenue support grant. I have seen nothing in this consultation, or in the final proposals, that causes me to modify my view. Past devices used to rig the grant have been maintained and, in some respects, added to.
My hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) detailed many of those issues and exposed the fact that, under this settlement, council lax payers throughout the country, irrespective of the political complexion of their local authorities, will pay more for less.
I wish to discuss revenue support grant as it affects my authority, Coventry, and Westminster city council. Coventry councillors are angry and frustrated, having raised this year, as they have repeatedly raised before, legitimate issues of anomalies within the settlement only to find that those have not been dealt with. Moreover, the final formula contains new anomalies that have not been the subject of consultation with local authority associations.
Coventry has asked for changes to the use of "homelessness" as an indicator, because it costs the city nearly £2 million per annum and is not a reliable indicator of need. It has asked for the type of tenure not to be used as a proxy for deprivation, as it punishes areas with higher-than-average home ownership. It continues to be appalled by the massive over-allowance being delivered to some authorities via the area cost adjustment. As usual, Coventry was listened to politely, but it discovered that, in the final settlement, changes were made without consulting the local authority sub-group. Those changes benefit some inner-London authorities and punish Coventry and other metropolitan boroughs. That has happened despite the fact that the Minister agreed with the findings of last year's Environment Select Committee report that transparency in decision making should be improved. One must conclude that that commitment paid no more than lip service to the report.
Over the next three years, cuts of £21 million will have to be made in Coventry, while this year tax levels will rise by 10.5 per cent.—3.2 per cent. as a result of the Budget in the autumn, and 7.3 per cent. as a result of Coventry losing grant to other authorities. We are left with the feeling that our lobbying on revenue support grant has been a failure, so we have looked at how other authorities lobby and, in that regard, at the workings of Westminster city council.
Westminster city council has lobbied and gained significant increases in its grant share over the years. It is well satisfied with this year's settlement, having received a 9.7 per cent. increase in standard spending assessment and the grants that flow from that. As a result of its success, and Coventry's lack of success, in lobbying for higher grant, massive anomalies have arisen. Spending per head of population in Westminster is 30 per cent. higher than in Coventry, but a 90 per cent. difference in grants turns that completely around at taxpayer level. The SSA for Westminster was 60 per cent. higher per head than for Coventry, which translates into grant pound for pound.
In education, the SSA per pupil in Westminster is 52 per cent. higher than in Coventry. Much of that difference is due to area cost adjustments, which assume that it will cost 32 per cent. more to employ a teacher in inner London than it will in Coventry. That is absurd, as the London weighting premium on teachers' pay is less than 10 per cent.
I do not have time to discuss the massive anomalies that have arisen in social services. In SSA for the elderly, Westminster receives 2.49 times that of Coventry. That, too, is absurd. The proportion of elderly people on income support in Coventry is higher than in Westminster, but Westminster gains because elderly people on income support are not taken into account when calculating the SSA, while elderly people in rented accommodation are. That has little statistical justification and leads to the absurd anomaly whereby an elderly Member of Parliament living in rented accommodation in Westminster counts as having special needs, but a single pensioner living alone on income support in a small owner-occupied terrace house in Coventry is not classed as such.
Westminster's SSA for highway maintenance is 1.52 per cent. higher than Coventry's, which is ridiculous given the borough's special ability to generate car parking income. Coventry's highways budget of £9.1 million is offset by car parking income of £1.6 million. This year, Westminster is expected to collect a staggering £34 million for on-street parking and is struggling to spend that sum. It is now repairing Westminster bridge outside this place to try to get rid of the money that is sloshing around in its account. Effectively, it is doing so at the expense of taxpayers in Coventry, St. Helens and elsewhere. A Touche Ross report on Westminster city council shows that it has massive balances in its account which it simply does not know how to spend.
Westminster's SSA for "other district services" is 3.94 times that of Coventry and the highest per head of any council in England. That arises because Westminster's SSA population is almost doubled by commuters, overnight visitors and day visitors. Its SSA for tourists is about 60 per cent. of Coventry's SSA for the entire resident population. Most absurd is the fact that commuters and tourists in Westminster are assumed to have exactly the same social characteristics as the resident population. For example, 12 per cent. of tourists and commuters coming into Westminster are assumed to live in overcrowded accommodation; 24 per cent. are assumed to be from an ethnic minority; and 36 per cent. are assumed to live in purpose-built—mainly council—flats. The idea that people who have a job in Westminster and can afford to stay in a hotel, or who visit Westminster on a day trip, should be classed as deprived is utterly ridiculous.
How does Westminster council achieve those marvellous levels of grant support? Has it used the same lobbying methods as Coventry and other councils? No, it does not have to do that, and it never did. A note to Lady Porter on Westminster city council's lobbying methods and results has come into my possession through the digging activities of the district auditor. It details how individual members of the Government should be
approached and targeted, and how blatant political considerations are used to get more money. With regard to the Secretary of State, the note says:
John Gummer is the most alert of ministers to political nuances He will be particularly conscious that with safety nets a number of high spending Labour London boroughs will appear to get 'off the hook' with Community charges lower than Westminster.
The note then details the work done on behalf of the borough in bringing pressure to bear to get its grant increased at the expense of other local authorities.
That is how it is done. One does not lobby the Department of the Environment using solid analysis of the grant system; one lobbies the Tory party, stressing its electoral interests. That is the real reasoning behind many of the changes that have undermined the credibility of the grant system.
I am firmly of the opinion that we are dealing not just with a renegade local authority at Westminster, which has been buying electoral advantage by such mechanisms as "homes for votes" and free repairs for leaseholders at the expense of council tenants, but with a Government who are up to their eyeballs in this issue. We need an urgent decision on an extraordinary audit into Westminster city council. We need an end to the abuse of grant distribution which is punishing good, well-run authorities like Coventry. We need to restore credibility to the grant system because the people of Coventry and elsewhere are tired of paying other people's taxes, as they have constantly been forced to do through this disreputable system of grant distribution.
We have heard much about certain cases today. I shall return to the essential elements of the debate as outlined by my right hon. Friend the Secretary of State at the beginning.
Like most hon. Members, I receive a substantial postbag every day crammed with letters demanding extra spending on all the items that we are discussing today. As all hon. Members should, I point out to my correspondents that the Government have no money of their own but only the ability to tax people. However, none of my correspondents is enthusiastic about paying higher taxes to provide greater resources to meet their massive demands. That is the background against which the Secretary of State's settlement must be viewed.
In the present circumstances, I believe that the settlement is reasonable. The economy is growing steadily in a sustainable way—although I know that many people are still waiting to feel the effects of the recovery. We have had a tough spending round. Many Conservative Members argued that public spending should he held down and we are not ashamed of that view now.
Local government has an almost insatiable appetite for funds which must be held in check, especially when the national economy demands it. The Government are concerned about the size of the public spending borrowing requirement. It is not the only national economic factor of central importance, but local government cannot be immune from the PSBR. The country as a whole must reduce its borrowing.
With underlying inflation at its lowest level in 27 years, I believe that this year's local authority finance settlement is fair. The Government believe that local authority revenue spending should increase by 2.2 per cent. in 1995–96, which is very close to the rate of inflation.
Against that background, it is up to local authorities to stay within the public sector pay guidelines suggested by the Government. They must make sensible budgeting decisions and look for further efficiency savings. Such good advice is not confined to local authorities; we must all expect to make savings. Government Departments are being asked to do it and private business understands the necessity of cutting costs while producing high-quality goods and services.
When considering local government finance, the really important question is: what do council taxpayers want? The answer is simple—they want good, effective services at the most reasonable cost possible. We have heard today from the Audit Commission's report, "Paying the Piper", which clearly highlights areas where local authorities can make further efficiency savings. The Audit Commission saw scope for councils to target their resources more efficiently and to increase staff productivity. It also pointed to the benefits of local pay management. That should be a model for all boroughs.
For some 15 years, I was an inhabitant and ratepayer of the London borough of Hackney. When it comes to Hackney, I know what I am talking about. I was part of a minority in Hackney: I was one of the few people who paid domestic rates. Since being elected as a Member of Parliament for the royal borough of Windsor and Maidenhead I have, very sensibly, taken up residence there.
However, the brief journey from east London to east Berkshire has been more than just a change of address; it has been an education in local government at its worst and at its best. It is highly relevant to the local government finance report because in both cases it is our money that is being spent.
When I saw Mr. McKinstry's article in The Spectator, it was like returning to Hackney. He said:
The hallmarks for which Labour local authorities have become renowned"—
accusations of racism, whining social workers, massive procedural delays, and rumours of corruption … Waste, bureaucracy and political correctness characterise too much of their work".
Those are the words of a former Labour party supporter. Fortunately, that is not the case in Windsor and Maidenhead, where there is a long history of responsible management.
The royal borough of Windsor and Maidenhead is a tightly run ship. Therefore, it is perhaps no surprise that it has done reasonably well in this year's settlement. In the settlement just announced, the royal borough has been given a 2.83 per cent. increase on 1994–95 funding levels. I am grateful to my right hon. Friend the Secretary of State for what will be seen as a reasonable outcome.
The royal borough makes its case to the Department of the Environment with reasoned argument. Last year, the royal borough made a case to the Secretary of State about three main issues and I joined the council in pressing its case: first, it raised the matter of the all ages social index; secondly, we thought that the figures which were used in the standard spending assessment calculations understated the population; and, thirdly, we argued that it was unfair that there was no allowance for day tourism.
I am glad to say that some relief was given in respect of each of those three factors. First, the social index factor was split in two, which helped to a small degree; secondly, a more realistic population figure, based on the 1991 census, was used; and, thirdly, a new day tourist factor was included.
In this year's settlement, a further significant increase of slightly more than 1 per cent. has been applied in the population figure which is used to calculate SSA. That is good news for Windsor and Maidenhead. However, other changes made in the previous year continue to affect the royal borough.
The third factor recognises the impact that day tourism has upon towns which attract many day visitors and it applies to the town of Windsor in my constituency. In leading for the Opposition this afternoon, the hon. Member for Holborn and St. Pancras (Mr. Dobson) lumped Windsor with some very distinguished towns as though it were one of the very wealthy shire county towns. It is not.
If the hon. Gentleman had allowed me to intervene, I would have informed him that, not so long ago, Windsor had a Labour mayor. I am very distressed that the Labour party is no longer so well organised in Windsor, because I am keen to encourage a higher Labour vote there.
Windsor is not one of the super wealthy towns of the Thames valley, and Engels would have been familiar with many of its housing terraces. Its housing stock is not dissimilar to the old housing stock in Hackney. Many people who lived in Windsor when the houses were built in the last century worked at the castle and there is surprisingly little housing of a substantial size.
Windsor is a complex town. It is dominated by its magnificent castle, which was begun by William the Conqueror and is now known throughout the world. The castle gives Windsor a wealthy and cosmopolitan image, but that is not the reality.
Hon. Members may recall the disastrous fire which occurred in the castle a few years ago. I am pleased to report that considerable progress has been made in restoring the basic fabric of the affected part of the building and plans for the interior rebuilding and redesign were published last week. I am also pleased to say that the number of visitors to the town and to the castle has held up well. Some people feared that the fire would lead to such adverse publicity that tourists would stay away. Fortunately, that has not happened. That is a good thing, because many people in and around Windsor earn their living, one way or another, from the castle.
Away from the castle, down our main shopping street—
I make it a point of principle never to discuss the affairs of the people who live in the castle.
A little way down our main shopping street, Peascod street, there is a thriving town in its own right which, like all towns in the Thames valley, has had to fight hard to retain the loyalty of local shoppers. That is the Windsor which most of my constituents know and it does not sit easily beside the tourist town up the hill.
My constituents know that, as council tax payers, they bear many of the costs associated with the daily influx of tourists. It is sometimes difficult to move along the pavements of the high street outside the castle in the high tourist season because of the procession of visitors. A mother with a pram may not he able to push her children down one of the main roads in the town because of the mass of tourists, some of whose associated costs she also meets. I was therefore very glad when the Government recognised in last year's settlement the problems that day tourism can cause.
In the hothouse atmosphere earlier this afternoon, it was difficult to follow what the Secretary of State was saying. Let me try to paraphrase it. This has been a tough and tight financial settlement. Public expenditure has to be kept control of, and local authorities must share the pain—and by the way, they have to be more efficient. That was the gist of what he said.
A number of hon. Members have today attacked local authorities in a fairly vicious way. I would therefore like to record the fact that, in recent years, local authorities have worked hard to make efficiency savings. They have implemented information technology; they have slimmed down management. Resources have moved from county halls to schools. The hon. Member for Scarborough (Mr. Sykes) talked about land sales. Nottinghamshire county council aims to sell £8 million-worth of land each year to support its budget.
Local councils, I believe, are becoming ever more efficient. That is also the view of the Audit Commission. Its reports of seven years ago said that savings of £541 million could be made. Today they are being made by local authorities. They are taking stock, and they are making the necessary changes. Ultimately, efficiency savings run out; one day, the pips will really squeak. Such savings are not endless.
We should also take a look at central Government, whose overall public spending has risen by 3.3 per cent. Next year, the Department for Education will have an increase of 4.1 per cent.; MAFF will have an increase of 13.5 per cent. So the pain is not being shared evenly.
What can be done to remedy the problem? We could look first at the hideous local government review. Fifty million pounds has been top-sliced off this settlement for that review. We do not know what its final costs will be. We are told that the transitional costs in Cleveland may be between £13 million and £18 million—that is what the Local Government Commission estimates. The bids coming in from councils in the area amount to about £30 million.
What will happen in the next financial year, 1996–97? How much will be top-sliced then: £150 million, or £200 million? No one knows, because the Department of the Environment has not taken the time to study what the costs of the review may turn out to be. It is a leap in the dark, and I predict that, by the end of the process, very few savings will emerge.
Secondly, we might look at capping. When it was introduced 10 years ago, it was designed to get the dirty dozen—the handful of difficult councils—but now it is universal; 85 per cent. of councils' grant now comes from central Government. The element of local discretion no longer exists.
I am astonished to find that Nottinghamshire county council has been given a capping increase of 0.5 per cent. The new police authorities are getting a capping increase of 4.9 per cent.; the inner London boroughs one of 3.2 per cent. If it is good enough for people in Brixton, Lambeth and Westminster, the increase should be good enough for my people in Blidworth, Lowdham and Walesby. Why cannot the Government stand by one set of caps for the whole country?
As I said, the London boroughs are being given an increase of 3.2 per cent. Applied generally, that would release £600 million for local authorities, and some of the real problems that local councils face would disappear forthwith. There would be no cuts in social services and few in education.
We also need to focus on the area cost adjustment system, which other hon. Members have already highlighted. When I met the Minister of State earlier this year, I was pleased to hear him say that research into this matter would be carried out. I should like him to consult widely in the course of that research. I am not sure whether looking at travel-to-work areas will help. The research must focus on real costs, not notional costs. If councils do not pay more, they should not receive extra grant. The system should be fair and transparent.
Bills in Nottinghamshire are set to rise by £30, or 6 per cent. People there will pay more for less after I April. There will be real cuts in education. The county council intends to spend £373 million next year, against an SSA of £347 million—a spending above SSA of £26 million, or 7.5 per cent. But there are going to be cuts. As many as 300 teachers will lose their jobs.
Abbey Gates primary school in Nottinghamshire, an excellent school, is a case in point. The chairman of the governors wrote to me to say:
We find ourselves unable to set a budget which is both legal and responsible, financially and educationally sound".
He is going to lose three teachers. The children will suffer, and class sizes will increase. That is what Ministers call a tight and tough settlement. In fact, it is a double whammy: people pay more for less.
This is an unjust settlement, and we must throw it out.
The hon. Member for Sherwood (Mr. Tipping) said that he did not agree with the settlement, but he and other Labour Members ought to look at the waste over which some Labour-controlled councils have presided for 10 years or so—debt, rent arrears, non-collection of council tax and so on. It is staggering to think that those authorities built up empires of extra staff and, at every turn, blamed the Government.
If Norfolk had behaved like them—overspending year in, year out—it would not, ironically, be suffering from some of its current difficulties, because it would have a higher spending base. There is something inherently unfair in a system that allows that to happen.
One has to try to put this year's settlement into the wider context of the economy. My hon. Friend the Member for Windsor and Maidenhead (Mr. Trend) did exactly that. This settlement is very different from those of previous years, because of the Chancellor's decisions at the time of the public expenditure survey round. If he had not been tough on public expenditure, the successful and satisfactory course of the economy recently would not have been maintained.
My right hon. and learned Friend would not have been able to sustain the confidence that has allowed businesses, especially in my part of the world, to say that they are more optimistic now than they have been for many years. That is because world markets have confidence in our Chancellor's economic management and fiscal and monetary policy.
I do not see how the Chancellor could possibly have ignored the sector that takes up one quarter of total public expenditure. Those who say that cuts in Government Departments must be made, and that some fat remains on various bones, cannot simultaneously claim that local government must be immune. So this is a tough settlement, and a difficult settlement for Norfolk, which will find life extremely hard over the next few months while implementing the cuts that will have to be made in some areas.
I did not agree with everything that my hon. Friend the Member for Great Yarmouth (Mr. Carttiss) said a moment ago, but it does seem strange that, while the overall settlement for local authorities has risen by 2.2 per cent., Norfolk's increase amounts to 0.5 per cent. I cannot see how that stacks up.
Many people in Norfolk are worried about the area cost adjustment, which the hon. Member for Sherwood discussed. Area cost adjustment bears down unfairly on shire counties such as Norfolk. Norfolk is an extremely pleasant place in which to teach in a school or to work, but, as a result, many of the staff working for the local education authority in particular are at the higher end of the age spectrum, and hence more expensive. As a result, we have lost about £10 million owing to the pernicious way in which the area cost adjustment works.
Only a few days ago, the Minister met a delegation from Norfolk. I know that he gave its members a fair hearing, listened to everything they said and considered their points about the area cost adjustment. I hope that he will be able to revisit the subject. I do not want to leave him in any doubt about how difficult things are going to be for Norfolk.
At the same time, I believe that Norfolk county council will he able to get through the year. Like many of my hon. Friends, I have received many letters from constituents, schools, parish councils and voluntary organisations. Many different bodies are extremely concerned that the education committee will have to save £1.6 million.
The cost of the teachers' pay settlement will be well in excess of 0.5 per cent. The education committee will have to bridge the gap. It will do so to some extent by cutting planned spending on non-school budgets by £3.9 million and transferring £2 million directly to schools to help them to meet the cost of rising pupil numbers.
The education committee will also reduce the planned nursery programme. There will not be a cut, but there will be a reduction in the committee's plans. There will have to be savings in the expenditure on school meals through contracting out and by increasing the charge by about 10 per cent., from £1.05 to £1.15.
These savings are sustainable and I can live with them. At the same time, however, the county council will have to rationalise bus routes, which will save about £100,000. That could have been done before, and it can be done now. There are proposed social services savings of £2.1 million. Quite a large part of those savings will have to come through higher charges, which will raise about £1.2 million. My hon. Friend the Minister will be interested to know that nearly £500,000 will be saved by leasing vehicles.
There will be some growth within the social services budget. An increase of 2.5 per cent. in the spending on home care will amount to £120,000. An extra £25,000 will be made available for the cost of foster-care places. There will be other improvements in the social services plans for the county.
The proposed savings in respect of planning and transportation amount to about £2.4 million. A considerable sum will be saved in departmental running costs—about £70,000. I am sure that my hon. Friend the Minister will welcome that. About £240,000 will be saved in the transfer of the waste regulation function.
I have given examples of what Norfolk county council is doing. Its officers are working extremely hard to find savings. They have examined rationalisation and greater efficiency and produced sensible ideas. I am aware, however, that there will be difficulties for schools, social services and other organisations that are backed, to some extent, by the county council.
In the context of a tough public expenditure round, I think that Norfolk Members will grit their teeth and live with what is proposed, because they support the Government's wider economic policy. On the other hand, they look to the Minister and the Secretary of State to understand that Norfolk is making sacrifices because of economic conditions in the hope that its case will be listened to in future.
We hope also that next year Ministers will realise that there will be nothing further to cut, because everything has already been cut to the bone. I leave the Minister with that thought. I hope that he will take on board everything that I and others have said.
I understand that I have seven minutes in which to speak.
It is a bit rich for the hon. Member for Norfolk, North-West (Mr. Bellingham), living in his Norfolk castle, surrounded by his servants and champagne and shooting small furry creatures, to lecture local authorities, especially in areas such as the one that I represent, about the need to secure further savings. He continues to lecture them on their inability to deliver services. The hon. Gentleman should experience the problems that we have in the east end of London. I can only say, having listened to his litany, that we dream of having problems like that in the east end.
One of the features of the debate throughout has been the way in which Tories have been running scared of Liberals in the west country. It has been quite a lesson. To paraphrase some great words of Winston Churchill, never before have so many underpants been filled so often by so many.
It seems that no one really understands local authority finances these days. The formulae are complicated, arcane and, at times, semi-lunatic. Unfortunately, the debate will be given little coverage on the television and in the media generally. That is because journalists, especially, do not regard debates on revenue support grant as sexy. They arc: wrong, of course, because of the significance of the debate for every man, woman and child. From nursery schools to residential homes for the elderly, everything is affected by the terms of the settlement that we are discussing. All that provision will be seriously affected.
There was a time when central Government exercised little touch and only light control on local government affairs. It is now a hands-on approach. Unfortunately, the hands are effectively on the throat of local government. There is far too much interference, even now, by central Government in local government affairs. I accept that ministerial attitudes have improved since the rabid days of some years back, but there is still too much of a tendency for Conservative Members to perceive local authorities as enemies of the state and of democracy.
Local democracy and accountability have been almost fatally undermined by the persistent actions of Conservative Governments. We must remove the shackles from local authorities and allow democratically elected councillors to get on with the job for which they were elected by local people, which is to run local services for local people. They should be accountable to local people through the ballot box.
We all have our own whinges, because this is a whingeing debate. I shall have my whinge on behalf of Newham, but I acknowledge—I always want to seem to be fair to Ministers—that Newham has received considerable additional funding over the past couple of years from the Government and the European Union. City challenge at Stratford has objective 2 status, we have assisted area status, and we have received considerable sums from the single regeneration budget. I am grateful, as are all my hon. Friends from Newham, who are in their places.
Newham deserves what it has received because it is an area of acute deprivation. It is top of the poverty league, which is one league from which I would like to see Newham relegated at the first possible opportunity. Despite the Government acknowledging that Newham has problems, they have said in the House that it stands to lose an additional £20 million over the next three years as a result of standard spending assessment and rate support grant settlement.
A way out from Newham's point of view would be to include it as an inner London borough for financial purposes. Newham, Tower Hamlets and Hackney comprise the most deprived sub-region in the country. It is ridiculous that two of the boroughs are classified as inner London while Newham is outer London. That situation is based on historic administrative reasons, not on a financial regime.
As a group, led by my hon. Friend the Member for Newham, South (Mr. Spearing), I and my hon. Friend the Member for Newham, North-East (Mr. Timms), with council officers and others, have asked Ministers for inner London status for Newham. I hope that our case will be considered favourably. I know that there will be problems with some Labour inner London boroughs, and we shall have to face them ourselves. We shall do so by arguing our case, as my hon. Friend the Member for Newham, South has said, on the basis of merit. We are more than prepared to argue with our colleagues.
We are definitely disadvantaged in Newham by the needs indices in the SSA formula. Ministers should take that on board. Newham is ninth in the social index and in 10th position in the new economic index. When it comes to the urban conditions index, Newham is in first place. That index should be included in the SSA formula. Specific consideration should be given to homelessness in Newham. It is an incredibly pressing problem.
All hon. Members have said that we are faced with a tight settlement. More than that, it is a strangulation of a settlement. We are being pushed to the limits in Newham. The Government must recognise our case. The Minister should understand that the three Newham Members hunt in a pack. We shall be hunting at ministerial doors in the years to come.
The financial settlement is indeed a tough one, but it is also well considered. I pay a small tribute to my hon. Friend the Minister for Local Government, Housing and Urban Regeneration, whom I know well and have met on several occasions to talk about the settlement in Hounslow. He listens. He absorbs. He is a master of his brief, and he acts on the advice and information that he has.
I listened to the points made by Opposition Members. One would think that the Conservatives—particularly the Minister—are a group determined to inflict pain and suffering on a vast area of the countryside. Let us for a few minutes examine what the Labour party has been doing. We all know that the Labour party has not been in power—national Government—for the past 15 years. I think that I am correct in saying that the leader of the Labour party stated, in The Spectator, on 1 October 1994:
I don't think the character of any party becomes clear until you're in power.
It has not been in power for the past 15 years, and the character of the Labour party in national Government may not be clear, but what is clear is that the Labour party has been in power. It has had control of vast areas of the country through the local government system. Let us look at that record to see what the character of the Labour party in power has been.
Even the Tribune on 15 May 1992, was forced to concede that Labour local government is
lacklustre and incompetent…ineffectual or rotten Labour councils…have been a feature of political life for as long as anyone can remember.
Let us look at the council tax bills, band for hand—bands C and D. The average charge for band C in a Conservative-controlled local authority is £429, but in a Labour-controlled local authority it is £560. For band D in a Conservative-controlled local authority it is £482, but in a Labour-controlled local authority it is £635. Why is it more expensive to live in Labour-controlled authorities? At this point, I ask my hon. Friend about something that has concerned me for some time. We cap local authorities—Labour and Conservative. By so doing, we do not expose the profligacy of Labour-controlled authorities to the tax payer. If we do not cap them, some will go completely over the top and will never be elected back into power. That is something that my more learned hon. Friends must think about.
Let us look at more figures. We know that some Labour-controlled local authorities are indeed in deprived areas, as the hon. Member for Newham, North-West (Mr. Banks) said, but does that mean that they cannot collect their taxes? If one look at the rate of tax collection in Labour-controlled local authorities, one will see that Lambeth has collected only 48 per of its taxes, Hackney, 67 per cent., Islington, 67 per cent., Southwark, 73 per cent., and Newham, 73 per cent.
Let us look at rent arrears. Is it so difficult to collect council tax and council house rents? Why has Hackney collected only 31 per cent., Greenwich, 25 per cent., Newham, 24 per cent.—
The hon. Gentleman is right. One Conservative-controlled authority—Ealing—has collected only 23 per cent., and I am sure that there are people who will do something about that.
Let us look at debt. Why do Labour-controlled local authorities have the highest debt in the country? Manchester has a debt of £1,326 million. Its total debt per head is £3,000. In Birmingham, it is £1,233; in Islington, £946 and so on. Why is it that those uncollected taxes and rents are in Labour-controlled local authorities?
Let us return to that great quote from the Leader of the Opposition—that the character of any party does not become clear until one is in power, because it is very clear indeed. Those Labour authorities have been in power for generations, for far too long, and some day their ratepayers will wake up and say, "This is no good. We have to do something about it."
In Hounslow, we have a Labour-controlled local authority that is more efficient than the local authorities that I have discussed. Its revenue support grant is about 0.5 per cent. more than last year. I know that this is a time to whinge, but I am not going to whinge. I merely put on record, as my hon. Friend knows, that we have to build two new schools this year, because our population is increasing faster than predicted, and we have a problem with refugees because of the airport. I know that my hon. Friend has taken that on board.
Conservative Members and Ministers have been talking in two ways. They know very well that the cuts in the rate support grant settlement are real cuts to their communities. It really is no good the hon. Member for Brentford and Isleworth (Mr. Deva) talking about the figures in the briefing for councillors, issued by Conservative central office. He really should show it to some of the Conservative councillors in many of the shire counties throughout the country. They are councillors, and political beings, as are the Liberal Democrats and the socialists, but they are representatives of their communities. Those councillors know full well that the rate support grant settlement will cut into services in their communities, which, as elected members, they hold just as dearly to their hearts as does each one of us. The hon. Gentleman does Conservative Members no good at all—
I can produce another briefing, in case Conservative Members really expect to get any satisfaction from the Minister's reply. Many of them have referred to the 0.5 per cent. cap, which cannot possibly cater for the needs of communities; they have also referred to the extremely flawed SSAs. I advise those hon. Members—who have urged their Minister to act with haste—to listen to what their local authorities have said.
In 1989, Warwickshire county council embarked on an attempt to persuade the Minister and his civil servants that the county's SSAs were flawed and unrealistic, and did not take account of local needs. The same applied to the cap. The council persevered, making representations in 1990, 1991, 1992, 1993 and 1994 and trying to persuade the Government to reconsider their SSAs and rate support grant settlement for Warwickshire. I have joined the council in its representations. We were listened to very politely, but at the end of the day nothing happened, although it was a Conservative-controlled authority that originally complained to the Government.
Some hon. Members have referred to councils setting expenditure limits above the cap, and then throwing themselves on the Secretary of State's mercy in an attempt to have the cap increased. I do not think that Warwickshire will dare to do that this year, unless the Secretary of State gives a sign that he is prepared to increase the cap before it sets its budget. If the Secretary of State does not take into account the amount by which the budget exceeds the cap, rebuilding that budget will cost another half a million pounds of council tax payers' money. Local authorities are being squeezed in a pincer movement.
My hon. Friend the Member for Sherwood (Mr. Tipping) mentioned a double whammy, but when councils can make no sense of the SSAs, cannot secure additional funds from the revenue support grant or a lifting of the cap and cannot even ask their council tax payers to contribute an extra 25p a week, it is really a triple whammy. Warwickshire's SSA is one of the lowest in the country, and should be reassessed. The 1995 cap will reduce school budgets in cash terms, and seriously damage the education of children in my constituency.
Last Friday, I went to a meeting in Leamington. Conservative Members are wrong if they think that they can hide the facts from their communities. More than 800 people attended the meeting—parents, head teachers, school governors and chairmen of governing boards, of all political persuasions. Those people know exactly where the blame lies, and that what has been done will lead to the demise of Warwickshire's education service.
A wonderful machine is now wheeled out on Saturday evenings. Numbers are drawn out of it. I think that it is called the national lottery. The SSAs are very much like that machine; the only difference is that it costs local authorities very much more than a pound to have a go.
It seems that, even now, the Government do not know how they constructed the SSA machine. For the same reason they do not know how to fix it, and the mess in which they find themselves will be to the detriment of everyone in the country.
Mr. Geoffrey 'Clifton-Brown:
I am delighted to follow the hon. Member for Nuneaton (Mr. Olner). I am sorry that his party is so bereft of ideas and policies that he has been forced to use a Conservative party brief prepared privately for Conservative Members.
This is a tight settlement, which amounts to about 25 per cent. of the Government's total expenditure of some £43.5 billion, but it is 2.2 per cent. higher than last year's. My county, Gloucestershire, is to receive an increase of 2.4 per cent. overall. For some services, it will get an increase of 4.3 per cent. compared with the county average of 3.3 per cent. Therefore, it has not fared as badly as many other shire counties.
The Liberal and Labour parties form the ruling group in that shire county. On average, in every community charge band Labour charges £100 more than the Conservatives while the Liberals charge £50 more. Representatives from Gloucestershire council came to see my hon. Friend the Minister for Local Government, Housing and Urban Regeneration with a proposal to cut £7 million from the education budget—a cut of 4 per cent. That is a disgrace and it is unfair to the children in my county. Last year, Gloucestershire council threatened that there would be a loss of 150 teachers. In the event, six were made redundant and 111 were retired, but 165 full-time appointments were made.
Gloucestershire requires only two more grant-maintained schools to reach the magical 75 per cent. at which all grant-maintained schools will be funded by the Further Education Funding Council. I recommend any school in my constituency which is running into budget problems to seek to become grant maintained. It will then be funded nationally and the children in the school will not be disadvantaged.
Gloucestershire council spends £1,000 a day for computer consultants. It is advertising for a third PR man for its social services department to rectify the public relations disaster of funding a safari holiday in Africa for a child in a special needs school. The child was difficult and had committed crimes and, believe it or not, the council sent him to Africa for a holiday. That is the nature of the council which is controlled by the Liberal and Labour parties.
The council owns more than 5,000 acres of agricultural land and I have had serious discussions with it on how it could sell some of that land to reduce its debt. When the council was under Conservative control in 1986, its debt was £26.5 million. Today, under the Labour and Liberal parties, it has a staggering debt of £120 million. That is an increase of well over 1,000 per cent. since the Conservatives lost control in 1986, and it has occurred simply because the council cannot control its expenditure. Its budget is almost £300 million and it should be able to make efficiency savings. I know of no other business or local authority with a budget of that size which could not make some efficiency savings.
County hall in Gloucester has office after office. What do the occupants of those offices do? I have no idea, but I am sure that it is possible for the council to make savings. I shall give an example. There is a footpath through my land. Gloucestershire county council has no less than four full-time footpath officers. The footpath on my land has been walked perfectly satisfactorily for 20 years and those officers are perfectly happy to use my field gate. They now want to move the footpath just 10 yards so that they can walk through the middle of my orchard.
The council wrote to me stating that it would like a gate cut in my fence and said that it was prepared to do it for £60. I wrote back and said that I would be delighted to have people walking through the middle of my orchard. I wrote, "Please do it for £60, that is very good value for money." After a fortnight I got another letter. Goodness knows what it costs to send them all, but in that one the council said that it had had another look and that the job was not quite as simple as was first thought. The letter said that a special gate would be required and recommended that it would be cheaper for me to do the job myself. I wrote back saying that I would be perfectly happy to do it and that I would make the necessary arrangements.
That is a typical example of the wasteful expenditure of Gloucestershire county council, yet it sends a delegation to see my right hon. Friend. It whinges, complains and produces a magical budget whereby it wants to spend another £22 million, no less. It then complains to my right hon. Friend that it has a cut on what it would otherwise have liked to have spent.
No, I cannot. I have less than a minute to finish my speech.
To all my constituents in Gloucestershire, I say that they have £300 million to spend. They should consider the best way of buying services, whether from the private sector or whoever, to ensure that all my constituents and, especially, the children in my constituency can benefit to the greatest extent.
Council officers or anyone else should not encourage the public to write and complain to me that the people of Gloucestershire are getting a bad deal from the Government. They are getting no worse a deal than many surrounding shire counties—in fact they are getting a better deal. The council should look wherever it can to provide a better service. I am sure that it will be able to do the job better than it is at the moment.
The House was entertained by the comments of the hon. Member for Cirencester and Tewkesbury (Mr. Clifton-Brown) about his orchard, but I am not sure whether it was the most central speech today. It is a great shame that the House spends less than one day debating what is the most important thing that affects local government. Even the Secretary of State for the Environment made the point that local government is responsible for something like a quarter of the funding that central Government provide. On that basis, I hope that we will have a much more lengthy debate in the future so that, if for no other reason, hon. Members on both sides of the House can have a little more time to make their points.
Confusion seems to exist between the two Government spokesmen. Just after the local authority statement was made in December, the Secretary of State wrote to hon. Members and said:
Local authorities, like central Government, must play its part in restraining the growth of public spending ‖ we are not asking authorities to do more than Government is itself having to do to control its costs.
As has been said by hon. Members on both sides of the House, that is simply not true. The record can be put clearly and simply. A number of hon. Members have made that point.
If we consider the settlement for local government, it is the Minister who is right. I do not think that he was speaking in a personal capacity when he said that he had been stuffed by the Treasury. He was expressing that view on behalf of local government, about which, I would be the first to say, he knows something. His view is rather different from that of the Secretary of State. Everyone knows that the settlement is bad for local government, which will have to make cuts of about £1.5 billion and increase the council tax across the board by 6 per cent. on average to stay within the settlement.
Local government has been given a cash increase of only about 0.4 per cent. in real terms, yet the budgets of other Departments of central Government are increasing—that of the Department of Health by 3.8 per cent., that of the Department of Social Security by 3.7 per cent., and that of the Department for Education by 4.1 per cent. That is happening at a time when the Secretary of State says that the schools budget can go up only by 1.1 per cent. That shows that central Government treat themselves differently from the way in which they treat local government.
The most significant budget increase involves the Secretary of State's former Department, the Ministry of Agriculture, Fisheries and Food. Its budget has increased by some 13 per cent. now that he has gone, but he has been able to achieve a paltry increase for the local government family. That is an indictment of Ministers.
If the Minister and his right hon. Friend really do believe that the SSA methodology is one
upon which decisions are even handed, rational and based upon the most information available for all authorities
he is out of touch not only with my hon. Friends, but with his hon. Friends.
We had a number of interesting speeches by my hon. Friends the Members for St. Helens, North (Mr. Evans), for Coventry, North-East (Mr. Ainsworth), and for City of Durham (Mr. Steinberg), as well as by the hon. Members for Derbyshire, West (Mr. McLoughlin), for Great Yarmouth (Mr. Carttiss), for Somerton and Frome (Mr. Robinson), for Wyre Forest (Mr. Coombs) and for Windsor and Maidenhead (Mr. Trend). They all complained about the methodology used for the SSAs. The Minister must accept that the methodology needs to he challenged.
My hon. Friend the Member for Holborn and St Pancras (Mr. Dobson) gave examples of the social index scores. I can give the House another example. Liverpool is one of the most deprived cities, not just in Britain but in the whole of western Europe, yet it is in 81st position with a score that suggests that it is less than averagely deprived. The City of London, that well-known centre of deprivation and urban squalor, is 19th in the list of deprived local authorities. If that is the index that the Minister is using, it really is time to look at this issue differently.
Local authorities up and down the land are being deprived because the index does not take proper account of the real statistics. For example, Surrey local education authority gains £8 million every year for the young people who live in the area, many of whom go to private schools outside Surrey. Surrey is a wealthy local authority and that £8 million is being provided at the expense of other authorities. The Minister must look again at the way in which the SSAs are calculated.
The jewel in the Government's crown, the authority around which the structure of local government finance is written, is the London borough of Westminster. We have heard from my hon. Friends the Members for Holborn arid St Pancras, for Coventry North-East and for St Helens, North about how Westminster is treated so much more favourably than the rest of local government as to be nothing short of a scandal. The Minister should explain to the House not why Westminster is an efficient authority--we know that it is not—but what he intends to do about that running sore which will discredit him, the Department of the Environment, and the Government unless they are prepared to act.
The real losers in this year's settlement are not Members of Parliament but those whom we serve and who use the services in our local authorities. Let us look at the settlement for education. Many hon. Members have mentioned that. The hon. Member for Derbyshire, West said that it is ridiculous that local authorities have to set their budgets before the pay settlements are known. That is made even more ridiculous by the fact that this year the Government have given, even in their own terms, a cash increase of 1.1 per cent. in the education SSAs, while the practical reality is that teachers' pay increases are outside the hands of local government. The local authorities are expecting to face bills in excess of that 1.1 per cent. and will have to find that money at the expense of education.
We know that another 110,000 pupils arc coming into our schools this year. Although we know that the pupil rolls will increase still further, it is only Education Ministers who believe that that will not be at the expense of the education of our young people. The number of pupils per teacher and per class in our primary and secondary schools is about 25. In Japan it is 17 and in France it is as low as 13.6. If it is good enough for children in Japan and France to have classes of that size, why is not it good enough for children in this country?
If the hon. Gentleman will forgive me, I will not give way because time is short.
The House will he interested to learn of a letter that the Secretary of State for Education wrote to one of her Cabinet colleagues. She said:
If teachers' pay increases by 2-3 per cent., then there will be a loss of 7,000 to 10.000 teachers
in England. I hope that the Minister will comment on that. The decision whether to fund the teachers' pay round properly is in the hands of the Government. It is up to
them to decide whether local government should be properly reimbursed or whether they will take out that extra cost on every child in every school up and down the land. The children will face bigger classes and the educational consequences of that.
Let me deal with social services. The hon. Member for Cirencester and Tewkesbury (Mr. Clifton-Brown) talked about his county council. Gloucestershire county council's care programme is £1 million in the red in the current financial year and is providing emergency care only to people at risk. John Standing, the Conservative group's spokesman, said that
community care began as such a good idea but it is no good if we do not have the funding to carry out the ideas.
That is a Conservative county councillor talking about what the Government have done to local government and community care.
In its recently published report entitled "Taking Stock: Progress on Community Care", the Audit Commission makes it clear that the community care system is under intense pressure. It states that it is underfunded, yet we know that the Government have de facto placed a freeze on the social services SSA for the coming year. In practical terms, that means a cut in funding for social services which, in turn, means cuts in services for the elderly and vulnerable. Those are the values of this Government—they are certainly the values that they have been pursuing for some years.
The hon. Member for Great Yarmouth has broken free from the constraints that once chained him and is now able to tell the truth. The implication of what he said was that there is a degree of hypocrisy among those sitting on the Conservative Front Bench, and it is not for me to disagree with him on this occasion. His was probably one of the better speeches that we heard from Conservative Members this evening.
Across the length and breadth of the land, county councils with social services responsibilities are saying that funding for the care in the community initiative is inadequate and that they cannot cope on the basis of the Government's settlement. It is no good the Minister saying that it is a good settlement when we know that his view is somewhat different—he recognised that the Treasury had managed to work one over on him and his colleagues.
It is important to get away from the idea that the debate is merely a competition in which Government supporters try to find Labour-run authorities to criticise and Labour Members are told that their own local authorities are nothing but incompetent. I shall refer to a number of local authorities where there has been all-party agreement on their approaches to central Government. My hon. Friend the Member for Tyne Bridge (Mr. Clelland) said that an all-party delegation from Newcastle went to see the Minister to tell him that it was unacceptable that Newcastle had to cut its council tax and its services when the local populace wanted the services maintained. The Minister should respond to that point as we are told that capping is in the interests of local people.
The Minister should consider the borough of Havering, which sent a delegation to meet, I think, the Minister of State. The delegation was made up of members of all political parties on the council. They pointed out to him that it was invidious that the council had to make £17 million worth of cuts and, at the same time, increase the council tax by some 11 per cent. Perhaps the Minister can explain to Havering and the House why residents will have to pay more but get fewer services. Perhaps he can also explain why, despite the claim that the council was terribly inefficient while Labour was in charge, that Labour council was able to point out to him that it has cut about £30 million plus from the budget that it inherited from the previous Conservative authority. There has been no suggestion, even by the Conservatives, that it is a high-spending, loony left Labour council. It is a good, sound Labour council forced to cut services and increase the council tax because of the Government.
Let us consider Warwickshire. My hon. Friend the Member for Nuneaton (Mr. Olner) and at least one Conservative Member said that there was a threat of the loss of some 200 teachers' posts there. Again, it is no good the Conservatives saying that that is scaremongering; that is certainly not the view of people of stature in the community, and not that of politicians. Mr. Seamus Crowe, the head teacher of St. Francis primary school in Bedworth, told a county-wide meeting at Leamington on Friday last week:
Our argument is not with the County Council, it is with the Government".
Ordinary people involved in communities up and down the country are saying to the Minister, through us, that the Government have caused the problem and that it is for them to deal with it.
The Minister met an all-party delegation from Shropshire headed by a senior Conservative Member of Parliament and one of my colleagues. That delegation comprised councillors of all persuasions. They made the point to the Minister that Shropshire had been traditionally high spending on education under the Conservatives. That high spending had been maintained under Labour with the support of the Conservative group on the council.
Last night, the Conservative group on Shropshire council decided to support an attempt to go through the cap. I hope that the Minister will comment specifically on Shropshire, where his own colleagues in local government are saying that they think that the Government have got it wrong and that what the Government are doing is incompetent and ineffectual. I ask the Minister especially to note the comments of the leader and the deputy leader of the Conservative group. The leader said:
Government needs to recognise the disaster it is heading for at the general election if it continues like this.
The deputy leader said:
The Government in London is remote from the impact of their decisions. I have to tell them they have got it wrong and we have got it right.
Conservative local government is saying that the Conservative Government have got it wrong and that Conservatives in local government know better.
The hon. Member for Holborn and St. Pancras (Mr. Dobson) spent almost an hour telling us that Conservative councils—Westminster and others—had been favoured at the expense of others. Now the hon. Gentleman is saying that Conservative councils are, as he would have it, in trouble in the same way. Both cannot be right, can they?
I hate to disappoint the hon. Gentleman. If he knew the political geography of this country, he would know that Shropshire is not a Conservative council, nor, indeed is Warwickshire any more. It is interesting that the last time that Warwickshire council was capped was when the Conservatives ran the council, which may also say something about the way in which Conservatives in local government increasingly see central Government.
I shall quote briefly from a report about Shropshire in this morning's paper in which Alan Cooper, head teacher of The Marches school in Oswestry—a school considered to be among the best, not only in the county, but in the country—said:
It was not the fault of the county council, … but government spending curbs which limited central grant to Shropshire".
Up and down the land, the Government are being rumbled. People know that when class sizes increase it is because of the Government. People know that cuts in the social services budget, so that the vulnerable and the elderly cannot get the social services that they need, mean that the Government are at fault. People know very well that when they send delegations from their communities to meet the Minister, the answer may be sympathetic, but it is still no.
My hon. Friend the Member for Holborn and St. Pancras made a rather interesting point that each Conservative council which was considered to have whinged too much, and went to see the Minister, came away with a budget cut. That is an interesting statistic which perhaps explains the rather more credible view of my hon. Friend the Member for Coventry, North-East, who told the House that the more secretive diplomacy of Westminster council was the way to get the Government to provide more funding.
We see the results all around us. We know that if the same favourable treatment which Westminster council received were offered to councils everywhere, few councils would not be able to reduce the council tax and few councils would not be able to provide better services. That is the reality of the modern Conservative Government. They are a Government who have no vision for local government, they see no future for local government, they let local government suffer further cuts for the foreseeable future and they treat local government in the most contemptuous and most corrupt way. The Minister should answer the charge. They are a Government who are not prepared to deal with the running sore of Westminster council. A Government who are prepared to reward Westminster council are, simply, not fit to be in charge of the future of local government.
Right hon. and hon. Members have raised important issues and I shall attempt to address those broad issues tonight. If I do not deal with a specific point, I shall write to them to cover it.
I begin by repeating the question that I put earlier to the hon. Member for Holborn and St. Pancras (Mr. Dobson). He said that the settlement was inadequate. If that is so, there are only two remedies: the first is to raise the revenue support grant which is financed from central taxation and the other is to permit the council tax to rise. We need to know which remedy the Labour party favours.
There is a third option. I explained in my speech that, because of its situation, Newcastle city council need only freeze the council tax at is current level and set its budget at that level; there would then be no need for cuts or an increase in the council tax. What does the Minister have to say about that?
The hon. Gentleman is not right. The question remains the same. If the settlement is inadequate, either the council tax must rise or the revenue support grant must be increased; either public expenditure must rise or the Government will have to provide further grants. That is the case even in Newcastle. We need to know which is the Labour party's policy and by how much. Labour Members cannot say that the settlement is not good enough if they are not prepared to say what would be adequate. The hon. Member for Holborn and St. Pancras will not say what would be adequate.
If my hon. Friend will allow me, I shall give way in a moment.
The Opposition claim that the methodology is crooked. Not one serious informed person believes that. Labour local authority leaders do not believe it, the local authority associations do not believe it and Tony Travers and Rita Hale do not believe it. They are the only two independent experts in this area.
I shall not give way, as I want to give the hon. Member for Holborn and St. Pancras a little more evidence.
Tony Travers stated:
It is small wonder that the allocation of such large sums of money to hundreds of local authorities should lead to accusations of political bias. Yet there is no evidence of such political intervention.
The Environment Select Committee, reporting unanimously with Labour Members agreeing, stated:
We should like to place on the record our understanding that the Government's recent review of SSAs has been conducted in an open manner. DOE tested all of the options that it was asked to consider, and it has made data available in a readily usable form to interested parties.
The Audit Commission, which the hon. Member for Holborn and St. Pancras intends to wheel into action as a Cooksey's cavalry to charge against local authorities which he thinks are spending to much, said:
The determination of SSAs, being wholly formula based, is explicit and open to scrutiny. It is a more sophisticated system for equalising needs than any overseas system examined in this study and it is an improvement on its predecessor in many respects.
That is what objective people say about the methodology. Any suggestion that the methodology is rigged is sheer nonsense from start to finish. It is about time the Labour party understood that.
Let me illustrate that point. If it were rigged, it is curious that the SSA per head for Westminster is £1,278 with a total support grant of £1,023 while it is £904 for Wandsworth, £1,104 for Lambeth, £1,295 for Hackney and £1,535 for Tower Hamlets. There is nothing wrong with that. The important point is that the funds follow the areas of greatest need. They do that above all to the inner cities, and to the inner-city areas of London, most of which are Labour controlled.
Three and a half minutes ago, my hon. Friend said that there were two options. That is not the case. The third option is that counties like Lancashire should become more efficient and shed the staff they should not have. Lancashire has one member of staff for every 17 teachers. That is manifestly excessive. That is the third option which no Labour-controlled councils choose to take.
I am grateful to my hon. Friend for pointing that out to me.
I wanted to explore the point a little further. If we consider the SSA per head in terms of political control, in inner London we find that the Conservatives receive £1,030 while Labour receives £1,189. In outer London, the Conservatives receive £663 and Labour receives £856, and in the shires, the Conservatives receive £87 while Labour receives £106.
The Minister selectively quoted the Audit Commission's evidence to the Select Committee. Does he recall that the Audit Commission actually proposed open ministerial decisions on the allocation of funds? It was questioned by Conservative Members, who asked, "Aren't you advocating a slush fund?" The reply was, "Is that not, in effect, what happens now?" Does the Minister recall that that evidence was given by the Audit Commission to the Select Committee?
I wish to make some important points.
I make my next point with particular emphasis so that the Opposition understand it. The characteristics in the method which give support to Westminster are precisely the same characteristics which benefit Camden, Lambeth, Hackney and the other inner-city Labour authorities. If the Labour party thinks that it will get hold of a system and try to distort it to disadvantage Westminster, the first to suffer will be inner-city Labour authorities with the same characteristics.
I shall do something unusual and pay a mild tribute to Lambeth. It has at last freed itself from the scandal of Labour control and it is actually trying to make efforts to pull itself around. It recently appointed a new chief executive, Miss Rabbatts. She is paid more than the Prime Minister, but she will have to earn every penny of it.
The Liberal Democrats have been running a campaign. The right hon. Member for Yeovil (Mr. Ashdown) was good enough to pop into the Chamber for a brief 15 seconds or so. He has been inviting all my hon. Friends to subscribe to a revolt of the west country. I have no doubt that the right hon. Gentleman's letter arrived on the desks of all the news editors before it arrived in my hon. Friends' postbags.
Conservative Members have made criticisms in the absence of my right hon. Friend the Member for Yeovil (Mr. Ashdown). The Minister and other hon. Members might wish to know that, in his capacity as leader of my party, my right hon. Friend has been involved in the developing situation in Northern Ireland, which has led to a ministerial statement, and the House has benefited from cross-party discussions on that matter.
The right hon. Member for Yeovil issued a call to arms in his letter, saying, "I hope that everybody will be there and vote on and discuss the issue." He has not done that. The Liberal Democrats wish to abolish capping—at least we know where they are coming from—and the area cost adjustment. I hope that they know what the consequences of that would he for some inner-city authorities, irrespective of what political control they are under, in terms of the impact on some of the most deprived people in the country.
Two subjects are of great importance, and I wish to refer to them briefly. On capping, there is genuine debate about the balance between central and local government funding. I acknowledge that there should he such a debate. However, as the hon. Member for Stretford (Mr. Lloyd) said, local government spends 25 per cent. of public expenditure, and any Government must exercise ultimate control over that. A 1 per cent. relaxation of capping for education authorities would add £200 million to the public expenditure totals.
Equally, I am sensitive to the arguments about local accountability and the wish of people to differentiate themselves financially in order to differentiate themselves at the ballot box. We are specifically addressing that matter, and we have put before local authorities a series of suggestions under the private finance initiative which would allow local authorities to use their capital receipts in a better way. We have invited them to establish joint companies with the private sector, and to do that within the compass of central financial controls. We are hoping also to extend that into housing. That is the way to target and mobilise all the community's resources to tackle problems, particularly deprivation, about which we are all concerned.
Methodology is always central to debates such as this, and I should like to deal with the area cost adjustment. I have said in previous years that the system is robust. I said last year that we needed to improve the methodology in the south-east, and we have done so. I also said that I would investigate whether we could find something that gave us what we needed to know, better.
I have told local authority associations that we are exploring whether we can apply a travel-to-work test to the whole country. We are having discussions with the Department of Employment about the necessary data. We are tendering urgently for research projects which would help us to hammer out a methodology. The system would have to work, and it would have to deliver what we need.
I cannot promise—I shall not give an impression to the House which could mislead it—that the system would be as robust as the present one, but I guarantee that we will pursue it with great energy to see whether it delivers more effectively. If it does, it will become part of a methodology in which we have consistently incorporated improvements.
I shall return to the issue of capping in a moment, but the hon. Gentleman will know that we are determined to control public expenditure. We have not reached conclusions on the capping limits for this year, and they are still provisional limits. The hon. Gentleman must appreciate the constraints on public expenditure.
My hon. Friend's announcement will be well regarded in those areas which are looking for a change in the system. How long will the research take, and when will my hon. Friend be able to publish its conclusions?
My hon. Friend will know that the sub-group in the working party with local authorities on SSAs will get into the final stages of any new system at the beginning of the autumn. Therefore, we would need that work to be sufficiently completed and subject to analysis from local authorities and ourselves by the time the House came back after the summer recess. That is the sort of time scale at which we are looking.
My hon. Friend the Minister has the great advantage of being one of the relatively few hon. Members who knows that the sparsity factor refers not to the scarcity of hair on the heads of Yorkshiremen but to the superabundance of acres in Yorkshire in relation to population—not least areas such as Skipton and Ripon. Is my hon. Friend aware that North Yorkshire is very worried that the sparsity factor is not given sufficient weight in the methodology, particularly in relation to the fire service and the police? Could he possibly press for improvements in the methodology relating to sparsity?
It is difficult to judge the right weighting for sparsity. Although local authority associations, particularly the Association of County Councils, complain about the existing weighting, they have not yet come up with a better idea. If they do, it will be examined rigorously and honestly.
This year, we shall continue work on the police SSA because we must move to a system that fully reflects the characteristics of each area rather than establishment numbers. We have additional work to do on fire SSAs, as I have always made clear. We have introduced a factor for the problems of coastal areas. [Interruption.] I am delighted to add my welcome to the enthusiasm which the right hon. Member for Yeovil has clearly evoked in the House.
We are also looking at how best to tackle the problem with regard to fire, because the pension scheme has a perverse incentive that, after 26 and a half years' service, people take early retirement through ill health and go immediately on to a full indexed pension. People recognise that that system creates problems. In the past, fire authorities may have been over-complacent—and complaisant—in conniving with that, and we must address the issue. We are trying to deal with it through the SSA methodology.
We shall look at the children's social services because we need better-quality information. The Department of Health expects to commission research to permit a reform, probably for two years from now, because it is a complex matter.
We shall also look at highways maintenance.
No, I have very little time and a lot more ground still to cover.
We are also looking at the homelessness indicator in the SSAs. That is relevant not merely to the SSAs hut to capital financing of the housing programme. It is important to have a robust methodology relevant to both those considerations.
That is not an exclusive list. Local authorities will want us to discuss other matters, which we always try to do in agreement with them.
The settlement must be seen in context. The Government must take account of the fact that local authorities spend 25 per cent. of all public expenditure. Typical budgets are: £620 million in Devon; £920 million in Hampshire; and £940 million in Lancashire. For big cities like Birmingham a typical budget is about £900 million, while the budget for Manchester is £430 million and, for Leeds, £500 million. We do not tell local authorities how to spend that money. It is the heart of the system that it is not hypothecated; they make their own decisions and allocate priorities. Nothing in our settlement compels people to penalise teachers. It is entirely up to them to decide where to allocate priorities, which is what local democracy is about and what local councillors are elected to do. The efficient councils will cope, inefficient ones will blame the Government and middling ones will probably try both. That has been the pattern in the past.
Councils can help themselves by looking at arrears in council tax collection and at whether they apply competitive tendering properly. They must put their own house in order. I acknowledge the fact that they have made progress. Many good authorities have come to grips with working properly and work in collaboration with the private sector to make life better for their communities. We must push that process much further.
We still need to know how much a Labour Government would spend, how much the council tax would go up, what would happen when they got rid of compulsory competitive tendering and what would happen when they put Unison back in control of the councils. All we have heard is the bizarre idea that we should send in the Audit Commission, not merely to go to high-spending councils but, according to the Opposition's remarkable new philosophy—Dobson's dictum—to attack councils that set low council taxes, because that is now undesirable. I can think of nothing dafter than to send in the Audit Commission to check councils because they are spending less taxpayers' money rather than more—thou shalt not set a low council tax. That is a funny way to run local authorities.
We know who the high spenders and municipal malingerers are. They are all Labour party local authorities. It is the old, eternal list of councils that are not making an effort, and that list must be sorted out. Labour's inefficiency is a tax on deprivation, a tax on the poor and a tax on those who are in greatest need. A half-baked, uncosted, knee-jerk solution will be a disaster for ordinary people who most need the services that local government provides. I urge hon. Members to have no truck with the Labour party's policy and to support us in the Lobby tonight.
|Division No. 61]||[10.00 pm|
|Ainsworth, Peter (East Surrey)||Brown, M (Brigg & Cl'thorpes)|
|Aitken, Rt Hon Jonathan||Browning, Mrs Angela|
|Alison, Rt Hon Michael (Selby)||Bruce, Ian (Dorset)|
|Allason, Rupert (Torbay)||Burns, Simon|
|Amess, David||Burt, Alistair|
|Ancram, Michael||Butcher, John|
|Arbuthnot, James||Butler, Peter|
|Arnold, Jacques (Gravesham)||Butterfill, John|
|Arnold, Sir Thomas (Hazel Grv)||Carlisle, John (Luton North)|
|Ashby, David||Carlisle, Sir Kenneth (Lincoln)|
|Aspinwall, Jack||Carrington, Matthew|
|Atkins, Robert||Cash, William|
|Atkinson, Peter (Hexham)||Channon, Rt Hon Paul|
|Baker, Rt Hon Kenneth (Mole V)||Churchill, Mr|
|Baker, Nicholas (North Dorset)||Clappison, James|
|Baldry, Tony||Clark, Dr Michael (Rochford)|
|Banks, Matthew (Southport)||Clarke, Rt Hon Kenneth (Ru'clif)|
|Banks, Robert (Harrogate)||Clifton-Brown, Geoffrey|
|Bates, Michael||Coe, Sebastian|
|Batiste, Spencer||Colvin, Michael|
|Bellingham, Henry||Congdon, David|
|Bendall, Vivian||Conway, Derek|
|Beresford, Sir Paul||Coombs, Anthony (Wyre For'st)|
|Booth, Hartley||Coombs, Simon (Swindon)|
|Boswell, Tim||Cope, Rt Hon Sir John|
|Bottomley, Peter (Eltham)||Cormack, Sir Patrick|
|Bottomley, Rt Hon Virginia||Couchman, James|
|Bowis, John||Cran, James|
|Boyson, Rt Hon Sir Rhodes||Currie, Mrs Edwina (S D'by'ire)|
|Brandreth, Gyles||Curry, David (Skipton & Ripon)|
|Brazier, Julian||Davies, Quentin (Stamford)|
|Bright Sir Graham||Day, Stephen|
|Brooke, Rt Hon Peter||Deva, Nirj Joseph|
|Delvin, Tim||Jones, Gwilym (Cardiff N)|
|Dicks, Terry||Jones, Robert B (W Hertfdshr)|
|Dorrell, Rt Hon Stephen||Kellett-Bowman, Dame Elaine|
|Douglas-Hamilton, Lord James||Key, Robert|
|Dover, Den||King, Rt Hon Tom|
|Duncan, Alan||Knapman, Roger|
|Duncan Smith, Iain||Knight, Mrs Angela (Erewash)|
|Dunn, Bob||Knight, Greg (Derby N)|
|Dykes, Hugh||Knox, Sir David|
|Eggar, Rt Hon Tim||Kynoch, George (Kincardine)|
|Elletson, Harold||Lait, Mrs Jacqui|
|Evans, David (Welwyn Hatfield)||Lamont, Rt Hon Norman|
|Evans, Jonathan (Brecon)||Lang, Rt Hon Ian|
|Evans, Nigel (Ribble Valley)||Lawrence, Sir Ivan|
|Evans, Roger (Monmouth)||Legg, Barry|
|Evennett, David||Leigh, Edward|
|Faber, David||Lennox-Boyd, Sir Mark|
|Fabricant, Michael||Lester, Jim (Broxtowe)|
|Field, Barry (Isle of Wight)||Lidington, David|
|Fishburn, Dudley||Lightbown, David|
|Forman, Nigel||Lloyd, Rt Hon Sir Peter (Fareham)|
|Forsyth, Rt Hon Michael (Stirling)||Lord, Michael|
|Forth, Eric||Luff, Peter|
|Fowler, Rt Hon Sir Norman||Lyell, Rt Hon Sir Nicholas|
|Fox, Dr Liam (Woodspring)||MacGregor, Rt Hon John|
|Fox, Sir Marcus (Shipley)||MacKay, Andrew|
|Freeman, Rt Hon Roger||Maclean, David|
|French, Douglas||McLoughlin, Patrick|
|Gale, Roger||McNair-Wilson, Sir Patrick|
|Gallie, Phil||Madel, Sir David|
|Gardiner, Sir George||Maitland, Lady Olga|
|Garek-Jones, Rt Hon Tristan||Major, Rt Hon John|
|Garnier, Edward||Malone, Gerald|
|Gill, Christopher||Mans, Keith|
|Gillan, Cheryl||Marland, Paul|
|Goodlad, Rt Hon Alastair||Marlow, Tony|
|Goodson-Wickes, Dr Charles||Marshall, John (Hendon S)|
|Gorman, Mrs Teresa||Marshall, Sir Michael (Arundel)|
|Gorst, Sir John||Martin, David (Portsmouth S)|
|Grant, Sir A (SW Cambs)||Mates, Michael|
|Greenway, Harry (Ealing N)||Mawhinney, Rt Hon Dr Brian|
|Griffiths, Peter (Portsmouth, N)||Mayhew, Rt Hon Sir Patrick|
|Grylls, Sir Michael||Mellor, Rt Hon David|
|Gummer, Rt Hon John Selwyn||Merchant, Piers|
|Hague, William||Mitchell, Andrew (Gedling)|
|Hamilton, Rt Hon Sir Archibald||Mitchell, Sir David (NW Hants)|
|Hamilton, Neil (Tatton)||Moate, Sir Roger|
|Hampson, Dr Keith||Monro, Sir Hector|
|Hanley, Rt Hon Jeremy||Montgomery, Sir Fergus|
|Hannam, Sir John||Nelson, Anthony|
|Hargreaves, Andrew||Neubert, Sir Michael|
|Harris, David||Newton, Rt Hon Tony|
|Haselhurst, Alan||Nicholls, Patrick|
|Hawkins, Nick||Nicholson, David (Taunton)|
|Hawksley, Warren||Nicholson, Emma (Devon West)|
|Hayes, Jerry||Norris, Steve|
|Heald, Oliver||Onslow, Rt Hon Sir Cranley|
|Heath, Rt Hon Sir Edward||Oppenheim, Phillip|
|Heathcoat-Amory, David||Page, Richard|
|Hendry, Charles||Paice, James|
|Hicks, Robert||Patten, Rt Hon John|
|Higgins, Rt Hon Sir Terence||Pattie, Rt Hon Sir Geoffrey|
|Hill, James (Southampton Test)||Pawsey, James|
|Hogg, Rt Hon Douglas (G'tham)||Peacock, Mrs Elizabeth|
|Horam, John||Pickles, Eric|
|Hordern, Rt Hon Sir Peter||Porter, Barry (Wirral S)|
|Howard, Rt Hon Michael||Porter, David (Waveney)|
|Howell, Rt Hon David (G'dford)||Portillo, Rt Hon Michael|
|Hughes, Robert G (Harrow W)||Powell, William (Corby)|
|Hunt, Rt Hon David (Wirral W)||Redwood, Rt Hon John|
|Hunter, Andrew||Renton, Rt Hon Tim|
|Hurd, Rt Hon Douglas||Richards, Rod|
|Jack, Michael||Riddick, Graham|
|Jackson, Robert (Wantage)||Rifkind, Rt Hon Malcolm|
|Jenkin, Bernard||Robathan, Andrew|
|Jessel, Toby||Roberts, Rt Hon Sir Wyn|
|Robertson, Raymond (Ab'd'n S)||Thomason, Roy|
|Robinson, Mark (Somerton)||Thompson, Sir Donald (C'er V)|
|Roe, Mrs Marion (Broxbourne)||Thompson, Patrick (Norwich N)|
|Rumbold, Rt Hon Dame Angela||Thornton, Sir Malcolm|
|Ryder, Rt Hon Richard||Thurnham, Peter|
|Sackville, Tom||Townsend, Cyril D (Bexl'yh'th)|
|Sainsbury, Rt Hon Sir Timothy||Tracey, Richard|
|Scott, Rt Hon Sir Nicholas||Tredinnick, David|
|Shaw, David (Dover)||Trend, Michael|
|Shaw, Sir Giles (Pudsey)||Trotter, Neville|
|Shepherd, Rt Hon Gillian||Twinn, Dr Ian|
|Shepherd, Colin (Hereford)||Vaughan, Sir Gerard|
|Shepherd, Richard (Aldridge)||Viggers, Peter|
|Shersby, Michael||Waldegrave, Rt Hon William|
|Sims, Roger||Walden, George|
|Skeet, Sir Trevor||Walker, Bill (N Tayside)|
|Soames, Nicholas||Waller, Gary|
|Spencer, Sir Derek||Ward, John|
|Spicer, Sir James (W Dorset)||Wardle, Charles (Bexhill)|
|Spicer, Michael (S Worcs)||Waterson, Nigel|
|Spink, Dr Robert||Watts, John|
|Spring, Richard||Wells, Bowen|
|Sproat, Iain||Wheeler, Rt Hon Sir John|
|Squire, Robin (Hornchurch)||Whitney, Ray|
|Stanley, Rt Hon Sir John||Whittingdale, John|
|Steen, Anthony||Widdecombe, Ann|
|Stephen, Michael||Wiggin, Sir Jerry|
|Stern, Michael||Wilkinson, John|
|Stewart, Allan||Willetts, David|
|Streeter, Gary||Winterton, Mrs Ann|
|Sumberg, David||Winterton, Nicholas|
|Sweeney, Walter||Wood, Timothy|
|Sykes, John||Yeo, Tim|
|Tapsell, Sir Peter||Young, Rt Hon Sir George|
|Taylor, Ian (Esher)|
|Taylor, John M (Solihull)||Tellers for the Ayes:|
|Taylor, Sir Teddy (Southend, E)||Mr. Sydney Chapman and|
|Temple-Morris, Peter||Mr. Timothy Kirkhope.|
|Abbott, Ms Diane||Callaghan, Jim|
|Adams, Mrs Irene||Campbell, Mrs Anne (C'bridge)|
|Ainger, Nick||Campbell, Menzies (Fife N E)|
|Ainsworth, Robert||Campbell, Ronnie (Blyth V)|
|Allen, Graham||Campbell-Savours, D N|
|Alton, David||Canavan, Denis|
|Anderson, Donald||Cann, Jamie|
|Anderson, Ms Janet||Carlile, Alexander (Montgomery)|
|Armstrong, Hilary||Carttiss, Michael|
|Ashdown, Rt Hon Paddy||Chidgey, David|
|Austin-Walker, John||Chisholm, Malcolm|
|Banks, Tony||Church, Judith|
|Barnes, Harry||Clapham, Michael|
|Barron, Kevin||Clark, Dr David (South Shields)|
|Battle, John||Clarke, Eric (Midlothian)|
|Bayley, Hugh||Clarke, Tom (Monklands E)|
|Beckett, Rt Hon Margaret||Clelland, David|
|Beggs, Roy||Clwyd, Mrs Ann|
|Beith, Rt Hon A J||Coffey, Ann|
|Bell, Stuart||Cohen, Harry|
|Benn, Rt Hon Tony||Connarty, Michael|
|Bennett, Andrew F||Cook, Robin (Livingston)|
|Bermingham, Gerald||Corbett, Robin|
|Berry, Roger||Corbyn, Jeremy|
|Betts, Clive||Corston, Jean|
|Blunkett, David||Cousins, Jim|
|Boateng, Paul||Cunningham, Jim (Covy, S E)|
|Boyes, Roland||Cunningham, Rt Hon Dr John|
|Bradley, Keith||Dalyell, Tam|
|Bray, Dr Jeremy||Darling, Alistair|
|Brown, Gordon (Dunfermline E)||Davidson, Ian|
|Brown, Nicholas (N'c'tle upon T E)||Davies, Bryan (Oldham C'tral)|
|Bruce, Malcolm (Gordon)||Davies, Rt Hon Denzil (Llanelli)|
|Burden, Richard||Davies, Ron (Caerphilly)|
|Byers, Stephen||Denham, John|
|Caborn, Richard||Dixon, Don|
|Dobson, Frank||Lloyd, Tony (Stretford)|
|Donohoe, Brian H||Llwyd, Elfyn|
|Dowd, Jim||Loyden, Eddie|
|Dunwoody, Mrs Gwyneth||Lynne, Ms Liz|
|Eagle, Ms Angela||McAllion, John|
|Eastham, Ken||McCartney, Ian|
|Enright, Derek||McCrea, The Reverend William|
|Etherington, Bill||Macdonald, Calum|
|Evans, John (St Helens N)||McFall, John|
|Fatchett, Derek||McKelvey, William|
|Field, Frank (Birkenhead)||Mackinlay, Andrew|
|Flynn, Paul||MacShane, Denis|
|Forsythe, Clifford (S Antrim)||Madden, Max|
|Foster, Rt Hon Derek||Maddock, Diana|
|Foster, Don (Bath)||Mahon, Alice|
|Fraser, John||Mandelson, Peter|
|Fyfe, Maria||Marek, Dr John|
|Galloway, George||Marshall, David (Shettleston)|
|Gapes, Mike||Martin, Michael J (Springburn)|
|George, Bruce||Martlew, Eric|
|Gerrard, Neil||Maxton, John|
|Gilbert, Rt Hon Dr John||Meacher, Michael|
|Godman, Dr Norman A||Meale, Alan|
|Godsiff, Roger||Michael, Alun|
|Golding, Mrs Llin||Michie, Bill (Sheffield Heeley)|
|Gordon, Mildred||Michie, Mrs Ray (Argyll & Bute)|
|Graham, Thomas||Milburn, Alan|
|Grant Bernie (Tottenham)||Miller, Andrew|
|Griffiths, Nigel (Edinburgh S)||Mitchell, Austin (Gt Grimsby)|
|Griffiths, Win (Bridgend)||Moonie, Dr Lewis|
|Grocott, Bruce||Morgan, Rhodri|
|Gunnell, John||Morley, Elliot|
|Hall, Mike||Morris, Rt Hon Alfred (Wy'nshawe)|
|Hanson, David||Morris, Estelle (B'ham Yardley)|
|Harman, Ms Harriet||Morris, Rt Hon John (Aberavon)|
|Harvey, Nick||Mowlam, Marjorie|
|Hattersley, Rt Hon Roy||Mullin, Chris|
|Henderson, Doug||Oakes, Rt Hon Gordon|
|Heppell, John||O'Brien, Mike (N W'kshire)|
|Hill, Keith (Streatham)||O'Brien, William (Normanton)|
|Hinchliffe, David||O'Hara, Edward|
|Hodge, Margaret||Olner, Bill|
|Hoey, Kate||Orme, Rt Hon Stanley|
|Hogg, Norman (Cumbernauld)||Parry, Robert|
|Home Robertson, John||Patchett, Terry|
|Hood, Jimmy||Pearson, Ian|
|Hoon, Geoffrey||Pickthall, Colin|
|Howarth, George (Knowsley North)||Pike, Peter L|
|Howells, Dr. Kim (Pontypridd)||Pope, Greg|
|Hoyle, Doug||Powell, Ray (Ogmore)|
|Hughes, Kevin (Doncaster N)||Prentice, Bridget (Lev'm E)|
|Hughes, Robert (Aberdeen N)||Prentice, Gordon (Pendle)|
|Hughes, Simon (Southwark)||Prescott, Rt Hon John|
|Hutton, John||Primarolo, Dawn|
|Illsley, Eric||Purchase, Ken|
|Jackson, Glenda (H'stead)||Quin, Ms Joyce|
|Jackson, Helen (Shef'ld, H)||Radice, Giles|
|Jamieson, David||Randall, Stuart|
|Janner, Greville||Raynsford, Nick|
|Jones, Barry (Alyn and D'side)||Reid, Dr John|
|Jones, Ieuan Wyn (Ynys Mon)||Rendel, David|
|Jones, Jon Owen (Cardiff C)||Robertson, George (Hamilton)|
|Jones, Lynne (B'ham S O)||Robinson, Geoffrey (Co'try NW)|
|Jones, Martyn (Clwyd, SW)||Roche, Mrs Barbara|
|Jones, Nigel (Cheltenham)||Rogers, Allan|
|Jowell, Tessa||Rooker, Jeff|
|Keen, Alan||Rooney, Terry|
|Kennedy, Charles (Ross,C&S)||Ross, Ernie (Dundee W)|
|Kennedy, Jane (Lpool Brdgn)||Rowlands, Ted|
|Knabra, Piara S||Ruddock, Joan|
|Kilfoyle, Peter||Sedgemore, Brian|
|Kirkwood, Archy||Sheerman, Barry|
|Lestor, Joan (Eccles)||Sheldon, Rt Hon Robert|
|Lewis, Terry||Shore, Rt Hon Peter|
|Liddell, Mrs Helen||Short, Clare|
|Livingstone, Ken||Simpson, Alan|
|Skinner, Dennis||Tipping, Paddy|
|Smith, Andrew (Oxford E)||Tyler, Paul|
|Smith, Chris (Isl'ton S & F'sbury)||Vaz, Keith|
|Smith, Llew (Blaenau Gwent)||Walker, Rt Hon Sir Harold|
|Snape, Peter||Wardell, Gareth (Gower)|
|Spearing, Nigel||Wareing, Robert N|
|Spellar, John||Watson, Mike|
|Squire, Rachel (Dunfermline W)||Wicks, Malcolm|
|Steel, Rt Hon Sir David||Williams, Rt Hon Alan (Sw'n W)|
|Steinberg, Gerry||Williams, Alan W (Carmarthen)|
|Stevenson, George||Wilson, Brian|
|Stott, Roger||Worthington, Tony|
|Strang, Dr. Gavin||Wright, Dr Tony|
|Straw, Jack||Young, David (Bolton SE)|
|Taylor, Mrs Ann (Dewsbury)||Tellers for the Noes:|
|Taylor, Matthew (Truro)||Mr. Joe Benton and|
|Timms, Stephen||Mr. Dennis Turner.|
That the Special Grant Report (No. 12) (House of Commons Paper No. 162), which was laid before this House on 30th January, be approved.
That the Limitation of Council Tax and Precepts (Relevant Notional Amounts) Report (England) 1995–96 (House of Commons Paper No. 163), which was laid before this House on 30th January, be approved.—[Mr. Gummer.]