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Orders of the Day — Local Government Finance

Part of the debate – in the House of Commons at 8:44 pm on 1st February 1995.

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Photo of Henry Bellingham Henry Bellingham , North West Norfolk 8:44 pm, 1st February 1995

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.