Orders of the Day — Public Services (East Midlands)

– in the House of Commons at 10:02 pm on 29th January 1997.

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Motion made, and Question proposed, That this House do now adjourn.—[Mr. Carrington.]

Photo of Graham Allen Graham Allen Shadow Minister (Environment, Food and Rural Affairs) 10:03 pm, 29th January 1997

The strongest argument for an east midlands regional assembly is the way in which the outgoing Tory Government have mistreated and neglected our region, its cities and its counties of Nottinghamshire, Leicestershire, Lincolnshire, Derbyshire and Northamptonshire. The only good thing about such a catastrophic failure of central Government is that it speeds the creation of more democratic and accountable forms of government which are familiar in most western democracies, including an east midlands regional assembly and more effective and independent local government.

Already the Yorkshire and Humberside region has set up an assembly, and all the local councils in the region have signed up and paid their subscriptions. Well ahead of legislation, one region is ready to go, and there may be others. Local councils in the east midlands should take heed and get their collective act together in the 13 weeks that remain before a change of Government.

I am delighted to see my hon. Friends the Members for Sherwood (Mr. Tipping), for North-East Derbyshire (Mr. Barnes) and for Bolsover (Mr. Skinner) in the Chamber. Several of my other colleagues may join the debate later. Shortly before Christmas, east midlands Members of Parliament from all parties met a delegation comprising council leaders of all political persuasions and regional Confederation of British Industry and chamber of commerce representatives. They were lobbying, on behalf of the east midlands, for what they called their "missing millions". Their case is incontrovertible: by any measure, the east midlands is not getting its slice of the cake.

We get less than our fair share of Government grants, of lottery schemes, hospital expenditure, and transport, housing, the arts and European funding. It makes a grand total of £700 million—which is a lot of missing money. The people of the east midlands are council tax payers and income tax payers, and we are entitled to our fair share of the pie—we do not want more than that—but we are clearly not getting it at the moment. That is partly because we do not speak with one voice on behalf of our region in the way that the north-east or the south-west do—and good luck to them. Our own regional assembly would be a step in the right direction.

I have called this Adjournment debate on behalf of the east midlands region, which has seen its public services squeezed and real opportunities for regional development lost as a result of Government underfunding. There are three key problems. First, local government in the east midlands has not received its fair share of the pie; secondly, local health services have suffered from disproportionate underfunding by the Government—a point that my hon. Friend the Member for Nottingham, East (Mr. Heppell) has made many times—and, thirdly, the region has received an under-allocation of lottery grants.

The past 20 years have seen a major decline in many of the east midlands' traditional industries. The Government decimated the coal industry—particularly in my county of Nottinghamshire—and the steel industry, affecting Corby most obviously. Rail manufacturing was affected, thereby undermining the industrial base of Derby and Derbyshire. The textile and footwear industries through Northamptonshire to Mansfield and the engineering industry throughout the whole region have declined. What economic growth we gave seen has occurred largely in the service sector.

Against that background, we can see how important it is for local councils to provide quality services in order to combat deprivation and rebuild our economic base. However, failure to be given our fair share of Government grants, the Government's nationalisation of the business rate and restrictions on the spending of capital receipts have had serious consequences for the properly democratically elected local councils in our region.

Since 1991, the east midlands has fallen 5 per cent. behind the average standard spending assessments of the shire counties. That amounts to a Government fine of £94.4 million on taxpayers in our region. Will the Minister explain why that has occurred? In 1996–97, the region will receive £126 per head less than the English average standard spending assessment. Given Conservative capping policies, that money cannot be made good elsewhere. Will the Minister tell the people of Nottinghamshire, Leicestershire, Derbyshire, Northamptonshire and Lincolnshire why that is so?

Basic credit approvals available to east midlands councils have declined in the past four years in terms of moneys raised and percentages available. Hinckley, Bosworth, Daventry, and Wellingborough have received no basic credit approvals since 1992–93. That is also an acute problem in Northamptonshire and in many other parts of our region. Will the Minister tell those hard-pressed councils and their taxpayers why that is so?

A comparison of regional funding generated by the regional development offices shows that, while the East Midlands Development Company generates almost as much funding as other major RDOs, it receives considerably less grant from central Government. That point has been made by my hon. Friend the Member for Mansfield (Mr. Meale), who is in the Chamber tonight. The Minister may smirk: only those boroughs that benefit from this perverse system, such as Westminster and Wandsworth—which is the Minister's former London borough—could smirk. If my city of Nottingham received the same grant as Westminster, not only would it not send out a demand for council tax, but it could send every council tax payer a cheque for £719. My right hon. Friend the Member for Chesterfield (Mr. Benn) told me that council tax payers in his constituency would receive a cheque for more than £800. The same applies to Amber Valley, Erewash, Luton, South and Brigg and Cleethorpes, which are Conservative marginals.

I suspect that electors in those area, who subsidise the Government's policy and whose Members of Parliament voted for it, will watch carefully the events in the Chamber on Monday when we discuss the local government settlement for England and Wales. They will want to know which Lobby their Members of Parliament go through, and whether they vote to continue the imposition of the fine on people who live in those constituencies. If it is not a fair and equal deal for all people, it is not the way in which a British Government should behave.

Another area of discontent is the current system of national lottery grant allocation, which has worked to the detriment of the east midlands. It receives a derisory 2·8 per cent. of the total. Despite the welcome recent announcement about the Nottingham ice stadium, the region remains severely underfunded. Why should we have to beg for fair shares? Funding should be ours as of right. What a travesty it is that for every £100 of lottery tickets bought by people in the Tory marginals of Derby, North, Lincoln, Milton Keynes, South-West or Corby, only £25 comes back to them in lottery projects, whereas in Wandsworth, Westminster and other parts of London, £75 of every £100-worth of lottery ticket money goes back to the region.

Photo of Alan Meale Alan Meale , Mansfield

Is my hon. Friend aware that no one knows how some of the people on the lottery boards got there? Some of them are place people, who are full-time local authority officials. Hardly any of them have been elected. They make some very wild decisions. If politicians made such decisions, they would be derided by the press on the front pages of local newspapers.

Photo of Graham Allen Graham Allen Shadow Minister (Environment, Food and Rural Affairs)

That is probably one of the reasons why, of more than 1,000 projects agreed by the Millennium Commission, only five have come to the east midlands. There is very little local and regional input.

Photo of Paddy Tipping Paddy Tipping , Sherwood

Will my hon. Friend confirm that the east midlands receives only 0·68 per cent of funds for millennium projects? There are adventurous projects, such as the landmark projects that will do up miners' welfares, the project to recreate the Sherwood forest and the project to get the Grantham canal back into operation. There are good, prestigious projects that will bring new investment and new life to the east midlands. We should ask for an undertaking that those projects will take place to bring a new future in the 21st century.

Photo of Graham Allen Graham Allen Shadow Minister (Environment, Food and Rural Affairs)

I agree with my hon. Friend. We must reorient the way in which some of these funds are spent so that people throughout the land feel that they are getting a fair crack of the whip. Local people have a greater affinity with some of the important but smaller projects. People do not like the grandiose projects that take place more than a train journey away from where they live. Regional priorities should be better reflected in funding decisions. Lottery boards should have a regional infrastructure and tougher ministerial guidance.

The east midlands is also the poor relation on health. Not one district health authority in our region is in the top third of the funding table. Leicestershire and Nottingham health authorities languish at the bottom of the table, in 87th and 86th place respectively.

Photo of John Heppell John Heppell , Nottingham East

Is my hon. Friend aware of the stage that the crisis in the health service has now reached, at least in the Nottingham area? For nearly six months of the year, many of my constituents—along with those of my hon. Friend and other hon. Members who are present—have only an emergency service available. All routine operations are cancelled.

Photo of Graham Allen Graham Allen Shadow Minister (Environment, Food and Rural Affairs)

Thanks to the campaigning of, in particular, my hon. Friend the Member for Nottingham, East, but also that of other hon. Members in the Nottingham area, even the Secretary of State had to admit in February that health services in Nottingham were underfunded by about £9 million, and were receiving considerably less than the Government's own figures demanded to meet the needs of Nottingham people. As my hon. Friend rightly pointed out, that has led to the postponement of so-called routine, non-emergency operations in our community medical centre in Nottingham for the remainder of the financial year. The Government must propose a way of ending the shortfall.

Again, we are not asking for money that people say we should not receive; we are asking for money that, according to the Government's own figures, local hospitals should receive. I am sure that my hon. Friends who are present could repeat that story throughout the region. Chesterfield and North Derbyshire Royal hospital has suffered a cut of £1·1 million from a budget of £59 million; two and a half wards and two operating theatres have been closed, and capital schemes have been deferred. Behind those statistics are real cases: real people need treatment, and are not receiving it.

It is possible to give similar examples in all policy areas—transport, European funds and education, which I know concerns certain hon. Members.

Photo of Mr Harry Barnes Mr Harry Barnes , North East Derbyshire

In 1989, Derbyshire had a proud record of having generally smaller class sizes than any other shire county. In primary education, it was in second position, just behind Nottinghamshire. Now, it has larger class sizes than any other shire county. The same group of politicians are attempting to operate the same policies, but there is an external factor: the way in which the Government make the standard spending assessment.

Photo of Graham Allen Graham Allen Shadow Minister (Environment, Food and Rural Affairs)

I entirely agree. As I have said, the story is repeated in every area of policy. All the Opposition Members who are present have suffered from the nonsense of Government intervention in our region in regard to European funds—the RECHAR money, and the urban initiatives. No Government involvement is actually necessary, but they are blocking real money, particularly money for the former coal mining areas that were decimated by the Government's policies in the 1980s. The regional allocation of challenge funds with no clear rules for their sub-regional allocation leads to serious anomalies between places such as Nottingham and Sheffield, purely because they are covered by different Government regional offices.

This can only exacerbate the divisions and deprivations that exist in many areas. The sooner the faceless bureaucracy of Government regional offices that has been imposed on the regions by the Conservatives is brought under democratic control, the better. In a modern democracy, it is no longer acceptable for my region—and all the others—to be treated by London like some imperial outpost. It is government by a district officer appointed by Whitehall. It only needs a donkey and a fly swat to complete the picture of the Raj ruling in our region.

That is not acceptable in this day and age. Funding regimes should ensure that bids are not ruled out by virtue of regional allocation formulae based on criteria that are not open to public scrutiny and debate, or by a relatively low number of high-profile bids receiving a disproportionate amount of money, with the result that high-quality smaller bids are rejected. I could deal with many other aspects, such as city challenge and the regeneration budget, but I must leave the Minister some time in which to reply. I have allowed a number of my hon. Friends to intervene.

I have been careful to be modest: I have asked only for a fair allocation of existing resources, rather than suggesting that there should be a bigger pot in any one area. It is possible to present a case for the east midlands to receive more than its fair share, as the typical east midlands income is 11 per cent. below the average, and the average wage in every one of its counties is below the national average, but my argument, like that of east midlands local authority leaders, the regional Confederation of British Industry, the chamber of commerce in the east midlands and trade unions in the east midlands, has been not for more expenditure globally or throughout the United Kingdom, but just that we should receive our fair share. That is modest and I hope that the Government will respond to it.

Labour Members hope that, even at this late stage, the Government will admit that there is a problem, that it has devastating consequences for people in our region, and that it must be put right now or after the general election.

Photo of Paul Beresford Paul Beresford Parliamentary Under-Secretary (Department of Environment) 10:19 pm, 29th January 1997

We talk about capping and this debate has capped an intriguing month. This month, we have been told by the right hon. Member for Dunfermline, East (Mr. Brown) that global expenditure will be kept down and that personal taxation will remain fixed—if we ever had the misfortune of a Labour Government—and the Minister for Local Government, Housing and Urban Regeneration and I met between 80 and 100 local authorities. They sang the same tune. They were almost all Labour. A few were Liberal, but they seemed to be under the same banner.

We also met local authority associations, which came up with the same tune as we have been hearing this evening. They all wanted more money in the form of the standard spending assessment—more from central taxation. They wanted capping to be lifted so that, through the council tax, they could soak local people for more money. Most of them wanted the business rate to be put back in their hands so that they could set it and take it. They also wanted compulsory competitive tendering, which is a means of obtaining value for money, to be removed. All that is a claim for more taxes, more public expenditure and more money.

The other point that is worth thinking about was made by the hon. Member for Nottingham, North (Mr. Allen): the old yarn over Westminster. That caused concern because he obviously does not understand the SSA system. He does not understand that it has been carefully worked out and that it has been recognised by independent experts as the best way for such a distribution. Of course the Labour Front-Bench environment team does not recognise experts.

There is a failure to recognise Westminster's needs. May I touch on some that are not found in the same proportion in the east midlands? Westminster has a higher proportion of people in shared or non-permanent accommodation than Hackney, Lambeth, Southwark or Tower Hamlets. Westminster has a higher proportion of people living in overcrowded accommodation than Islington, Lambeth, Southwark or anywhere in the east midlands. Westminster has a higher proportion of people born outside the European Community, the old Commonwealth or the United States of America than Hackney, Lambeth, Southwark or Tower Hamlets.

It is clear that the Government's correct intention is that the overall and fundamental aim is to reduce public sector borrowing. Despite that, they have managed to increase next year's expenditure provision to local authorities overall by 2·5 per cent.

This year, east midlands authorities will receive some £3 billion of taxpayers' money through the SSA. In addition, we have recognised the pressure on the national health service. Year in year out, extra money has gone in. I understand that North Derbyshire health authority recently issued a press statement saying that it received over £2·9 million more than it expected, and Nottingham health authority also received a larger budget than it expected.

Photo of Paul Beresford Paul Beresford Parliamentary Under-Secretary (Department of Environment)

I am afraid not. I have seven or eight minutes left. There is a lot to say, as much is happening in the region.

Every year, the Government regularly discuss possible changes to the method of the standard spending assessment with local authority associations and general agreement is reached All the information is up to date. It is all available to the authorities, which take the opportunity during the consultation to put forward points. Although the Government make their commitment to local services through the SSA system, they are prepared to change it where good cause is shown. We expect local authorities to spend locally raised and Government resources wisely and well.

It was intriguing last week to see some local authority representatives trooping in and telling appalling mismanagement stories. Northampton is but one example. It expects the Government to provide funding of £1 million a year for loss of rent on a council-owned building. Some years ago, when the building had a tenant, the council was advised by its treasurer to sell it, but it refused. It is suffering from its own inefficiency, and expects the Government to bale it out.

Local authorities present shopping lists, and they are only that. They must recognise that this is 1997, not 1947, and that we need to think forward about different ways of operating. Public services today and tomorrow will depend more and more on private sector delivery. At the very least, local authorities should be looking towards using competitive tendering and the private finance initiative. The east midlands has received enormous and comprehensive support.

Photo of Paul Beresford Paul Beresford Parliamentary Under-Secretary (Department of Environment)

No. I have just a few minutes left and I have plenty to say.

Under capital challenge, 20 authorities in the east midlands have been successful and between them they will receive £42 million over the next three years. I give credit to the Under-Secretary of State for Social Security, my hon. Friend the Member for Gedling (Mr. Mitchell). As sponsoring Minister, he helped to support and promote the area's cause.

Photo of Paddy Tipping Paddy Tipping , Sherwood

On a point of order. Mr. Deputy Speaker.

Photo of Mr Geoffrey Lofthouse Mr Geoffrey Lofthouse , Pontefract and Castleford

I hope that in such a short debate it is a genuine point of order.

Photo of Paddy Tipping Paddy Tipping , Sherwood

The Minister mentioned the Under-Secretary of State for Social Security. Did the Minister give his hon. Friend notice that he would mention him? I draw to your attention the fact that there is not one Tory Member from the east midlands in the—

Photo of Mr Geoffrey Lofthouse Mr Geoffrey Lofthouse , Pontefract and Castleford

Order As I feared, that was not a point of order.

Photo of Paul Beresford Paul Beresford Parliamentary Under-Secretary (Department of Environment)

I did give my hon. Friend notice.

There is no doubt about the benefits of competition and partnership. They are the way forward, because they form the right approach and have helped the east midlands. City challenge has given each of the cities of Nottingham, Derby and Leicester Government support of £37·5 million to revive parts of their urban areas. That Government contribution is expected to lever in £413 million from the private sector and £150 million from elsewhere.

Under the single regeneration budget, 40 partnerships in all five counties in the east midlands will receive £142 million between them, and that will attract £320 million from the private sector. There is no doubt that communities in the east midlands have come out of the competitive process well. National lottery funds were mentioned. The hon. Member for Nottingham, North failed to recognise that those are not distributed geographically. They have to be applied for, and applications are judged on their merits rather than on their geographical origins.

Next year, the east midlands will receive £70 million under transport policies and programmes. That will allow considerable road improvements, package bids and road safety measures. Many transport projects will receive support from capital challenge and the region will get £94 million a year from the housing investment programme over the next two years.

The Government have an impressive record in helping to make the east midlands an attractive place in which to live and work. I know the area, because I go there frequently, and I know that it is impressively successful. Government programmes have helped to increase the competitiveness of the region, and overall growth to the year 2000 is expected to exceed the national average. The Government's prompt action in 1993 included a £200 million national package of support following coalfield closures, and the east midlands received more than £35 million of that. In addition, four coal enterprise zones were designated and are proving successful. We estimate that they will create about 6,000 new jobs.

Europe and European structural funds were mentioned. The 1994–99 programme will provide another £40 million and those grants will attract another £100 million. It is worth repeating some of the figures. SSA this year in the east midlands will amount to £3·061 billion. The 1997–98 estimate was £3.11 billion. Capital challenge for 20 authorities was £42 million and city challenge was £112.5 million. Challenge funding was £142 million. Those funds will lever in £733 million from the private sector. Over two years, TPP will bring in £70 million and HIP £94 million to the east midlands. European funding will provide the area with £240 million, whereas the response to the coal closures will bring it £35 million.

In the few moments I have left, I should remind Labour Members that they have failed to learn one basic fact: one should not judge the quality of a service by the amount of money—other people's money—spent on it. There is a tremendous amount of truth in a statement that is becoming an old saying: new Labour, new taxes.

Question put and agreed to.

Adjourned accordingly at twenty-nine minutes past Ten o'clock.