I am pleased to see that there are more Members in the Chamber than normal for an Adjournment debate, but I am sure that the number will drop to its customary level within a matter of seconds.
I am delighted to have secured this Adjournment debate, but I am sad that it has to highlight the threat to local government services in Leicester as a consequence of the Government's revenue support settlement. I discussed Leicester in the local government finance debate two weeks ago, but received no satisfactory reassurances on that occasion, which is why I seek to revisit the subject today.
During that debate, Member after Member said that, despite Government assurances to the contrary, the proposed financial settlement would lead to increased pressure on service provision. I think that my colleagues from Leicester would agree that nowhere is the problem more acute. At a time when the city is preparing to take on major new responsibilities as a unitary authority, it is faced with the worst budget settlement in its history. Inevitably, that will have dire consequences for service provision and development.
Perhaps at this juncture the Minister will seek to answer two specific questions. First, why is Leicester the only 1997 unitary authority to be capped at its notional 1996–97 budget plus l per cent? Secondly, why does Leicester face the lowest budget settlement of any reorganising authority this year or last?
I appreciate that the Government can reasonably argue that, in a budget of over £260 million, some savings should be possible, but the scale of the proposed cuts takes them out of the league of efficiency savings. I should like the Minister's comments on those two questions, and on what he feels would be reasonable efficiency savings in a budget of £260 million.
As I said on a previous occasion, Leicester is non-metropolitan district council that is permitted to overspend in the current year 40 per cent. above standard spending assessment. It gives me no pleasure to make the point again, as I realise that the Minister may use it to attack the city's position, but that is the reality, and to argue that it is wrong and that it is the root of the problem will do nothing to resolve the difficulties that the city will face in the next financial year.
As a unitary authority, Leicester will have a spending limit of some 2 to 2.5 per cent. above standard spending assessment. Unless the Government are prepared to make late changes, that will entail cuts of about £70 million to existing budgets. I am sure that the House will realise that no service can be protected from such a savage reduction in budget.
The city council is already having to look closely at many sensitive areas. There is a proposal to cut £1.7 million from the schools budget, some £500,000 from elderly people's homes, and £1.3 million from employment training. The leisure services in Leicester will be decimated, with the possible closure of St. Margaret's baths. Housing renewal strategy that assists owner-occupiers in the inner city will be hard hit, neighbourhood centres throughout the city may face closure, and all voluntary organizations—that play a vital part in confronting many social problems—will have their funding affected.
Some organisations, such as the Federation of Moslem Organisations, will cease to receive funding altogether. That is a particularly unhappy decision in a multi-ethnic city such as Leicester.
Perversely, while services are being cut, the capping limit will lead to an £80 fall in band D council tax. Leicester could spend an extra £5.8 million next year and still deliver a reduction in council tax. It will come as no surprise that there is real disquiet among council employees about the impending threat of redundancy. According to the latest calculations, some 300 to 400 staff will be affected, and up to 275 people will face compulsory redundancy. The threat of redundancy is having an adverse affect on staff morale, and inevitably that will persist long after the vesting day of the new unitary authority in April 1997.
The cuts and their consequences have provoked anger and alarm in the community. There have been many public protests and demonstrations at council meetings, calls for industrial action from trade unions, coalitions seeking a budget above cap, and a huge quantity of correspondence seeking reassurance that clearly cannot be given about specific projects.
I hope that, even at this late stage, we can convince the Minister and the Government that it would be a disaster for the new unitary authority to start life with large service cuts and redundancies as a consequence of the unexpectedly harsh revenue settlement for Leicester. The city council recognises the need to rationalise and review services following unitary status, but this is not the time to do it, given the immense pressure imposed by the level of cuts. It is not the best or the most cost-effective way to proceed. The city requires time and a slightly more generous settlement.
The Minister will be aware, because there has been correspondence between his Department and the city council, that there is an option open to the council—if the Government are prepared to agree—and that is for the council to maintain council tax at its present level, and to set a budget above the cap. That would produce an extra £5.8 million, which would offer some protection to key services.
I hope that the Minister will be able to indicate some sympathy towards this proposal. If it was to be adopted and given sanction by the Government, it would afford some further protection to key services, which is undoubtedly necessary at the present time.