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That the draft Precept Limitation (Prescribed Maximum) (Inner London Education Authority) Order 1989, which was laid before this House on 27th January, be approved.
Today's debate concerns the financing of ILEA in 1989-90. [Interruption.]
Mr. Simon Hughes (Southwark and Bermondsey) : On a point of order, Mr. Speaker. This is an important debate for London. I do not mean any disrespect to the Minister, but she certainly cannot be heard. I would like to ask you, Mr. Speaker, to ask for quiet before she starts.
Mrs. Rumbold : Today's debate concerns the financing of the Inner London education authority in 1989-90. This order limits the precept which may be made by ILEA for 1989-90 to 78.42p in the pound, which on the latest information would raise £960 million.
The precept maximum set out in the draft order has been arrived at after careful consideration. It is the product of a process which has taken six months. During that process, we have taken full account of the representations put to us by ILEA, both in writing and in person. In a moment I shall outline briefly the process which has led to this draft order. Before I do so, it may be helpful to the House if I say a few words about the wider context.
In April 1990, ILEA's functions will transfer to the inner London boroughs ; 1989-90 will therefore be the year in which a new structure for London's education service takes shape. The Government have been determined to play their part to ensure a smooth transfer of responsibilities in the interests of pupils, students, parents and teachers. To this end, we are providing a substantial sum by way of specific grant to the boroughs for preparation work in 1989-90. We have increased the £10 million originally announced to £25 million. My right hon. Friend the Secretary of State for the Environment has made a separate proposal in relation to the distribution of the capital money order next year in order to assist the inner London boroughs with their education department accommodation costs. As I shall explain, my right hon. Friend has had regard to ILEA's representations about the particular circumstances of 1989-90 in coming to his decisions on the financing of the authority in that year.
Over the past months, I have been struck by the enthusiasm with which the inner London boroughs have tackled the job of preparing for their education responsibilities. All have now made senior appointments to their education departments and carried out programmes of local consultation. Almost all have now published detailed draft development plans. All appear to be on target for publication of the final version of those plans at the end of February. So the foundations have been laid. Of course there is still much to be done. No one is guilty, I hope, of complacency. Some of the boroughs are
Column 1082making faster progress than others, and I believe that that pace of progress will have to accelerate over the coming months. However, so far the work done is encouraging.
The Government believe that the transfer of education to the boroughs is right both for the quality of delivery and value for money in education in inner London. As an example, I shall draw some comparisons of ILEA's unit costs with those of other metropolitan authorities in 1988-89 to illustrate the authority's continued excessive spending. According to figures fom the Chartered Institute of Public Finance and Accountancy, the metropolitan authorities are spending on average £1,036 per primary pupil, excluding support service costs. The outer London boroughs are spending £1,141. ILEA is spending £1,510 on the same basis--32 per cent. more than the outer London boroughs and 46 per cent. more than the metropolitan districts. The metropolitan districts are spending £1,664 per secondary pupil, again excluding support service costs. The outer London boroughs are spending £1,787.
Mr. Jeremy Corbyn (Islington, North) : Before the Minister leaves this rather tedious list of statistics, will she add one to it? Will she add a statistic for the costs of building, running buildings and salaries and wages in inner London compared to those in outer London and the rest of the country? Will she give us a reasonable normal statistical base for her assertion, rather than this condemnation of the ILEA?
Mrs. Rumbold : I am sorry that the hon. Gentleman does not like the truth revealed by the figures. If he listens carefully to what I am saying he will note that the comparisons I am making are perfectly right and relevant to my argument. I do not think that I need accept any judgment from him about how I present my figures to the House.
Mr. Stuart Holland (Vauxhall) : Surely the Minister is aware that inner-city costs are always higher for any kind of service--that is the case on the continent, in the United States and in Britain. Does she also agree that, because of housing costs for teachers and the prevailing salaries, we are faced with a crisis in primary education in ILEA? In the Walnut Tree Walk school in my constituency, classes are being sent home on alternate days because, despite advertisements, no teachers have come forward to take the posts. The Minister is simply not addressing this crisis. Will she do something about it?
Mrs. Rumbold : On the hon. Gentleman's first point, I intend to quote figures that show that we are making comparisons with metropolitan authorities of similar character. All the development plans that we have seen from individual boroughs address the hon. Gentleman's concern about the recruitment and retention of teachers. I hope that those plans will make a difference to the recruitment of staff when the security and attraction of work in smaller authorities appeals to some teachers.
Mr. Simon Hughes rose
Mrs. Rumbold : I am sure that my hon. Friend is aware that the examination results from ILEA are, sadly, in no way related to the cost of running that authority. Those results are considerably worse than any other authority in the country.
Mr. Simon Hughes rose
The outer London boroughs are spending £1,141 ; ILEA is spending £1,510 on the same basis--32 per cent. more than the outer boroughs and 46 per cent. more than the metropolitan districts. [Interruption.] The metropolitan authorities are spending £1,664 per secondary pupil, again excluding the support service costs. The outer London boroughs are spending--
Mr. Corbyn : On a point of order, Mr. Deputy Speaker. It appears that the hon. Member for Leicestershire, North-West (Mr. Ashby) is getting extremely excited and shouting abusive remarks at my hon. Friend the Member for Hackney, South and Shoreditch (Mr. Sedgemore), who has been behaving himself impeccably. Will you kindly call to order those Members who do not represent inner London constituencies and who are merely being abusive about a matter that many of us take seriously?
Mr. Ashby rose --
Mr. Ashby : Further to that point of order, Mr. Deputy Speaker. I was challenged by Opposition Members and it was suggested that I know nothing about inner London education. I should point out that I was a member of ILEA for a number of years, as were a number of my hon. Friends. No one on the Opposition Benches has ever been a member of ILEA. [Interruption.]
Mrs. Rumbold : The outer London boroughs are spending £1,787 on their secondary pupil costs, ILEA spends £2,279, which is 28 per cent. more than the outer London boroughs and 37 per cent. more than the metropolitan districts. Some of them, such as Leeds and Birmingham, have the same features of urban deprivation and high concentrations of ethnic population as ILEA.
Mr. Simon Hughes : The Minister has not yet answered the two separate points made to demonstrate the invalidity of her figures. In London, the costs for the police, health and social services are substantially higher than in other areas, even though the police and the health services are run by Government Departments and the health authorities are appointed by the Government. We have the 10 most deprived authorities in Britain. There is no
Column 1084comparison, and the Minister should not waste the time and intelligence of the House going over an argument that has been proved time and again to be invalid.
Looking within those figures, the ILEA is spending twice as much per primary pupil on support staff as are other metropolitan authorities, and more than twice as much per secondary pupil. That is a staggering difference. Even transport costs are two and a half times as much. Almost two thirds of the budgets of metropolitan districts' secondary schools goes on teachers, compared with just over a half for ILEA. Other authorities apparently make their top priority having teaching staff in front of children. That does not seem to be the same case with ILEA.
Looking at other areas in the same set of statistics, ILEA spends three times as much on adult education per head of adult population as Leeds, four times as much as Birmingham and five times as much as Liverpool. However splendid this provision is, it need not be so expensive.
Mr. Nicholas Bennett (Pembroke) : As another former member of the ILEA--like my hon. Friends the Members for Leicestershire, North-West (Mr. Ashby) and for Dulwich (Mr. Bowden)--may I ask the Minister if she has seen the figures which were published in Hansard last year showing that ILEA came top on spending and 86th on examination results, yet in a parliamentary answer to the hon. Member for Southwark and Bermondsey (Mr. Hughes) it was made clear that Wigan, which has the same sort of problems as ILEA, came 27th in terms of spending and ninth in terms of exam results?
ILEA's spending per head of population on administration and inspection is 1.9 times that of the outer London boroughs, 2.4 times that of the metropolitan districts and 2.9 times that of the counties. So much for economies of scale.
Mr. Harry Greenway (Ealing, North) : Can the Minister give me any reason why I should vote for 32 per cent. more spending on education in inner London compared with my constituency, when my area has just the same problems as inner London, and in some cases has problems which are even more difficult?
Mrs. Rumbold : My hon. Friend makes the point well. There is no earthly reason why he should vote for additional expenditure when the problems in his constituency are similar to, if not the same as, those facing the inner London authorities.
I come to the events leading to the draft order. In July 1988, my right hon. Friend selected ILEA for precept limitation under the Rates Act 1984. He did so because of the authority's continued excessive spending. ILEA's budget for 1988-89 is £1,028 million. That is more than 60 per cent. above its assessed need to spend. It is £43 million more than the £985 million which the precept that my right hon. Friend set for it in that year was intended to raise. I acknowledge that ILEA has instituted a programme of some genuine savings in 1988-89, but that is only a start on what needs to be done.
At the same time as selecting ILEA for precept limitation, my right hon. Friend set an expenditure level
Column 1085for the authority in 1989-90 of £940 million. This was, in effect, a cash freeze on the £985 million level implied by the 1988-89 precept, once allowance of £45 million is made for spending on polytechnics and colleges transferring to the PCFC sector. That £985 million was £30 million more than the spending level he originally set for ILEA in 1988-89. My right hon. Friend believed that the £940 million for 1989-90 represented a fair and reasonable level, given all the circumstances, including the prospective need to provide for smooth transfer of education functions to the inner London boroughs, and ILEA's budgeted spending in 1988-89. He made it clear, however, that he would consider further representations from ILEA as the process continued.
Since October, ILEA has sought redetermination of the expenditure level. It requested an addition of up to £100 million. My right hon. Friend took careful account of all the material put to him by ILEA. He met representatives of the authority to hear what they had to say. The authority's estimate of its spending needs assumed that the benefits of the cost controls introduced in 1988-89 would continue, but it did not envisage that any further action would be taken in 1989-90.
My right hon. Friend's view is that there remains real scope for new savings. He did, however, decide to add £10 million to the original expenditure level, in the light of ILEA's representations, including its representations about the particular circumstances of the authority's last year of operation, to which I referred earlier. He announced the redetermined level of £950 million on 19 December. At the same time, my right hon. Friend proposed a precept maximum for ILEA in 1989-90 of 77.61p in the pound, which on the latest information available would enable it to raise £950 million. In January, the authority rejected the proposed precept maximum, and sought to raise an additional £56 million, £44 million less than the original increase it had sought, but nevertheless requiring a precept about 4.5p higher than the Secretary of State's proposal. The ILEA officers had drawn up a package of measures which would save £35 million in 1989-90, but the elected members had rejected that. The authority's revised estimate assumed only £20 million of new savings. The authority had also revised its estimate of its reserves position upwards to £20 million.
My right hon. Friend again considered carefully all the authority's arguments and again met representatives of the authority so that they could put those arguments to him in person. He remains convinced that the authority's estimates do not take account of the scope for greater efficiency and economy in the delivery of the service. He decided, however, to allow a small increase in the precept maximum, from 77.61p to 78.42p, in the light of ILEA's representations, including those relating to advice from the district auditor that ILEA should have regard to the meeting of liabilities under £15,000 when balancing its budget for 1989-90. The revised precept maximum would raise £960 million, £10 million more than the level set in December. The revised precept maximum is 3.38p, or 4 per cent., lower than this year's precept.
My right hon. Friend then laid before the House a draft order which would, if approved, enable him to prescribe a
Column 1086precept maximum of 78.42p. He did so because he is concerned to have the final outcome fixed by 15 February, the date set out in the Rates Act, to avoid the uncertainty associated with the use of interim procedures, and so that there is no cause for ILEA to delay implementing whatever measures are necessary to live within the precept income which the maximum would raise. He made it clear that he was prepared to withdraw the order if agreement on the precept could be reached. The authority has, however, rejected the revised figure.
Mr. Chris Smith (Islington, South and Finsbury) : The Minister seems to be describing savings that she believes might be possible in ILEA's budget in a way that is wholly unrelated to the needs of children in inner London. What guarantees can she offer that the sums that she and her right hon. Friend propose can meet the urgent needs in my constituency? For example, the roof of Hungerford infants school is in urgent need of repair, and the school cannot be brought back into operation until that is done. ILEA wants to carry out the work. Will it be able to do so with the money the Minister has mentioned?
Mrs. Rumbold : I have said nothing that would prevent ILEA from using its capital allocations to meet the expenses that the hon. Gentleman has outlined. It is a matter on which the Inner London education authority should make decisions and is not a matter on which a Minister standing at the Dispatch Box should arbitrate.
Mr. Patrick Thompson (Norwich, North) : I am interested in what is being said, because one hears about ILEA gaining extra money from the Government by making representations. Is it possible for other authorities to do the same, and if extra money is given to ILEA, do other authorities lose?
Mrs. Rumbold : No. My right hon. Friend has taken seriously the representations made to him by the Inner London education authority at two points. As a result of that careful consideration, he has given £20 million extra.
Mr. Derek Fatchett (Leeds, Central) : Will the Minister clarify this point? The Secretary of State has given no money to the Inner London education authority. The order will increase the amount that the Inner London education authority can raise in rates. It is time that the Minister stopped misleading the House, understood the brief and made ILEA's position clear.
Mrs. Rumbold : The hon. Gentleman clearly seeks to make a point. It is true that the limitation rates have been raised so that the Inner London education authority may raise £960 million. As a result of the moves my right hon. Friend has made, the precept maximum in the draft order will allow the authority to raise that sum. [Interruption.] I realise that it is difficult for Opposition Members to grasp these difficult figures. That is £20 million more than the original expenditure level.
The authority has said that that precept maximum will jeopardise the smooth transfer of education functions to the boroughs. I do not accept that. My right hon. Friend has responded positively to the authority's representations at each stage in the process. He has taken full account of the circumstances of the authority in its final year. We are satisfied that the precept maximum is reasonable and achievable, given responsible action by the authority.
Column 1087We have also given thought to the effect of the precept maximum on ratepayers in inner London. The maximum is 4 per cent. lower than this year's precept. It will ease London rate bills. The authority's estimate of its needs implied an increase on the current year's precept, despite the fact that it will make automatic savings from the transfer of the polytechnics.
To allow such an increase would put additional pressure on rates bills. I do not believe that it would be right to do so, given the existing high level of rates in London, which can, in part, be laid at the door of ILEA's past overspending. That is why this draft order has been laid before the House. I ask the House to approve it. 10.38 pm
Mr. Derek Fatchett (Leeds, Central) : The order is bad news for the children of London and for education in inner London. Yet the Minister's speech did not relate to the seriousness of the problems and the reduction in opportunities facing inner London children. All that we had from the Minister, in a lengthy speech, was a repeat of last year's arguments and last year's statistics. One of the sad points about the Minister's speech is that she has clearly learnt nothing from last year's debates about the Inner London education authority. Had she done so, she would have realised that expenditure in London on the police, social services and all other services will be more expensive than in the metropolitan boroughs and district councils. She had not learnt that and all that she did tonight was to repeat the statistics that we dealt with so effectively last year.
Mr. Fatchett : There are several who fit that description on the Conservative Benches. The simple point is that it is more expensive to run services in London. That comes through in the figures, but the Minister and some of her hon. Friends have failed to understand that point.
It may be useful for the Minister to take her history lesson back not just one year to the debates about the abolition of ILEA but about 80 years to the debate about the London school boards. Given the nature of the Minister's speech, it has probably been recycled a few times in those 80 years. Had she been participating in those debates, she would have said exactly the same--that the London school boards' education was more expensive than in other parts of the country. She would have been right then because the London school boards were costing 50 per cent. more per child 80 years ago than their equivalents in other parts of the country. The argument related precisely to the cost of providing services in London, and it was as right then as it is now.
The Minister's argument is not about statistics, but about her dislike of ILEA and her opposition to spending money on inner London children, investing in their education and extending their opportunities. Her enthusiasm for making cuts is matched by her desire to spend taxpayers' money on assisting the private sector with fees and at levels of expenditure per child far greater than in ILEA. The Minister looks askance, but that is the real world. She approves of higher spending levels for the private sector and the assisted places scheme than for the youngsters in ILEA.
This order will undoubtedly hurt education provision and education standards in inner London. The fact that the Minister has the audacity to stand at the Dispatch Box and say that the Government are investing in inner London education shows how little she understands the brief and how little she knows about inner London education. The simple fact is that the Government are not helping with revenue expenditure on those children.
Mr. Bennett : It is correct that inner London costs must be higher than in any other education authority because of inner London weighting, but outer London boroughs also have weighting--it is slightly less than in inner London, but not dramatically different. Can the hon. Gentleman explain why the outer London borough of Bexley charges £900 per child less than ILEA? Or if he prefers to take a Labour-controlled borough as an example, why is Barking £800 per child cheaper than ILEA?
Mr. Fatchett : It was a mistake to give way to the hon. Gentleman. I should have learnt that. My hon. Friends were absolutely right. Perhaps I can throw some figures back at the hon. Gentleman. Can he explain why in Tory-controlled Westminster social services are more expensive than in outer London boroughs? Again, the argument comes down to the nature of provision in inner London. I am delighted that in his opening comments the hon. Gentleman ceded the argument and agreed with us on that point.
These cuts will undoubtedly hurt education, children and education standards. It is no good the Government saying that this happened last year and there was no proof of a reduction in education opportunities. There was indeed a reduction and in the coming year there will be an even greater reduction because ILEA will not have the opportunity to use reserves as it did last year. In this year's budget the cut of £60 million, or more than 6 per cent., will be a real cut which will be felt in the classroom, in the provision of teachers and in the number of books.
Mrs. Rumbold indicated dissent.
No private-sector organisation would take nearly 7 per cent. out of its budget in one financial year without recognising that that would harm its product. The Government are expecting the Inner London education authority to do that, either without recognition of the harm or--nearer the truth, I suspect--without even bothering about the harm to education standards in London. There are real problems, not just in the cuts this year but in the fact that this is the final year of the Inner London education authority. There were Conservative Members who had just one purpose in seeking to abolish the Inner London education authority, and it was not based on argument or logic but on spite and a desire to create chaos in inner London services.
Column 1089The Minister in her contribution today recognised that Labour and the Labour-controlled Inner London education authority are doing their very best to provide an education service for the future. It is thanks not to the Government or their investment but to Labour London boroughs and Labour ILEA that children have something to look forward to in education. The House does not have to take my word for that. Hon. Members can consider the district auditor's words to the members of ILEA :
"I am very encouraged by the efforts being made by your officers to assist the successors of the London education authority." Labour is working for London's children. It also recognises, as the district auditor recognises and the Government should recognise, that in the process of handover to the boroughs there will be additional charges and demands on resources. The Minister talks about providing £25 million to help the boroughs to take over the education responsibilities of inner London, but anyone with any knowledge of education in London can tell her that that is simply not sufficient to cover the transfer of responsibilities.
I am not arguing that because of the peculiar problem this year there will be a slippage in expenditure or poor management. We are asking the Government to recognise the scale of the problems that will be created and to help the boroughs and ILEA to ease the process of succession. The present Minister clearly has no interest in that process.
Column 1090The targets--the maximum rate and level of expenditure--have clear implications for the successor authorities. The safety nets of the future must be related to the redetermined expenditure level set out in the order. This year's squeeze will clearly have a knock- on effect. We spent hours in Committee debating the future financing of ILEA but we have still not had any commitment from the Minister that the redistributive impact and mechanism of ILEA polices will work through in terms of future financing.
In view of the Minister's speech today, what hope is there for youngsters in Tower Hamlets, in Hackney, in the poorer inner London boroughs? What reason is there to believe that the Government will not further squeeze education expenditure in those boroughs? Perhaps when the Minister replies to the debate she can answer one question. I understand that these levels of expenditure do not satisfy the Tory boroughs of Wandsworth, Kensington and Chelsea, and Westminster. Will the Minister tell us what representations she has received from those authorities and what the Tories are saying to her privately? I suspect that they are saying that the money is not enough and that they want more to provide education in their own boroughs. For the next few years education in inner London will face acute difficulties. The order deals neither with the immediate problems nor with those that will be forced on the boroughs, and faced at borough level, by the abolition of the Inner London education authority. That is why, for the sake of the children of inner London and their education, we shall vote against this order.
Column 109110.49 pm
Sir Geoffrey Finsberg (Hampstead and Highgate) : Oh for the Bob Mellishes and Ron Browns of this world, the members of the London Labour party who cared for Londoners, and understood what London was about. The Opposition Members who now speak for London have no representation so far as the electors are concerned. Those Labour Members do not find themselves in the company of those who ran the London county council education committee.
We must remember that the Inner London education authority is a creation of very few years standing. The old LCC education committee had a good reputation. The trouble is that the people in ILEA were told six, seven and even eight years ago that they should rein in their expenditure, but they failed to do so. That is why these major reductions must be made, because they went on blindly in pursuit of their political objectives.
I compliment the hon. Member for Leeds, Central (Mr. Fatchett), the new Londoner who spoke from the Opposition Front Bench, on producing some new quotations to enliven the same old dull theories. The Labour party cannot accept the independent figures from the Chartered Institute of Public Finance and Accountancy which show that ILEA is the most spendthrift education authority in the country, with some of the poorest results. It is no good Labour Members blaming the wicked Tories. In 12 months' time ILEA will have gone like a puff of smoke and will be as unlamented as the Greater London council. The public want education to be run by the boroughs. As my hon. Friend the Minister said--
Sir Geoffrey Finsberg : Pointing is better than sitting and shouting from a sedentary position. That is all that the hon. Member for Hackney, South and Shoreditch (Mr. Sedgemore) seems capable of doing.
As my hon. Friend the Minister said, the position is clear. Ten days ago in Camden there was a by-election in Hampstead Town. We held that ward, although we have lost it in the past. The Conservative candidate increased her majority and the Labour candidate was pushed ignominiously into third place. The Labour candidate was the ILEA member for Camden. After all the nonsense that we have heard about polls and the public attitude, when it came to the vote, the Labour candidate was pushed into third place because the public know that what is being peddled about ILEA is utter rubbish. So long as the Labour party wants to rely on public opinion polls, I am content to rely on the view that electors record at the ballot box.
Perhaps I should refer to education in general as it applies to ILEA. We could consider the way in which ILEA has dealt with school meals. Similarly we could consider how, suddenly in the past 12 months, ILEA has
Column 1092discovered that there are bad teachers and has decided to move a bunch of them. Was it electorally difficult for the ILEA leadership to take action over those teachers before?
Perhaps we should consider the actions of ILEA nominees at the polytechnic of north London, which interestingly enough is in the news today. I spent 25 years as a governor of that polytechnic. Five years were spent under pretty grotty management, although before then the management was good. That polytechnic had been well run because the old LCC did not believe in peddling its philosophies ahead of education.
I ask the House to consider the situation in respect of repairs to inner London schools. To listen to the Labour party, one might imagine that all the repairs now needed have suddenly arisen. However, one recalls that ILEA and its predecessor, the London county council, were under Socialist control almost from the time of creation. It is they who must bear the main responsibility both for inadequate educational standards and for inadequate repairs. They were not prepared to do a proper job.
My hon. Friend the Minister told the House of the reductions proposed by ILEA officers to the members of that body. The hon. Member for Leeds, Central quoted the district auditor's report. I hope that it was not written by Mr. Skinner, because I should not believe much of anything that he writes. He said that he welcomed what the authority's officers are doing --yet they are the self-same officers who were repudiated by the ILEA leadership when, in attempting to meet a sensible target, they presented a package of savings.
Labour Members cannot have it both ways. If they acknowledge--as they have- -that ILEA's officers are good and reliable, they must accept also that the officers' proposals are unlikely to be detrimental to the children affected. Basically, they present the most helpful proposals that they can devise. Occasionally, the officers do not choose to cut into their own empires--but other than that, they are helpful. Nevertheless, ILEA's leadership rejected many of their proposals. If they do that, there is little they can grumble about if my hon. Friend the Minister, having twice considered the ILEA figures, arrives at the increases that she has in the permissible amount that the authority can raise.
It is of course true that parents in London are not getting the best possible deal--but it is evident from the results of London local government by-elections that they realise where the blame lies. It does not lie at the door of this Government, but with those-- [Interruption.] If the Opposition do not believe that, I am happy for them to continue deluding themselves. The fact remains that the average Londoner knows full well that it is the Government who are making possible a good education system at a realistic cost.
Mr. John Marshall (Hendon, South) : Will my hon. Friend confirm that, under the order, ILEA expenditure per pupil will be substantially higher than in outer London boroughs--such as Brent--that are not renowned for their financial rectitude?