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local government overall, but there has been great difficulty in satisfying each local authority that it has received a fair amount in the distribution. In his usual eloquent manner, my right hon. Friend the Member for Shropshire, North (Mr. Biffen) explained the problems facing north Shropshire in terms of the distribution. Those problems are common to some of us in the midlands.Last year, we in Warwickshire had to take a look at all our services, and because education was the big spender, it got the biggest look and was put right at the top of the list. The county council eventually said that it could protect nursery education, but that it would have to make savings elsewhere. This year, it has decided that it will protect the schools' budgets and police spending, but inevitably that means that other services come under pressure. The local authority must consider how its provision of those services can be changed, which may mean staff reductions. Great pressure is placed on local government.
I appreciate that this year, like last year, some changes have been made to the SSAs, and that some are slightly to the advantage of the county of Warwickshire. However, although any swingeing changes may benefit some, they will be to the detriment of others and, by its very nature, local government is totally incompetent to deal with big and quick changes. Warwickshire found the change from grant-related expenditure to the revenue support grant system a big change which was difficult to cope with. That is the nature of local government--
Mr. James Pawsey (Rugby and Kenilworth) : My hon. Friend has an entirely deserved reputation in Warwickshire as an assiduous Member for Parliament. I readily acknowledge that he defends his constituents through thick and thin. Will he join me in asking our hon. Friend the Minister of State whether, if Warwickshire should produce a budget that is reasonably above the level of the SSA, he will give helpful consideration to lifting the cap, as he did last year? Such action would be much appreciated by all Warwickshire Members.
Mr. Stevens : I appreciate what my hon. Friend says, and hope that our hon. Friend the Minister of State will listen sympathetically. I am sure that, when we know Warwickshire's budgets, the Minister of State will be willing to meet delegations to explain the position in Warwickshire with the same courtesy as previously.
The effect of the SSA being, as we think, rather low, is that that directly puts pressure not only on services but on the level of the community charge. Depending on how the SSA works, that in turn can affect the district councils as well as the county council. The Opposition have sought to give the impression that they would do away with the local authority expenditure limits that the Government have suggested. They have implied that a Labour Government would provide as much extra money as the local authorities say they need. The Opposition approach is : "Don't worry, we'll provide a system of local government finance that will work without restrictions. We do not want to restrict local government, but to give it a free hand."
There is no way in which any responsible financial approach is compatible with taking the lid off local government. Many years ago, a senior Labour politician told local government, "The party's over." The Opposition will not be able to bring back that sort of party again.
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In answer to the point that counties such as Warwickshire are being unfairly treated under the SSA system, the Labour party says, "Don't worry, we'll find a way round it. There will be no problem." However, we know from the Labour party's past practices--this is the implication of what the hon. Member for Dagenham (Mr. Gould) said--that the Labour party may well shift the distribution, but that it will almost certainly do so in favour of the urban areas, not the shires, which we believe are the areas that get the weakest deal at the moment.I hope that, when my right hon. and hon. Friends talk to the local authority associations in the near future, by which time they will be able to take into account data from the 1991 census, they will look carefully at the formula for the SSA. Some of us in the north and the midlands believe that the area cost adjustment gives too much to certain areas but not enough to others. I thank my hon. Friend the Minister of State and his officials and Warwickshire council officers for taking the time to go through SSA calculations in some detail. Nevertheless, we feel that some factors are over-compensated for and that that problem needs to be addressed.
We should like the SSA to be refined but, to do that, further studies may need to be carried out. The decision on reallocation should not be taken off the cuff. We may need to refine the area cost adjustment--and not only for the south-east. Perhaps we should introduce a graduated area adjustment, but it may not be possible to do that with any accuracy at the moment on the information that is available. However, I am sure that my hon. Friend will consider setting up studies that may lead us to a better, more refined SSA system in the years to come because it--or something very similar--will form the basis of all future distributions of finance to local government.
Local government is in a difficult position, but some of its problems are self-made. My county authority is not profligate, but we believe that the SSA should be adjusted in the next and subsequent years and that it should be refined in an attempt to make it more equitable. I know that my hon. Friend is aware that some changes have only small effects on some authorities but large ones on others. I hope that, in the months ahead, he will look carefully at the ways in which we can adjust the SSA--perhaps to make minor changes, as has happened recently, but perhaps also with a view to making more extensive changes to try to find something that appears more obviously fair to all the local authorities in England.
Finally, the Government's proposals take a realistic view of the total amount that should be given to support local government in the coming financial year, and lay down a good guideline on the amount that local government should be aiming to spend overall. Local government's job must be to provide a base to allow the area to take advantage of its services and to build the community it wants. Local government's job is not to establish the grandiose schemes that we have seen in some authorities, which some people think are good and should be established irrespective of whether the Government think that local government should do that job.
Several Hon. Members rose --
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Mr. Deputy Speaker : Order. I remind hon. Members, that, between 6 pm and 8 pm, speeches will be limited by the 10-minute rule. 5.58 pm
Mr. Nigel Spearing (Newham, South) : I gather from the speech of the hon. Member for Nuneaton (Mr. Stevens) that Warwickshire is in trouble, and from the earlier speech of the right hon. Member for Shropshire, North (Mr. Biffen) that Shropshire is also in trouble. Those councils are drawing on their balances to maintain nursery education. Presumably those councils operate in counties where the Minister's friends abound. I ask the hon. Member for Nuneaton and the right hon. Member for Shropshire, North to contemplate what the effect of reducing nursery education would be in east London--in Silvertown, Custom House, Upton Park and such places, where employment is more difficult to find.
One principle in the arithmetic is politically neutral, and depends upon equity and justice. I hope that such high-sounding words prove attractive to the Government. We have heard a lot about SSAs not covering costs, but one SSA is particularly important and has not been named hitherto. It is that on the estimate of capital repayment and interest arising thereon. One should remember that that represents a heavy burden and that roughly 80 per cent. of local authority income comes from Government. That is lower than it should be, and the effects are considerable.
The borough of Newham spends about £28 million a year on paying interest on capital borrowing. I am told by the borough treasurer that, last year, Newham had just over £20 million in its SSA to cover that. This year, we have experienced a shortfall, and the borough has only £18 million in SSA for capital costs. Therefore it has to make up £10 million from other services to cover what is surely an assessable need. The borrowing of £28 million was not sudden or profligate. It was something that any Government, particularly the one that we have had for the past 10 years, would say was necessary. It was approved and known borrowing, with a known repayment. Therefore, the £10 million that the borough is down must be obtained by cutting other services--taking from other SSAs--which is a very difficult job indeed.
I should like the Minister to tell us the basis of the calculations for SSAs and for capital interest. I cannot conceive of any equitable formula that would come up with such a deficit and with such an unjust burden on those services that have to carry it. We have already heard from hon. Members on both sides of the House about the unjust imposition on services. I want the Minister to comment on that, because that expenditure is, by definition, necessary.
Another and perhaps more complex point is equally bizarre and requires some explanation. All over the country, commercial and industrial premises are applying, quite properly, for rate reviews and reductions. Valuation courts have come up with the figures, but we do not know the total yet. In a written answer to me, which appeared on 24 January at column 387, the Government said that they too did not know all the figures.
The borough of Newham put some money aside against such losses, but suddenly, this year, it had to pay for borrowing £6 million to repay rates that were overpaid. That was due not to the rating valuation done by the council but to the valuation of the Government's own agency. If there was an error, it was that of the Inland
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Revenue's estimate of rateable values. It had nothing to do with the council. The council has been told by the Government that that money has to be paid back to those firms that have paid too much in rates, despite the fact that the £10 million non- domestic rate pool cannot be touched as a result of legislation passed by the Government.In my constituency, the council has made two large repayments ; one to Tate and Lyle--the big sugar firm--of about £2 million and one to the Post Office, which has a large sorting office in my constituency, of about £1 million. Another £5.8 million must be paid on top of that to other organisations in the borough. That must be paid back in addition to the £10 million I mentioned earlier. All the increases in grant which the Government claim, despite the problems of inflation, will be more than absorbed by those repayments.
The unhappy borough councillors of Newham have been placed in an awful dilemma. That experience is shared by other councillors of all parties in different parts of the country. My councillors have asked whether Newham can capitalise on the money owed in respect of services. That deficit has built up over many years and they want to know whether Newham can take it forward. No, say the Government, it cannot, but they say that it may be possible to capitalise £3 million for two years. It is all up in the air, and I hope that the Minister can give us the proper answer tonight. The Government have said that, if Newham could capitalise, they would not allow it to spend the interest necessary to sustain that capital. I am shocked at that. In Silvertown, a mother who worked at Tate and Lyle might ask me whether the £2 million that Tate and Lyle had received--big money--could not be spent on school books at Drew road school. We have had to cut the provision of school books. It is also rumoured--I do not believe it to be true--that teachers will be without nursery classes. We have heard that Shropshire has already had to make such a decision.
That mother may ask whether it will be possible to send teachers on courses for the new national curriculum which the Government have imposed upon them. She will want to know whether the quality of her children's life will be reduced because the borough are paying her employers, the Post Office and X and Y company money that the borough should not have received five years ago. That is the position into which the Government have put us. They will not even allow the council to borrow the money to pay those organisations. That seems extraordinary.
All of us receive in the post advertising asking us to borrow. That is part of the Government's philosophy of the free market. However, the Government will not allow Newham borough council to borrow money to ensure that children and teachers get the services which the Government say, by statute, that they want them to have. That is the position. I do not understand why the Government will not allow the council to borrow. I am reminded of the scriptural story of the unjust steward, who was let off his debt by the king but who would not let off his own debtor.
The mechanism hits teachers and children and the future of any community-- not just Newham but everywhere else. I have only one answer to that--the Government are ignorant of the effect of their own machine. They are ignorant of what the rules and regulations mean in practice to communities and societies--and yes, society does exist, particularly in east London.
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The Government are ignorant of injustice, but they must be conscious of it. If the Government are ignorant, they must accept that, and the injustice must be remedied. If the Government are knowledgeable of that injustice, they must remove it, because they would not want that millstone to hang around the necks of children into the next general election.6.9 pm
Mr. Graham Riddick (Colne Valley) : From the hon. Member for Eastbourne (Mr. Bellotti) we heard the usual Opposition parrot cry for more money. The hon. Gentleman said that there was not enough money in the pot, and we have heard similar noises from other Opposition Members. The one difference between the hon. Member for Eastbourne and other Opposition members is that his party deserves credit for having the honesty to say that it would increase taxes. The Labour party denies that it would increase taxes to pay for the enormously boosted local government spending that it advocates. This is the last year of the community charge or poll tax. I do not particularly like the council tax, but I like it a lot more than the alternatives--the poll tax, which is going ; the rates, to which Labour advocates a return ; and the Liberal Democrats' local income tax. The council tax will be seen as sensible and fair. A return to a rates system--something that the Labour party would regard as fair--would unleash an explosion of local government spending. People who have significantly improved their homes and those who live in houses with high market values would be penalised enormously. Of course, that is exactly what Opposition Members want.
As usual, the Liberals try to pretend that butter would not melt in their mouths. They advocate a local income tax. The hon. Member for Eastbourne smiles sweetly, just to prove the point. I am sure that my constituents would not want the Kirklees council to have access to their tax returns. In any case, a local income tax certainly would not be cheap. On the basis of the current spending of Kirklees council, a working couple on average incomes would pay £850 to £900 a year.
The systems being advocated by both Opposition parties have a common additional flaw : they would both remove the capping powers of the Secretary of State. Once again, it would be party time for Labour local authorities. We know how socialist politicians love to spend other people's money. Both main Opposition parties would give those politicians the green light to do exactly that. I have no doubt that, in this respect, the Kirklees local authority would be no different from other high-spending Labour authorities.
In my part of the world, the scare stories for the next financial year have already started. On the one hand, council leaders are threatening to increase the poll tax by 17 per cent. ; on the other, the chairman of the education committee is promising cuts in the education service.
Mr. Riddick : Indeed it is disgraceful.
Those education cuts are proposed despite the fact that the education standard spending assessment in Kirklees has been increased well ahead of inflation and the fact that Government grants to Kirklees as a whole are to increase in line with, or slightly ahead of, inflation. The trouble is that Labour's scare stories have a nasty habit of coming
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true. I very much hope that Kirklees will stick to the Government's guidelines and set a poll tax of no more than £257, which would represent an increase of 7 per cent. Local people would not like it, but I think that they would regard it as fairly reasonable. It would be an absolute disgrace if Kirklees socialists were once again to cut the education budget, as they are threatening to do. A number of schools in my constituency are struggling to make ends meet. There are two main reasons for this. First, Kirklees council, which is run by the Labour party, cut the education budget last year. Secondly, the local education authority is holding back far too much money for its own central administration. Far more money should be passed down to individual schools.There are two further reasons for the fact that schools provision--indeed, the authority's budget as a whole--is under pressure and for the fact that Labour authorities throughout the country are setting community charges higher than those of Conservative authorities. First, there is poor management of the available resources and of the services that are provided. Secondly, many Labour authorities set wrong priorities. The rent arrears in Kirklees amount to more than £4 million. It is disgraceful that that money has not been collected. Almost 1,000 council houses are empty.
Mr. Pawsey : Does my hon. Friend's council have a housing problem?
Mr. Riddick : Indeed we do have a housing problem, to which I shall refer later.
On the question of management, I should like to relate an interesting little episode. When it comes to the repair of local roads, the local authority has insisted that it will carry out permanent reinstatement. I have discovered that between £2.5 million and £3.5 million is awaiting payment to the Kirklees council by utility companies. The reason for the delay is that the council has not yet carried out the permanent reinstatement. Some of the work has been outstanding for four or five years. That is pure bad management.
Let me come now to priorities. Like many other Labour authorities, Kirklees council spends almost £1 million on equal opportunities projects and peace committees. Recently, it advertised in the local newspaper six vacancies for equal opportunities officers. I estimate that the cost of that advertising is about £250,000. Secondly, the joint venture company that Kirklees council and a private company have set up is costing an amount well into seven figures. But the joint venture company is not developing derelict sites ; it is developing decent sites that could quite easily be developed by private undertakings.
Another interesting fact is that housing associations have lost about £12 million-worth of investment in Kirklees over the past five years. Let me explain why. The council's Labour group is, or has been, very hostile to housing associations. As a result, it has refused to co-operate with the Housing Corporation and the associations. The £12 million that could have come to Kirklees has gone to other local authority areas in the north of England. It is an absolute disgrace. Let me refer to another interesting local issue. The council is imposing smokeless zones on rural areas, at a cost, this year, of £250,000. This is highly unpopular and
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totally unnecessary. I should like to go into more detail, but I am running out of time. [Interruption.] It is difficult to hear hon. Members.Mr. Pawsey : My hon. Friend is not missing much.
Mr. Riddick : I can quite believe that.
I have heard people say that many young electors have never experienced a Labour Government. What is more, many people have forgotten what a Labour Government are like. I shall tell my constituents that they have had a taste of Labour government in the shape of Labour local authorities up and down the country. At the general election, my Labour opponent will be the leader of the council. I am very happy about that, as I shall have an opportunity to demonstrate that a Labour Government would mirror the antics of Labour local authorities. They would put taxes up as high as possible. It would be profligacy--the expenditure of money on all sorts of madcap schemes. I am confident about the outcome. 6.20 pm
Ms. Joan Walley (Stoke-on-Trent, North) : I am sick and tired of hearing Conservative Members attack Labour-controlled local authorities. We just heard such an attack from the hon. Member for Colne Valley (Mr. Riddick). We heard from the hon. Member for Nuneaton (Mr. Stevens) what is likely to happen in Warwickshire. My main purpose tonight is to explain what the settlement, if confirmed, will mean to Staffordshire, where we could be talking about £20 million-worth of cuts, a large proportion of which will have to be found from services. Much will depend on how much can be found locally from reserves, but I fear that as a result of the Government not listening to Staffordshire's representations, we could suffer cuts locally of up to £12 million. The people of Staffordshire, including those I represent, should not have to suffer cuts of that magnitude.
It is clear that if the people I represent lived in a county such as Bedfordshire, instead of experiencing an increase of 29.4 per cent. in their standing spending assessment, they would get as much as 45.4 per cent. more. It is not as though the Secretary of State is not aware of the concerns in my area. Delegations and representations to Marsham street from Staffordshire county council have set out those concerns in no uncertain terms. Indeed, it seems that the Secretary of State has not only not listened to our concerns but has not even taken note of the views of his Government colleagues. Special difficulties have arisen in Staffordshire as a result of the pindown affair. All concerned have been critical of what happened in that case. I pay tribute to the work that Staffordshire county council is doing now in trying to put right what was clearly a wrong. In that process, discussions have taken place with various Ministers, including with those at the Department of Health. There has been much sympathy from the Government about the way in which the wrongs of pindown must now be put right.
That being the case, how can it be that, in addition to not listening to the representations from Staffordshire county council, the Minister has not heeded the advice of his Government colleagues? They have said that they share our concern about the additional resources arising out of the pindown experience which must be made available within the local services budget to meet the costs of
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additional training and so on for those in need of social services. None of those extra resources will now be available to Staffordshire as a result of the SSA.Presumably the Minister has not heeded the views of the Secretary of State for Education and Science. It is clear from letters that I have received from parents and others, and in representations made to me at meetings with local head teachers--it seems as though I have been locked into such meetings for whole weekends--that the Secretary of State's pronouncements about the national curriculum and the need to improve educational standards will not be implemented in Staffordshire because of this SSA fixed by the Government. I am anxious, in the limited time available to me, to consider comparative spending in other areas because the debate is not simply about the overall amount of money available. It is about the distribution of that money and where it should go in terms of social need. We in Staffordshire have a combination of a rural area with high needs combined with the inner- city area of Stoke-on-Trent, which receives little recognition from the Department of the Environment. The Government should explain why the SSA that has been set will enable Staffordshire to spend only £23 per child within the social index, when some authorities can spend as much as £220 per child. That state of affairs cannot be right. What has Staffordshire done to deserve such treatment?
We hear much about care in the community, about how we shall need to provide more from the social services, and, at the same time, do more to help the carers. I hope that it will not be necessary for Staffordshire county council to go ahead with its proposal to close Tan-y-Bryn, a place of respite for the disabled and their carers. There are proposals to close two workshops for the blind and disabled serving the entire county area, one in Fenton and one in Newcastle-under-Lyme, each of them providing employment for a large number of my constituents. I have visited the workshops and spoken to the people there. I hope that, in the process of setting its budget, Staffordshire county council will find a way to save those workshops. Let it be known that, if they have to close, the blame must be laid squarely at the door of the Government.
I have never received so many letters from pupils, parents, governors and head teachers about education issues. At a time when we are hearing so much about the delivery of the national curriculum, it is being asked locally how it will be possible for Staffordshire to undertake the extra commitments when it may be forced to make cuts of as much as £7 million because of the SSA set by the Government. How will my area finance as many as 400 teaching redundancies ? About 190 have already been notified to the Department of Employment. Imagine the effect of those redundancies on children's education in Staffordshire. I am almost having to write to myself on the subject, for my children go to school in Staffordshire. The local budget has already been reduced. We recently had one of the lowest staying-on rates in the country. Gradually, those rates are being improved by the county council. Schools had to accommodate increased numbers without extra money. Now we seem to be crucified by the Government for making those improvements.
The people of Staffordshire are angry. They do not deserve the cuts that are having to be made. As I say, we have visited Marsham street to make our case, as we have
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in the past, but nobody listens to us. The Government should redistribute money rather than remove it from areas such as mine. More money should be allowed to Staffordshire because we cannot afford to make the cuts that are being demanded.Had Staffordshire been another area, such as one of those selected by the Government in their positive discrimination towards some county areas, my county council could receive as much as £38 million more. That would be extra money to spend on necessary services. Instead, we could be suffering cuts to the tune of £20 million. Those cuts will hit us hard. It is impossible to consider cuts of that magnitude in expenditure on highways, schools and the social services without admitting that people will be hit hard.
The people of north Staffordshire appreciate that the Government are responsible for those cuts being made. We all want to do all we can locally to cushion the blow. I hope that the Minister will at least address the problems that we in Staffordshire are experiencing, particularly over pindown, and say that the Government will listen to some of the representations that have been made by Staffordshire county council.
6.29 pm
Mr. Michael Carttiss (Great Yarmouth) : To many people the annual debate on the RSG settlement must be one of the most boring in the House. I rise with no great expectation that the next 10 minutes will add anything to the interest of these proceedings [ Hon. Members :-- "Shame."] However, it is one of the most important debates that takes place in this Chamber. My right hon. Friend the Secretary of State was absolutely right in emphasising, when he opened the debate, that the House should explore thoroughly how £33 billion of taxpayers' money is spent.
Local council spending touches the lives of our constituents more directly than does almost any other item of expenditure upon which Parliament has to vote each year. It is inevitable that the Government should seek to control local authority spending, given the proportion of the gross national product devoted to local government services.
My hon. Friend the Member for Nuneaton (Mr. Stevens) recalled the former Labour Secretary of State, Tony Crosland, saying many years ago that the party was over in local authority spending. With a large Conservative majority on Norfolk county council in those days, we did our best to follow the Labour Government's programme of restraining local council expenditure. That, I might add, was in the teeth of the opposition of the Labour group at county hall. I recall our sending a deputation in 1979 to protest about the rate support grant settlement announced by the then Secretary of State for the Environment, my right hon. Friend the Member for Henley (Mr. Heseltine), who is now back in that job.
Seven years ago, I made my maiden speech in the RSG debate and, while I sought to observe the convention of not being too controversial, I could not avoid criticising the way in which the Conservative Government, just elected, had treated the Conservative county council in Norfolk. This may be why these annual debates on local authority expenditure are boring : we have to keep on saying the same thing over and over again. Here we are with another RSG settlement that is patently unfair in the
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way it treats the people of Norfolk, who send to this House seven Members in the Conservative interest, of whom three are prominent members of this Administration on the Treasury Bench.I wish that the accusation by the hon. Member for Dagenham (Mr. Gould) that the Secretary of State helps Tory authorities over and above Labour- controlled councils was near the truth. It is not true for Shropshire, as my right hon. Friend the Member for Shropshire, North (Mr. Biffen) said. It is not true for Warwickshire, as my hon. Friend the Member for Nuneaton said and as my hon. Friend the Member for Rugby and Kenilworth (Mr. Pawsey) will have a chance to say later. It certainly is not true for Norfolk.
On 9 December, the county treasurer's report to the county council about the RSG provisional settlement, announced by the Secretary of State on 26 November, concluded :
"Overall, the proposed settlement can be described as a difficult one which hopefully, subject to the level of future pay awards and inflation, will enable us to maintain our existing services"-- that is loyalty, and I draw it to the attention of my hon. Friend the Minister for Local Government--
"but which is unlikely to leave any room to tackle many, if any, of the new demands on our services."
Norfolk's provisional SSA for 1992-93 was £446.460 million, which was a 6.8 per cent. increase over the 1991-92 figure of £417.945 million. That is a cash increase of £28.515 million, for which we are very grateful. This increase for Norfolk of 6.8 per cent. compares with the average increase nationally of 6.8 per cent.--so we are on a level playing field there--but the average county increase--and, as my hon. Friends representing shire counties have said, which shire counties have benefited remains to be seen--has been 7 per cent. The figures for the neighbouring East Anglian counties, which have much in common with Norfolk, are : Cambridgeshire, 7.5 per cent., Lincolnshire, 6.9 per cent., and Suffolk, a disastrous 5.9 per cent. However, the settlement announced on 24 January robbed Norfolk--that is, my constituents--of about £0.5 million. The county council confidently expected an increase because of the change in the rules which allows any addition to the police establishment--and we had an increase in our police establishment, approved by the Home Secretary--to be included in the first year ; normally a council would have to finance the first year on its own. Despite this, Norfolk's RSG has gone down by nearly half a million pounds, and the capping limit is reduced in line. This reduction at this late hour, as the leader of the Norfolk county council has pointed out, makes a nonsense of sound planning. It also undermines the claim by spending departments in Whitehall that it is all in the SSA.
Incidentally, Cambridgeshire, which had the most generous settlement announced in November for the East Anglian counties, has gained from the January settlement. So a relatively poor county such as Norfolk has lost money to a rich area such as Cambridgeshire. I am sure that has nothing to do with the fact that one of the Members for that county is my right hon. Friend the Member for Huntingdon (Mr. Major) and another is my hon. Friend the Member for Cambridgeshire, South-West (Sir A. Grant).
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Sir Anthony Grant : If what my hon. Friend says is true, and I am sure it is, does he not find it absolutely astounding that, with one accord, Labour and Liberal politicians in Cambridgeshire have been spending months complaining how mean the Government are, and are still doing it?
Mr. Carttiss : What people in Cambridgeshire do does not surprise me, especially the Liberal and Labour people there. Fortunately, there are not many Liberal and Labour people in Cambridgeshire. The hon. Member for Eastbourne (Mr. Bellotti) drew attention to the effect of the teachers' pay award. Norfolk has a relatively low SSA, and the county council has had minimal room for manoeuvre within its budget, bearing in mind the pressures that we have in our county from a rising local population and additional crime. The teachers' pay award will cause budgetary difficulties if it is significantly above inflation and if the Government do not then make the appropriate upward adjustments to the SSA and the RSG.
As a former member of the teaching profession, I am very happy for the Government to approve a pay award above the rate of inflation, but they must make that extra pay award feature in the RSG settlement. In other words, Her Majesty's Treasury must look after that above-average pay rise, if it comes, and not expect local authorities to find that extra money from within their own budgets at the expense of other services, given the point that has already been made about local authorities having no say in or control over that item of expenditure.
Speaking of teachers prompts me to comment on the capital allocation for education in Norfolk, which has been limited to £3.1 million. That is an extremely low allocation, particularly compared with our neighbours in the rest of East Anglia : Suffolk, education capital allocation £11.3 million ; Lincolnshire, £12.4 million ; and, once again, Cambridgeshire £13.9 million. Norfolk, I repeat, has only £3.1 million. It would be monstrous if, having spent just above SSA, we had charge capping.
I have one minute left, I am advised, to draw the attention of the House to the problem that arises from sea defences. The people of Great Yarmouth and Norfolk are not expected to pay for the Navy. The last time that we helped with the cost of the Navy from our local expenditure in Yarmouth was in 1338, when the town magistrates provided money for men-of-war against the nation's enemies. In 1340, we provided half the fleet for Edward III's battle against the French at Sluys, which we won.
Flood defences are a nationwide responsibility, as they should be, yet they feature within the local authority budget. If the Yarmouth borough council spends over its SSA, including the cost of sea defences, it will lose money.
No doubt, Mr. Deputy Speaker, you will call me to order when I reach the absolute limit of my time, but I want to say that in Great Yarmouth we want to spend £150,000 on a coastal strategy defence study. The Ministry of Agriculture, Fisheries and Food will eventually pay for it. MAFF is constantly urging us to increase expenditure. The levy from the National Rivers Authority is 8.7 per cent., yet the Department wants to limit us to 6.5 per cent.
Mr. Deputy Speaker (Sir Paul Dean) : Order. I am sorry, but I must call the hon. Gentleman to order now.
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6.39 pmDr. Ashok Kumar (Langbaurgh) : I wish to highlight the major impact that the Secretary of State's announcement on standard spending assessments will have on the local councils that cover my constituency.
My constituency is served by Cleveland county council and two borough councils, Langbaurgh and Middlesbrough. Those model local authorities have all been the subject of favourable comments by the district audit service. I am proud to say that they are all controlled by the Labour party, as demonstrated by their continuing electoral success. They will all be severely affected by the Secretary of State's announcement.
Langbaurgh borough council has been allocated an SSA increase of 1.5 per cent. and Middlesbrough borough council's SSA has been decreased by 0.2 per cent. The chief executive of Cleveland county council, in a letter to me dated 20 January, said that the SSA announcement for Cleveland county council has
"required some very difficult decisions. The need to stay within the overall limit is complicated very substantially by the pressures arising from other government legislation, especially in Social Services where the implementation of the Care in the Community and the Children Act are estimated to cost £4.9 million in the perfect world".
He goes on to say that, unfortunately, we do not live in that perfect world --how right he is--and that only £1.6 million can be spent in those areas. That budget decision will adversely affect some of the most vulnerable in our society--people living institutional lives and young children, possibly in peril. The fact that new duties have been imposed on local councils while cuts have been made in resources is plainly an example of double dealing.
The chief executive of Cleveland council also tells me that he is "unlikely" to be able to meet new statutory legislation for trading standards inspections and that he will be unable to recommend the allocation of additional funds to schools for the implementation of future stages of the national curriculum. That means that our children's futures will suffer and local people may find that the consumer watchdogs on which they rely to protect them from sharp practices will be left toothless--a grim prospect.
Although the position within local councils is obviously grave, amazingly, Cleveland county council is comparatively fortunate because its SSA is relatively close to its actual expenditure under the arcane Department of the Environment rules apparently agreed to by the Secretary of State. For the two borough councils in my constituency, the situation is far worse. Langbaurgh is perhaps the worst affected, being in the unique position of covering some of the poorest urban areas in mainland Britain and an ex- mining area of rural villages. Consequently, it is designated by the Government as both an urban programme authority and a rural development area, a position that is unique to Langbaurgh. I hope that that gives hon. Members some idea of the problems with which that authority must grapple.
The announcement of an SSA for Langbaurgh of £12.16 million--an increase of 1.67 per cent. over 1991-92--has come as a body blow to Langbaurgh. That is not a knee-jerk reaction. The council previously employed a leading firm of accountants, Peat, Marwick, McLintock, to examine the SSA and its impact on the authority. The accountants found that the low SSA was due to two specific factors. The first is the ward-weighted density
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factor. Langbaurgh has undergone a ward boundary exercise, but the new wards were not used by the Department of the Environment. Peat, Marwick, McLintock argued that the use of census enumeration districts would give the Department a better picture of the borough's needs. Secondly, the all-ages social index lost the borough some £1.2 million, whereas the borough had expected to gain because of its pressing social problems.Langbaurgh cannot use its reserves, because almost all of them have been used to alleviate heavy payments in last year's budget exercise. The district auditor has told the council that the balances are now dangerously low and should be increased from £500,000 to £1 million. That is a difficult, if not impossible, task to accomplish, but it has not deterred the Secretary of State from telling Langbaurgh that he is ready to use his capping powers, which would discriminate against some of the poorest people in one of the poorest boroughs in Britain. If the rules are not relaxed, people in Langbaurgh will suffer this winter.
Langbaurgh's grim problems will intensify as the full impact of the recession begins to bite. In the past year, we have continually seen news of sackings in the borough's traditional industries of steel and chemicals. Those sackings come on top of the already high unemployment figures, which, incidentally, are not used in devising the borough's SSA and they can only mean more pressure on the borough's local services and council aid.
Middlesbrough, too, will suffer. Along with Langbaurgh, it has all the problems associated with long-term unemployment, poverty and ill health, It wants desperately to work to remedy those social evils and create a living environment that is fit for the 21st century. Given that the statutory housing responsibilities of Langbaurgh and Middlesbrough borough councils are effectively ring-fenced, their grave problems have led to a new round of rent rises, and their highways duties are managed on an agency basis for the county council. That can only mean massive budgetary cuts in their work in non-statutory areas.
Another aspect that will have a severe impact on our people is the possible loss of bus passes, which will be particularly resented by local senior citizens in my area. The secretary of the Cleveland Pensioners Association said that any cuts
"will have a devastating effect on old people."
For some, it could mean virtual imprisonment in their own homes and a charge in their daily lives that could mean a difference between life and death.
Two weeks ago, a typical local senior citizen visited me in my surgery. Tom Miller lives in the village of Carlin How in east Cleveland and suffers from heart and chest problems. He told me that the withdrawal of bus passes would make him and his wife virtual prisoners in their village. For Tom Miller and his neighbours, many of the facilities that we take for granted, such as visiting a doctor, supermarket or local market, involve a bus journey of many miles. Mr. Miller has written to the Secretary of State for the Environment, and I hope that the right hon. Gentleman's reply will not be an attempt to fob him off with the usual feeble rhetoric or an attempt to divert the blame on to our hard-pressed local authorities, because Mr. Miller and his neighbours have already rumbled him.
Only last week, I attended a public meeting of senior citizens who expressed deep anxiety about the cuts in Langbaurgh borough council's SSA. The council's work
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and that expression of local pride and autonomy are threatened by the Secretary of State's announcement. The real agenda is obvious. At heart, the Secretary of State does not like the idea of local people deciding their futures and destinies. At heart, he is still an enthusiast for the view that the man in Whitehall knows best, so long as that man is the Secretary of State for the Environment. I give the Secretary of State notice that, in a few short weeks, his record and views will be judged by the electorate. From my day-to-day work and my life in my constituency, I know what the verdict of the thousands of local voters living in Middlesbrough and Langbaurgh will be. They want an end to the callous disregard for local government, and an end to the Government who have fostered and nurtured that disregard.6.49 pm
Mr. David Martin (Portsmouth, South) : Any debate on local government finance is liable to tax people's understanding even more than central and local government tax their purses. It is an arcane subject, mainly because central Government pick up the lion's share of the bill. There is therefore a complex relationship between local and central Government at the heart of which is the revenue support grant system, SSAs and all the rest, with a myriad mathematical equations, incomprehensible to normal people, amongst whom I count myself.
Therefore, I intend to take a broad-brush approach in raising first a specific matter involving local government structure and expenditure, where change could be made to achieve a cheaper system, more accountable to local people and less expensive in central Government grants. Too many powers are exercised by county councils which ought to be carried out more locally. I appreciate that the Local Government Commission is being created to investigate the best future structure for local authorities. I very much welcome that. In the meantime, however, county councils continue to exercise very wide overlapping planning powers which brings them into conflict--sometimes serious conflict--with district or city councils which also have fully-fledged planning departments. It is true, of course, that the system allows for an application to my right hon. Friend to call in a planning application so that conflicts can be resolved. However, this is a most expensive procedure which falls on local charge payers and on the grant system.
There is a good example of serious planning conflict in Portsmouth in the constituency of my hon. Friend the Member for Portsmouth, North (Mr. Griffiths), who cannot be here because of Select Committee duties. The problem affects his constituency, but also mine because many of my constituents live in the vicinity.
In Quatremaine road, Hilsea, there is a waste incinerator site. On it stands an incinerator which has been shut down. Adjoining the site is land belonging to Portsmouth city council. A planning application is before the county council, the planning authority--not Portsmouth city council--for an enormous new energy-from-waste incinerator. Its size and scale are such that it would require also the adjoining site belonging to the city council which would need to be compulsory purchased.
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