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The new incinerator would dominate the landscape like some hideous, belching, secular cathedral--tower, chimney and all.

Portsmouth city council is unanimously against it, not on the ground that Portsmouth is not prepared to see a reasonable size state-of-the-art waste disposal system on the existing site which will deal with the waste of Portsmouth and perhaps Havant, Gosport and Fareham too, but because the proposal is intended to deal with waste from all over Hampshire, and no doubt from West Sussex as well under contract, with the massive environmental impact that will have, not least on a densely populated residential area but also on the road system. Portsmouth wants other areas to take responsibility for their waste disposal and not have it all transported in one direction.

That is precisely the sort of example which underpins my conviction that dual county-city planning powers should not exist. Further, if on 9 March the county council planning committee does not take account of the strength of feeling in Portsmouth by rejecting the proposal, it will serve as the most eloquent support from Portsmouth to look after all its own council affairs again, as a unitary authority, rather than being subsumed in a remote, out-of-touch, over-blown, administrative and political structure in Winchester which costs far too much money--our money--for all the good it does. Incidentally, sensible local government reform is one of the best reasons for supporting the return of a Conservative Government at the general election. The proposals of the Labour and Liberal parties would result in a whole new tier of regional government--heaven forbid--with all its increased bureaucracy and bloated cost in grant and so on.

In Portsmouth, where we have a Labour administration propped up by Liberals, we have learnt the lesson that I hope the whole country will heed : there is nothing to choose between Labour and Liberals. There are two ways of getting Labour national or local government--by voting Labour or by voting Liberal. Just as in local government their policies are barely distinguishable, in this place eight out of 10 times they vote in the same lobby.

In another area of local government expenditure which involves considerable central taxation support--housing--housing revenue account subsidy and housing investment programme capital grants are only obliquely connected to revenue support grants, but a council's housing policies and programmes have a great impact on taxpayers and local charge payers.

Portsmouth has not only done well this year out of the revenue support grant but also the HIP allocation, which in a difficult year has risen by 3 per cent. in real terms--recognition by the Government of the extra help required and deserved to meet housing needs in Portsmouth. To its credit, the Labour administration has continued the sensible housing enabling strategy of its Conservative predecessors, hence the increased Government support. Of course, we shall never get to the bottom of housing need, however deeply the taxpayers and charge payers dip into their pockets, until we mobilise the private sector by taking a further look at the destructive workings of the rent Acts in that vital area.

The Labour party and the Liberals suggest that housing needs could be met by a new spending spree, including allowing councils to spend all the proceeds of council home sales, which in their hearts they still oppose, instead

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of having the present restriction of 25 per cent. of the product of such sales. Allowing 100 per cent. expenditure would certainly lead in the short term to more council houses being built. However, apart from the horrendous effects on public expenditure and inflation, it would have only a temporary influence on waiting lists. As we saw in the 1960s and 1970s, virtually unrestricted council building just does not cure waiting lists and brings in its wake massive debt and expenditure on maintenance to be borne by future generations. We are still paying off the massive debts built up in that era, when it was thought that those policies would cure the housing problem. The enabling policies being pursued at present, with sensible building for particular social purposes in partnership with housing associations, is sensible and defensible. I am glad that those policies are being carried out in Portsmouth, with Government grant to help in various ways to address the problems of the city's homelessness and inadequate shelter.

The revenue support grant system will never please everyone, but I am delighted to pass on to my right hon. and hon. Friends the news that their support for Portsmouth has been noted.

6.56 pm

Mr. Ian McCartney (Makerfield) : I always enjoy following the hon. Member for Portsmouth, South (Mr. Martin), not just because occasionally we are paired, but because he is never one to underwhelm the House. He puts his case boldly and fully, although I rarely agree with what he says. However, he is one of the few Conservative Back Benchers whose views on local government are clearly understood by the Opposition.

In the past four months, the Minister of State and I have spent much time together, in Committee on the Local Government Finance Bill and the Local Government Bill, and also in discussions in his office in Marsham street. So that I do not put him to sleep, I do not intend to go over the ground that I have already covered with him about my own authority.

I wish to highlight the reasons why my local authority, with other metropolitan authorities, feels let down by the Minister of State's announcement about standard spending assessments. The views that I shall express have already been expressed by others, such as the local chamber of commerce, the leader of the Conservative group in my local authority and The Times.

Recently, The Times did a survey of local authorities, covering value for money, quality of service, efficiency of service and the way that Government perceives the development of services. The Times found that Wigan borough council gives value for money and that its services are run efficiently. In answer to questions, Ministers use my local authority as an example of best practice to other local authorities on how to run departments such as education, housing and social services. However, for the second time, my local authority will face substantial cuts of more than £10 million in its budget. In the past two financial years it has had to cut £37 million from its budget simply because of the way in which the Government calculate standard spending assessments.

On Monday 3 February, under the heading "Spending curbs land thrifty Wigan with 20 per cent. poll tax rise", The Times local government correspondent said :

"Wigan, run by Labour moderates,"--

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the Minister of State knows from my speeches in Committee that I am a moderate person who always puts his arguments moderately-- [Laughter.] I knew that hon. Members would be tickled by that-- "has become a by-word for the inadequacy of the grant system. Praised by ministers and the Audit Commission for its efficiency, the borough council has had to make £37 million worth of cuts in the past two years. It has been forced to shed 1,250 staff from a workforce already smaller than the national average and spends less on services than many Conservative councils. It also has one of the best records of poll tax collection."

The authority also has the third lowest level of council house rent arrears. It has proved to the Government time and again that it provides value for money in the way that it manages and produces its services.

However, last night my local authority was meeting in emergency session to decide where to make substantial cuts that will include redundancies of about a further 1,000 staff in the housing, direct labour, community care and education departments. There is the possibility of hundreds of teachers being made redundant in order to meet the Government's spending targets. Given the funds it receives and the amounts allocated in SSAs, how can my authority provide the same level of care for children at risk as Wandsworth council, which receives eight times the amount of grant?

Just a few miles down the road is Manchester, another inner urban authority. My authority receives less than £900 per person to spend on local services, while Manchester has £1,448. Yet my regional authority is placed twelfth out of 104 in terms of the number of GCEs obtained. It receives £510 per head for local schools, compared with an average of more than £700 per head in the other metropolitan authorities, including the inner London authorities, which receive many hundreds of pounds more to provide the same basic services. How can an authority that is so efficient in the level and spread of services it provides find itself losing millions of pounds of resources due to the way in which the Government calculate SSAs? I am not the only one to be puzzled ; The Times agreed with me. The chambers of commerce also agreed, and when their representatives met the Minister of State, they made it absolutely clear that they supported the authority and were dismissive of the Government's attitude to SSAs. They said that the Government's position was undermining the local economy.

The representatives understand that many of the services provided by the local authority are supplied in conjunction with the private sector. When the authority has substantially to reduce its service budgets, the people to lose will include not just those who receive the services, but local companies involved in the tendering to provide those services.

Councillor Chadwick, the leader of the Conservative group on Wigan borough council, agreed that the way in which the SSAs are calculated was wrong. He agreed with the authority that the Government are manipulating and massaging the figures to produce the assessments, to the detriment of authorities such as Wigan. He was bitterly disappointed at the failure of the Minister of State to show any recognition of the level, delivery and value for money of services provided by my local authority.

Therefore, it is clear that not just the Labour party, but local industry, the local Conservative party and a Conservative-backed newspaper-- The Times --hold the

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same views. One cannot get a broader consensus. The Minister cannot say that the view is held only by the bleeding hearts of a socialist council, supported by Labour Members of Parliament. Many local authorities in the north, in Yorkshire, Lancashire and particularly Greater Manchester are aggrieved as they witness the effects of SSAs, which always result in their receiving a lower level of grant. In previous debates the Minister has alluded to the marked discrepancy in the way in which SSAs are calculated. In meeting with the local authorities he recognised that there is a need to consider marginal aspects, but he is not prepared to accept the substantive argument that major problems exist. As a result, growing numbers of local authorities are being caught in the net of the SSA calculations which do not take into account the large, rural hinterlands attached to many metropolitan boroughs, the social deprivation of many of those boroughs and the fact that the transport system precepts now come out of the district council local budgets.

We in Wigan have to pay the capital cost of the new rail link to Manchester airport and the introduction of the metrolink in Manchester. That is because the Minister of State, in his days at the Department of Transport, removed the precepting powers of the Greater Manchester transport authority. As a result, if Wigan wants to maintain its bus system, it must take the money from schoolkids, pensioners, industrial development and the promotion of jobs--the same is true of Yorkshire. If money is not taken from those sectors, the investment in public transport will be dramatically reduced. Either way, local authorities cannot win.

I see that the light is flashing, which means that I must sit down--and Mr. Deputy Speaker is making circling hand signals for me to sit down. I feel as though I am in a television studio.

If not this evening, then at an early stage in Committee, will the Minister of State give us an idea of when the Government will take seriously the issue of SSAs and look for a change in the system? The Minister has the excuse of the introduction of a commission to review local government. Therefore, he could take that oppportunity to change the SSA system.

7.7 pm

Mr. Kenneth Hind (Lancashire, West) : Local government in many parts of the country has still not accepted the words of Mr. Anthony Crosland about the party being over for local government spending. However, this local government spending settlement is reasonable, and the Government have been more than generous to local government. Total spending for 1992-93 is £41.8 billion--an increase of 7.2 per cent. That represents the maximum amount that the Government think it will be necessary for local authorities in England to spend in 1992-93 to provide a standard level of service.

In order to encourage local government, we must ensure that we get the best value for our money--that is what it is all about. It is not good enough to say, "Spend, spend, spend" ; consideration must be given to obtaining good value.

The hon. Member for Makerfield (Mr. McCartney), like many Opposition Members, constantly whinges about

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the amount of Government grant. He does not apply his mind to the issue of generating the tax income that goes into local authority expenditure or consider the community charge payer, who has to fork out for those services, or the income taxpayer and business taxpayer, who have to provide the money, through the Treasury, to make up the grant. One must generate wealth to spend it, and only my right hon. and hon. Friends understand the necessity to create the financial resources that allow grants to be made.

Overall standard spending assessments have increased by 6.8 per cent., which is well above the rate of inflation. Local government should be able to live with that figure. The average increase in respect of specific grants--such as for the police--is even higher, at 11.9 per cent. The increases in most SSA totals are also well above the inflation rate--14.7 per cent. for the police ; 15.2 per cent. for all other services ; 8.3 per cent. for fire services ; 7.2 per cent. for social services ; and 7.1 per cent. for education. Those major increases reflect the circumstances and represent a prudent and sensible settlement.

Mr. McCartney : The hon. Gentleman should tell the truth.

Mr. Hind : I will tell the truth also about Labour-controlled local government.

A large number of whingers in local government and in the House constantly complain about spending levels, but they never worry about how the money will be raised or about the impact that higher expenditure will have on the individual and the business community. The authorities in the top 20 for uncollected rent are all Labour controlled. Liverpool is sixth, with some 26 per cent. of its tenants behind with rent totalling £16.4 million. Imagine what a local authority could do with that sum. Labour-controlled Preston is in 16th place. Some 9 per cent. of its tenants owe rent totalling £1.56 million.

Of the 20 local authorities with the highest proportion of empty dwellings as a proportion of their total housing stock, Liverpool has 9.7 per cent. of its properties vacant ; Manchester, 6.47 per cent. ; Salford 6.23 per cent. ; Burnley, 5.84 per cent. ; and Knowsley, on the edge of my constituency, 4.49 per cent.

Mr. Irvine Patnick (Lords Commissioner to the Treasury) : Not to mention Sheffield.

Mr. Hind : My hon. Friend is right, because Sheffield also has one of the worst records in that respect.

At a recent local government conference, the hon. Member for Dagenham (Mr. Gould) complained that the 1989-90 revenue support grant was £6 billion to £7 billion short of the sum needed. Is that a measure of the amount that a Labour Government, in the unlikely event that one were elected, would ask the electorate to pay? That would require a tax increase of 2p or 3p in the pound. We should add that to the £37 billion of excess spending that Labour has promised in its documents and in the House.

We must consider also the impact of Labour's local government proposals on those who would have to pay. Labour would end tendering for services, which would create a large loss that would have to be met by the council tax or whatever form of rates applied. Labour would also sweep away the Audit Commission, which identified £1.2

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billion of potential local government savings and has seen £650 million of them actually achieved. Under Labour, there would be no watchdog to exercise such control.

Labour would create large numbers of new quangos, with all their excessive costs, and increase costly new bureaucracy at the expense of the local taxpayer. Above all, Labour would abolish the capping restrictions that Parliament placed on local authority spending, which protects local government taxpayers from being milked and imposes a degree of necessary prudence. In the past, certain local authorities served as milch cows for irresponsible left-wing councillors. They did little for the community, but drove out jobs. The uniform business rate is controlled by central Government and is currently set at the rate of inflation. Labour would hand back the uniform business rate to local authorities. In the late 1980s, we saw in places such as Liverpool and Manchester a sharp increase in business rates. Jobs and investment were driven out, with the consequence that the actual take went down. Massive unemployment followed in those areas, but constituencies such as mine benefited from businesses moving from profligate, high-spending

Labour-controlled areas to low-cost areas run by Conservative councils, where they could make better profits, expand, invest and create new jobs.

The future under Labour would be spend, spend, spend. Local authorities already spend an enormous amount of money and certain limits must be imposed. We must ensure responsible control if there is to be sensible local government budgeting in future.

The capping rules were changed recently and many councils that spent more than £17 million found themselves caught as a consequence of using their investments to balance their budgets. Under the new capping criteria, many of them will be required to reduce their expenditure. I ask my hon. Friend the Minister for Local Government and Inner Cities to allow such councils two years in which to reduce their expenditure to the required level. When my hon. Friend gives that matter his consideration in April, he may agree that that is a reasonable provision.

Capping is a necessary mechanism of central Government, and I am sure that the public recognise that we finance local government sensibly and do not take advantage of those who have to pay local government tax. The public can look to a Conservative Government to ensure that will continue to be the case in future. In those circumstances, I urge all my right hon. and hon. Friends to support the motion.

7.17 pm

Mr. Ron Leighton (Newham, North-East) : Our annual debates on local government finance are replete with esoteric jargon and initials--such as SSA, meaning the standard spending assessment. The operative word is "standard". Everything is to be standardised across the country. There is no local decision-making, but everything is centralised ; the man in Whitehall knows best. Local manifestos and the wishes of local voters do not seem to matter. Instead, a standard is set at the centre. There is no local discretion or judgment, and democratically elected councils are told what to do. Even committees are told what are their individual SSAs and how much they can spend. All local freedom of choice is eliminated.

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How does this affect the London borough of Newham? If it rolls forward its existing programme and does not add anything new, it will spend £11 million in excess of the cap set by the Department of the Environment. It will therefore have to make painful cuts in its services--but not because the council is profligate or loony. First, the capital financing SSA is inadequate. This covers the cost of servicing the capital debt, and to service the capital debt costs £30 million. The borrowing is Government approved, but the

Government-approved SSA is only £18 million : there is therefore a £12 million deficit.

Secondly, there is no procedure for recognising the existence of homelessness in the SSA, which is a major problem in my part of the world. Council housing provision has virtually come to an end ; there have been many repossessions, and we have many refugees. Homelessness costs my borough roughly £5 million, but, although the SSAs do not provide for that, the Government have imposed a legal duty on us to deal with the problem. So we should have an extra £12 million for capital financing, and £5 million for homelessness--£17 million more. If my authority had that extra £17 million, it would find itself in a reasonably comfortable position, but instead it is having to make major cuts. A meeting took place last night to discuss the matter. As education represents 50 per cent. of our local expenditure, cuts are inevitable. My area is not doing well in the education league table ; the east end is struggling, in difficult circumstances, to raise education standards. Now, however, we are being forced to make these painful cuts.

Parents and teachers object to the cuts. Last night a demonstration took place outside the town hall ; my hon. Friend the Member for Newham, South (Mr. Spearing) was present. The councillors, who do not want to make the cuts, are being forced to do so. They are also having to sack members of staff, who are resisting by going on strike : Newham's poll tax department is on strike now.

I congratulate the Minister on having sat through the debate so far, and thank him for his courtesy in meeting us last night. I believe he knows that the people who run Newham council are honest people, and that the council is honest, too. It is not a loony council in any respect ; yet, although it is situated in a part of east London that has many problems, it is having to endure these agonies. I wonder that those councillors are even willing to remain in local government. It is not their fault that cuts are being made in essential services, but they are taking the stick. Every night they are barracked by crowds outside the town hall ; but they are only the messenger boys--the tools of the Government. They have no local discretion.

The Government do not want local government, which involves discretion and democracy, the issue of manifestos and voting by the local electorate. What they want is more local administration, as applies in the health service : those who run the health service are appointed, not elected--and most seem to be card-carrying members of the Conservative party. They do what they are told ; the law is laid down centrally. The Opposition want proper local government. The story gets worse. There are also the rate refunds resulting from backdated rateable value adjustments. The Minister listened very patiently to our views on that last night. At the time when the rates were abolished, a number of commercial ratepayers had appeals outstanding against the rateable valuation of their properties. Such appeals are

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determined by valuation courts. In Newham, the valuation court's decisions have resulted in an estimated reduction of £6 million in rate income. This is on top of all the other problems that I have mentioned.

Let me stress that Newham has no control over the refunds. The original rateable value was set by the Inland Revenue ; it had nothing to do with the council. The appeals had nothing to do with the council either. The council comes in only when it has to pick up the costs. This has made the local position almost impossible. Something must be done. Last night, the Minister was willing to listen to a number of options, and I hope that since then he has come up with a solution. The first option was that the cost of the refunds should be chargeable to the Collection Fund, and be met from the non-domestic rate pool. That is Newham's favoured option. The second was that the cost should be treated as a disregard for capping purposes ; but that would merely raise the poll tax level, and I see little point in such a move.

A third option was to ask the Department of the Environment to increase Newham's temporary revenue borrowing limit for 1992-93. That would spread it over two years ; I should prefer it to be spread over a longer period. The final option was for the authority to be allowed to capitalise the refund costs. That would help Newham only if the Department provided additional credit approvals to enable the capitalisation to take place, because the council's capital programme is already fully committed. We are asking only for approval to borrow, to make payments staggered over five or six years, so that our position is not made untenable. We are not asking for cash from the Government.

The Minister of State listened very carefully to our submissions, and I hope that he will be able to give some good news to a council that is struggling, in good faith and with the best will in the world, to find a way through its terrible difficulties.

7.27 pm

Sir Anthony Grant (Cambridgeshire, South-West) : I entirely agree with the hon. Member for Newham, North-East (Mr. Leighton) : all our debates on local government finance, whether the community charge or the rating system is involved, are a nightmare. That has been true for as long as I have been in the House. It is very difficult for us not to become extraordinarily confused, so I shall confine my remarks to East Anglia ; I shall not move an inch north of Norfolk, or take a step along the road to Wigan pier.

I referred to Norfolk because my hon. Friend the Member for Great Yarmouth (Mr. Carttiss) made a powerful speech on behalf of his constituency in particular and Norfolk generally. He pointed out how differently Cambridgeshire had been treated in regard to the revenue support grant. Let me explain the position.

I wish that some of the socialist and Liberal politicians who make such a clamour in Cambridgeshire about the tight-fistedness of central Government were present now. If they had heard not only the speech of my hon. Friend the Member for Great Yarmouth, but those of hon. Members representing such areas as Wigan, Sheffield and so forth, they would have realised that Cambridgeshire's settlement is not at all bad.

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For many months, my hon. Friends representing other parts of Cambridgeshire have had to point out that Cambridgeshire has been unfairly treated in the past, because it has been one of the fastest-growing counties in the country. At one time, it was the fastest growing in population terms, because so many people wanted to move to such an excellent place.

I am not saying that we are the fastest-growing area, but we are the fastest growing in terms of population, certainly much faster than Norfolk. We have had a bad deal in previous years, but this year we spent a long time talking to the Government about the problems. I pay tribute to my hon. Friend the Minister of State and to the Under-Secretary, my hon. Friend the Member for Salisbury (Mr. Key) who have been extraordinarily patient and have looked into this in enormous detail and listened to us carefully when we explained the problems.

As a result, we have achieved a 7.5 per cent. increase in RSG, which is a satisfactory solution and a reasonable compromise. We are not top of the list of counties, but we are ninth out of 39 and fourth in the list of shire counties in terms of percentage per head of population. Therefore, we have nothing to complain about. There is to be a 7.5 per cent. increase in education. In that respect, the county council has wisely and sensibly made primary education its priority and has not put the full burden on secondary education. I commend the county council for its wisdom.

The police are important and it is necessary to have an adequate Government precept for them. Cambridgeshire has embarked upon a policy of civilianisation of the police as vigorously as possible under the excellent chairman, Councillor Kenneth Spink. The council has done a splendid job and it is important that it should not be penalised for indulging in civilianisation. It should be praised for doing so, because it is entirely in keeping with proper and sensible Government policy.

I disagree slightly with some of my hon. Friends on the uniform business rate. The many small businesses in my constituency are finding it onerous. It is all very well for people in the north, including Lancashire, to say that it is better than the ghastly things that happened under the old rating system and loony councils in Liverpool and other places. They are certainly better off. However, the uniform business rate bites hard on people in the south and east, and they should not be neglected at times of economic difficulty. Another issue is the ridiculous area cost adjustment system. That results in the absurd circumstance of Oxford benefiting from that system when Cambridge does not. I have never heard of anything so ridiculous. The reason is that the incredible formula is worked out not on a county basis but on some arbitrary boundaries that result in Oxford and some other parts of East Anglia being caught up in the so-called highly expensive places in the south-east and Cambridge being caught up in the not -so-expensive places. I do not know who drew up those mad boundaries, but it time that the Government looked at them.

I hope that my hon. Friend the Minister will look at this matter, because the boundaries are absurd. It is said, "Oh well, you in East Anglia and Cambridgeshire do not have very high costs." That may be true of parts of north Cambridgeshire and the northern parts of East Anglia, but it is not true of Cambridge, of the rest of my constituency or of that of my hon. Friend the Member for Cambridgeshire, South-East (Mr. Paice). It is damned expensive, just as expensive as in Oxford or Hertfordshire.

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Huntingdon district council, which is part of my constituency, and Cambridge council are very responsible authorities. Those councils embarked vigorously on the sale of council houses. That is an excellent policy and has given people homes of their own. It has transformed much of my constituency and those surrounding it. Those councils have accumulated a number of balances. As I have said, they are responsible local authorities which run sensible and tight ships. They do not waste money or embark upon lunatic ventures. The time has come for a release of some of that money, the retention of which I find it increasingly difficult to justify. I realise that it is not a matter entirely for my hon. Friend the Minister, but I hope that he will talk to the Treasury and the Chancellor, as I have done, as it is a way to give a much-needed stimulus to the housing market. On balance, the Department of the Environment has done a good job on the RSG. It is a good team under my right hon. Friend the Secretary of State. The Department has achieved a sensible RSG in times of great difficulty. I have not heard a word from Opposition Members about how they would make it better if they were in office. I leave my hon. Friend the Minister with the message that no situation is so bad that a Labour Administration could not make it infinitely worse.

7.35 pm

Mr. Eric Illsley (Barnsley, Central) : The Secretary of State mentioned the annual ritual of these debates, and I make no apology for again attacking the standard spending assessments because of the effect that they will have on my constituency. In the past, I have attacked the level of grant that we have received and the standard spending assessment which has denied my area adequate levels of funding. Once again, my local authority is bottom of the list of 36 metropolitan districts. When we ask why we are so low, the Secretary of State says that somebody has to be at the bottom. There is no justification and no sensible argument why my local authority should receive such a low standard spending assessment. In fact, I do not think that the Government know the reason why.

The calculation of standard spending assessments defies logic. Last year, my local authority provided a report that was commissioned by Coopers and Lybrand Deloitte. It was sent to the Minister explaining why we should have a better standard spending assessment. There was no response. I am sure that all the representations from Opposition Members will meet a similar fate.

The revenue support grant is tied into the Government's calculation of total standard spending assessments. After we remove special grants from the total figures, the total SSA for 1992-93 shows a 6.7 per cent. increase. However, when we look in a little more detail, we see that the shire areas will receive 6.75 per cent., London will receive 7.84 per cent., but the metropolitan districts will receive 5.96 per cent. That is a lot lower than the average figure. Given the current level of inflation, if we compare the 1991-92 total budgets with those for 1992-93, the increase in SSAs falls to as low as 4.8 per cent. So the figure of 6.7 per cent. being bandied about by the Secretary of State is obviously wrong. The figure becomes even smaller if we consider balances and reserves that local authorities have to take into account.

Time and again my local authority has asked for changes to the SSA methodology. This year, there has

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been a change in methodology--an extension to cover foreign visitors and a change in relation to interest receipts. Both those changes will have no effect on my constituency and my local authority. Extensions to cover foreign visitors will probably make the position worse. The special area protection grant will be reduced by £25 per adult. Again, because of the position of my local authority, that will probably make things worse.

The SSA for Barnsley for 1992-93 is £140.74 million--an increase of 4.6 per cent--not 6.7 or 7.2 per cent. but 4.6 per cent. That is 89 per cent. of the average increase for metropolitan districts. It equates to 68 per cent. of the national increase, to 65 per cent. of the average increase for shire counties and to 55 per cent. of the increase for Westminster council, which will receive double the standard spending assessment of my authority. Why is Barnsley metropolitan borough council required to provide the same level of service as all the other authorities but with half the resources? How can that be justified? It cannot.

My metropolitan district will rank 36th out of 36. Manchester's standard spending assessment is 78 per cent. greater than that of my authority. Why does Manchester need 78 per cent. more finance to provide a standard service? Why does my authority have to do it far more cheaply than Manchester? Why is there no capping criterion for the level of SSAs when, of the 36 authorities, the one at the bottom receives 78 per cent. less than the one at the top? The Government are quick to impose a cap on budgets and to restrict the level of the council tax in relation to the bottom and top levels, but, when it comes to the SSAs, the top authority is 78 per cent. ahead of my authority which languishes at the bottom. Why is there no cap on such an expenditure level?

If we consider previous settlements of the revenue support grant, we find that, from 1991-92, there has been an increase of about 13.4 per cent. There will be a decrease in the national non-domestic rates because the rateable base has fallen. However, all in all, when one considers the RSG and the business rates, my authority will receive a net increase of 1.6 per cent. taking into account external financing. My authority will receive not 6.7 or 7 per cent. but 1.6 per cent. Bearing in mind the Government's capping criteria that allows an increase of about 4.6 per cent. on the budget for 1991-92 and gives us a capping avoidance target of £147.7 million. That will leave us £5 million short of our budget requirements to maintain the level of expenditure of this year.

It has already been said that the teachers' pay settlement will be about 5 or 6 per cent. I do not intend to go into the details of the ideas that Barnsley will have to consider for cuts. We tried that before with the Secretary of State's predecessor who complained that there would be a procession of bleeding stumps. I know darned well that that Secretary of State will ignore any information I give about cuts.

If Barnsley's SSA had been increased by the national average, we would have £3 million more to spend. If our SSA had been increased by the same amount as that of Westminster, we would have a further £5.2 million and I would not be standing here making the same speech that I made just a year ago and the year before that.

It is inevitable that there will be budget reductions and that my constituents' poll tax bills will increase by more than the rate of inflation, and this at a time when we are being denied the RECHAR funding to which we are

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entitled from the European Commission because the Government will not allow it to be additional to the 1.6 per cent. increase. The Government say that we cannot have it because of inflation and other factors, but it is additional to nothing.

Finally, I mention the South Yorkshire fire and civil defence authority. In 1992-93, its SSA will be about £28.6 million, against a budget cap of £30 million. To maintain the current level of service, it would need £31.8 million. It would need £33 million for a reinstatement budget. A current service level budget means training cuts, no use of the fire service college, equipment cuts and the fire authority being 28 posts below establishment. A reinstatement budget would allow it to train officers and to have an establishment closer to Home Office minimum levels.

Let us compare South Yorkshire's fire and civil defence authority's SSA to that of other areas. Greater Manchester has received a 10.2 per cent. increase, Merseyside a 7.4 per cent. increase, Tyne and Wear 11.5 per cent., London 8 per cent., the West Midlands 7.6 per cent. and South Yorkshire 4.5 per cent.--bottom of the list again. Only South Yorkshire's fire authority has an SSA lower than the capping limits. There will be a £2.4 million shortfall between the cap and the minimum standard of fire cover. Clearly, that will lead to a poorer level of fire service provision in my constituency and, as I have said, higher poll tax bills. I again ask the Government to get rid of this stupid SSA methodology.

7.44 pm

Mr. James Pawsey (Rugby and Kenilworth) : Hon. Members representing Warwickshire have argued consistently for more than 12 months that the standard spending assessment formula is flawed, and I shall give the House three examples.

First, there is no reduction in the percentage of the education SSA which refers to additional educational needs. I am advised that Warwickshire county council, if able to decide for itself, would certainly not distribute 20 per cent. of its schools budget on the basis of figures produced by the 1981 census.

Secondly, the use of the current SSA formula highlights a serious difference between the Home Office and the Department of the Environment on fire service spending. Despite representations made by Warwickshire county council, there are no changes being made to the formula, which results in a gap of about 25 per cent. between the permitted SSA and the standstill expenditure on the fire service. The SSA which is produced by the Department of the Environment's computer apparently identifies Warwickshire as an overspender, but Her Majesty's inspector of fire services has serious doubts about the service's ability to meet the operational requirements laid down by the Home Office. Therefore, it seems likely that Warwickshire county council will be making two command apearances--first, before the Home Secretary for not spending enough to ensure an adequate quality of fire service and, secondly, before my right hon. Friend the Secretary of State for the Environment for overspending on its SSA.

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The third flaw that I have identified is in anticipated revenue. In the equivalent debate last year I drew attention to the fact that there is an assumption made within the formula for the amount of anticipated revenue that the authority receives from interest on receipts. I freely admit that my right hon. and hon. Friends have made an adjustment which reduces the size of the anomaly, and I am grateful for that. However, despite that adjustment, the county does not receive the amount, and, indeed, cannot receive the amount, laid down by the SSA formula because Warwickshire county council's balances are much lower than the assumed figure. Low balances equal low revenue.

Hon. Members will be aware that counties are grouped by the Audit Commission into families. Warwickshire had the lowest revenue support grant per adult in its Audit Commission family for last year and this year. Let me illustrate that shortfall by again referring to the Audit Commission family. In 1992-93, top-of-the-pops Bedfordshire receives a massive £475 per head in revenue support grant. Bottom-of-the-league Warwickshire gets £286, a shortfall of almost £200 per head.

Earlier I referred to the discrepancy between the deemed interest and the interest actually received by the authority on its receipts. But we also have a problem with the area cost adjustment, which is known to local government buffs as the ACA. That point was made by my hon. Friend the Member for Nuneaton (Mr. Stevens), who is sitting in his customary place. I acknowledge once more his hard work in seeking to obtain a sensible level of revenue support grant.

The ACA directs more than £1 billion each year to the south-east, which is not so much a brain drain as a bullion drain. It is based on general data and applies to employees whose pay is, in the main, determined not by area but by national pay scales, which apply to the midlands and to the south alike. The practical results of the ACA show that county councils in the south have standard spending assessments £200 million more than the amount that they believed it appropriate to spend in 1991-92. In other words, the lucky and favoured south-east underspends when judged by SSA. If Warwickshire could join that favoured grouping, Warwickshire's problems would be over. If that is not acceptable to my right hon. and hon. Friends- -and I understand why it may not be--may I point out to my hon. Friend the Minister that there is a second possibility, advanced by the Association of County Councils, which is to abolish the area cost adjustment.

There can be little justification for the ACA when £200 million is not spent. In a table giving the increase of this year's SSA compared with the figures for the last year of the old formula of general rate expenditure, Warwickshire is second from the bottom. I suggest to my hon. Friend that, by any criterion, Warwickshire and its charge payers are suffering pretty rough justice.

Like most hon. Members, I know that there is a pretty tenuous relationship between quantity of spending and quality of service provided. In education, for example, Newham spent the second largest amount per child, but came second from the bottom in terms of results. That can be contrasted with North Yorkshire, which was fourth in results, but 81st in terms of money spent per child. I remind my right hon. and hon. Friends that Warwickshire is not socialist Newham or Brent, which are run, or have been run in the past, by left-wing Labour councillors.

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Warwickshire is run by sensible, responsible, Conservative councillors who genuinely do their best for their communities.

Mr. Tony Banks : Will the hon. Gentleman give way?

Mr. Pawsey : No, because I am limited to 10 minutes.

Last year, Warwickshire was capped, but thanks to the efforts of all Warwickshire Members and to the understanding of my right hon. Friend the Secretary of State and of my hon. Friend the Minister, the cap was lifted by almost £3 million. That made a most significant contribution which did much to prevent draconian cuts being made in Warwickshire services. This year, Warwickshire finds itself in a broadly similar position to last year's. I shall not therefore, be able to support the Government in the Lobby. The fact that for two years running I find myself opposing the proposals may give some food for thought.

I ask that should Warwickshire set a budget marginally and reasonably above SSA--and I made this point in an intervention in the speech by my hon. Friend the Member for Nuneaton--my right hon. Friend will show understanding and sympathy similar to that which he showed last year. He measured that sympathy not so much in words, but in money. Similar funding will this year protect the quality of service in Warwickshire. That plea comes from Warwickshire Members. I know that my right hon. Friend has done much to help and I, like other Warwickshire Members, am grateful for that help. However, I ask him, his hon. Friends and the Department of the Environment again to consider the SSA and to devise some method of producing an SSA which is fair not only to other counties but to Warwickshire.

7.54 pm

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