House of Commons Hansard Debates for 18 Feb 1992

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Teachers' Pay and Conditions

10.29 pm

The Parliamentary Under-Secretary of State for Education and Science (Mr. Michael Fallon) : I beg to move

That the Additional Grant Report (England) 1992-93 (House of Commons Paper No. 264), a copy of which was laid before this House on 17th February, be approved.

Mr. Bob Cryer (Bradford, South) : On a point of order, Mr. Speaker. On the Order Paper, in connection with this motion, there is the following note :

"The Instrument has not yet been considered by the Select Committee on Statutory Instruments."

In fact, the Select Committee considered the instrument this afternoon and found no basis, within the framework of Standing Orders, to report to the House.

Mr. Speaker : I am sure that the whole House is grateful to the hon. Gentleman, who is Chairman of the Committee.

Mr. Fallon : The House is indebted to the hon. Gentleman, not just for his work on the Committee but for the information that he has just provided.

Perhaps I should remind the House of the background to this report. In July last year, the School Teachers' Pay and Conditions Act 1991 received the Royal Assent. Under that Act, the Prime Minister is required to appoint a review body to examine and to make recommendations on the statutory conditions of employment of school teachers in England and Wales.

The Government's decision to establish a School Teachers Review Body was widely welcomed, not least by five of the six teacher unions. It was rightly seen as clear evidence of the Government's commitment to raising the status of the teaching profession, and was seen by teachers and parents alike as welcome recognition of the professionalism that is now so evident in our schools. Indeed, only the Labour party and some of the more militant members of the National Union of Teachers opposed the establishment of a review body--a fact which we shall again and again make clear to teachers over the coming weeks.

On 20 September, the Prime Minister appointed Sir Graham Day as chairman of the STRB. On the same day, my right hon. Friend the Secretary of State asked the review body to make recommendations on the pay and conditions of teachers for the year beginning 1 April 1992, and to do so by the end of January. He invited it to consider, in particular, whether modifications should be made to the system of selective payments and how the pay of school teachers might be more closely related to their performance.

Hon. Members may recall that the School Teachers' Pay and Conditions Act 1991 does not give the Secretary of State any power to constrain the work of the review body. He cannot, for instance, impose a financial constraint within which the review body must operate. But he is empowered under section 1(4) of the Act to give the review body directions

"as to considerations to which they are to have regard". In his letter of 20 September, my right hon. and learned Friend drew attention to a number of such considerations. One of these was affordability, given the level of education standard spending--ESS--for 1992-93. On 26 November,

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the Secretary of State formally notified the review body of the level of ESS in 1992-93. This represented an increase of 7.2 per cent. in England and Wales as a whole over the 1991-92 figure. My right hon. Friend's letter and his letter of 20 September are reproduced in the STRB's report.

The review body got into its stride without delay. All interested parties were invited to comment, and many were given the opportunity to present oral evidence. Despite the pressure of time, the review body completed its work before the end of January, and its report was published on 10 February.

We believe that the review body has produced an excellent report. The analysis it contains is extremely helpful, and it makes a number of very constructive suggestions for the future. We particularly welcome the review body's affirmation of the importance of moving towards properly designed performance-related pay arrangements, and its intention to bring forward proposals for possible implementation in 1993-94.

For 1992-93, the review body recommended a 7.5 per cent. increase in the value of the standard scale for classroom teachers, the heads and deputies pay spine and most discretionary allowances. It drew particular attention to the needs of primary teachers and, accordingly, recommended that an extra 26,000 incentive allowances should be awarded in primary schools from next September. It also recommended a two-stage increase in London weighting--6.4 per cent. from 1 July 1991, and a further 5.6 per cent. from 1 April. These are very substantial increases, but the Government nevertheless propose that the review body's recommendations be implemented in full. My right hon. and learned Friend the Secretary of State has now invited the employers, the teacher unions and other interested parties to comment on the report and on the proposition that it should be fully implemented. Subject to that consultation, the Secretary of State will publish a new school teachers' pay and conditions document and make an order requiring that teachers be paid at the new rates. This award is a fitting tribute to teachers' dedication and achievements.

The review body's recommendations will in total add 7.8 per cent. to the teachers' pay bill in England and Wales. In order to help local authorities to cover the cost of the award the Government propose, subject to this House's approval tonight, to pay additional grant to authorities in England totalling £56.5 million.

In considering the financial implications for local authorities of the review body's recommendations, the Government took into account that the 1992-93 local authority finance settlements for England and Wales had allowed for local authority spending on education to rise, in the two countries taken together, by 7.2 per cent. between 1991-92 and 1992-93. The 7.2 per cent. growth in education spending which we had allowed for in the RSG settlements represents a substantial rise in real terms--the GDP forecast of inflation for the relevant period is only 4.5 per cent.

In the Government's view, the real-terms growth in education standard spending already built into the RSG settlement gives local education authorities adequate headroom to cover the great bulk of the 7.8 per cent. cost of the award for teachers recommended by the review body. I have already reminded hon. Members that, in November last year, the Government directed the review

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body, in considering its recommendations, to have regard for affordability, given the level of education standard spending for 1992-93. In its report the review body says :

"we have taken careful note of what was said to us about affordability by all the parties and have exercised our judgment in the light of all the evidence".

The review body went on to say, quite rightly, that it was the Government's responsibility to decide whether to accept its recommendations and

"how they should be funded".

The Government have accordingly considered carefully the extent to which the review body's recommendations are affordable within the context of the 1992-93 RSG settlement. We have concluded that local authorities should be able to afford to meet the cost of an award which is broadly in line with the overall uplift in education standard spending--7.2 per cent. in England and Wales.

Mr. Christopher Gill (Ludlow) : My hon. Friend is aware of the unhappiness in Shropshire about the methodology used to calculate the standard spending assessment and its effect on the county's budget this year. Does he agree that, where the additional grant is based on a pro rata calculation, it has the effect of compounding the apparent unfairness in the settlement for the county of Shropshire?

Mr. Fallon : My hon. Friend will recall that some weeks ago I met a delegation from Shropshire led by my right hon. Friend the Member for Shropshire, North (Mr. Biffen) to hear Shropshire's criticism of the SSA methodology. I have subsequently written to him about that. I shall move on to say that the SSA methodology is reviewed each year in conjunction with the local authority associations, and any points made by Shropshire and other authorities about the various factors involved in the SSA methodology --including the sparsity factor, which I know was of some concern to some of the more rural shires--will be considered in the context of that review.

In coming to their view, the Government took account of pressures on LEA budgets, notably the pressure of higher pupil and student numbers and of the full year cost in 1992-93 of the 1991 teachers award which, as the House will recall, was staged. We have also taken into account the substantial scope that remains among LEAs for efficiency savings. On this basis, we have concluded that the RSG settlement as approved was consistent with an award for teachers representing a 7.2 per cent. addition to the pay bill.

The additional grant which we propose in England under section 85 of the Local Government Finance Act 1988 accordingly represents the difference, broadly speaking, between the cost of an award corresponding to the uplift in the overall settlement--7.2 per cent. for England and Wales taken together--and the actual award of 7.8 per cent. The £60 million has been calculated on the basis that the overall teachers' pay bill in 1992-93 in England and Wales before implementation of the review body's recommendations is about £9.8 billion.

On this basis, the difference between an award costing 7.2 per cent. and one costing 7.8 per cent.--that is, 0.6 per cent.--is the equivalent of about £60 million for England and Wales taken together. England's share of this, on a pro rata basis, is £56.5 million and that is the amount of additional grant set out in the draft order that we are

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debating. Wales's share of £3.5 million is being built into its main RSG settlement which the House approved last week.

I am fully aware that some local authority spokesmen claim that the additional grant we propose falls short of what is needed to cover the full cost of the award. It has been suggested in some quarters that, in aggregate, LEAs will be as much as several hundred million pounds short of what they need. I assure the House that the arithmetic underlying such estimates needs to be taken with a very large pinch of salt. It is based on a presumption that all of the LEAs' existing expenditure--including all spending in excess of the Government's assessment of standard spending-- should simply roll forward into 1992-93 completely untouched and that pay and price increases and other new pressures next year will be met entirely with new money simply added on to all existing expenditure.

The 1992-93 RSG settlement allowed for spending on education in England to rise by £1,244 million--7.1 per cent. higher than the total for 1991- 92 and a staggering 24.2 per cent. higher than the figure allowed in the 1990-91 RSG settlement. The increase in teachers' pay recommended by the review body and the full-year effect of the 1991 staged award for teachers will cost about £900 million. That still leaves authorities with about £400 million headroom, taking account of our proposed additional grant, to meet cost increases and pressures elsewhere in their budgets. Even with inflation at current levels--and it is likely to fall further over the next year--local authorities should be able to live within this, while continuing to maintain acceptable standards of provision.

The local education authorities can do more. The delegation of budgets to schools and colleges has created real scope to reduce the number of bureaucrats in town halls. The LEAs are spending substantial sums on maintaining surplus school places--at least 1.5 million empty desks in England--at a cost of about £350 million. We have never sought to argue that it was practical for LEAs to take all their surplus places out of use, but if only half the current surplus were removed, it would save LEAs running costs of £175 million a year.

Those are not the only areas in which there is scope for savings. The Audit Commission recently published a report which showed that LEAs could make £20 million a year savings in home-to-school transport simply by running it more efficiently. In further education, there is scope for economies of scale as student numbers rise. In further education colleges in England, there is one lecturer to every 11 students.

That makes better use of resources than in the past. In 1988-89, there was one lecturer for every 10 students. But there is still considerable scope here for tightening up. In other words, many of the additional students who are enrolling in LEA colleges--we are very glad to see them in such numbers --can be accommodated at marginal cost without employing additional lecturers.

The difference between the Government's figures and that of certain local authority spokesmen is to be explained entirely in terms of their sheer unwillingness to contemplate the efficiency savings that must be made to get value for money and to keep public spending within tolerable levels. The Government make no apology for encouraging efficiency savings ; it is our duty to do so to protect taxpayers and charge payers from excessive demands.

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I reiterate our view that, on a realistic and reasonable assessment of what is affordable, local authorities should be able to cover by far the greater part--7.2 per cent.--of the proposed teachers' award within the main RSG settlement as already approved. The review body's recommendation represents a slightly higher uplift than that allowed for in the RSG settlement and the Government propose to pay additional grant under section 85 to make up the difference. There will therefore be no extra demand on LEAs.

There has been some confusion among authorities about the mechanism by which they will receive this grant and its relationship with charge capping. Under section 90, the grant is paid into authorities' collection funds. That means in shire areas that it will be paid into the collection funds of shire districts. London boroughs and metropolitan districts will under section 98(1) transfer the grant into their general funds. Shire districts will be directed to pay the grant to their local education authorities.

Education authorities will need to include the extra expenditure to be financed by the grant in their budget calculations. However, taking the grant into account means that this extra expenditure will not increase their precepts or demands on the collection fund, which are the amounts on which capping bites. The Under-Secretary of State for the Environment, my hon. Friend the Member for Salisbury (Mr. Key) may have a little more to say about that later, if he catches your eye, Mr. Deputy Speaker.

The basis for distributing the additional grant is necessarily described in rather technical terms in the report. In brief, and in general terms, we are proposing to allocate the grant by reference to standard spending assessments which are the basis of distribution of the revenue support grant. SSAs represent the Government's assessment of the appropriate amount of spending by each local authority consistent with the provision of a standard level of service. We propose to use the schools elements of the standard spending assessment for the distribution of this additional grant. The schools elements are under-fives ; primary ; secondary ages 11 to 15 ; and secondary ages 16 plus. These elements take account of the distribution of school pupils between LEAs and allow for authorities' different circumstances, in particular for the higher salary costs of employers in London and the south-east and for extra costs incurred by authorities because of additional educational needs.

The SSA methodology to which my hon. Friend the Member for Ludlow (Mr. Gill) referred is the subject of extensive consultation every year with the local authority associations. In our view, it represents the fairest means available for distributing grant for educational purposes to local authorities, but we continue to subject that judgment to annual review and full consultation with the local authority associations.

In conclusion, the Government have not brought forward this proposal for additional grant lightly. We bring it foward only after very careful consideration of affordability. We are satisfied that efficient and well- managed authorities will, with the additional grant that we propose, be able to cover the cost of the award while continuing to provide an education service of high quality and without imposing any additional demands on their charge payers.

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The House need not simply take that as my view. I would like to quote a letter written by a chief education officer in the press last week :

"There have been many reports in the local press of the predicted impact of the 7.5 per cent. pay award to teachers on the education budgets of certain local councils. I would like to make it clear the North Yorkshire County Council, unlike quite a number of education authorities it would seem, has included within its contingency budget for 1992-93 sufficient funds to meet the teachers' pay award in full. That pay award will not therefore in North Yorkshire lead to a loss of teachers' jobs ; nor will any change need to be made in the programme of educational improvements already planned for the coming year."

That quotation shows that a well-managed authority ought to be able to implement the recommendations of the review body with the additional help that we are providing tonight.

10.48 pm

Ms. Hilary Armstrong (Durham, North-West) : It is interesting to follow the Minister, having heard all his blandishments, which bear no relation to the reality that local authorities, teachers and schools face in the current climate. The School Teachers Review Body acknowledges that it has been able to make the settlement in the knowledge that recruitment and retention is better than it had been of late because of the recession.

The junior Minister has given us a complacent picture of local government spending. It offers the prospect of a pay rise to many teachers, the cost of which will be their own jobs.

The reality is that there are severe problems in many authorities, not merely Labour-controlled authorities. For the Minister to dismiss in that way the many problems that everyone in education is facing is--to put it kindly--complacent beyond words. It shows no commitment to raising educational opportunities and standards. He is saying that, as far as the Government are concerned, spending on education in the state sector must be pushed down for ever and a day at whatever cost, even if they are prepared to meet rising costs in the independent sector.

Mr. Fallon : The money is increasing, you silly woman.

Mrs. Armstrong : I shall not rise to the inevitable sexism which comes from the Government Front Bench.

The Secretary of State knows that overall spending on education will not meet the rise in teachers' pay or the rise that schools and authorities know is necessary to meet the other demands which his Department has put upon them, and to meet rolls which are rising because of the increase in the birth rate and because authorities are trying to encourage many more young people to stay on in full-time education after 16. We are supposed to be in favour of that, yet authorities are being penalised for encouraging more young people to stay on in education after 16. They also seem to be being penalised because the birth rate is rising, and I do not know that local authorities have much influence on that.

The junior Minister tried to tell us that all efficient authorities could manage. That would be true if they were facing different circumstances. He is saying that authorities such as Warwickshire, Shropshire and Gloucestershire, which know that they will have enormous difficulties in meeting the pay rise, have been profligate and have not considered the spending needs of their charge payers.

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Some authorities have been telling us that they are being penalised because they have been low spenders, because the Government have calculated standard spending assessments in a way which penalises them. I am not sure that anyone really understands the calculation of SSAs. I led two delegations on the subject to Ministers. There was much agreement that no one around the table really understood it.

When my father was in the Department of the Environment, he used to say that only three people in the Department understood the way in which rate support grant was settled, and none of them agreed about it. There might be a few more people who think that they understand it now, but they probably all disagree with each other. The people who are trying to administer the enormously complex arrangements that the Government have set in train are certainly finding that they do not understand much of it either.

It is clear that the STRB had great difficulty in understanding the complexities in teachers' pay. One of its clearest instructions to the Government is that they have to simplify and clarify the structure of teachers' pay, and that they have to tell governing bodies what they can do.

Mr. Rupert Allason (Torbay) : Just to show that the hon. Lady, at least, understands how SSAs are calculated, will she tell the House how many criteria are used in their assessment?

Ms. Armstrong : I am here in my capacity as a shadow Education Minister-- [Interruption.]

Mr. Allason : Well, educate us.

Ms. Armstrong : I have studied the complexities behind that calculation. I wonder whether the hon. Gentleman knows the answer. He may know how many criteria are used, but that does not convince me that he understands what those numbers mean and can explain them. Mr. Allason rose --

Ms. Armstrong : I shall not give way, because we are discussing an issue that is much more serious than the hon. Gentleman's question. The hon. Gentleman cannot convince me that he understands, especially as the civil servants and the Minister for Local Government and Inner Cities were unable to persuade me that they did.

Some local authorities led delegations to the Minister for Local Government and the Inner Cities to ascertain what they should allow in their budgets for the teachers pay increase. He said that they should allow no more than 5 per cent. Perhaps that Minister and the Under-Secretary of State for Education and Science should have conferred about what a sensible authority should provide for that expenditure, because the Under-Secretary has given us different information.

Once again, local authorities are expected to deal with the fudge that the Government have made of that spending. It is clear from what the Under- Secretary said that the election is pending. It is clear that the incoming Government will have to pick up some enormous bills because of the Government's incompetence.

Perhaps local authorities will be reassured by what the Under-Secretary said to his local newspaper at the weekend.

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"I have never seen a cut in education in spending."

I wonder whether he would be happy to repeat that in Warwickshire, Gloucestershire and Shropshire. He went on :

"Every year we get scare stories before the budgets are set, yet each year there is more money."

Mr. Fallon : That is true.

Ms. Armstrong : The hon. Gentleman should speak to the teachers. They believe that spending on education has been reduced. The report of the pay review body states that the conditions in which teachers work and children learn are important. It says that the ability to provide the right environment is almost as important as pay. The number of available books and the state of the buildings in which children and teachers operate effect the morale of teachers and the recruitment and retention of staff. No one who visits schools regularly can be satisfied with the conditions in which much of state education is provided.

The pay review body also drew attention to the ability of primary school teachers to have non-contact time. It recognises that that serious issue has not been addressed adequately. It believes that such non-contact time is of crucial importance if those teachers are to fulfil their responsibilities to children properly under the national curriculum.

The review body also drew attention to the wider issues that must be considered, such as teacher shortages in particular subjects and localities. The review body said that the problems had eased during the year, although they remained serious in some subjects in some localities. It went on :

"It seems likely, however, that this is largely attributable to current labour market conditions and that some teacher supply problems will return when the economy moves out of recession." In other words, we are not overcoming the problem of teacher recruitment and retention.

The Secretary of State's press notice accompanying the review body's report made grander claims than the report. For example, the right hon. Gentleman's view of the average teacher is of a person who works in London, who receives incentive allowances, who probably receives some form of discretionary supplement and who perhaps even receives the social priority allowance. I am not sure that the average teacher described in the press notice would be recognised as average in many parts of the country.

The issue of affordability is critical. As I pointed out, there is no comfort for teachers who receive rises above inflation if the cost is losing their jobs because their governing body can no longer afford to employ them. For the last three years, teachers' pay rises have been staged. In 1991-92, there has been a particularly heavy end loading for basic pay and incentive allowances. In the view of teachers and LEAs, the average increase is more likely to be 10 per cent. than the 7.8 per cent. quoted by the Minister. It has often been claimed that the education standard spending assessment has not taken that end loading into account, bearing in mind the additional 2.9 per cent. on the pay bill compared with last year, and the fact that that has not been taken into account in SSAs.

The supplementary grant that we are discussing assumes that each authority has had an average increase of 6.7 per cent. My authority has had an education standard spending assessment rise of 5.8 per cent. The difference must be made up. The Minister may say that, in global

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terms, that is not the case, but even his figures show that, in percentage terms, authorities in England must find more than authorities in Wales. In addition, many authorities receive much less than the average SSA increase.

Some hon. Members seem to have difficulty realising that, when talking about league tables and averages, some fall below the line of the average, so some authorities receive less than the average. Many of those are already up against their capping levels, and while the Minister said that capping levels would be irrelevant, they must still find the additional spending. Capping might be irrelevant in terms of the supplementary grant, but is it irrelevant for local authorities that must find additional money for the pay award? For Durham county, that cost will be about £3 million, after receipt of the supplementary grant. Will that authority be able to raise its capping level? If so, will the Department of the Environment agree to that, or will that £3 million have to be found out of money allocated for existing commitments, meaning that other parts of the education budget will have to be cut? Will more teachers' jobs have to go? The Minister did not tackle that issue, about which local authorities are most concerned.

Mr. Fallon : I am particularly grateful to the hon. Lady for giving way so that we can continue our dialogue about Durham, which she began. She asked me a straight question about Durham's position. The straight answer is that Durham can increase its precept by 6.5 per cent. for 1992-93 before it reaches the ceiling at which it is likely to be capped. I hope that she will not pretend that non-salary costs outside the teachers' pay bill are running at 6.5 per cent. when inflation is only 4.5 per cent. I particularly hope that she will not exempt Durham from the search for efficiency savings, when Durham is the sixth worst delegater of central bureaucracy in the country.

Ms. Armstrong : The Department of Education and Science approved the delegated scheme in every authority, including Durham. Given the Minister's interest in Durham, I am sure that he was personally responsible for that. He answered my question clearly, and his answer was no, the Government will not raise the capping limits to take account of the additional moneys that authorities like Durham, Shropshire, Gloucestershire and Warwickshire will have to find to meet the teachers' pay bill. Warwickshire has postponed setting its budget because it is now in such disarray. It knows that it will be unable to set a budget without significant cuts in the education service. Because its education members do not want to do that, it now has no date for setting a budget.

Other authorities say that doing that will inevitably have a knock-on effect on other parts of education. It is generally accepted, by the Government as well as everyone

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else, that teachers' pay will now form a bigger proportion of the overall education budget. That means that less money will be available for other items.

The Minister has the cheek to talk about getting rid of surplus places. The Government have made it virtually impossible for local authorities to get rid of surplus places. They have approved a number of grant-maintained schools where the local authority was trying to deal with the problem of surplus places. They said that they needed to close the schools to deal with surplus places, which meant that the whole system was frozen. The schools to be closed then became grant-maintained, so the surplus places remained. The reorganisation of those schools has been turned down, and local authorities know that, if they seek further reorganisation, they are likely to be in exactly the same position, with their ability to deal with surplus places increasingly depleted.

It is--I was about to use unparliamentary language but I shall not do so-- [Hon. Members :-- "Go on, spoil yourself."] It is simply not on for Ministers to be so deceitful with the public about what they are doing. They have frozen the surplus places system and ensured that authorities are unable effectively to reorganise their schools.

Mr. Fallon : Just for the record, before the hysteria reaches new heights, may I point out that, of those schools approved for grant- maintained status, only a small minority were threatened with closure. Most of the others were not.

Ms. Armstrong : The Minister does not understand the implications of his legislation and actions. Some 35 to 40 per cent. of schools that have opted out were originally scheduled for closure. That has meant that the authorities are not prepared to introduce other schemes as they fear that the Government will encourage opting out, which will not help them to sort out their reorganisations. Until the Government take a more coherent line on that issue, we shall not find a solution to the problem of surplus places.

I was interested that the Minister said that we should look at the Audit Commission's report on school transport. He should think about what it would mean for Durham county, where many poor parents would be at a significant disadvantage when trying to gain access to schools for their children.

There is no truth in the Government's claim that they are fully funding the teachers' pay award. They are not, but they are pushing the problem down to schools. It will result in teachers losing their jobs. I do not believe, teachers do not believe and local authorities do not believe that the Government are dealing with education in a way that will raise standards and improve opportunities. They are saying to teachers, "Yes, you can have a pay rise, but by gum we shall make the rest of your job difficult."

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11.11 pm

Mr. John Biffen (Shropshire, North) : My hon. Friend the Minister referred to having met a delegation of Shropshire county councillors and Members of Parliament. We appreciated the interest and concern that he showed in the education problems that undoubtedly afflict that county. This evening, I wish, in a brief intervention, to reinforce the nature of those difficulties in order to help focus attention on how best to resolve them.

The additional grant is, of course, much appreciated, but in Shropshire's case that aid must be set in the context of the extent to which the 1991-92 pay award was staged and how the latter parts of the staging fall in the coming year. It must also be set in the context of the expectation of some Shropshire county councillors that the current pay award for 1992-93 would be staged, not paid in its entirety as has proved to be the case. Another relevant factor when considering the additional grant is that Government funding does not reflect the growth of numbers in education in the county of Shropshire.

However, the issue inevitably revolves around the methodology of the standard spending assessment. As my hon. Friend the Minister made clear, the additional grant is related to that methodology, so if it had some unintended deleterious consequence for a county--as it had for Shropshire-- we must take account of that in these proceedings. I very much appreciate it when my hon. Friend says that the matters will all be considered sympathetically and with sound realism, which is absolutely essential, as the result of the additional grant, and its related costs, for Shropshire has been that the county has been obliged to return to the policy of using reserves. Until the statement, the reserves were to be reduced by £4.5 million, and now the use of reserves has risen to £6 million--an increase of £1.5 million in use of reserves is implict in the issue to be resolved this evening. That policy cannot be countenanced for one moment. It is related to a highly critical situation, but it cannot be a permanent feature of the prudent financing of county affairs. I believe that Shropshire is a prudent county. Its politics has been traditional, broken only by the election as Member of Parliament for Shrewsbury of Disraeli in the last century--a rather exotic performance. But Disraeli was not really representative of the county of Shropshire. Gladstone, who lived just over the border in Hawarden, was more typical of it, and the Gladstonian approach to public finance has characterised Shropshire. Let no one suppose that it is a kind of pastoral Lambeth with a slap-happy approach to financial affairs. It is not. It has played fair by public finance, and in return the county deserves fair play from the Government.

11.14 pm

Mr. David Bellotti (Eastbourne) : The pay rise for teachers is to be warmly welcomed. For many years they have faced the problem of trying to catch up and even this increase will not put them on proper salaries-- because of what has happened in the lifetime of this Government. Nevertheless, I am sure that the rise will do a little--not a lot--to retain some of the excellent teachers in our schools, particularly those who teach what have become known as the shortage subjects of science and mathematics.

The problem that the pay increase creates for local authorities is not to be underestimated. I was disappointed

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by the Minister tonight. He exhibited a mixture of complacency and total disregard for the way in which local education authorities need to budget.

The Government's advice during the past year has been clear : as local authorities budget for the coming financial year, they ought to allow for inflation of about 4 or 4.5 per cent. LEAs will have budgeted for that ; certainly, East Sussex did.

The teachers' pay rise means that local authorities will have to find well over 3 per cent. and in some cases 3.8 per cent. increases within their overall budgets. We wait to see what help the Government will give them. The £56 million on offer tonight is nowhere near enough to make up the difference between the figure that LEAs budgeted for and the sum that they will have to pay out. The Government should at least come clean about that. The Minister acknowledged it tonight, so he cannot have it both ways.

East Sussex is no different from Shropshire and many other local authorities. The gap in the figures remains worrying. East Sussex is spending up to the maximum of its SSA this year ; its balances are not huge and its contingency reserves are not enough to pay out the necessary sum.

The Government are offering my authority help of only £670,000. This afternoon I attended the budget meeting of East Sussex county council, on which I still serve as a councillor. Members of all parties on the council do not doubt that they will have to find at least £2 million more to meet the requisite sum. It is complacent of the Minister to argue that the Government money is enough. It is not enough for East Sussex, and I suspect that it is not enough for most local authorities--

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