House of Commons Hansard Debates for 3 Feb 1993

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Latterly, my predecessor, Mr. John Lee, was vocal in his opposition to the poll tax. In a low-rated, low-wage, poverty- stricken area, such as mine, the council tax too will have punitive effects. There is nothing in this financial settlement--nothing in the transitional relief or in the council tax or in the SSAs--to give me, any of my council colleagues or the residents of Pendle any encouragement at all. It is a bad deal for north-east Lancashire and, more importantly, for local government generally.

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Mr. Roy Thomason (Bromsgrove) : I am grateful to you, Mr. Deputy Speaker, for calling me as I had not intended to speak in the debate until I heard the remarks of the hon. Member for Blackburn (Mr. Straw), who is not now present. It is a pleasure to follow the hon. Member for Pendle (Mr. Prentice) who is, I believe, the gentleman who is alleged to have invented the loan swaps that have caused so much grief and difficulty for many local authorities.

Mr. Gordon Prentice : The member of Hammersmith and Fulham council who introduced it to loan swaps was Mr. Kim Howe, a Conservative leader of the council in 1981-82. If the hon. Gentleman wants to know the history of loan swaps in Hammersmith and Fulham, he should read the independent report, commissioned by the council and written by Mr. Van Veeder QC. It completely exonerates all Labour members of any nefarious dealings.

Mr. Thomason : I am delighted that the answer is given in such a pat manner that it must have been repeated on numerous occasions. I wish to say a few words in praise of local government, as not enough is said here in support of the men and women who give such valiant service in the councils of England, Wales and Scotland. It is right that we should put down a marker noting what they do. Some 17, 000 or 18,000 people serve in that way. It is inevitable that a few of them--whatever their party or political complexion--will prove to be rotten apples in the barrel. However, the country should express gratitude for the way in which the vast majority of them give of their time and service.

Some of those people feel that they have a constitutional role in local government that overrides the views and policies that may be dictated by and originate from the House and the national Government of the country. I say that because I recall the hon. Member for Burnley (Mr. Pike) attacking me vigorously on that issue not many months ago.

Local government is subservient to national, central Government. That has always been my view. However, again and again in the debate it has been argued that there is some divine right in local government to determine national policies that may run contrary to those of central Government. That has rarely been, and never should be, the case.

We do not live in a federal authority. There are plenty of European precedents of local government or inter-state government shaping the form of national policies, but that is not so in our country. The German la"nder, the Italians and even the French, to a lesser extent, have a history of small states coming together in relatively recent years to create a nation. They consider that their local government

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--in the sense that it is a federal organisation--has rights to determine national policy. Such a belief is alien to the history and principles of this country.

Local government in this country does not have the right to demand expenditure levels contrary to the determined policy of the Government, supported by the House and the other place. The decisions must be made here. We should resist the temptation to give local government the right to seek to set expenditure levels in excess of the priorities that have been debated and determined in the Chamber. There seems to be some Opposition Members who believe that local government should embark on social engineering of some form. Such issues should be determined here in the Chamber, as they are matters of national, not local, priority.

The standards of probity that we should expect of local government, and that we so often see, have unfortunately fallen short in a number of authorities. That is true not just of individual members about whom accusations have been made or are being processed, but of some local administrations. That ought to worry Opposition Members, since almost all those local authorities are under Labour control.

Mr. Andrew Mackinlay (Thurrock) : The hon. Gentleman may recall that, in a previous incarnation, I used to meet him in my capacity as a National and Local Government Officers Association official at the Association of District Councils, over which he presided. We both had to deal with the gross mismanagement of an organisation called the Local Authorities Management Services and Computer Committee, which cost district councils many thousands of pounds, which is probably still having to be paid over. I still have the files, and I remember that this happened under the stewardship of the hon. Gentleman and other members of the ADC. It is wrong of him to talk about mismanagement by Labour local authorities when there is a whole raft of evidence--he is well aware of it--of wrongdoing in LAMSAC, over which he, Lady Anson and others exercised a considerable degree of control.

Mr. Thomason : Since he has the files, the hon. Gentleman ought to recall the facts a little better. He should remember that LAMSAC, on whose board of management I never served, included among others representatives of an organisation known as the Association of Metropolitan Authorities-- those members were prominent in its organisation and they came from the Labour party, as did representatives from other local government organisations. So the body was not stamped with any political mark, contrary to what the hon. Gentleman suggests. I appreciate that he may have lost himself in those files, which he seems to have retained to produce for events like this one, but he really must try to do better next time. Earlier, I mentioned the high standards of probity in most local government. There has, however, been an appalling lapse of administrative control--not necessarily wrongdoing by individuals--in authorities such as Lambeth, Hackney and Sheffield, not to mention Monklands in Scotland. Those of us who want local government to do well and who want to be able to support it believe it fair to criticise those lapses of administration

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and sort them out. It concerns me that the Labour party seems slow to put its colleagues in local government right even though they have obviously gone wrong.

The hon. Member for Sheffield, Attercliffe (Mr. Betts) said that Sheffield had won the support of some beauty parade that appeared in the Local Government Chronicle, which showed that it was a well managed authority. I seem to recall that the article in question was based on a survey of the views of local government officers, not on external appraisal by a body such as the Audit Commission. Those local government officers were mostly in the employ of local authorities, such as Sheffield city council, controlled by the Labour party.

It follows that Labour Members should check their facts before claiming examples of good management practice. In this case, the hon. Member for Attercliffe cited an authority that had spent £10 million--lost £10 million--on the student games, and which is now spending money on providing offices for Members of this House. There have been allegations in this debate of rigging the population formulae for assessing revenue support grant. Extraordinarily enough, Opposition Members suggested that the population of certain parts of the country was being under-estimated because their residents were trying to avoid registration for community charge purposes. It is surprising that some hon. Members think that many of their constituents sought to avoid the legitimate processes of community charge registration. Those hon. Members must answer to their electorates for that.

Opposition Members fail to understand the significance of population increases and movements in terms of the estimates and appraisals in the RSG calculations. We all know, and some hon. Members will know to their cost as the parliamentary boundaries are changed, that inner cities are being depopulated, a trend that has continued for many decades. Conversely, some urban fringe and rural areas are seeing a population explosion.

Local government in such areas has to provide a substantial infrastructure to support the increased population. New schools and roads have to be constructed, and even new social services offices have to be built. Therefore, the demands on local government in the expanding parts of the country are very much greater than in areas of declining population.

There is no gerrymandering when revenue support grant properly reflects population changes that are the inevitable product of the movement of people. Such movements have continued throughout this country's history, as jobs change their nature and people seek to follow them. It is wrong to complain about grant following population in that way.

It has been said that there will be substantial job losses. There may be some, and we all regret that, but the Opposition and their colleagues in local government are engaging in much scaremongering. We were told that Birmingham city council would lose 1,000 jobs. Only a few weeks ago, the Labour leaders of that council said that they would lose 3,000 jobs. If that trend continues, they will tell us in a few weeks that they are about to take on employees. A review in the Municipal Journal reveals that 22 per cent. of local authorities will take on extra employees. We must avoid histrionics in talking about employment in local government. The truth may be very different overall when the figures are finally known.

Opposition Members spoke about spending. Many tears have been shed over the difficulties that local

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government will allegedly suffer next year because of the small increase in total standard spending over this year's budgets. The issue is important, because comparisons are being made between this year's budgets and next year's total standard spending. Local government, sometimes for bad reasons and sometimes for good, has spent substantially over its total standard spending in the current year. Is it suggested that that overspend should now be built into the revenue support grant calculations so that it is ratified? That appears to be the argument, but it is nonsense, because it would mean that every local government overspend in every year would be automatically and retrospectively approved by the Government. That is not on, and the Opposition ought to know it. No Government, whatever their political colour, could possibly ratify past expenditure levels and simply carry them forward as a base for the next year. We must have a level of stability, which must be based on the total spending of the previous year, according to the formula. From that formula, additions are constructed.

Local government needs stability. I entirely support hon. Members' suggestions that area cost adjustments should be examined next year, and I welcome the Secretary of State's announcement that he is looking at the SSA mechanism. I trust, however, that, in considering any amendments, he will remember that violent changes in grant distribution from year to year should be avoided, just as violent changes in the demands on the individual community charge payer, or council tax payer, should be avoided from year to year.

The hon. Member for Pendle suggested that his constituents would suffer as a result of the imposition of the council tax. He seems to have completely forgotten about transitional relief. The same rules should apply to changes in SSAs and the grants that follow from them year by year.

Opposition Members have talked a great deal of nonsense. The truth is that the Government's proposals are eminently fair and reasonable. They will not make life difficult for local government ; I know that my council colleagues of a year or two ago would make the same point. Of course it will be a tough settlement, but every year brings a tough settlement. Every year requires local government to investigate its expenditure thoroughly, and this year will be no exception. I am glad that the majority of local authorities will look at their expenditure carefully, and will seek to achieve efficiency and effectiveness in delivering services. I hope that the few that have not done so in the past will change in the future.

9.16 pm

Mr. Doug Henderson (Newcastle upon Tyne, North) : In previous years' debates on the Local Government Finance Report, hon. Members have complained that debate has involved more of the same Tory attacks--more financial restrictions, more cuts in resources, more job cuts and more damage to local authority services.

Today's debate again involves more financial restrictions, more cuts in resources and jobs and more damage to local authority services. However, it differs from the debates of past years. Although such cuts have undoubtedly been made in the past, local authorities in the past have been able to mitigate, at least to some extent, the worst effects of Conservative cuts. They have increased

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local sources of finance to compensate for central Government cuts ; sometimes they have dug deep into their reserves, and--as many of my hon. Friends will know--in numerous cases they have virtually emptied those reserves. They have also attempted to borrow on occasion, in an attempt to defend services and protect the local population. Few such avenues are now open to authorities, because most borrowing schemes have been decreed to be inoperable. Authorities have lost the potential to tap reserves, and central

Government--through severe capping regulations--have taken away their remaining powers to raise additional resources locally.

As the Government well know, the difference between this and previous years lies in the depth and severity of cuts--cuts in services, cuts in jobs on a scale unknown before the current round of local government financial announcements, cuts in virtually every part of the country. I warn Conservative Members to make no mistake--there will be pain in many constituencies, not only in those of my hon. Friends. There will be pain for children whose schools are not properly funded, pain for elderly people when home help services are cut, pain for young people when youth clubs are closed or they have to wait much longer to get a start on housing, and pain for most of us--indeed, all of us--who use roads which will be less well lit and less adequately maintained. There will be pain for almost all sections of the community because, whether hon. Members like it or not, virtually all members of our community are in one way or another dependent on local authority services.

The debate is about that difference in severity compared with previous years. It is about the additional pain that the cuts will inflict, but it is also about the negation of democracy, about denying local communities the right to determine their future and denying people the right to have a say in their community. It is no longer local people who decide what services are provided, what education or social services or what level of road maintenance is required. Essentially, central Government decide those matters. The 152 Tory Acts relating to local government which have been introduced since 1979 mean that local government can no longer function democratically, and democracy cannot function without local government. It is our democracy which maintains our British way of life and which is infringed by repressive legislation. Ours is the only nation in western Europe and among the industrialised countries which has so much central Government control of local government. Many other interesting issues have also been raised. The right hon. Member for Brent, North (Sir R. Boyson) showed himself capable of making a reasonable contribution, even though he is a Blackburn Rovers supporter--probably a very depressed Blackburn Rovers supporter--by making a plea for the house owners in his constituency who will suffer through being placed in a high band for the council tax. He said that the situation was worse because of the slump that he detected. He was able to distinguish between a slump and a recession because of his northern roots. The House and his constituents will be grateful for his observations. Certainly, his constituents will be grateful that he cares so much about their economic circumstances.

The right hon. Gentleman raised two other useful points on which we can all agree. He spoke about the

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inadequacy of our registration system for voters. I do not believe that we can have a proper democracy unless we know who is able to vote. There should be a debate between the parties to consider how to improve the system.

The right hon. Gentleman also said that the battle--in some ways, the relentless battle--between central and local government did neither party any good. He called for balanced, measured judgment and for local democracy. Unfortunately, he dug a little too deeply into his conscience and did not feel that he would be able to vote with the Opposition today. May I plead that, after hearing the debate, he might not need to dig so deeply as he had thought?

The hon. Member for Cirencester and Tewkesbury (Mr. Clifton-Brown) brought out a box of tricks which he had clearly obtained from Conservative central office. He is in danger of being known in future as the hon. Member for Pandora because even with his box he did not get it right in relation to public sector borrowing requirement problems. The blame does not lie with local authorities, which raise perhaps £10 billion a year, or even with central Government finance for local authorities, which is of the order of £32 billion a year. The real problem lies with the level of unemployment because we now spend £20 billion of virtually wasted resources buying ourselves out of unemployment.

I am glad to see that the hon. Member for Harlow (Mr. Hayes) has returned to the Chamber. He emphasised his duty to make representations on behalf of his constituents, and he certainly did that in a humorous way today. He said that he was not confident that the Minister would necessarily respond to all his representations. However, I believe that he revealed some of his real views when he paid tribute to the important work of a child abuse centre in his constituency, but was not prepared to recognise that there is a clear link between the way in which the SSA is calculated and the amount of resources available to a local authority to spend on that essential duty.

The hon. Member for Harlow also gave himself away when he criticised a community group having access to a public building at peak times. I should have thought that the whole purpose of a public building was that community groups should have access to it and, if they needed access to it at peak times, that was an appropriate use for that building.

Mr. Mackinlay : I am grateful to my hon. Friend for giving way to the authentic voice of Essex which I believe is vested in me. The Labour- controlled council of Harlow is having to grapple with the effects of inheriting a new town with its large infrastructure as well as the reasonable expectations of its residents, but that situation is not matched by appropriate funding from central Government. There is at least a moral commitment for the Government to fund that infrastructure. Is not the hon. Member for Harlow (Mr. Hayes) caught between a rock and a hard place? His Government are letting him down while his constituents are being failed by the same Government financially.

Mr. Henderson : I am grateful to my hon. Friend the Member for Thurrock (Mr. Mackinlay) for raising that point. The hon. Member for Harlow did not inform the

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electorate before the general election that there was a need to rein in public expenditure : the electorate found that out to their cost afterwards.

The hon. Member for Brentwood and Ongar (Mr. Pickles) said that he believed that the country deserved good local government, and I certainly endorse that. I was not sure about his point in respect of the redundancies in Birmingham, whether the figure for job losses is 3,000 or 1,000, but even 1,000 job losses is bad for a city such as Birmingham which has suffered some of the worst effects of the recession.

Mr. Riddick : Does the hon. Gentleman approve of the way in which Sheffield council has used poll tax payers' money to subsidise the constituency offices of five Labour Members to the tune of £55,000?

Mr. Henderson : Whatever else I thought about the hon. Member for Colne Valley (Mr. Riddick), I thought that he intervened in this place sufficiently frequently to have heard the answers to questions. Had he been in the Chamber today, he would already have heard that those facilities are made available to Members of Parliament in Sheffield.

The hon. Member for Cheltenham (Mr. Jones) agreed with my hon. Friend the Member for Blackburn (Mr. Straw) that it was surprising that the Secretary of State did not mention job losses. My hon. Friends the Members for Tyne Bridge (Mr. Clelland), for Barnsley, Central (Mr. Illsley), for Sherwood (Mr. Tipping), for Lancashire, West (Mr. Pickthall) and for Pendle (Mr. Prentice) identified the way in which the calculation of the SSA has been extremely damaging to their constituencies.

My hon. Friend the Member for Tyne Bridge compared the situation in Gateshead with that in Westminster, clearly demonstrating the inequities in the system. My hon. Friend the Member for Barnsley, Central has repeatedly emphasised the way in which the system discriminates against coal areas such as Barnsley. I pay tribute to his persistence and I hope that the Minister will say more about that than his predecessors have in years gone by.

Mr. Redwood : Is the hon. Gentleman associating those on his Front Bench with the idea that money should be taken away from inner London and given to the north? That would affect Camden, Islington, Hackney and Lambeth, as well as Westminster. Is that the Opposition's policy?

Mr. Henderson : I think that I am running out of time-- [Laughter.] Hon. Members should wait a moment. I was about to help the Minister by explaining the work that has been done by Dr. Martyn Senior at the university of Salford in examining the criteria in respect of the standard spending assessment. The hon. Gentleman has brought me to that point a little prematurely, but I will answer his question. At present, the criteria do not allow any significant impact for long-term unemployment, which badly damages certain and specific communities and leads to increased needs in respect of education, social services and economic development. That has nothing to do with comparisons between the north and London boroughs, but everything to do with an equitable system.

My hon. Friend the Member for Blackburn highlighted the failure of the capping system. He showed that cuts in

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local government expenditure have a deflationary effect on our economy. He said also that, when expenditure has been buoyant, so has the private sector, because it has gained much from healthy local authorities. He pointed out contradictions in the Secretary of State's position on capping, jobs and service cuts.

There are occasions in the House when hon. Members regret something that they have said. The Secretary of State has no great reputation for regretting things that he has done, but hon. Members might wonder whether he has any regrets about what he has said about capping. If he has some regrets, he will be able to take some consolation, for his political acrobatics have no doubt impressed Treasury officials well in advance of any leap that he might want to make in future from his Kremlin at No. 2 Marsham street to the bunker at No. 11 Downing street. If he is to square what he said in his November statement about no jobs being lost with what is evidently happening in local authorities, he will need the acrobatic qualities of the gladiators we see on television on Saturday evenings.

I remind the House that the Secretary of State said that local authorities should be able to maintain the full range of services that they provide if they run them efficiently. How does he square that statement with Tory authorities' response to his announcement? How does he square it with the response of Devon, which has announced £21 million in cuts and 145 job losses? How does he square it with the point made by the hon. Member for Cambridgeshire, South-West (Sir A. Grant)? Cambridgeshire's SSA is down from £402 million to £380.6 million, and 330 jobs are at risk. How does he square it with Harrow, where 10 per cent. cuts in services will take place and 200 jobs will go? How does he square it with Enfield, which has emphasised that it has a £21 million gap and that up to £10.5 million could go in its education budget?

Some schools have said that they could lose up to 20 teachers. An education officer has said that it is possible that children will be taught part-time at Enfield. The head of a school tells parents that children might be on a four-day week or a four-and-a-half day week by the time the council has finished its budget. How does the Secretary of State square what he has said with the situation in Barnet, where the chief executive has said that the effect of the Government's policy is to take the arms and legs off the local authority? The chief education officer in Barnet talks about the education system being bankrupt.

Mr. Howard : The hon. Gentleman should in future co-ordinate his speech rather more closely with that of his hon. Friend the Member for Blackburn (Mr. Straw). The thrust of his hon. Friend's speech was that the system was a giant con trick designed to favour Conservative-controlled local authorities at the expense of Labour-controlled local authorities. Now we have from the hon. Gentleman a litany of woe specifically related to

Conservative-controlled local authorities. The Opposition cannot have it both ways.

Mr. Henderson : The Secretary of State must acknowledge that the Opposition are not trying to have it both ways. My hon. Friend the Member for Blackburn emphasised the advantage that he believes that shire counties have had, but he also emphasised that the SSA system was so inequitable that not only Labour authorities

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but many Conservative authorities were complaining. What is the Secretary of State's response to those authorities?

Sir Anthony Grant : Will the hon. Gentleman give way?

Mr. Henderson : No, I want to make progress.

Is the Secretary of State saying that those authorities are misrepresenting the true position? Is he saying that they are inefficiently run Tory councils? What is his advice to Barnet council? Is he saying that it should make £8.5 million cuts in education to avoid capping, or is he saying that teachers should be made redundant and class sizes increased? Is he suggesting that there should be part-time education in Barnet and that support staff should be sacked? Is he recommending that there should be cuts in equipment? Is he saying that all those cuts should take place? What is the Secretary of State saying to those Tory authorities?

What is the Secretary of State saying to parents in Barnet, who, in Conservative Britain, in state schools in 1993, are now being told that under local management their schools cannot afford to buy services from the local authority such as music, sport, and other facilities? What is his advice to the Tories on Barnet council? After hearing today's debate, is he still prepared to say that his settlement is an eminently reasonable one, as he stated in his opening remarks?

Clearly, great damage has been caused to our local authority services by the Government cuts and the destruction of local democracy. There is also a sense of grievance throughout the country, which is made worse by the feeling that the calculation of the standard spending assessment is distorted and biased. If we are to have a system of local government which is considered fair and which is honoured at local level by people of all political colours, as many Conservative Members have said today, we need a major review of the SSA system. It is not good enough to say that such a review will take place internally. I believe that there should be an independent review of local government finance. That is the view of Tory and Labour local authorities, the academic world and the Audit Commission. We all look forward to the evidence from the Audit Commission in future.

Contrary to their November statement that cuts would be unnecessary, the Government are asking the House to vote for deep cuts in local authority services. Contrary to that commitment, they are asking the House to vote for thousands of job cuts in local government at a time when 3 million people are unemployed. Contrary to the Secretary of State's commitment that capping should be used only as a reserve power, they are asking the House to vote for an unprecedented regime of Soviet-style central control of local government finance which will totally destroy democracy. Contrary to their claims about subsidiarity at the time of the Maastricht summit, they are asking for the right to deny British people the right to decide their own level of local authority provision, a right which any reasonable interpretation of subsidiarity would grant them.

We believe not only that the financial regime which the Government are set to impose on the British people is flawed and

incomprehensible, but that its structure shows bias in the setting of SSAs and notional budgets and in the allocation of grant. Cuts will cause severe pain to those in local communities who depend most on local authority

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services, and job losses will have a further deflationary effect on the economy with a consequential increase in the cost of unemployment benefit. We believe that British people can be trusted at local level to decide the contribution that they make to their own services. We believe that democracy does matter nationally and locally, and we ask the House to reject the Government's proposal today.

9.38 pm

The Minister for Local Government and Inner Cities (Mr. John Redwood) : The hon. Member for Newcastle upon Tyne, North (Mr. Henderson) certainly gave us a more powerful rant than the hon. Member for Blackburn (Mr. Straw), but his speech was equally wide of the mark. The charge of the Labour party that the grant system is biased and rigged is simply wrong. It is a disgraceful charge to make, and I intend to disprove it.

We have had a good debate, and I would like to add my praise to all those councillors and people who work in local government who were mentioned by my hon. Friend the Member for Bromsgrove (Mr. Thomason) and several other hon. Members on both sides of the House. Local government does extremely important work. We are often well served by our local councillors, and I add my tribute to them.

Mr. Jimmy Boyce (Rotherham) rose--

Mr. Redwood : No, I must press on, because I wish to answer many points from the debate.

The hon. Member for Pendle (Mr. Prentice) dared to attack the idea that the single person should get a discount from the council tax. This is of great importance to 6 million people and it amazes me that the Labour party wants to take that discount from all those single people. I hope that my hon. Friends will be telling their constituents just what the Labour party wants to do in this respect. The hon. Gentleman complained that the SSAs needed changing and that they were not stable enough. To add even more extraordinary remarks to his speech, he went on to say that the Office of Population Censuses and Surveys had identified that there were people missing from its census, but did not seem to realise that it had adjusted the census and added them back in so that the SSAs would reflect the actual number of people. There are good statistical methods for correcting these things and the work has been done by independent statisticians.

The hon. Member for Cheltenham (Mr. Jones) said that the Liberal party wished to take off all the caps and he did not mind the tax consequences. He told us that he had had no letters from people wishing to keep taxes low and that this did not really matter ; we should allow local government in Cheltenham and elsewhere to spend anything it liked. If that were the policy that Parliament had approved, the hon. Gentleman would soon be getting plenty of letters from those living under Liberal councils throughout the country, because they are indeed spendthrift, just like the Labour councils, which spend more and provide less service for the money they are getting. He made no mention of the fact that Cheltenham is getting a 10.9 per cent. increase in its SSA this year--one of the biggest increases in the country.

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I should like to praise my hon. Friend the Member for Brentwood and Ongar (Mr. Pickles) for his excellent speech on the position of local government next year, drawing on his very wide experience of local government. I can reassure my hon. Friend that the internal management working party will look at the role of the officer and of the member in local government. I have much sympathy for his remarks that for good local government there needs to be a clear distinction between those roles ; the councillors should be interested in policy and monitoring and should leave officials to get on with the job of executing and running the policies that they have agreed. To the hon. Member for Barnsley, Central (Mr. Illsley) I can give the assurance that next year, when we review the SSAs, we will look not only at the data that are becoming available, which will be updated and changed, but also at the method. I take his remarks and those of other speakers in the debate as early representations of what they would like to see in those amendments to method. As the House will have heard during the debate today, there are many different views of how they should be changed, and of course different parts of the country want them to be changed in entirely different directions.

I enjoyed the remarks of my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Clifton-Brown). His was both an amusing and a hard-hitting speech. I also enjoyed the pantomime double act with the hon. Member for Wolverhampton, North-East (Mr. Purchase), who played the straight man, or the other end of the pantomime horse, with great aplomb.

My hon. Friend the Member for Cirencester and Tewkesbury attacked the debt mountain of certain local authorities. I echo his remarks that those local authorities that can get themselves out of debt naturally get more financial freedom. They show that they can manage their affairs extremely well and they are not then spending their money on interest charges ; they are spending it on real services for their people.

The hon. Member for Lancashire, West (Mr. Pickthall) attacked the whole idea of the area cost adjustment. He seemed unable to grasp the point that, despite the area cost adjustment, because there are many other factors in the formula that help his part of the country at the expense of places like the home counties and London, his part of the country really does quite well. Lancashire's SSA per head is £615, while, of the counties that he eyed enviously, Hampshire has £568 and Oxfordshire £541. I do not think that his council or constituents would like it if we swapped the one for the other. It shows that the points that he made about Lancashire's needs are clearly picked up in the formula for the SSA.

My hon. Friend the Member for Isle of Wight (Mr. Field) was rightly disappointed that members of the Liberal party were not present to hear his contribution. It is strange, as the Liberals have always claimed an interest in the Isle of Wight, but now that it is safely under the control and in the good hands of my hon. Friend perhaps the Liberals have learnt that it is not worth discussing the Isle of Wight any more.

Mr. Nigel Jones : I apologise to the Minister and to the hon. Member for Isle of Wight (Mr. Field) for missing his speech. I had an engagement with the BBC at the time.

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Mr. Redwood : The hon. Gentleman obviously knows where his friends are and where his friends are not.

Mr. Clifton-Brown : The hon. Member for Cheltenham (Mr. Jones) was desperate to get to the BBC before I did.

Mr. Redwood : I am grateful to my hon. Friend, who, I am sure, will have made better use of the invitation than did the hon. Member for Cheltenham.

I hope that my hon. Friend the Member for Isle of Wight is pleased that the Isle of Wight has, at 6.1 per cent., the biggest increase in standard spending assessment per head of any of the counties next year, and that it makes budgeting easier. It has picked up some of the points that he mentioned. I give him the assurance that we will look at the issue of the fire services SSA distribution in the working party and in the discussions ahead of next year's settlement. If he or any other hon. Member wishes to make representations on that, we will be happy to receive their letters.

The hon. Member for Sherwood (Mr. Tipping) made no reference to the Newark and Sherwood councils which have increased their budgets by almost 50 per cent., comparing the current year with 1990-91. Despite their having gone up 50 per cent. against inflation of 12 per cent., we were treated to the usual speech about deadly cuts and savage impositions by the Conservative Government. What price, then, the freedom of local government when a council in his own area can increase its budget by almost 50 per cent. if it wishes? It seems to me to show considerable local freedom and autonomy, together with the ability to put the interests of those providing the council services ahead of those of the chargepayer. The SSA is primarily a mechanism to distribute grant--the hon. Member for Sherwood seemed keen that I should say that--but, as he knows, it serves other purposes as well. The hon. Gentleman also attacked the idea of the area cost adjustment. He seemed unaware that Nottinghamshire and an SSA of £603 per head while Surrey, deep in the area that he covets, has an SSA per head of £513. I hope that he will find that the £90 extra is not only useful but reflects the way in which needs differ between Nottinghamshire and Surrey and are picked up by the formula. I was delighted to learn that my hon. Friend the Member for Ludlow (Mr. Gill) will give the Government his wholehearted support on this issue. I hear that there have been one or two disagreements recently between him and the Government, but I am delighted that he sees fit to support us on this occasion. We will look carefully at the points that he made on sparsity and area cost, but he may like to know that already his council is the second biggest beneficiary from the sparsity factor. That, among other things, will be reviewed. We will also review the weightings, although it would mean putting another fraction into the grant formula, and my hon. Friend, in his amusing speech, was a little critical of the fractions in some of the grant formulae.

I agree with my hon. Friend that we should attempt to make all that we do intelligible and easy to understand. Some of the documents are, by their nature, complicated because they attempt to provide accurate assessments around the country and they form the base for the computer programming and the detailed work of local authorities. There are more accessible ways of learning

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about the system. My Department has sent out leaflets in plain English on, for example, the council tax, so that people can find out how the system is built up without all the complex detail needed to run the computers and define the SSAs precisely.

Mr. Straw : The Minister will recall that when he was asked on the BBC at lunchtime about whether jobs would be cut, comparing next year with this, he dodged the question. Will he tell the House categorically whether he believes that this time next year there will be fewer, the same or more jobs in local government than there are today?

Mr. Redwood : I will not forecast the number of jobs in local government, because, for example, there may be a good many grant-maintained schools. I do not know how many will decide to become grant-maintained. If that happens, the same number of people will still be employed but they will be employed by the schools, thus reducing the number employed by the local authorities. If a large number of local authorities do more competitive tendering, there could be a transfer of jobs from local authorities to the private sector.

Mr. Straw rose--

Mr. Redwood : The hon. Gentleman should let me answer and then he may have another cockshy if he wishes to. He may be disappointed that he is not getting anywhere on this point. One cannot forecast that sort of thing.

As my right hon. and learned Friend the Secretary of State said, the settlement means that there is no need for compulsory redundancies in any well run authority, given the increases in grant and permitted spending which we are offering. There may be one or two badly run Labour authorities which have budgeted badly, overspent and got into terrible difficulties in the past. Those authorities may have to take awful steps. My hon. Friend the Member for Harlow (Mr. Hayes) said that the fault lay with Labour Members, not Conservative Members, for the way in which such authorities are run.

Mr. Straw : The Secretary of State said that there will be no compulsory redundancies. In fact, in his letter to me dated 17 December he said that there would be no need for any job cuts. The question that I put to the Minister again, which is different, is : taking account of any transfers to the grant-maintained sector and privatised commercial undertakings, can he say that this time next year the overall level of jobs in local government will be the same as or lower than this year?

Mr. Redwood : I agree with my right hon. and learned Friend the Secretary of State that there will be no need for job losses. I refer the hon. Member for Blackburn to the survey in the Municipal Journal, which interviewed the personnel chiefs of all local authorities. Of the local authorities surveyed, 22 per cent. will be making extra jobs in key areas, especially in care in the community ; only 10 per cent. are thinking of any job reduction and 68 per cent. are not thinking of making changes. That is one estimate ; it is not my estimate. As I told the hon. Member for Blackburn, I will not estimate the number of jobs that there will be in local government in the next 12 to 15 months. Personnel chiefs suggest that more councils will increase staff numbers in key areas rather than make reductions.

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My hon. Friend the Member for Harlow gave the House a riveting account of what can happen in a Labour-controlled council which deliberately overspends. When such councils overspend, not simply by the odd million pounds but by many millions of pounds which they do not have, they must get the money back from the taxpayers.

Mr. Henderson : Is the Minister aware that Wandsworth council announced this week, as it prepared its budget, that it has overspent by £6 million? How does he compare Wandsworth in those circumstances?

Mr. Redwood : Wandsworth council is well known for its good financial management and low taxation. I do not expect to see Wandsworth as a potential applicant for capping, whereas I fear that one or two Labour- run councils may have to be so.

As we heard from my hon. Friend the Member for Harlow, the result of council overspending and bad management is damage to taxpayers and services and the sacking of employees. it is a disgrace that local authorities should be so badly run that councils get to the point of damaging taxpayers and services and sacking employees when the overall settlement is perfectly reasonable.

The hon. Member for Tyne Bridge (Mr. Clelland) contrasted Westminster and Gateshead as an example of alleged political bias. That is one of the kernels of the debate. The matter was first taken up by the hon. Member for Blackburn. The issue is whether there is any bias in the system. Let us examine the facts. On the standard spending assessment--it is right to examine the amount of spending and the grant based on it which councils are given for each individual in a local authority--the councils which do well under the current formula are Lambeth, at £1,241 a head, Hackney, at £1,410 a head, and Tower Hamlets, at £1,435 a head.

I can see a bit of political bias in that, but I fear that the criticism will come from Conservative Members, not from Labour Members. When I compare those figures with the shire areas, I see Surrey at £513 plus £80 or £90 for each district and West Sussex at £551 plus £80 or £90 for a typical district. Those figures are under half the level that large Labour and Liberal authorities in inner London receive.

Let us consider the specific argument of the hon. Member for Blackburn, who said that we had singled out the Labour shires for bad treatment. The eight Labour shires have an average SSA per head of £594, and the average for all shires is £585, so they had £10 per head more than the average.

Consider the averages by types of authority. In the shire areas, where there are more Conservatives, taking county and district together, it is £674 per head. In the metropolitan areas, where there are more Labour councils, it is £814. In London--with the considerable weight given to inner London where many Labour councils are--it is £1, 055 per head. So I completely reject the idea that there is any political rigging whatsoever. The hon. Member for Blackburn does not want to intervene now because he knows that that is right. He knows that the formula gives more money to Labour-controlled areas.

Mr. Straw : I am grateful to the Minister ; he should not make an invitation like that. He failed to deal with the fact

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