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Mr. Pickles : We shall have to see the outcome of the police investigation, then I will comment on the case. I shall come back to the hon. Gentleman's specific point when I refer to Tameside. Nottingham put its contract for road sweeping and refuse collection out to tender and awarded the contract to its own work force. In the process, it organised a party costing about £2,000 to celebrate. Returning to the hon. Gentleman's point, I have been concerned of late to read articles in the specialist press about externalisation, which seems to be the latest fashion. We often see fashions move in local authorities. The latest idea is to provide services, but not by providing direct employment within the council. That obviously has an appeal to Conservatives. However, some of the articles suggest that the primary motivation for that is to get around the regulations and avoid compulsory competitive tendering. As I think I demonstrated earlier, if that is the sole motivation, it is likely to lead to disaster.

The hon. Member for Attercliffe talked about South Oxfordshire. I should like to talk about Tameside council, which is currently being investigated by Greater Manchester police fraud squad. It is investigating £2 million losses by Tameside Enterprises Ltd.--a company created by the council to look after old persons' homes. I shall not go into the various allegations because they are still under investigation.-- [Interruption.] If I were the hon. Member for Denton and Reddish (Mr. Bennett), I would not be so confident because a lot of elderly people have had a poor deal out of the process. I hope that hon. Members on both sides of the House are prepared to admit it when things go wrong. I am prepared to give the Labour councillors the benefit of the doubt until the investigation is complete. It seems that a clever wheeze was thought up to get around compulsory competitive tendering and insufficient thought was given to the level of service that would be delivered.

Mr. Bennett : Does the hon. Gentleman accept that, since the trust and Tameside Enterprises took over the running of elderly people's homes in Tameside, the quality of care in those homes has been as good as anywhere else in the country? Does he further accept that the directors and the council asked for a full investigation into the sad misbehaviour of one of the employees, and the council, directors and trustees asked the police to investigate the matter? The investigation is not a criticism of the council. The council, the trustees and the directors sought to put right an unsatisfactory situation created by an employee who appears to have broken the law.

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Mr. Pickles : I am grateful to the hon. Gentleman for that information, but that is not my argument. If more thought had been given to the way in which the external trust was put together, many of the problems that have surfaced in the allegations could have been avoided. I commend to my right hon. Friend the Secretary of State an article in the Municipal Journal, which bears close scrutiny. There is a disaster in the making unless the Government are prepared to offer guidelines on external funding.

The grant settlement is more generous than local authorities were expecting. It can be implemented without widespread compulsory redundancies across the country. I shall walk into the Division Lobby to vote for it with enthusiasm.

Mr. Deputy Speaker (Mr. Michael Morris) : A large number of hon. Members still wish to speak. May I make a plea for slightly shorter speeches?

7.42 pm

Mr. Jeremy Corbyn (Islington, North) : I shall be as brief as possible. The hon. Member for Brentwood and Ongar (Mr. Pickles) spoke for only 21 minutes--it just seemed much longer than that. I shall try to be much briefer.

I put on record the fact that I am sponsored by UNISON, formerly the National Union of Public Employees. I used to be the union organiser representing local government workers, who are bearing the brunt of an awful lot of what the Government are doing to local authorities.

There have been many redundancies. Compulsory competitive tendering in local authorities has led to the awful sale of jobs every five years to the lowest bidder. The people who lose are part-time school meals workers, education helpers and school cleaners who work on disgustingly low weekly or hourly wages. They often have no job security and are unable to do a job properly.

Local government workers, whom I represented before I came to the House, used to be proud to work for the local authority, and proud that schools were clean and good places for children to attend. All pride in work disappears when there is no guarantee of job security and wages are lowered every time compulsory competitive tendering comes up.

The hon. Member for Brentwood and Ongar went on about the problems of compulsory competitive tendering and the way in which some local authorities have stacked the bid in favour of local authority direct services. But he should bear in mind the fact that, when a local authority's bid for a service is successful, there are nearly always job losses, a deterioration in working conditions, loss of training opportunities and trade union facility time and many other factors. Working conditions are getting worse, not better, in the public sector. We should bear that in mind, because we all rely on the efficient work of refuse collectors, street sweepers, maintenance workers, school meals workers, social workers and social services centre workers. Instead of offering a constant stream of condemnation, Ministers should remember that.

I am also the chair of the London group of Labour Members, and I want to mention the problems in London. At present, there are 465,000 jobless people in the capital city. London's unemployment mirrors the national average for the first time in many years, and the position is getting

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worse. There are 39,000 homeless people in London living in hostels or bed-and-breakfast accommodation--some of them, tragically, living on the streets of the capital.

We have chaos in transport and planning, yet, overall, the settlement undervalues London by £600 million in local authority spending. If we want a decent, clean capital, we have to be prepared to fund it. Above all, however, we need to bring some sense to the way in which London is managed.

It is not surprising that London did not even have the opportunity to make the British bid for the Olympic games, and that London lost the chance to make the British bid for the Commonwealth games. Nobody will take seriously a city that has no unified form of local government. Who would one talk to if one wanted to bring the Olympic games to London? It would not be easy to arrange a meeting with the 32 London boroughs, the City of London and 25 quangos. It is not a sensible or good way to run the capital.

When the Secretary of State said that he wanted to hear what Londoners thought about such matters, he craftily sent out the questionnaire in copies of the Evening Standard . That questionnaire asked people to reply, but it was loaded with questions such as : "Do you like the parks? Do you like the open spaces? What do you like most about London?" He did not include in the questionnaire the fact that Government money has been taken from London and that the elected Greater London council has been taken away from us.

Across the river from the House, we now have the nonsense of European, Japanese and company flags outside county hall, which has been bought by a Japanese hotel chain. That building belongs to the people of London, and I hope that it will be returned to them, hopefully by compulsory purchase order by a future Labour Government.

The subject of urban deprivation is not a debate or a competition between the north and south of the country or between Opposition Members. We all have problems in our communities, and we all have problems of underfunding. The 1991 census's score list on urban deprivation shows that seven of the top 10 regions are London boroughs. The list is headed by Newham, Southwark, Hackney and Islington, with Haringey in 10th position. There are many arguments about how the score list is drawn up. If we consider the SSAs of those boroughs in the settlement, we find that Newham loses 6.9 per cent., my borough of Islington loses 5.1 per cent., and so it goes on.

The 1991 census was extremely inaccurate. It was plagued, as was the country for several years, by the appalling poll tax and by people fearing that answering questions posed by the census enumerator would lead to someone coming round and trying to make them pay the poll tax, even if they were staying at that address for only a short time. London has lost a lot through the poll tax. It is losing a great amount of council tax because of the way in which house prices are falling.

The Government propose that, from next year, there should be a unified regeneration budget for London. I cannot work out--I am still open to persuasion on the matter--whether that is a late admission by the Secretary

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of State that London needs unified local government to tackle its needs, or, as I suspect, yet another attack on individual local authorities in London.

My hon. Friend the Member for Newham, South (Mr. Spearing) sent a series of questions to the Secretary of State about how the scheme would operate. The answers that were finally given to my hon. Friend showed that there would be a sort of Government gauleiter appointed to look after the regeneration budget for London. I understand that Manchester and Birmingham will also have such a scheme.

If the Government recognise, as perhaps they finally and lamentably have, that there are overall needs in a city the size of London, why cannot they honestly say so? They could then give us an authority that was elected by the people of London so that they, and not an endless parade of quangos, could decide what Londoners want. The former Secretary of State for the Environment--he with the blond hair, who waves the Mace--said that he was going to kill the quangos in London. However, he and his successors have ensured that London is dominated by quangos--mostly filled with placemen nominated by Tory central office. Are those people fit to run a combination of estate action programmes, education and training support, section 11 grants, regional enterprise grants and business start-up and local initiative funds? They are the sort of people who will decide how that money is spent in London.

I hope that the House will at least recognise that the way in which the standard spending assessment operates seriously mitigates against inner urban areas of this capital. We want something done about it. My borough has serious problems, and is not a wealthy area by any means. Unemployment in my constituency is around 22 per cent., and in some estates is as high as 40 per cent. and rising. There is a sense of desperation and misery, especially among young people and older pupils who are approaching school leaving age. They feel a sense of hopelessness about the future, and also deep frustration that their local authority cannot meet their needs in any way--through youth provision, social services, libraries and so forth.

I do not condemn the council, but simply point out the impossible bind that my local authority has been put in year after year. It has been told to make cuts, and on top of the £20 million in cuts last year, it will have to make more cuts this year.

While the capping level for Islington council's spending has increased slightly, it will not meet the increased statutory requirements that have been placed on the local borough because of the introduction of community care and the like. On top of that, every council tenant has been told that rents will have to rise by £2.90 per week, which is yet another attack on people in the poorest sectors of society.

I hope that the Minister will be able to deal with one issue when he replies to the debate. I understand that representations about housing benefit indicators were made to the Secretary of State during the SSA consultation period--in cases where the SSA goes to the landlord authority rather than the resident authority.

Only boroughs or councils which made representations to the Secretary of State benefited. Those councils which did not--like mine, which has a considerable number of City of London properties within it--have lost. I should be

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grateful if the Minister could tell us what attitude the Government will take. It is an important problem, and he should be aware of it, although I do not know that he is.

Mr. Tony Banks : Has my hon. Friend any knowledge of another practice which seems to have become common? Liberal-controlled Tower Hamlets has been putting homeless familes in the next borough--my borough of Newham--and leaving them there for some considerable time. It has then made them an offer that they can only refuse, thus rendering them homeless in the very borough that it put them in, which results in greater problems for Newham. It seems a deplorable practice, and one which is normally associated with Westminster, but it seems to have spread to Tower Hamlets.

Mr. Corbyn : I can confirm that. I have also had some experience of Tower Hamlets council and its treatment of homeless families living in bed- and-breakfast accommodation. I am not surprised that the Liberal spokesperson gave what must be the shortest speech on record in a local government debate. There was no chance for anyone to intervene to ask what Tower Hamlets council was doing. If he wants to intervene now to tell me, I shall be happy to give way.

My hon. Friend the Member for Newham, North-West (Mr. Banks) is right, and that problem underlines the importance of having a London-wide housing strategy. We have an appalling vista of local authorities trying to get rid of their responsibilities for homeless families, refugee children and anyone else. They are pushing them from one borough to another.

Surely to God we ought to care for those people who need a roof over their heads, rather than play ducks and drakes with the rules. The way in which central Government operate, however, encourages local authorities to play ducks and drakes, because they know that they will not get the money back at the end of the year for needs that they were totally unable to assess in the first place. I shall be brief, because there is not a lot of time, and other hon. Members wish to speak. I have been given a copy of the briefing document from the Association of Metropolitan Authorities about budget reductions in 1993-94. I am sure that other hon. Members also have a copy and it makes very sorry reading.

For example, 184 job losses were achieved through redundancies in the borough of Barnet. The jobs were taken from special needs staffing in schools, from discretionary awards and from closing day nursery and elderly people's homes. Camden has lost 2,000 jobs, and borough after borough has been forced to make people redundant or lose them through natural wastage. That all adds up to an inferior service for people who desperately rely on local authorities to maintain some sort of standard of life, whether through social services, housing, recreation or other services.

Why are half the libraries in London shut most of the time? Why are swimming pools not open as often as they should be? Why are so many families living in bed-and-breakfast accommodation? Why are local authorities encouraged to spend money lining the pockets of bed-and- breakfast landlords and private landlords, while the Government tell them that they cannot use their own resources to invest in decent housing for the people of this capital city?

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I spent yesterday morning visiting one of a number of schools in my constituency. Highbury Quadrant school is a splendid school, with brilliant teachers and lovely kids 25 languages are spoken in the school, and everyone there is proud of that fact and proud of their cultural diversity. It is a lovely school. Ashmount infants school, which my son attends, is also a wonderful school, where many different languages are spoken.

All the schools are terrified about what will happen because of the cuts in section 11 funding. My borough is set to lose £900,000 in section 11 money because the Government have changed the formula. I hope that it can absorb the cut within the budget, but I doubt it. I suspect that some very good teachers will end up unemployed as a result of that cut, and a lot of very bright kids will end up short-changed by the education system because there will be no one to teach them English as a second language, or to give them the support they need.

These are desperate times to be in local government. I do not envy the lot of any councillor. The settlement is always used as a form of attack. The Government think that local government is the problem and must be attacked all the time, but without good and responsive local government, what sort of society are we?

I am fed up with the attacks on local government. I want a return to real democracy and an acceptance of central Government's need to give proper financial recognition for deprivation in inner urban areas such as my constituency.

7.56 pm

Mr. Christopher Gill (Ludlow) : I shall do my best to comply with your request for short speeches, Mr. Deputy Speaker. I thank my hon. Friend the Minister for Local Government and Planning for his patience and understanding and for his unfailing courtesy, first at the meeting at which he met me--I was also representing my right hon. Friend the Member for Shropshire, North (Mr. Biffen) and my hon. Friend the Member for Shrewsbury and Atcham (Mr. Conway)--and secondly when he subsequently met senior officers and group leaders of Shropshire county council.

I do not wish to dwell upon the disappointment in Shropshire at this year's settlement, but people are disappointed about the changes in the settlements for area cost adjustment and sparsity. The 1994-95 reduction in sparsity weighting is estimated to have cost Shropshire's SSA £2.9 million and the area cost adjustment is clawing back around £5.4 million annually from the SSA.

For the record, during the period of the new rate support grant system Shropshire's SSA increase has been the lowest of all countries and the capping increase has been lower than 37 of the other 38 counties. However, I do not intend to dwell on that.

In his opening speech, my right hon. Friend the Secretary of State told the House how he and his colleagues had met deputations representing 58 councils. My contribution to this debate is set against the background of the annual round of representations and deputations resulting from decisions about local government finance. My hon. Friend the Member for Isle of Wight (Mr. Field) queried the cost of that annual ritual of deputations. It is impossible to quantify that cost, bearing in mind the time, effort and energy that has been expended, but I

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suggest that it must be quite substantial. The time expended on those deputations and delegations is time not spent on more productive work in the shire and town halls.

The Government champion subsidiarity--the principle of allowing decisions to be taken at the lowest competent level. They also champion deregulation. As the House knows, the Second Reading of the Deregulation and Contracting Out Bill is next week. They also champion the reduction of the burden of public expenditure, and the House will have noted the remarks of my right hon. Friend the Secretary of State when he opened the debate. My proposals are deregulatory, thrifty and fully in accord with the principles of subsidiarity. I advocate an end to the sharing of responsibilities. Many of the difficulties that we have--and those difficulties produce the deputations and delegations with which we are all so familiar--arise from the fact that on so many scores responsibilities are divided between central and local government.

I further advocate an end to the separation of authority from responsibility. That is one of the cardinal principles of good management. It is impossible to run a business, a local authority or a Government if one separates the authority for carrying out a function from the responsibility. If one tells a manager in a business, "You are responsible for that function, but you must not make any decision without further reference to a higher authority", that is a great demotivation to the manager and the management of the company suffers accordingly.

I further advocate the vesting of total control for providing and funding of local government services in the same pair of hands. My recommendation is that those hands should be existing district councils as the new unitary authorities. I shall not regret the demise of county councils--that most remote and expensive tier of local government which is increasingly recognised by my constituents as the tier that we could do without. One of the three weaknesses about the present system of local government is that there are too many tiers, and the one most eligible for abolition is the county council.

If subsidiarity means anything, it means cutting the Gordian knot that binds local government so tightly to central Government. It means critically examining the functions that we intend local government to discharge in future.

There are three things to take into consideration if we want efficient local government. First, we have to consider how it is financed. We have had three different methods of financing local government in as many years : the rating system, the community charge and now the council tax.

Secondly, we have to consider its structure. We reorganised the structure of local government 20 years ago. My fear is that we are in danger of reorganising local government again and not coming up with the right answer. We shall then have a botched reorganisation of the structure.

Mr. Andrew Mackinlay (Thurrock) : The Conservatives reorganise local government and the National Health Service as frequently as the Forth bridge is painted. They do not even finish before they start again. In the past 20 to 25 years there has been a tradition of Conservative Governments expensively reorganising public services with little to show for it at the end of the day.

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Mr. Gill : The hon. Gentleman makes an interesting point. I hope that he will listen to the rest of my speech.

Having attempted to put the financing of local government on to a proper footing and get the structure right, we have neglected to examine its functions under a microscope and decide exactly what we want local government to do. Having decided what we want local government to do, we must not hedge our bets by saying that local government should carry out part of a particular function while central Government do the other part of it.

I am advocating a complete demarcation between resonsibilities which can and should be discharged at local level and those which can be discharged only at central level.

There may be howls of anguish--even from the hon. Member for Thurrock (Mr. Mackinlay)--when I suggest that we might have to consider abolishing local education authorities, but there is some logic in that. As an increasing number of schools opt for grant-maintained status, it is clear that the importance of local education authorities will be diminished and ultimately one can envisage their demise.

Mr. Gordon Prentice (Pendle) : Does the hon. Gentleman appreciate that every local government reorganisation since the war has been carried out by the Conservatives? Why should people have any confidence whatever in any future organisation on which the Conservative party wants to embark?

Mr. Gill : The reorganisation that we carried out in the early 1970s resulted from taking off the shelf the blueprint left there by the previous Labour Administration. I entirely agree with the hon. Gentleman. I personally regret that my party took the blueprint prepared by the previous Administration and implemented it. I see that the hon. Gentleman is nodding in assent to what I have just said.

The gist of my speech today is that whatever we do in future must be in a form that we can all understand. It would be a brave hon. Member who pretended to understand all the intricacies of local government finance. I invite hon. Members to consider everything in the documents that accompany this evening's debate.

Undoubtedly, much of the system of calculating a grant for a local government settlement depends on arcane calculations and equations which I find difficult to understand. I am sure that local councillors have difficulty in understanding them, too. Frankly, we cannot expect good, efficient, economic local government if councillors cannot understand the way in which the whole operation is funded.

We have to have intelligible systems which essentially need to be simple so that we can all understand them and make a better showing of delivering services to the general public.

I was saying that I advocate the abolition of local education authorities. I also suggest transferring social services to district health authorities. Both those services--education and social services--are in effect funded not by the council tax but by the taxpayer.

Ministers have said more than once this evening that we do not have hypothecation of taxes in this country. However, let me illustrate my point. Education in my own county of Shropshire will cost £148 million in 1993-94. Social services in the same period 1993-94 will cost £33 million. The total of those two services is £181 million and

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the total external support that the county will attract in the same 12 months is £182 million. The two figures neatly cancel each other out, which proves that the two services could be removed from the local government equation and become a charge on the taxpayer, with all other services being deputed to the unitary authority. Three things must be done. First, local authority functions must be scaled down to match the local revenue-raising potential of the council tax. Secondly, councils and councillors must be required to raise £1 for every 100 pence that they spend. Thirdly, they must be exclusively answerable to the electorate for the services that they provide.

The hon. Member for Pendle (Mr. Prentice) shakes his head, indicating disbelief. I apologise for not knowing his background, but what I am saying is predicated on a lifelong involvement in management and trying to motivate people to do a good job. One of the important lessons that I have learnt from that experience is that it is not possible to motivate people by giving them half a job, by giving them responsibility but ordering them to refer decision making to another authority or by facing them with an unintelligible system : they find that completely demoralising.

We can create transparency of both funding and efficacy by making councils responsible for all their functions--including raising revenue for their spending--making them wholly accountable to their electorates and by defining their functions precisely so that they can be discharged within the limits of local fund-raising capacity. That, in turn, will lead to increased accountability and economy, which I--along with the Government and, I believe, every council tax payer in the country--want to see.

There can, however, be no local accountability while there is doubt about who is responsible for which function : that is why it is so important to the Government to consider which tier should do what. Nor can there be accountability while funding remains a maze of arcane equations and calculations. Similarly, there will be no thrift while councils continue to spend ever-increasing amounts of other people's money. The figures speak for themselves : 75 per cent. of money spent by local authorities now comes from central Government, while only 25 per cent. comes from the council tax.

Last but by no means least, there can be no prospect of improving the calibre of councillors, or of involving the business community, while the current position continues. Ministers do not need a commission to tell them what to do ; the answer stares them in the face.

8.13 pm

Mr. John Evans (St. Helens, North) : I am sure that most hon. Members will agree that local government finance is the most mysterious, arcane and complex subject in the political calendar. I suspect that, apart from council finance officers, few

people--including national and local politicians--have any idea of the complexities involved.

Having said that, let me add that I am grateful for the opportunity to speak on behalf of the people of St. Helens. I am sure that the Minister will not disagree when I say that St. Helens is one of the councils that have had a raw deal ever since the SSAs were established some three years ago. As he knows, a small group of northern authorities was heavily handicapped by the lack of any factor relating to

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unemployment or economic decline, although all had been affected by the rundown of the mining, steel, engineering and, in the case of St. Helens, glass and chemical industries.

For three years, those authorities--St. Helens, Wigan, Wakefield, Barnsley, Rotherham, Doncaster and Sheffield have fought to right the current wrongs, constantly making representations to the Government. It is only fair for me to add that we are grateful to the Government for recognising the validity of our case and accepting that economic and social indicators should be included in the assessments ; that has undoubtedly benefited St. Helens.

During the Secretary of State's speech, I suggested that he should consider giving some recompense to those authorities in recognition of the three years for which they were so severely handicapped. St. Helens borough council, for instance, has been forced over the past three years to spend its entire balance in cutting £20 million to set a legal budget. Last year, it was forced to take £10.5 million from a budget of £142 million. Even jobs in the authority disappeared, in a town that has lost 20,000 jobs over the past 10 years as a result of the decline in our traditional industries. It had to close a library, an elderly people's home, a day nursery, a family centre and a day centre, while increasing charges for home helps, school meals and meals on wheels. We were not just cutting essential services ; we were cutting the authority's work to the bone.

It was with some trepidation that I heard today's announcement that the Government had accepted the teachers' 2.5 per cent. pay claim but that there would be no additional money. I doubt very much that St. Helens will be able to find the money to cover that increase without having to slash services further.

The people of St. Helens are mystified by some of the unfairnesses in the SSAs. Over the past two weeks our two local newspapers, the St. Helens Star and the St. Helens Reporter, have run a series of articles comparing St. Helens with the London borough of Westminster, whose population size is almost identical. They pointed out that, on the social index chart, Westminster ranks as a much more impoverished borough--as do Kensington and Chelsea, City of London and Kingston upon Thames, to name but a few.

Most people would be astonished to learn that Westminster is more impoverished than St. Helens. It is very peculiar, given that St. Helens is part of Merseyside, which the European Commission has just recognised as one of the most deprived regions in the European Union and has granted objective 1 status--which means substantial extra funds.

What mystifies people in St. Helens even more, however, is the difference between the grants that it receives and those received by Westminster. In 1994, Westminster is to receive £2,622 per primary school pupil, while St. Helens will receive £1,851. In other words, it costs £770 more to educate a pupil in Westminster than it does in St. Helens. The figures for secondary pupils are even worse : Westminster receives £3,677 per pupil whereas St. Helens receives £2, 590, so Westminster receives more than £1,000 more per pupil. For the care of the elderly, Westminster receives £18 million more than St. Helens, which works out at almost £1,000 per elderly person. The Secretary of State said that the figures for London boroughs were fair. If he says so, I have to accept it but I

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should be grateful if he would write and explain how the figures are arrived at. I guarantee that his answer will be published in the St. Helens newspapers.

Mr. Gill : Will the hon. Gentleman give way?

Mr. Evans : No, I shall not give way because time is getting on. The hon. Gentleman spoke for a long time and several of my hon. Friends still wish to participate in the debate.

I shall now complete the comparison between Westminster and St. Helens. Both councils have received the auditor's report. Most people will agree that the report on Westminster was rather damning. Indeed, some Westminster officers and councillors were criticised unmercifully. In St. Helens, the district auditor, Frank Kerkham, gave a special mention to the council's

"sound and business-like management".

He especially praised the way in which the authority collects and monitors the council tax. The district auditor said :

"By the end of October 1993 the money owed in Council Tax was £4.9 million. This represents 3.9 per cent. of the gross debit for three years of the community charge's existence."

The council believes that that is a good performance, given that it has had to introduce and collect the council tax in tandem with the residual community charge. In other words, Westminster receives a great deal more finance from central Government than St. Helens but received a damning and damaging report from the auditor whereas St. Helens received praise.

I wish to raise a more immediate and pressing problem. As I said, the new SSA is beneficial to St. Helens and we are grateful for that, but the roof has fallen in on St. Helens council once again. A major road is being constructed, a link from the M62 to the town centre. It is vital for the economic regeneration of St. Helens, but the area through which the road passes contains almost 300 hectares of some of the most contaminated derelict land in the country. More than 180 hectares of the land have been identified as potentially excellent development sites. Indeed, a couple of years ago Pilkington decided to locate its UK5 and UK6 flute glass plants in St. Helens rather than on the continent or in southern England because of the benefits that would flow from the new road. The prospect of the new road has already begun to attract people to St. Helens.

The original tender for the main contract, which was awarded in May 1991 when the total cost of the scheme was estimated at £35 million, was for £19.2 million. The current estimate of the final cost is £53.6 million. I shall not go into all the details, but the increase in costs has been caused by problems over which the council has no control. They include hitting unknown dumps of highly toxic waste which have had to be removed to the ends of the country because of the new environmental protection legislation and hitting deposits of coal which have also had to be removed. Gas mains were discovered which no one knew were there, public utilities have also had to be removed at considerable expense and a serious problem arose with British Rail over the new bridge that had to be constructed as part of the project. The costs and delays have added to the council's problems.

As the problems arose, the council notified the Departments of Transport and of the Environment but, out of the blue, the Department of Transport informed the

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council at Christmas that it would receive no assistance with the additional costs. That was a considerable bombshell to be handed to the council as a Christmas box. The council must now attempt to fund the project out of revenue which, as I am sure the Minister of State will accept, is utterly impossible.

This morning, I led a council delegation to the Departments of Transport and of the Environment. We are grateful for the sympathetic response that we received from both Departments and I pay special tribute to the Under- Secretary of State for the Environment, the hon. Member for Banbury (Mr. Baldry). Ministers were courteous and sympathetic, but I do not know whether they can help us to solve the problem. I want the Secretaries of State for the Environment and for Transport to understand the problem and accept that St. Helens council is in a catch-22 situation.

If the council attempts to fund the scheme out of revenue, it will not only have to slash education and social service provision once again--they have already been decimated in the past five years--but will undoubtedly have to overspend and be capped. The alternative, which some people in the town are beginning to demand, is for the council not to complete the road, although 80 per cent. of it has already been built. If it were left unfinished, the centre of the town would be in utter chaos and look like a first world war battlefield. It would mean that the main contractor and many small contractors would face a financial crisis, to say the least. I suggest that no council should have to face problems of this nature involving the construction of a major highway. I appeal to the Secretaries of State for the Environment and for Transport to ensure in the coming three or four weeks that St. Helens receives assistance to solve the short-term problem. 8.25 pm

Mr. David Harris (St. Ives) : I am pleased to follow the hon. Member for St. Helens, North (Mr. Evans), because the contrast between the problems facing his local authority and the problems with which I shall deal later could not be greater.

I wish to speak about the Isles of Scilly. The mention of the Isles of Scilly in the same breath as St. Helens highlights the fact that local government has to meet very different needs in different parts of the country. I am also pleased to see sitting next to the hon. Gentleman the hon. Member for Newham, North-West (Mr. Banks), with whom I sat for many years on the Greater London council. I mention that only because I do not share his view about the demise of that authority, a view which is supported by some other hon. Members. I look back on the GLC with great nostalgia. I was a member for eight and a half years, and in those days it had a role to perform. That role largely disappeared because of the fact that services such as sewerage were taken over by the boroughs. The GLC's role was rationalised, and in the end it was left searching for something to do.

Mr. Tony Banks : I shall be brief because I do not want to prevent the hon. Gentleman from talking about the Isles of Scilly. Is it not odd that London is the only capital city in the world that does not have a single authority or an elected mayor to speak on behalf of its population ? If such a system works in every other capital city, why not in London ?

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Mr. Harris : I understand the hon. Gentleman's point, but to return to that huge bureaucratic structure would be a retrograde step. I have read all the opinion polls that are trotted out on this subject and, despite their findings, I do not sense among the people who live in London a great longing for a return of the GLC. I, too, spend the week here, and return to Cornwall for the weekend. I am still recovering from the remarks of the hon. Member for Newbury (Mr. Rendel). I pay tribute to him for sitting patiently through the debate. He said--I intervened to ask him about it-- that he thought that less money should be provided by central Government, albeit in the context of the local income tax and the raising of more money locally to fund local services. I pointed out that that was not the view of his colleagues on Cornwall county council.

I think it is fair to say that the Liberal Democrats who now control Cornwall county council--the chairmen of its various committees--virtually have season tickets to come up to London on delegation after delegation to plead with Ministers for more essential Government money to meet the needs of Cornwall. They cannot really lose. The Liberal Democrats come up to London and say, "You Ministers must give us more money." If the Ministers do not give them more money, they blame the Government, but if they do give them a bit more money, they say, "Liberal Democrats are wonderful people, because we have got more money from central Government for the needs of the people of Cornwall."

The hon. Member for Newbury should have a word with his colleagues at county hall in Cornwall, and try to get the party line clarified on that aspect of policy, as on so many others.

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