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I take it that the Minister agrees that Grampian region has done extremely well on education, but we have problems. Beechwood school in my constituency caters for children with special needs. The school swimming pool has been closed for more than a year because the region does not have enough money to repair the heating system or install a new one. One might ask, "What's a swimming pool? It's just for recreation. The children can go elsewhere." The kids are going elsewhere, but they have to be out of school for two and a half hours to get a half-hour swimming lesson. For children with special needs, swimming is not simply recreation ; it has therapeutic value. It is disgraceful that such money should be held back and that there is not enough in the budget. That is one example of how education is being squeezed and the children who are most in need are the ones to suffer.
People are beginning to understand that one will always have to pay the price for neglecting social provision and social problems and for ignoring the rise in drug addiction and other similar problems. There is a price to be paid. Parents in many parts of Aberdeen are becoming desperately concerned because syringes that have been used to inject drugs intravenously are being left lying around. That is dangerous for health. That is the cost which must be paid. If one neglects good housing conditions and good education, the community will pay the price.
It is far better for the community to face up to the costs of providing good education, social services, housing and employment prospects. That is a much better and more positive price to pay. People are beginning to grasp that argument and the fact that holding the council tax down--as the only real test of a council's efficiency or value--is bad news and a bad way to approach the problem. The more that they wake up to the fact that good social and local authority provision are good for the community, the better. We are winning that argument and we will win votes as well.
Mr. Jimmy Wray (Glasgow, Provan) : The hon. Members for Tayside, North (Mr. Walker) and for Kincardine and Deeside (Mr. Kynoch) said that my area has high expenditure, but it is not much higher than other areas of Scotland. The hon. Member for Tayside, North mentioned addressing the issues, and I shall certainly do so tonight-- [Interruption.] Conservative Members should be called to order. I have served on local authorities for a number of years, and I know exactly where all the problems began. Just in case the Minister has never visited a constituency such as mine, let me tell him about the poverty and the misery that has been created over the years by the Government. We have heard all the rubbish about the revenue support grant, but everyone knows that it is a pittance, which will never deal with the problems.
In my area, some houses have been boarded up for two years. People are crammed into houses, and others are
Column 730homeless. They never will get a house from the Government. My authority is still paying the interest charges on houses that were built 60 years ago. We know all about local authorities and we know how, over the years, the Government have pressed them hard and brought them to their knees. How did they do it? The answer is the Miscellaneous Financial Provisions Act 1983 and the Local Government and Planning (Scotland) Act 1982, which gave the Secretary of State more powers. Is it not a scandal, wrong and shocking that the Secretary of State should have those powers?
I wish that we had a video of all the problems that have been created since the Government came to power. All the problems I have mentioned are related to the rate support grant and to the revenue support grant, which is supposed to clear up the problems of the country.
What have we got? Unemployment is high all over the place. The poor health of my constituents is unsurpassed throughout Britain. Glasgow has the worst infant mortality rate in Britain, and the mortality rate for adults between 45 and 65 years is the highest in the country. Those are the problems created by the Tory Government. The people of Britain and of Scotland must do one thing. They must recognise that the Government are not on their side. If they were, they would not just be giving people a small pittance in the revenue support grant.
How are people supposed to deal with the problem of 12,000 drug addicts in Glasgow, with an evil trade worth £188 million? The police cannot even catch the dealers for a breach of the peace. They cannot deal with the problem, but the morgue is full of youngsters. What are the Government doing about that when they talk about statistics? This is not a game for the faint-hearted or one of comedy. It is a game of seriousness, because people are out there dying on the streets. We want to make sure that something is done. That is why we must increase the revenue support grant when we take power.
The hon. Member for Kincardine and Deeside mentioned the unemployment figures, and how we should deal with them if we cannot deal with the problem through the rate support grant. The only way to deal with the problem is to regenerate the economy. We should not pay £9,000 for people to sit in their houses and lie on the labour exchange. The Government should invest that money to give those people a job and hope. Show them a light at the end of the tunnel. If the Government cannot do that, they should not be in power, and they should never return to power.
Many local authorities in Scotland, especially those in Glasgow, would like to do more to improve housing. Over the years, Glasgow has suffered from Tory landlords who have left and sold their properties off at a pound a time. They put a burden on local authorities, when priority should have been given to people who are living in slums. Their fathers and mothers could not get a job and they were on the labour exchange from the day their children were born to the day they died. This is the kind of world that the Tories want people to live in.
Bad education is hereditary. Why did the Government not take up the recommendations of the Plowden report, which said that areas of deprivation should be made a priority and given nursery education? It also said that the pupil-teacher ratio should be reduced. [Interruption.] It is all right for the hon. Member for Billericay (Mrs. Gorman) to laugh. While you are laughing, people are suffering out
Column 731there. I hope that the cameras are on you, because you are a certain calibre of Conservative. Why are you laughing when people out there are suffering?
Mr. Deputy Speaker (Mr. Geoffrey Lofthouse) : Order. May I cool things down a little bit by saying that I am responsible for none of this? The hon. Gentleman keeps on referring to "you", but that means the occupant of the Chair. If the hon. Gentleman refers to an hon. Member or hon. Lady, he will be in order.
Mr. Wray : Thank you very much, Mr. Deputy Speaker, for your correction. Unfortunately, we are worried about Conservative Members who come in here--perhaps they have been sitting in the Tea Room, when we have been sitting in the Chamber all day because we are really interested in trying to improve services throughout Scotland.
Mr. Graham : My hon. Friend and I are close friends. He will be aware that I have been inundated with requests from mothers for nursery provision in all areas, including Erskine, Kilbarchan, Lochwinnoch and Gourock. Those mothers are desperate for their kids to get some pre-five education. My hon. Friend is quite right that Strathclyde cannot provide it, because it does not get enough money from the Government to satisfy the needs of our people.
Mr. Wray : My hon. Friend is quite correct. Strathclyde region had policies that were designed to last not for one or two years, but for between five and 10. It had decided to implement policy, but when it had an opportunity to implement the recommendations in the Plowden report, it had to close schools down. Plowden recommended that people living in deprived areas should have a pupil-teacher ratio of 1:10 not 1:20, 1:30 or 1:50, as in the past. That is the kind of education we need for people from humble backgrounds. [Interruption.] I hope that Conservative Members will listen carefully.
Mr Bill Walker : I genuinely respect the hon. Gentleman's passion and concern. I trust, however, that he acknowledges that not all Conservative Members have no experience of poverty, and that we care just as deeply as he does.
You, Mr. Deputy Speaker, will agree that Labour Members are extremely concerned about the changes that have been made, especially with regard to housing. Under health legislation of 1970, if a house is below tolerable standards and is damaging household effects, a tenant in Scotland has a right, because the local authority is not dealing with the service as it should and is creating a hazard to the tenant, to summon the local authority to court.
Column 732Under housing legislation of 1966, local authorities have the discretion to spend money to put those properties right. Glasgow district council has had to spend millions of pounds in compensation, because the Government would not give it enough money to deal with the problems in the area.
Strathclyde regional council was restricted by rate capping, so it could not deal with its transport problems. The Government then introduced deregulation, when good services disappeared and we were left with ghost streets. A greyhound service and a leapfrog service now compete with each other. Many important services have been lost, so we know exactly what the situation is.
The Government wasted millions of pounds when they introduced the Water (Fluoridation) Act 1985, allowing local authorities to buy equipment and waste money. Those millions of pounds could have been spent on solving the problems. If the Government had come to me, I would have told them about the food and drugs legislation, the Water (Scotland) Act 1946 and section 130 of the Medicines Act 1968, which would have saved local and central Government millions of pounds. We took them to court because they did not know the Act, which is why they had to introduce the 1985 Act. All that was a waste of money. Why do hon. Members think that all the mad schemes which the Government have introduced, such as the poll tax, the council tax and those mad local government schemes, were not respected by COSLA? We had seen what local government reorganisation meant. Men and women who had worked for years in local authorities were dumped on the dole because the Government had bought out their jobs.
Two decades later, the Government are doing the same again. They are looking for money through the introduction of those schemes. Schemes such as child support have nothing to do with helping children : they are simply about helping to clear up the deficit. Of the £530 million coming in, only £50 million will go to the children. That is why local councils cannot provide the rate and revenue support that is needed.
I realise that many hon. Members are waiting to speak, so I shall not take a great deal more time. I could stand here all night, because I have a great deal of experience in the corporation. I live a lot among the people. They act as a sounding board for me every Saturday. Why do not the whole Government take a walk with me around Paddy's market on a Saturday and see exactly what the problems of the people are? A walk around the Oxfam shops will show them just how well people are doing.
I just hope that, next time we deal with rate support revenue or any other assistance which the Government hope to give working-class people, they will give them a wee bit more.
Mr. Malcolm Chisholm (Edinburgh, Leith) : The consequences of this important debate will have an impact on thousands of council workers and millions of service users. Once again, this debate has shown that there are lies, damn lies and Scottish Office statistics. The Government have particular reasons for distorting the figures this year, because this is the worst settlement for local government since 1979, and Opposition Members can all remember quite a few bad ones.
Column 733Tonight we need to compare the figures for 1994-95 with the figures for 1993-94--not that this year's figures were very brilliant. But before we do so, we should bear in mind two points which may have become muddled by certain Conservative Members in this debate. First, what inflation rate are we talking about? We are not talking about the rate that includes mortgage interest relief--at 1.8 per cent. We are talking about the other inflation rate, which, according to the Red Book, will be 3.25 per cent. in the coming year.
Secondly and crucially, we must remember that the money for next year includes community care money that was not included in the settlement for this year. That community care money will amount to about 2 per cent.--a fact consistently forgotten by Conservative Members, enabling them to inflate the actual figures for next year's spending.
I want to look at the figures for Lothian region ; it helps to look at one authority instead of bandying about general figures. The aggregate external finance for Lothian region for this year was £572 million. Aggregate external finance for next year will be £583 million. No doubt the Government will tell us that that represents an increase of £11 million. I must tell the Government, however, that transferred money for new expenditure on community care will amount to £11.5 million ; so the cash settlements for Lothian region this and next year will be the same.
I could also point out other items of new statutory expenditure, such as money for devolved school management and local government reorganisation. Taken together, these would mean that the cash for next year, in straight terms, is less than for this year. For the sake of this debate, however, let us assume that the figures for the two years are the same. Since 1979, as far as I can remember, Lothian region has never suffered no cash increase from one year to another. The settlement therefore represents a real cut, given the inflation rate of 3.25 per cent. This 3.25 per cent. cut is part of a general public expenditure cut across local authorities in Scotland and across all the services in the United Kingdom. This has led Andrew Dilnot of the Institute for Fiscal Studies to say that this public expenditure round makes Lady Thatcher and Lord Howe look like socialists, so draconian is it and so much worse than anything they imposed.
It is because of this sort of figure that the Government aim to reduce the share of GDP taken by public expenditure from 45 to 42.5 per cent. in only three years. These draconian figures are getting worse ; my hon. Friend the Member for Peckham (Ms Harman) has seen the Grey Book--the updated public expenditure figures--which reveals an additional £750 million cuts in public sector asset creation. No doubt there will be other changes too, but that is the one that she has drawn to our attention.
This is a terrible settlement for local government, and it is part of a terrible public expenditure settlement. Lothian will receive the same cash this year as in the previous year, once the community care money is stripped out of the figures.
The Governnment claim that there can still be a cash increase of 1.75 per cent. It does not take too much imagination to realise that the only way to achieve that is to hike up the council tax. Even a cash increase of 1.75 per cent. will still mean a cut, but to achieve that cut Lothian
Column 734region will have to increase its council tax by 10 per cent. So the region faces next year a cut in services and a 10 per cent. increase in council tax.
Quite apart from the general budgetary problems faced by the Government, it probably suits their political purposes to do this, because this is regional elections year and a time of local government reorganisation. Doubtless the Government hope that the people of Lothian will feel that theirs is not a good council, because it is putting up the council tax by 10 per cent. and cutting services at the same time.
The Government hope that the people of the region will not regret the passing of that council--but the people of Lothian are not stupid. They are quite used to the cuts imposed on them by this Government, and they will realise, when their council tax rises and the cuts are imposed, that the blame lies at the door of the Government. To get to that 1.75 per cent. capping point in the next recap, Lothian councillors must decide how to take £12 million out of what is already a strictly disciplined base budget. Those decisions will be made this week, and £12 million of cuts must be made in education, social work and other services. Although the decisions have not finally been made, we will probably find that, when people leave their jobs, their jobs cannot be filled, there will be fewer teachers and people in community education, grants to voluntary organisations will be cut, and school meal charges may even go up.
Lothian region will have to make those cuts because it is not getting enough money from central Government. It has had a massive real-terms cut, which means that the amount it receives this year will be the same as that for next year. The cuts would have to be twice as great if Lothian were to give the normal pay increase. In its budget this week, it will have to allow no money whatever for wage increases for its employees. We may have heard of pay freezes since the second world war under various Governments, but I cannot remember a pay freeze that did not give at least some protection to low-paid workers.
We all know that thousands of council workers are on low pay. Let us consider the effect that the settlement will have on their lives. If the freeze is maintained for the next three years, their pay will be cut by 10 per cent. Many of the tax increases that we know will happen in April will penalise low-paid workers in particular--such as the freezing of allowances, increases in national insurance contributions and VAT on fuel ; not one low-paid worker will get a penny of compensation for VAT on fuel.
Mr. Graham : My hon. Friend will realise that there will be a swingeing increase in rents for the thousands of Scottish Homes tenants that the Government control. That will affect very much the low-paid workers in local government. Once again, we are seeing the boot being put in to people who are least able to defend themselves.
Mr. Chisholm : I thank my hon. Friend for adding that point. Housing is not strictly the subject of this order, but it relates to the public sector pay freeze, and allows me to say that there will be a rent increase in Edinburgh for another reason, because Edinburgh does not get a penny of housing support grant. I will not trespass on that subject, but that must also be borne in mind.
The public sector pay freeze is built into Lothian region's budget and all the Government's budgetary calculations. They are assuming that it will hold for the
Column 735next three years. Public sector workers have an impossible choice. If the freeze does not hold, there will be job losses. From this settlement and the general public expenditure settlement, we are likely to get job losses, a pay freeze and a devastating effect on services--all because of the economic incompetence and mismanagement of the Government.
It is not even as though, at the end of the day, it will achieve the Government's objectives. They would argue that we must take that medicine to solve the problem of the budget deficit, yet many experts are questioning whether the Government can achieve, by taking so much demand out the economy through pay cuts and public expenditure cuts, the growth that is necessary for them to achieve their targets. Studies have been made in the past week by the National Institute of Economic and Social Research, the London Business School and the CBI, all of which say that the Government will not achieve their growth targets, and therefore will not solve their budget deficit problems. That leads to the obvious conclusion that the only way in which we shall have some restoration of public services, solve the deficit and achieve growth is by electing a Labour Government. That cannot come too soon.
Mr. Alex Salmond (Banff and Buchan) : If the hon. Member for Glasgow, Provan (Mr. Wray) took the present collection of Ministers round Paddy's market, he might have difficulty in finding a buyer. His speech, however, was very worth while. It brought us back to some of the basics-- basic services affected by the orders.
There is a tendency for debates such as this to become ritualistic. The debates are also complicated by the fact that virtually no one understands the distribution formula that is being discussed. This is very much the Schleswig-Holstein question of Scottish politics. Only three hon. Members have ever understood it : one is dead, one is mad and the hon. Member for Glasgow, Garscadden (Mr. Dewar) is no longer in the Chamber.
That ritualistic quality does not convey a message worthy of the subject. In the normal course of events, the Government describe the settlement as generous, and the Opposition call it miserly and inadequate. We quote figures from the Convention of Scottish Local Authorities, such as £1.20 and 10 per cent. increases in council tax. The Minister implies, or even says in some cases, that COSLA has a vested interest in the figures and that its estimates are, therefore, not to be trusted.
When the overall settlement for Scottish local government was made, I took the precaution of asking the House of Commons Library to give its opinion of what the settlement would mean for the revenue position of Scottish local government. I did that at least to demonstrate that the hon. Member for Fife, Central (Mr. McLeish) was not the only person to use the services of the statisticians in the Library.
I think that the House of Commons Library provides a reasonably authoritative and independent estimate. It is not a hotbed of anything, apart from librarians. This is what the Library said about the settlements :
"We estimate that after adjustment for changes in responsibilities this implies falls in real Government Support Expenditure (GSE) of 1.7 per cent. in 1994-95, 1.9 per cent. in
Column 7361995-96 and 0.7 per cent. in 1996-97. On an equivalent basis Aggregate Exchequer Finance will fall in real terms by 2.9 per cent. in 1994-95, 2.7 per cent. in 1995-96 and 1 per cent. in 1996-97."
Even if the Minister is not prepared to accept figures from local government itself, is he prepared to accept argument and analysis from the House of Commons Library? Is he prepared to accept that that is the real position that faces local government in Scotland over the next few years of his stewardship? It is not good enough for him to point to individual councils that have succeeded in controlling their finances and to say that that proves that the overall settlement is adequate. That proves nothing except that some councils have managed their finances very well.
I was interested to hear hon. Members on both sides of the House compliment Grampian region on the running of its finances--although the hon. Member for Kincardine and Deeside (Mr. Kynoch) seemed to have forgotten the complexion of the council, and I am not entirely convinced that the hon. Member for Hamilton (Mr. Robertson) knew it in the first place. In any event, Councillor Pearl Paul, Scottish National party finance convener of Grampian region, will no doubt take the tributes made to her--by implication, at least--in good faith and in good heart. Grampian region indeed deserves to be complimented, not only on freezing the council tax but, for example, on the excellent 10p bus scheme that it introduced this year, which has been lauded by old-age pensioners throughout the region.
Let me offer a quick catchline to the hon. Member for Kincardine and Deeside, which he will doubtless hear rather more often during the coming weeks. What is the difference between the current administration of Grampian region and the Conservative party? The current administration helps pensioners and freezes the council tax ; the Conservative party freezes the pensioners and helps itself to the tax.
Individual councillors and councils can do very well by prudent financial management and by looking after their own resources. That, however, does not alter the fact that, on the whole, the settlement and the orders are extremely bad news for the financial position of Scottish local government. We deserve an answer to the point about the overall settlement and the overall squeeze on local authority finance.
Mr. Bill Walker : The hon. Gentleman kindly read out some of the observations of the House of Commons Library. I doubt that any hon. Member would suggest that our Library gives us anything other than splendid service. Would the hon. Gentleman care to read out the qualifications listed along with the figures that he gave?
Mr. Salmond : I am happy to tell the hon. Gentleman that the only part that I did not read out was the following sentence : "As you will be aware, there was an announcement yesterday on local authority finance in Scotland."
Apart from that, I read out the whole of the Library's summary. I am happy to hand the full correspondence across the Chamber. I hope that, now that I have given the hon. Gentleman that information, he will join us in the Lobby tonight. Who knows? Wonders will never cease.
There is a real and important point in regard to what the settlements mean for Scottish local government. The
Column 737Minister should tell us a bit more about the overall settlement and not about individual success stories of councils in Grampian or elsewhere.
Scottish local councils and councillors are underpaid, under-appreciated and under the thumb of central Government. That position is deleterious to good local government administration. By and large, local councils and councillors in Scotland discharge their responsibilities very well. There are individual exceptions. Some councils are blots on the landscape of Scottish local government. When Ministers and the Labour Front-Bench team fling at each other the extreme examples of Kyle and Carrick and Monklands, it does not add to the debate and both parties are on a loser.
I have another question on finance. What evidence can the Minister produce to show that withdrawing powers from Scottish local government--powers that are covered by the revenue support grants--will lead to the better administration of public services in Scotland? What evidence can he produce that control by quango is more economically efficient than control by democratic local government? What evidence has emerged from the recent experiences of the Greater Glasgow health board and various local enterprise companies that control by quango, adding to the 5,000 quango members appointed by the Secretary of State for Scotland and the £5.5 billion--40 per cent.--of the Scottish Office budget already controlled by quango, will be in the best interests of the economic administration of services?
In the administration of finance, local government and local democracy have a better track record than quango government. Every local democratic council, even Monklands, has one essential saving grace. If Monklands district council does not discharge its responsibilities properly, its electorate can get rid of it at the next electoral opportunity. That check on efficiency is not available to anyone who wants to get rid of quango members who are clearly not allocating and carrying out their responsibilities properly. I can see that you, Mr. Deputy Speaker, are becoming somewhat restless about the comparisons that I am drawing, but they are relevant to the economics of the revenue support grant in Scottish local government. Local government provides both the best economic and democratic means of allocating finance for important services.
My next argument relates to the cost implications of the changes, including the £5 million that is mentioned in the orders. There is a good argument that single-tier local government will be more efficient. There is academic evidence based on the fact that smaller councils have a good track record on efficiency. I grant that to the Minister, but he should also face the fact that severe questions surround the estimates on the changes to Scottish local government that he has provided to the House. The estimates of other bodies seem to be a good deal more competent and soundly based than the Minister's. Apart from the Convention of Scottish Local Authorities and other participants in the debate, independent organisations such as the Chartered Institute of Public Finance and Accountancy are severely critical of his estimates. The range of estimates also tend to show that the Minister is not confident about the figures that he has put forward.
As the Minister knows, before I fell among thieves in this place, I used to turn a penny as a professional economist. It was well known in the economics profession that, to safeguard one's back against future inquiry, one
Column 738could conduct a scenario analysis. One would present not a single figure for projections and forecasts but a wide range of figures so that one might blunder into the right estimate. That appears to be exactly what the Government have done.
The hon. Member for Linlithgow (Mr. Dalyell) asked the Minister a question last Wednesday. Incidentally, the hon. Gentleman should be running a seminar on how to ask questions during Scottish questions, from which many hon. Members might benefit. When he asked the Minister to give to the nearest £10 million his latest estimate of the changes in Scottish local government, the Minister's eyes glazed over. At the very least, that should not make us confident that there had been a proper and adequate financial examination of the figures.
Mr. Dalyell : I do not know whether I fall into the category of thieves among which the hon. Gentleman has fallen in this place, but I do agree with him that we have not had from the Scottish Office any suggestion of the way in which it has arrived at its figures. At the least, it owes the Chartered Institute of Public Finance and Accountancy and the rest of us some explanation of how it has arrived at its figures because, bluntly, Miss Anna Capaldi and her Touche Ross figures have just been exposed as being totally flawed--in fact, I do not know how Touche Ross got taxpayers' money.
Mr. Salmond : I happily exclude the hon. Gentleman and myself from the category of thieves into which we have both fallen. I am not so sure that I would be excluding Touche Ross, if we consider the benefits that have been gained for itself from its expensive report into the financing of Scottish local government. I think that the argument has been well made once again by the hon. Gentleman. I want to make two final arguments, in summary. I hope that the Minister will not continue to make the argument that I hear sometimes from his lips, that somehow, when the Convention of Scottish Local Authorities, which is the representative organisation for local government, says something it is necessarily in the pockets of the Opposition parties and necessarily its viewpoints and arguments must be disregarded. I merely draw to his attention the fact that the president of COSLA, Charles Gray, is one of the more
independent-minded members of the Labour party in Scotland and has a known track record of saying things in an extremely independent way. When someone such as Charles Gray makes comments on those matters, his arguments deserve to be taken on their merits. I should like some indication, at least, that the Minister is prepared to do that and not allow Charles Gray to fall victim to the "Stalinist tendency" that has been identified in the ranks of certain political parties in Scotland.
Secondly, and lastly, I should like the Minister to show some appreciation of the fact that the debate is not just another ritual debate about the revenue support grant orders. As the hon. Member for Provan reminded us, the debate affects finance, and real services which affect real people. I hope that if the House gives leave to the Minister to sum up the proceedings this evening, there will be some sign in his closing speech-- which I do not think was there in much of his opening speech--that he realises the importance to people of the services that we are debating this evening.
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Mr. John McAllion (Dundee, East) : The debate has been characterised by some excellent contributions by Opposition Members and by total ignorance about local government displayed by Conservative Members.
I begin by paying tribute to my hon. Friend the Member for Glasgow, Provan (Mr. Wray), who made a tremendously passionate and clear speech about the implications of the orders for ordinary people outside the House. The hon. Member for Banff and Buchan (Mr. Salmond) was equally right when he drew attention to the ritualistic nature of the way in which we debate rate support grant orders and housing support grant orders. They become just another item on the agenda of the business of the House and we sometimes forget how much they matter to people and how measures that we can joke about and make cheap debating points about across the Chamber affect people's lives and mean more suffering and more deprivation for everyone. It is important that we try to remember that and keep our remarks to the point of the debate.
This is a very disappointing settlement for local authorities in Scotland, and it is not only hon. Members who have long experience of local government who are saying that but local government itself. Of course the Minister would argue back that local government "would say that, wouldn't it", saying that it has an interest to argue that it is a poor settlement. As the hon. Member for Banff and Buchan said, the objective analysis of the settlement that is provided by the House of Commons Library suggests that the settlement is worse than does the analysis by COSLA. We should keep that in mind when we consider the figures.
The hon. Member for Kincardine and Deeside (Mr. Kynoch) drew attention to the fact that most local government expenditure is tied up with employing people ; the wages bill accounts for most of it. Ingeniously, he argued that we can cut that out of the rate support grant settlement--freeze employment, not think about employing any more people and so on. He said that the settlement is generous if one considers only the 40 per cent. expenditure that remains after one thinks about employment.
I draw to the attention of the hon. Member for Kincardine and Deeside the fact that the local government services that are provided across Scotland are people-intensive. They have to be
people-intensive. They are about employing people. Government statistics show that there are more pensioners in Scotland, and more people aged over 85, than there ever have been before. That fact in itself means that local government needs to employ more people to look after the elderly. There will have to be more home helps and social workers--residential and domiciliary--and more warden support and meals on wheels. The provision of such services means people being employed to deliver them--there is no way around that. One cannot exclude people costs.
Mr. Kynoch : Does the hon. Gentleman accept that the figure that I cited for the revenue support grant increase excluded community care and that the increase in revenue support grant could be applied to the non- wages element if the wages element were frozen?
Column 740only care in the community that is people intensive ; all the services provided by local government are people intensive. For example, everyone admits that crime is a massive problem in Scotland, especially in the urban areas. There are more offenders than ever before. Local councils provide offender services and need social workers to look after offenders. Victim Support is in its infancy in Scotland and if it is to grow and if victims are to get the proper care and attention that they require, that will have to be provided by local authorities and regional councils and the social workers employed by them.
It is disingenuous of the hon. Member for Kincardine and Deeside to argue that we can discuss local government services without talking about local government employees. Local government services are all about local government employees. If one reduces the number of local government employees, one reduces local government services to people who need them. If Conservative Members do not understand that simple fact, they do not deserve to be representing their constituencies.
Mr. Bill Walker : I happen to agree with the hon. Gentleman that local government services are largely about people doing jobs on behalf of the community. I also agree with what he said about issues such as law and order--we all think that more money should probably be spent. However, a large percentage of the cost involved in the provision of services is taken up by human factors such as wages. There is nothing odd about that. Retail distributors know that it is not uncommon for 60 per cent. of their costs to be accounted for by wages, but one can increase efficiency and make savings by changing the way in which services are delivered. The hon. Gentleman must accept that that is as true in local government as it is in distribution.
Mr. McAllion : My hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) has answered the hon. Gentleman's point. The retail industry is all about low wages, reducing the number of employees and cutting corners. One cannot cut corners when providing services for vulnerable people. Cutting corners in the provision of such services means that the vulnerable suffer and end up being sacrificed for the sake of levying a council tax lower than might otherwise have been the case had proper services been provided by the local authority. That is what Conservative Members favour.
Mr. Ian Davidson (Glasgow, Govan) : Does my hon. Friend agree that, when the hon. Member for Tayside, North (Mr. Walker) refers to the need for efficiency and compares public services to retail, he is making a fundamental mistake? One cannot compare a home help with someone working in retail, in a shop. If efficiency is to be improved, presumably a home help will have to look after more old people. A better service would result in home helps looking after fewer people more intensively, which is the very opposite of private sector efficiency.
Mr. McAllion : My hon. Friend speaks from direct and recent experience of working on a major regional council. He knows what it means to deliver services to people in a large part of Scotland. If some Conservative Members had come from a local government background, we might not be debating such orders.
Column 741Mr. Bill Walker rose --
I believe that a copy of the brief from the Convention of Scottish Local Authorities has been given to every hon. Member. The first sentence states :
"The Convention re-affirms its earlier view that on average Council Tax bills are likely to increase by about 10 per cent. or £1.20 per week next year as a result of the settlement proposals".
COSLA is not saying that the council tax will increase because inflation is going up, because local authority wage settlements are going up or because local authority services are being increased ; it is talking about council taxes going up by £1.20 as a direct result of the revenue support grant that the Government have made available to local authorities in Scotland.
That example is not an isolated one. As many hon. Members have pointed out again and again, it is only two weeks since we debated an order on the housing support grant which will inevitably increase rents across Scotland. We have also recently heard about the increase in NHS prescription charges. We have heard about the massive increases in income tax that the Government are to introduce in April. We all know about VAT on fuel. If we consider all those things together, a pattern begins to emerge. The Chancellor of the Exchequer has set himself the target of eliminating the public sector borrowing requirement, which currently stands at £45 billion, by 1997- 98. He will do that by cutting public services in every way that he can think of. One way is to cut back on the funding for local government, as the order shows.
COSLA makes that point very clearly. It says that the level of grant- related expenditure for next year is well below the figures that it has identified as being necessary to maintain the level of services available in local authorities at the moment. If COSLA says that the amount is not enough even to maintain services, against a background of increasing unemployment in Scotland--that is the official level of unemployment and not the unofficial level, which is much higher--and against a background of massively increasing poverty in Scotland, what does that imply for ordinary people whom we are meant to represent here?
Tayside regional council social work department recently sent me a report. It considered the figures from the 1991 census. It went through a number of the changes in my part of Scotland over the past 10 years. I suspect that they are fairly typical of what is happening in the rest of Scotland. The department pointed out that there has been a massive increase in the percentage of single-parent households. As there are more single-parent households, there is a need for greater child care facilities to be provided through local authorities.
There is also a need for more nursery provision through local authorities and there is a need for more bridging schemes to allow single parents to make the jump from relying on benefit to going back into employment. There is a need for employment schemes to be run by local authorities. There is a massive need for local authorities to increase their expenditure at a time when the Government are cutting the RSG that is available to local authorities in Scotland. The department points out that, over the past 10 years, there has been a large increase in the percentage of people