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Column 389

Campbell-Savours, D. N.

Chisholm, Malcolm

Coffey, Ann

Cohen, Harry

Corbyn, Jeremy

Cunningham, Jim (Covy SE)

Eagle, Ms Angela

Flynn, Paul

Foster, Don (Bath)

Garrett, John

George, Bruce

Hanson, David

Hill, Keith (Streatham)

Hughes, Kevin (Doncaster N)

Jackson, Helen (Shef'ld, H)

Janner, Greville

Jones, Nigel (Cheltenham)

Kennedy, Jane (Lpool Brdgn)

Kilfoyle, Peter

Lewis, Terry

Livingstone, Ken

Loyden, Eddie

Macdonald, Calum

McFall, John

McMaster, Gordon

Martlew, Eric

Meale, Alan

Michie, Bill (Sheffield Heeley)

Morley, Elliot

Morris, Rt Hon A. (Wy'nshawe)

Mullin, Chris

Pickthall, Colin

Powell, Ray (Ogmore)

Rendel, David

Simpson, Alan

Spearing, Nigel

Spellar, John

Steel, Rt Hon Sir David

Taylor, Mrs Ann (Dewsbury)

Taylor, Matthew (Truro)

Tyler, Paul

Wardell, Gareth (Gower)

Wareing, Robert N

Winnick, David

Wise, Audrey

Tellers for the Noes :

Mr. Harry Barnes and

Mr. Dennis Skinner.

Question accordingly agreed to.

Resolved,

That this House, at its rising on Thursday 26th May, do adjourn until Tuesday 14th June.


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Council Tax (Sheffield)

7.19 pm

The Minister for Local Government and Planning (Mr. David Curry) : I beg to move,

That the draft Council Tax Limitation (Sheffield City Council) (Maximum Amount) Order 1994, which was laid before this House on 23rd May, be approved.

On 7 April, the Secretary of State took his capping decisions, adopting principles that broadly gave effect to the provisional criteria that had been set out in the preceding autumn's Budget setting. Sheffield decided to challenge the proposed cap and suggested an alternative. The authority wished to retain its original budget and submitted a substantial paper setting out its reasons in support of a higher cap.

I met a delegation from Sheffield to hear its case. My hon. Friend the Member for Sheffield, Hallam (Mr. Patnick) and the hon. Member for Sheffield, Attercliffe (Mr. Betts) were present at that meeting. We had a constructive discussion and invited Sheffield to respond to further questions--which it did. Before taking his decisions, the Secretary of State carefully considered all the points, including those made and demanded at the meeting.

Sheffield faces difficult decisions, in part because of some budgeting decisions in earlier years that left it with substantial inherited commitments and, in particular, a steep increase in financing costs. Whatever the cost, we have to consider an authority's current circumstances and the case that it presents in support of a higher cap must be considered on its merits. In reaching our decisions, we must take the world as it is and not as we had hoped it would turn out to be.

I am conscious of the fact that Sheffield has to face increased financing payments that are required for the leisure facilities associated with the world student games following a rescheduling of borrowing. No one wishes to see authorities lurching from one crisis to the next. If Sheffield is to succeed in establishing a more secure budgetary position in the longer term, it will need to push ahead strongly with its plans for improved efficiency and better financial management. Sheffield has signalled its intention to pursue further the programme of action that will be needed to put its affairs on a more even footing in the longer term. That will remain essential. In the light of those and other factors, we must consider the impact that a particular combination of circumstances that faces Sheffield in 1994-95 might have for the provision of local authority services in the city. Having carefully examined all the available information on factors that are relevant to budget setting, our judgment in the circumstances in which the authority finds itself for 1994-95 is that some relaxation in the proposed cap would be justified. Accordingly, we have decided that the final cap for Sheffield should be £381.65 million, a relaxation of £3 million on the amount originally proposed. It is for Sheffield to determine the services to which it wishes to devote the additional resources for which provision is made in the cap.

The final cap represents a reduction on the budget originally set by the authority. None the less, Sheffield will be able to increase its overall budget by 2.6 per cent.


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compared with the equivalent figure for 1993 -94. Two-adult band D council tax in the city will be about £18 lower than in the previous year.

If the House approves the order, we shall serve a statutory notice on Sheffield formally setting its cap. Within 21 days thereafter, the authority must reduce its budget in line with the cap and set new lower council taxes. It is for Sheffield to decide how to live within its cap. However, we are satisfied that the final cap for Sheffield is reasonable, achievable and appropriate in all the circumstances of the city. I commend the order to the House.

7.22 pm

Mr. Keith Vaz (Leicester, East) : We are discussing a very important measure which will affect the lives of everyone who lives in Sheffield. I am delighted to see so many hon. Members who represent the city of Sheffield here for the debate. They include my hon. Friends the Members for Sheffield, Attercliffe (Mr. Betts), for Sheffield, Central (Mr. Caborn), for Sheffield, Heeley (Mr. Michie), for Sheffield, Hillsborough (Mrs. Jackson) and for Sheffield, Brightside (Mr. Blunkett).

In last year's debate, the Minister said that local authority spending was £1,000 a head. This year, Sheffield city council proposed to spend just £723 a head. Although that is a massive reduction over last year's level, the Government decided that it was too high. How can that possibly be so ? The present round of capping comes at a time when the total budget for local authorities has been cut by 1.2 per cent. since last year.

The Labour party is unequivocally opposed to the idea of capping, for the reasons that my hon. Friend the Member for Blackburn (Mr. Straw) spelt out in the debate on 2 February. However, Sheffield's unfortunate situation is nothing more than the tip of the iceberg. Capping was meant to be a temporary measure with a limited use, but the reality is that, in setting budgets, every council now has to undertake the painful process of capping itself. That is done by the Government announcing the levels that they are willing to accept, and, unless a council wants to suffer the direct intervention of the Department of the Environment, it must set its budget within those defined limits. Effectively, that means that each year services have to be cut by local councillors themselves to avoid the bizarre process of direct Government intervention in the setting and regulating of local budgets.

The Government have almost entirely taken control of local authority budgets, to the extent that we now live in the most centralised system in Europe. That is contrary to the view expressed by the Conservative party in its propaganda for the European elections in which it pretends that it is Labour that wants such a system. The Conservative party is determined to turn local government into little more than its agent, forcing it to undertake the unpleasant tasks of central Government and to take the blame for cuts that are due to Conservative party mismanagement.

Since the Government came to power, they have forced through 195 Acts altering the powers of local authorities. That is more than one Act a month since 9 May 1979. Why has this sustained attack continued ? It has continued not


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for democracy or for the good of the populace but so that Tory paymasters can be given seats on quangos and joint boards. Quangos now control nearly as much spending as local authorities, but, while councillors are rightly open to public scrutiny and surcharge and possible criminal proceedings, members of quangos are free from even the most basic scrutiny. In the past when irregularities have been found, more often than not the culprit is rewarded with a gong and paid off. The governing ethos of some quangos and board members is "squander and defraud". For every £60 that is wasted by central Government and quangos, local government loses just £1.

The total by which Sheffield city council asked to exceed its new capping limit was £2.5 million. That is less than the amount that the Government have spent this year on mobile phones and pagers. But the money was not to be frittered away : it was to protect vital front-line services. In education, for instance, there will be 400 more pupils for Sheffield council to educate, but, because of the imposed cuts, there will be 80 fewer teachers. Average class sizes are already over 29 in core subjects.

A third of schools will have to cut spending on special needs facilities, even though there is a growing demand. The district auditor has expressed concern at the effect on development and control of cuts in those areas.

Environmental health spending has had to be cut to such an extent that the council is struggling to achieve its statutory duty level. Sheffield suffers from particular problems caused by the construction of the supertram and the way in which that is treated in the standard spending assessment system. The costs associated with the development of that innovative transport programme have not been recognised in the capping limit.

This year, Sheffield suffered a further cut in its budget through the cancelling of the urban programme and the capital receipts holiday. Sheffield succeeded in raising £19.3 million in extra capital receipts during the holiday period between November 1992 and December 1993. But even that was £5.4 million less than it had received through the urban programme. Sheffield city council made a bid for its budget to be maintained at the level at which the council set it. That level was not excessive, merely a rate that would keep the council tax the same as last year.

I congratulate the Minister on his good grace in accepting that the Government's capping limit was wrong and I congratulate the Government on their decision to increase it. However, if the budget cap is to be increased, it should surely be at the level suggested by the council. The fact that that is not the case leads us to wonder whether the Government are merely playing politics and indulging in a face-saving exercise at the expense of people's services in Sheffield.

The city of Sheffield has suffered extremely badly because of the decline in manufacturing. It lost more jobs in 18 months than the total that we shall lose because of the closure of the coal mines. The city had to cope with that calamity virtually without the help of central Government.

Instead of sitting back and resigning itself to its fate, the city has surged forward and set in place a regeneration partnership with the training and enterprise council, the development corporation, the chamber of commerce, the private sector, universities and the health authority. The survival of that partnership, which is a prime example of exactly what the Government are urging local authorities to


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do, is threatened because the other partners doubt whether the city council can deliver its side of the partnership because of budgetary constraints.

Yesterday morning, I spoke to the leader of Sheffield city council, Councillor Mike Bower

Mr. Irvine Patnick (Lords Commissioner of the Treasury) : He is in the Strangers' Gallery.

Mr. Vaz : As the hon. Member for Sheffield, Hallam (Mr. Patnick) rightly points out, he is watching this debate.

Mike Bower has already received telephone calls from ordinary people in Sheffield with messages such as this :

"We do not want our council tax decreased. You keep the money and save the money on re-billing. We want the services."

That may sound unbelievable, but the council tax cut that the Government are forcing on Sheffield amounts to a reduction of only £17.15 for a band D property. The Minister will not like being reminded that the average council tax bill in Labour authorities is £40 less than in Conservative authorities. The sum of £17 does not make a substantial difference. The forced cut is accompanied by the re-billing costs of between £100,000 and £140,000. Those funds must be found from the existing budget and the result will be even more cuts.

Those facts are not new to the Minister, but, as some of the representations that he has received from Sheffield show, the list is far more exhaustive than we have time for this evening and I shall not repeat it entirely. None the less, fully aware of those facts, on the recommendation of the Minister, the Secretary of State is cutting Sheffield's budget by £2.5 million. It seems absurd that Sheffield should have a further £2.5 million torn from its budget when the pay award for teachers alone will cost the city an additional £2.8 million.

The Minister has studied the Sheffield budget and, as he told the House, has met delegations from the city. Will he now tell the House and the people of Sheffield where he proposes that the necessary cuts be made ? Which services provided by Sheffield city council are surplus to requirements ? The Minister will probably reply that it is not for him to dictate how local budgets are allocated. That is precisely our point. It is not for him, the Department of the Environment or central Government to decide how local budgets are set or spent. It is entirely up to the councillors, who operate under the mandate that they receive from local people, to respond to local needs, and they should be left to set their own budgets.

The reaction of the Liberal Democrat party in Sheffield displayed what the Labour party has highlighted for years--it has no policies and no conscience. Locally, the Liberal Democrat party campaigns saying that it cares for local people and local politics. In Sheffield, those scavengers of British politics insisted that the city council did not bother disputing the cap but just accepted the Government's imposed budget.

However, the appropriately named Liberal Democrat leader, Mr. Moore-- although he requires less for Sheffield--was quoted in the Yorkshire Post yesterday as saying :

"We are not out of the woods yet by any means."

One would think that the words "egg on his face" were invented personally for that gentleman.

If the people of Sheffield had a Liberal Democrat council today--a horrifying prospect--they would be £3 million worse off. That means that £3 million worth of services to local people would have been cut because of the attitude of the Liberal Democrat party. The Liberals are


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beginning to be exposed locally and nationally for what they really are. They care for neither people nor policies ; they care only for power for power's sake.

On 5 May, the Conservative party was shown what people feel about its fabrications and failures locally and nationally. The Government and their discredited policies are no longer wanted. Labour is the largest single party at local level because it delivers what it promises. The Labour leadership in Sheffield sets realistic aims and knows how to deliver the services cheaply and efficiently. The Conservative party did not win a single seat in the local elections in Sheffield. The message that local people have sent it is that it is neither wanted nor trusted. That is not surprising when we consider the underhand way in which local authorities are being treated. The Conservative party has been exposed as the "do anything, say anything to get into power" party.

Today, Sheffield city council becomes the latest casualty of the secret war being waged against democracy and representation. Local needs are being superseded because of the Government's failure nationally. [Interruption.] The Minister may laugh, but that is the reality in Sheffield. Instead of supporting the civic entrepreneurs of Sheffield and other major towns and cities, helping to make them the best in Britain and able to compete with the best in the world, the Conservative Government are setting about their destruction. The past 15 years have seen a catalogue of interference by the Government. Year after year, good, effective councils such as Sheffield have been made to suffer increasingly, leaving the people of those cities desperately short of resources and services. How can the difficulties experienced by Sheffield and other cities be squared with the corruption in Westminster and the massive handouts received by Wandsworth from central Government ? I remind the Minister that Wandsworth receives 11.6 per cent. of the total non-needs related grant for the whole country, yet it has a population of just 0.5 per cent. that of the whole country. In 1993-94, Wandsworth received 25 per cent. of the council tax transitional relief set aside for each of the 33 London boroughs. Regardless of the gerrymandering that has been occurring for the past 15 years and despite the Government's obvious favouritism for its own councils, Labour councils cost less and provide more.

The leaders of Sheffield city council, past and present, and their excellent Members of Parliament--my hon. Friends the Members for Brightside, for Attercliffe, for Sheffield, Central, for Heeley and for Hillsborough--have fought hard to protect the services which people in Sheffield want. Yet, this year, regardless of local needs, the Government are imposing a stiff cut in funding. That great and dynamic city is now faced with the stark reality of being made to pay for the bankrupt policies of the Government at a cost to those who elect the council.

Even at this late stage, I urge the Minister to listen to the representations that he will hear this evening from the hon. Members who represent the people of Sheffield, and to take heed of what the city council has requested by increasing the cap limit by a further £2.5 million.

7.37 pm

Mr. Bill Michie (Sheffield, Heeley) : First, I welcome the news that at least £3 million will be handed back to Sheffield where it rightly belongs. I also welcome the


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speech of my hon. Friend the Member for Leicester, East (Mr. Vaz) and his glowing report of how Sheffield council, in difficult times, has literally picked itself up by the bootstraps. It has stood on its own feet because few of the resources required have been forthcoming from central Government.

The point has been made about the demise of the manufacturing industry and how Sheffield has taken tremendous risks in developing sports facilities. It has taken the criticism and blame for that, but, ultimately, it has changed the whole of the east end area, which otherwise would to this day have remained almost derelict. I suppose that we should be grateful for the extra £3 million. It will certainly be welcomed in Sheffield and will be well spent. Although the increase is small, it will be regarded as a good housekeeping certificate for Labour-controlled Sheffield city council.

Mrs. Helen Jackson (Sheffield, Hillsborough) : I am grateful to my hon. Friend for giving way. He has spoken about important issues and small projects. The sum of £3 million will be worth while when the council is working out what cuts it need not make. Like me, my hon. Friend will want to ensure that the money is spent on education and other crucial areas which affect people's lives. For example, perhaps we can look forward to the provision of public toilets in Hillsborough which, until now, has not had those sorts of basic facilities.


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