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Mr. Jacques Arnold: What does my hon. Friend say about a leaflet that was issued by the education officer of Kent county council to parents throughout the county, at a cost of £4,000? There were claims within it that various cuts would be made, despite the fact that Government funding for Kent has increased by 2 per cent. overall.

Mr. Pickles: My hon. Friend had the courtesy to show me the leaflet. I believe that the officer concerned stepped over the mark. That officer has mistaken a majority view in the council for a view that should be passed on to the public. As I have said, I firmly believe that local authority officers have high standards. If, however, they are to retain their independence, they must retain party political independence.

Mr. Gerry Sutcliffe (Bradford, South): Surely it is a bit rich for the hon. Gentleman to give us lessons in the use of local authority funding. When he was leader of Bradford council--this happened on the casting vote of the lord mayor--he took £13 million out of the council's budget and set the pubs of Bradford running.

Mr. Pickles: The hon. Gentleman has given me the opportunity to remind him that, during my time, spending on or in schools increased, as did the number of teachers.

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The reduction in teaching numbers came when the hon. Gentleman was leader of the council. I hope that the hon. Gentleman will have an opportunity to apologise for that.

The most extravagant claims have been made about secondary schools. I am pleased that such schools in my constituency have been free from them. One of the reasons is that Brentwood and Ongar is the only constituency in which all secondary schools have opted out of the local authority's control. They are free, therefore, from political bias. I have little doubt that the shroud waving of Opposition Members will encourage others to join Brentwood and Ongar. Parents in my constituency enjoy schools that are free from dogma. Mr. Leo McKinstry's description of a Labour administration "mean-minded cocktail of political correctness, bureaucracy, intervention and abuse of public money"

when talking about Islington could well fit Essex county council, which is controlled by the Labour party and the Liberal Democrats. My constituents have been the victims of a combination of fuzzy dogma and incompetence. The county council is damaging them over a relatively small sum. They have been denied care in the community services. Beds in local hospitals are being blocked. Children are worried about the future of their elderly parents. It should not, and need not, have happened. It has, however, because the county council has decided to use the elderly as a battering ram.

No one ever thought that care in the community would be a cheap option. We always knew that it would be expensive. That is why the sum made available by the Government to Essex county council for care in the community was increased last year by £32 million. There will be an extra £18 million this year. Since 1990, the grant for care in the community to the county council has risen by 95 per cent. My constituents have been the victims of poor decision making. There has been a transfer of about £500,000 from the care in the community budget to support inappropriate services, and the charging policy has been turned completely on its head, to the tune of £1.25 million. That is almost the exact sum that the county council chooses to take away from elderly people.

The county council has decided to end the policy of selling old persons' homes. I have some experience of this because I visited Brooks house. Before the election, I saw an old, rundown building where the staff offered excellent care. Unfortunately, it was not a place where elderly people should see out their last years. When it came to the surroundings, there was no dignity and no respect. The sale was fought hard by the Liberal Democrats; indeed, it has ended that policy. I had the pleasure of opening Brooks house last year under the new regime. What I saw there was respect for the elderly people, the same staff running it and a better organisation. Under the new regime, it is a lot cheaper and a lot better in the private sector. Essex county council could buy considerably more care under that process if it would follow the example of putting the care of those old persons into the private sector.

I firmly believe that it is within the power of Essex county council to use its not inconsiderable balance of £28 million to put care back where it is needed--into the hands of the elderly in my constituency.

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6.40 pm

Mr. Gordon Oakes (Halton): The hon. Member for Brentwood and Ongar (Mr. Pickles) will forgive me, I hope, if I do not follow all the points in his speech, although I wish to refer to some of them. It was refreshing to hear a voice from local government talking about the motion, because in your absence, Madam Speaker, the debate became a shambles. I have attended many of these debates. It was no fault of your deputy, Madam Speaker. The fault lay in the fact that the Secretary of State quite deliberately allowed interventions over and over again from Conservative Members. I know that a Secretary of State or a Minister gives way to interventions, but not repeatedly like that.

I have taken these motions many times in the House. I have proposed them from the Front Bench. One allows a few interventions, but one does not base one's speech on interventions. One should try to explain to the House what the motion is about. That the Secretary of State signally failed to do by talking about street signs in Suffolk and lesbian centres in Camden, by criticising the fact that the right hon. Member for Yeovil (Mr. Ashdown) was not in the Chamber--all that sort of silly arguing. I wish that a video of the debate would be sent to every councillor, especially Conservative councillors, who, like us, are concerned with the community. They are caring people, just as Labour and Liberal councillors are caring people. They are colleagues of ours in a different sphere. To be treated in that way in what is probably the most important debate for local government was nothing but a disgrace.

The motion has been described as harsh. I would go further and say that it is intolerable, because local authorities will find not only that their services have diminished but that they will be unable to provide some services at all because of lack of money--not from malice, not from putting people in fear, but simply because they have run out of money for those particular services.

I am an honorary--I stress that word--vice-president of the Association of County Councils. It is opposed to the motion and finds it deplorable. I also represent a Cheshire constituency. I hasten to tell the Minister that it is not a Labour-controlled authority but an alliance between Conservatives and Liberal Democrats and they oppose the motion because of its injustice.

Let us take two Departments in central Government--the Department for Education and the Department of Social Security. I understand that the figures for this year--limited though they are--are 4.1 per cent. for education and 3.7 per cent. for social services. The actual figure this October, with all the changes in police orders, and so on, is 0.5 per cent. for each of those services in local government. That shows the disgraceful discrepancy between the way in which central Government treat themselves and the way in which they treat what should be their partner--local government.

I have another criticism, and I agree with my hon. Friend the Member for Bolsover (Mr. Skinner), whose intervention was on this subject. One reason why there are discrepancies between Cheshire, Derbyshire, Cleveland and Tyneside is that an area cost adjustment is built into the system. That adjustment is supposed to compensate for the fact that it is more expensive to pay staff in London and the south-east than in the rest of the country. That might have happened at one time, but I

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challenge that assumption now on national wage bargaining. Even if there is some truth in it, it does not excuse the enormous advantage that counties and boroughs in the south-east have over the rest of the country. There is no way in which that can be excused. I do not think that it is a coincidence that most of the Conservative seats in the country are in the south-east.

I wish briefly to look at one service, because the motion covers a vast subject--social services, to which the hon. Member for Brentwood and Ongar rightly referred. It is central Government and local government at the sharp end. It is where the Government come into contact with the most distressed people in our society: the old, the sick, especially the mentally sick, and children, right at the centre of their lives. As Members of Parliament, we all know that. We see it in our surgeries and we gladly pass on those cases to the county or borough social services department. Alas, when we do that in future, many of those services will not be able to be provided, because the departments will not have the money after the settlement. The ACC estimated the cost of such social services. There is a shortfall in the amount that departments are to be given under the motion-- I have the figures, but will not go into them, as that would waste time--of £261 million. The people who will suffer are the old, the sick and children in need of care.

A couple of years ago, Cheshire county council introduced a system of charging for care. Now, I understand, more than one third of councils are forced to charge for care. As a result of the settlement, I guarantee that the percentage of councils that are forced to do that will be 100 per cent., because there is a built-in system whereby 9 per cent. is assumed to come from charges. We are talking about the most vulnerable section of the community. It is likely to come from the poorest--those not with low means but, in many cases, no means. There is no way in which a caring--even an uncaring--county council can recover those sums.

What will that mean, then, in human terms? We have debated the figures-- they are major figures--but it comes down to human terms. One of the few ideas that the Government had was to implement the community care scheme. Everybody agreed to it--the Association of County Councils and every shire county. It is a far more humane system. The national health service has benefited from it, quite rightly, because people are better off in the community. Previously, people were institutionalised, either long term in a hospital or in some other institution. The community care scheme should have been the Government's flagship, but the transfer from the NHS has not been followed up and matched by a fair transfer of finance among the authorities.

What is happening now? We see it in our streets. In the community, local authorities have the responsibility of care; they would willingly provide that care, but they do not have the money to do so. The Secretary of State may say that that is because of waste or inefficiency, but that is not what the Audit Commission says. It is not what his own inspectors say when they examine how the community carries out the schemes.

We must look at the subject in human terms, in terms, for example, of the people who suffer from schizophrenia. There have been some dreadful, tragic cases, for the

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person concerned and for his or her family, and sometimes the family of the victims. The money will not be available to provide the care needed.

We must think of special needs teachers. I am sure that my hon. Friend the Member for Ellesmere Port and Neston (Mr. Miller) would have raised that matter had he not been upstairs in a Select Committee. We must think of children who need to be put in care as a result of sexual or other physical abuse: places will not be provided, as they were in the past. We must think of meals on wheels, and other services for elderly people. Those, too, will be cut. Finally, we must think of the carers who save the country millions of pounds more than the revenue support grant, through the love and care that they devote to, for example, sufferers from Alzheimer's disease for 24 hours a day, 365 days a year. At present, councils can provide places that allow those carers some respite, but they may not be able to do so in the future.

Many Conservative Members are as caring as Opposition Members. When they vote tonight, let them remember that.

6.50 pm

Mr. Patrick Nicholls (Teignbridge): I hope that the right hon. Member for Halton (Mr. Oakes) will not be offended if I do not follow his speech. It was an excellent speech, although I could not agree with all of it, but I am constrained by the time limit.

The right hon. Gentleman's speech was a marked and welcome contrast to that of the hon. Member for Holborn and St. Pancras (Mr. Dobson), which was boorish, ignorant, graceless and thoroughly uninformed. At least it had the virtue of being entirely consistent with every other speech that I have ever heard the hon. Gentleman make, and we should also give him credit for coming here to make it: that is more than can be said for the right hon. Member for Yeovil (Mr. Ashdown), who has played a significant part in the misrepresentation of the current settlement. Despite the steps that he has taken to misrepresent what is going on in the west country, the right hon. Gentleman could not even come to the House today. I find that remarkable, and think that it should be noted.

It is in the nature of politics that politicians, whether they are Labour, Liberal or Conservative, seek to put the best possible construction on their actions. Sometimes, the public feel that that amounts to dishonesty; I do not think that it does. Obviously, any political party will try to set out its stall as well as it can. However, what has happened in Devon in recent weeks goes far beyond that. The Liberal administration there has not merely put the best possible gloss on its own policies and the worst possible gloss on those of the Conservative Government; it has engaged in a campaign of deceit, disinformation and downright lying. I have a fairly thick skin in political terms--I need to--but that campaign is so appalling that even I have been surprised at not only what the Liberals have done but at the extent to which, so far, they have got away with it. What the Liberals have done in Devon, and the way in which they have presented the position, is wicked, because it obscures the debate. If the Government had produced a settlement for Devon that was not fair, the

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Liberals' behaviour and the fact that it can be rubbished so easily would actually make it harder to bring Ministers to account--if, indeed, they had to be brought to account.

We Members of Parliament make the mistake of thinking that, because we all understand--to a greater or lesser extent--the way in which local government is financed and the way in which it works, our constituents will understand it as well. Most of them do not. What parents know, certainly those in Devon, is that their children have only one opportunity of being educated. If the Conservatives sort out Devon's education service when they are returned to power there, it will not help someone who has already gone through the school system.

My hon. Friend the Member for South Hams (Mr. Steen) used a phrase for which he was derided; he should not have been. Let me use the phrase again. What terrifies parents is that they do not know the minutiae of local government funding. They do not understand that a local education authority has certain functions to perform, and has discretion to set its own priorities; what they know is that they are being told by their councillors --their councillors would not lie to them, would they? Would they hell!-- that there will be massive cuts in the classroom. Teachers will be made redundant, and parents are outraged about that.

Let me draw attention to one of the most unfortunate aspects of all this. If my hon. Friend the Minister cannot deal with it today, I put down a marker: I shall pursue the matter in correspondence. What the Liberals in the west country are saying has been given some credibility by the fact that local government officers are prepared to sign letters that are no more than the crudest party political propaganda. Those same officers are also prepared to speak on television programmes, doing the Liberals' dirty work for them. It is almost as though my hon. Friend the Minister had a tricky television interview coming up, and persuaded his departmental permanent secretary to do it for him.

We may wonder why professional council officers allow themselves to be traduced in that way. We can imagine the pressure that they must have felt themselves to be under, to allow their professional expertise to be employed and their cloak of apparent honesty to be thrown over the shoulders of the Liberals.

What are the Liberals up to? Any lie must be told in a big way. They have held briefings, and I have observed the results from telephone calls, letters and visits that I have received. People have been told that Devon county council will receive less money this year: that is the first thing that they have been told. Is that true? It is false. Last year, the police authority was maintained within the council, but it is now maintained separately. If we compare like with like, we find that there has been a 7.8 per cent. overall increase rather than a decrease.

Parents are being asked--in a sense, this is the chief criterion--whether Devon is performing better than the average, in an average way or worse than the average, and they find that it is performing far worse than the average. I have discovered from meetings that they have even been told that Devon is the worst-funded county in the United Kingdom. The truth is, however, that it has received the fifth largest standard spending assessment increase. As for educational SSA, it has received double the national average. At the mention of annual capital guidelines, parents' eyes will glaze over, but hon. Members understand the significance of those guidelines. They

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specify what local education authorities can spend. Devon does not receive as much as it used to and it never will, but it receives about half as much again as the national average.

Mr. David Nicholson (Taunton): Will my hon. Friend give way?

Mr. Nicholls: No; time is short. My hon. Friend can make his own speech in his own way.

The Liberals say that an increase that is less than the increase they want is really a cut. They think that, if they say that long enough, someone will believe them. Once they have convinced parents that the cuts have been imposed by the Government--almost suggesting that my right hon. Friend the Secretary of State has said that there must be cuts in the provision of a particular school--we suddenly discover the existence of reserves. How did I find out about the reserves? A headmaster in my constituency telephoned me. He said, "Have a look at the papers. They have squirrelled away £17 million." When I said, "If there is £17 million there, why do you not take the matter up with the council?" he said, "It is more than my job is worth." There is a climate of fear in Devon. The headmaster will not even take the matter up with his own Member of Parliament. What was the attitude of the Liberal county council to the reserves? On day one it denied that they existed; on day two it said that it was scandalous to suggest that they amounted to £17 million--there was only £16.8 million. We now discover from a written parliamentary answer to my hon. Friend the Member for Lancaster (Dame E. Kellett-Bowman) that there may be as much as £51 million. The fact is--and parents in Devon needed to know this--that a local education authority can set its own agenda. It is entitled to decide its own priorities, and the priority of Devon county council is to threaten to cut the number of teachers, when in the past year it has increased staff numbers by a huge 718. Then it has the nerve to turn around and say that, because of Government action, it will have to cut pupil numbers. That is utterly dishonest. Here is a body that employs more people than the European Union, and it says that it must cut the number of teachers.

The LEA has a question to answer: where do its priorities lie? Is it concerned about core functions at county hall, or about services in county schools? I do not expect parents to accept uncritically everything that my hon. Friend the Minister will say; not do I expect them to accept uncritically anything that a Conservative Member of Parliament says. All that I will say to parents in Devon is this. Democracy is a two-way street, and citizens have a responsibility to see what is being done in their names. Yes, by all means send in the letters in their hundreds and question Conservative Members of Parliament about what they are doing, but also question the LEA, which has the funds to set its own priorities if it wishes. Ultimately, if parents question both Members of Parliament and the LEA, they should get the truth, but that process has not yet started in Devon. I should like to think that, as a result of tonight's debate, it will.

6.59 pm

Mr. Don Foster (Bath): As I intend to touch on a number of education matters, it is important for me to

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declare my interest as an adviser to two teacher associations. I assure the hon. Member for Teignbridge (Mr. Nicholls) that I shall shortly deal with his points.

It is becoming increasingly clear that the Government have no love for local government. They do not like it, and they do not trust it. Therefore, they have set out systematically to destroy it, and they are doing that by reducing its powers, often giving them to remote, undemocratic quangos. In addition, as we have noticed in the debate, the Government are attempting to starve local government to death, and with it many of the much-needed and valued services that it provides. For evidence, we need only look at the settlement. We all know the figures as they have been discussed already, but perhaps the best source of information is the press release issued by the Department of the Environment on 29 November last year. It states that, net of community care, the settlement represents a cash decrease of 0.4 per cent. As all hon. Members know, when inflation is taken into account, that means a significant cut in the amount of money being made available to local government. I do not need to refer to more up-to- date information, because figures contained in recent announcements are almost identical to those in that press release.

Despite all the delegations that came to plead with the Secretary of State and the Minister, very little has changed. Little notice has been taken of the people in those delegations, all of whom care about local government. The present cuts are on top of cuts in previous years. The Government are calling for local government fat to be removed, but the fat was removed many years ago. The flesh has now gone, and the bones will soon be bleached white.

The hon. Member for Brentwood and Ongar (Mr. Pickles) spoke about savings that were outlined in the Audit Commission report. He will correct me if I am wrong, but I think that the report suggested about £540 million. I am sure he accepts that those savings were intended to be made over seven years, and that more than 50 per cent. of the report's recommendations have already been enacted.

Mr. John Sykes (Scarborough): The hon. Gentleman talks of fat in local government. Is he aware that, in my area, North Yorkshire county council received a 1 per cent. increase in this year's allocation but is complaining about drastic cuts? It wants to reduce the number of fire engines in Scarborough, although we all know what happened last year to the Richmond hotel. The council owns 13,000 acres of farmland in North Yorkshire, which is worth £10 million. There is no thought of selling that. Local authorities must be made to face difficult decisions. That council should be forced to decide whether it wants to provide fire engines or farmland.

Mr. Foster: I am grateful to the hon. Gentleman for his intervention, because it gives me the opportunity to remind him that the sale of assets does not immediately make available to the local authority the whole of the proceeds. The Government limits the amount that can be

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spent. I hope the hon. Gentleman agrees that, when assets are sold, the most useful use for the proceeds is to create new assets for the local authority.

Mr. Sykes rose --

Mr. Foster: Madam Speaker has given me dispensation to go beyond the allotted time, but I have promised that I shall try to abide by the spirit of the 10-minute rule. Therefore, I will not give way. The purpose of the cuts is clear. There will be cuts in the fire service, community care, library services, housing and roads, but the worst cuts will be in the education and youth services. The cuts in education will be across the board, but especially important is what will happen in the classroom. Those cuts are real. As many hon. Members know, even the Secretary of State for Education, in her letter to the Chancellor of the Duchy of Lancaster, warned of the possibility of problems in education because of this settlement.

Mr. Rupert Allason (Torbay): Why is the Liberal Democrat administration in Devon threatening massive cuts in the education budget, even though the administration has a surfeit of more than 700 people? Perhaps that is fat. How has the administration at Exeter managed to achieve more than double the average increase in the education SSA?

Mr. Foster: I shall be happy to deal with that when I reach that topic in my speech. I wish to set the national scene, and I shall then reply to the points that hon. Members have raised.

Within the settlement, the Government expect local education authorities to manage with less money per pupil. Of the 117 LEAs, only four have avoided a real-terms cut in their SSA. Across England, the cut is the equivalent of £50 per primary pupil and nearly £200 per secondary pupil. Altogether, that represents a cut of £750 million.

The Secretary of State said that local government must get its priorities right, but one must question the Government's priorities, because they say that there must be significant cuts in the amount spent on each pupil. That is based on the Secretary of State's figures.

Mr. Gummer: I appreciate that the hon. Gentleman is making general points, but perhaps I could make a specific one. In Devon and Somerset, Liberal administrations or Liberal-supported coalitions have increased the number of employees. There have been significant increases in the amount that those administrations receive from the Government, but they have written to schools telling them that there will be staff cuts. Those matters do not hang together, and the right hon. Member for Yeovil (Mr. Ashdown) is not here to defend the words that he put in letters to Conservative Members. Many of us are beginning to wonder whether the Liberals are being honest on this.

Mr. Foster: The Secretary of State is repeating interventions that have already been made, to which I have promised to respond. He is taking up precious time. He knows that, because of the unfairness of the area cost adjustment, all the LEAs in the south-west are placed at a considerable disadvantage. On average, they have £130 per pupil less to spend in the classroom.

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I said that I would reply to some specific points. Some hon. Members spoke about Somerset. Based on information provided by the Department for Education, in real terms the SSA per primary pupil in Somerset will be cut by £46. The cut for secondary pupils will be £147. The overall shortfall for the Somerset budget as calculated by the county treasurer is £20.4 million, of which £12.4 million is in the education budget generally and £9 million is in the schools budget in particular.

Although a number of Conservative councillors in Somerset initially disagreed, I understand that they have now accepted those figures from the county treasurer. The Devon figures show a cut of £46 per primary pupil and £178 per secondary pupil in real terms in the SSA in this settlement.

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

Mr. Foster: No, I am not giving way again.

Many people fail to understand that marginal increases fail to take into account the increased number of pupils.

Right across England, local education authorities are expected to do more and more, with less and less. As one head teacher put it recently:

"We are running a medium sized business on peanuts and goodwill".

As all right hon. and hon. Members know, standard spending assessment cuts will be compounded by the results of the teachers' pay award. Unless the Government fund that centrally, even less cash will be available for use in the classroom.

The Prime Minister told us that education was one of his Government's top priorities. Today, the Secretary of State for the Environment told us that education was at the heart of the needs of the nation. The settlement, however, shows that neither the Secretary of State nor the Prime Minister are putting our money as taxpayers where their mouths are. They would rather put their party before this country's future. Instead of investing in education, they want to cut money from it, giving themselves room for tax cut bribes before the next election. But they have been rumbled.

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

Mr. Foster: No. [Interruption.] I have already said that I would not give way again. You, Madam Speaker, have asked me to comply with the 10-minute ruling for speeches.

The nation knows that every right hon. and hon. Member who votes for the settlement tonight--that includes the right hon. Member for Bridgwater (Mr. King)--is voting for teachers to be sacked, for rising class sizes, for less money for books and equipment in our schools, and for less money for much-needed repair and maintenance. Worst of all, they are voting to ensure that no real possibility exists of the much-needed expansion of nursery education.

Conservative central Government have admitted that the settlement is tight for education and for all other local government services. The Secretary of State called it a "tough" settlement. It is far worse than that--it is a deplorable settlement. Anyone who cares about local government and the services it provides should vote against it tonight.

Mr. King: Will the hon. Gentleman answer one question?

Madam Speaker: Order. The hon. Member for Bath (Mr. Foster) has sat down.

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7.11 pm

Mr. Patrick McLoughlin (West Derbyshire): I do not want to follow the line that the hon. Member for Bath (Mr. Foster) elocuted in his speech, because it is not worth following.

I praise one of my councils--Derbyshire Dales district council. Its standard spending assessment was some £6,069,000, and it is estimated that it will spend some £6,007,000. Basically, that results in a reduction of 8.1 per cent. for the council tax payer in Derbyshire Dales.

I am grateful that that council has managed to achieve that within what I accept has been a tight settlement. I praise all members of Derbyshire Dales for their prudent running of the local authority. They have reduced the community tax, and, at the same time, total council expenditure contains growth of 3.4 per cent. and inflation of 3.3 per cent. They deserve praise for the way in which they have run a prudent and efficient system.

Yet again, Derbyshire county council has been using its usual tactics to frighten everyone about the implications of its spending settlement. I say "its usual tactics", and I have slight evidence for that. I was looking through some papers this morning, and I came across a report from the county treasurer. It states:

"Taking the above factors into account, the County Treasurer anticipated the County Council operating in circumstances where the cost of maintaining services based on a realistic estimate of pay and price increases, amounted to £470 million, whilst the Secretary of State's assumption on Derbyshire's level of spending was £435 million, a reduction of £35 million."

He said that that £35 million would mean the cutting of one of the following:

"2500 teachers, the entire regular police force, maintaining County roads and supporting public transport, residential and support services for children, and elderly and physically handicapped people."

That report was presented on 16 December 1987.

The problem is that, year in and year out, we hear such arguments from local authorities about the way in which they run their services. They then tell us that they should be allowed to continue in their present form. My right hon. Friend has in front of him the Derbyshire review. I do not believe that Derbyshire county council is an efficient service provider, and I hope that he will carefully take that into account when he considers his response to that review. I accept that much of the money is spent on education. The hon. Member for Holborn and St. Pancras (Mr. Dobson) mentioned school meals. We know about school meals in Derbyshire because, in the past 14 years, Labour-controlled Derbyshire county council has spent more than £100 million on subsidising school meals. If that £100 million had gone into schools and education, the council would be in a far better state to provide services.

Providing those services would have been better than subsidising my children to go to those schools and to have cheap meals. What nonsense. How stupid and ridiculous. Yet the hon. Gentleman sought to defend that argument. I find that unbelievable.

Mr. Charles Hendry (High Peak): Will my hon. Friend confirm that Derbyshire council has an abysmal record in the amount of money that it holds back for central administration? Will he confirm that, if it was as efficient as Nottinghamshire council, which itself is not

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very efficient, it would have another £70 to spend per child in schools? That would be better than spending the money on its bureaucrats in county hall.

Mr. McLoughlin: That fact has come out of the research that we have done. Derbyshire county council may score high on spending, but its allocation on schools is the lowest of any shire county. It spends more on central administration than any other county. I am not proud of that record, because I would prefer money to go into schools.

Until a few years ago, there was no option in the state system. All schools were run by the local education authority. Back in 1988, I was pleased to be parliamentary private secretary to my right hon. Friend the Member for Mitcham and Morden (Dame A. Rumbold). We took the Education Reform Act 1988 through the House, which allowed schools to become grant-maintained.

Now, there is another option for education. I welcome that option, because it makes Derbyshire county council be careful about some of the nonsensical decisions that it has taken in the past. We had the crazy situation in which all school notepaper was taken back to county offices to be overprinted with "Derbyshire supports nuclear-free zones." It has become a bit better in recent times. I should like to share with the House some of the experiences of schools that have gone grant-maintained. The head teacher of Belper high school said recently:

"The school has benefited from enhanced funding because although we are linked to the Derbyshire formula the element for central costs can be spent specifically to meet our own needs. Independence enables us to manage our finances far more effectively because we have full control. We received an emergency grant from the DFE to replace our twenty-year-old boilers. Queries are always answered promptly and clearly by the DFE which has made the task of management much easier."

Dr. Dupey, the head of Ecclesbourne school, said:

"The last four years have been the most professionally fulfilling of nearly two decades of headship. Not only have we been able to put right most of the physical deficiencies of the School's site and buildings, we have been able to assign a much higher proportion of what was our share of the resources allocated to Derbyshire for education to the business of teaching and learning. The effort wasted on petty politics and bureaucracy has also been significantly reduced, leaving more time, energy and enthusiasm to devote to the needs of our students.

Mr. Gummer: Does my hon. Friend agree that that is probably the reason why the leader of the Labour party has chosen a

grant-maintained school for his child? He knows that the money will be spent on the child and not on the bureaucracy.

Mr. McLoughlin: I am not sure whether my right hon. Friend knows this, but it is even worse than that. As I understand it, only one school in the country has opted out of the national pay negotiations. I shall not give my right hon. Friend any prizes for guessing which school that is.

We have a further alternative in the education system. That is a positive step.

Several hon. Members rose --

Mr. McLoughlin: I would rather not give way, because I have a great deal to say.

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I could speak on this subject for a long time, but time is short. There are alternatives for education.

I am particularly concerned about the area cost adjustment. Some of us wonder whether the Department of the Environment has got the formula right. It should be looked at. It might mean that some London boroughs will have to lose money. The hon. Member for Holborn and St. Pancras (Mr. Dobson) did the House a disservice by spending 25 minutes talking about London. Many hon. Members are much more interested in what is happening in the rest of the country than in history lessons about Westminster. Will my right hon. Friend consider carefully the area cost adjustment?

When my right hon. Friend the Prime Minister was Chief Secretary, he talked about the pay review bodies reporting after local authority budgets had been set. That does put local authorities in an awkward position, in that they do not know what the pay settlements will be in the coming year. It should be looked at. It is not fair that they should find out what the pay review bodies say after they have set their budget. That is not the most efficient way to move forward. I have no doubt that we will hear the same bleating as we have heard over the past few months--some of which may be genuine. Scaring parents is deplorable and does no credit to the people involved. Year after year, we hear the same excuses. I urge my right hon. Friend the Secretary of State to use every opportunity to expose what the Labour party and the Liberal Democrats are trying to do, and to explain what the outcome will be.

7.22 pm

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