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Mrs. Helen Jackson: Will the Minister give way?

Mr. Curry: No. What Yorkshire Water does in terms of its own inquiries is entirely for it to decide, but it is important for us to draw conclusions from what has happened this year, to ensure that it does not happen again. I have made it clear once again to Yorkshire Water that, irrespective of the weather conditions and the rainfall, we must not find ourselves in a similar position next year. That means a sustained programme of refilling reserves in the reservoirs in the coming months and of putting right some of the faults in the system.

As I have said in public and to the company's face repeatedly, a justifiable criticism can be made of the company. At the turn of June or in July last year, it should have realised that demand was going through the roof. It

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was rising rapidly and the company did not respond quickly enough and placed too great a hope in the weather eventually changing. If it had acted more rapidly, particularly to reduce compensation flows out of reservoirs into streams, we would have been in a much better position now. At their height, the flows were about 80,000 tonnes a day, which is half the entire consumption of Calderdale and Kirklees. Frankly, the water was running to waste.

Action has to be taken on four fronts. The first is for Yorkshire Water. It is urgent that the company addresses itself to the problems of the distribution grid within Yorkshire. It inherited an extremely old, unmodernised and out-of-date grid and serious problems are caused by, for example, subsidence from mining, which makes it difficult to improve and replace the system-- [Interruption.] I hope that hon. Members will recognise that fact when Yorkshire Water has to replace the grid and improve the mains in places such as Halifax. It will mean considerable disruption because of the road and engineering works that it entails. I hope that they will not complain about the disruption when that work takes place.

Secondly, Yorkshire Water has to ensure that it is able to secure the necessary long-term water supplies. It must study rising demand and the possible trends and realise that, in five out of the past seven years, there have been hosepipe bans, which should have been a litmus test for the problems to come and led it to take action earlier this year. Now the company has to set out clearly the actions that it will take in the medium and long term. That means dealing with the leaks and reviewing the compensation water regimes, which the Secretary of State has already undertaken to review.

It is a matter of renewing the grid network within Yorkshire so that capacity is improved, particularly to enable the company to move water east-west. As the hon. Member for Bradford, North (Mr. Rooney) said, one of the problems has been that rainfall has tended to be in the east, whereas the historical pattern was for rain to fall over the Pennines. The company has to consider improvements in pumping capacity and the overall supply position. That may include looking for new, long-term supplies, including Kielder Water--no doubt to the eventual long-term benefit of shareholders in that company.

The Government have made it clear that, if the companies do not do well enough, we shall consider statutory leakage reduction targets.

Mrs. Ann Taylor (Dewsbury): Consider!

Mr. Curry: That is a responsibility that should fall on the companies. That is why there is a statutory undertaking. Although the Labour party is deeply in love with the Armageddon strategy, and would love Yorkshire to run out of water, which would give it political satisfaction, I do not intend to give it that satisfaction-- [Interruption.]

Mrs. Mahon: Will the Minister give way?

Mr. Curry: No.

Mrs. Mahon: On a point of order, Mr. Deputy Speaker. That is the most outrageous and insulting remark and the Minister should withdraw it immediately.

Mr. Deputy Speaker (Sir Geoffrey Lofthouse): Order. That is not a point of order for the Chair. In the few minutes available, I should have thought that the House would want to hear what the Minister has to say.

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Mr. Curry: I realise that there is colossal concern in Yorkshire about the situation. I have tried to outline the position and what can be done about it. The Labour party has engaged in a constant programme of political barracking, which I do not think will be appreciated by the people who are concerned in Yorkshire. It is a tone different from that of the constructive conversations that I have had with Labour Members from Yorkshire. I wish that that had been carried through into this debate and not what we have heard this morning.

I can well appreciate that, for Yorkshire Water, the satisfaction of shareholders matters. I can equally understand the importance of the views of its City analysts and financiers. However, the people who matter most of all are the customers and consumers of Yorkshire Water, because they have nowhere else to go. They must be given priority in the future investment programmes of Yorkshire Water.

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Education Funding (Northumberland)

12.30 pm

Mr. A. J. Beith (Berwick-upon-Tweed): We have plenty of water in Northumberland. It is funds for schools that we are short of. I am tempted to offer to trade one for the other because we are in such a desperate state and the Minister has so far not been able to offer us much. We intend to seek more from him today.

In September, a leaked memo from the Secretary of State for Education and Employment acknowledged that there is a perception that schools are underfunded and that peace in the classroom threatened. If that is true at national level--and it is a remarkable admission--it is even more true in Northumberland because of specific difficulties about the funding of education in our county.

In the already underfunded education system, there are authorities which have been placed in an especially difficult position by the failure of the standard spending assessment mechanism, which does not take adequate account of regional differences and the additional pressures that face some areas. That problem is made worse by the capping system. Some authorities threatened to set deficit budgets because they felt unable to make yet more cuts.

Perhaps one of the greatest sets of difficulties is that faced by Northumberland, which lost about £7 million when the SSA replaced the former system of education funding. The authority was particularly disadvantaged by two factors. The first was the additional educational needs factor. Northumberland lost about £5 million because of the large increase in the percentage of the SSA formula that was devoted to additional educational needs, which are needs different from those prevalent in Northumberland. The other factor was area cost adjustment, which was also increased substantially when SSAs were introduced, and affected Northumberland especially badly.

Northumberland is geographically the largest of the shire counties; its population is the smallest except for that of the Isle of Wight. That means that it has lowest population density and all the problems that that brings. Sixty out of the county's 146 first schools have fewer than 100 pupils. A number are very small, with fewer than 25 pupils, but are in remote places where it is necessary to retain a school. Small schools are expensive to maintain.

Distance is another problem. Pupils in some parts of the county have to travel 15 or even 25 miles each way to school, which is a major cost to the budget. The extra cost arising from small rural schools is about £1.3 million; rural school transport costs £3.7 million. Of course, if more schools are cut, the transport bill will go up. The sparsity factor in the SSA does not adequately compensate the county council for the extra costs.

As well as the initial losses, Northumberland county council has experienced four years of budget reductions which, according to its calculations, have wiped another £13.4 million from the education budget in real terms, based on a standstill budget. Considered year by year, in 1992-93 there was a £3.8 million cut against a standstill budget; a £4 million cut in 1993-94; a £4.6 million cut in 1994-95; and a £1.235 million cut in 1995-96. That last figure would have been higher if the county had not cut its reserves to £4 million. An auditor's report the year

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before said that letting the reserves fall below £6 million would be imprudent, but the county felt obliged to take that action.

In money terms between 1992-93 and 1995-96, the total education budget for the county rose by 5.7 per cent., taking account of the changes in further education, when the retail prices index grew by 11.8 per cent. and the number of pupils in Northumberland schools increased from 45,960 to 48,454. At the same time, teachers' salaries, which make up four fifths of the budget, have increased by 28.5 per cent.

School budgets have been hit badly. Although in cash terms some schools have had their budgets increased since 1992, that increase has been undermined by inflation, teachers' salary increases and the additional costs of local management. The Office of Standards in Education warned that further cuts at one school would seriously affect its ability to meet the statutory requirements of the national curriculum. Pupil-teacher ratios in Northumberland have been deteriorating at an alarming rate compared with the average in the rest of England; compared with Scotland, the situation is worse still. We make the comparison with Scotland because it adjoins us.

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