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Mr. Pickles: The hon. Gentleman talks about dishonesty; would he care to tell us why not one penny piece of additional money was allocated for district council functions in the Liberal Democrats' shadow Budget?

Mr. Rendel: As I hope has become entirely clear--indeed, I believe that the hon. Gentleman himself made it clear in his speech--the Liberal Democrats' priority now is to increase education funding and spending, because we believe that to be in the long-term interests of the country. We have made it clear that where necessary we shall raise income tax to pay for extra education spending. That is where our priority is, and that is where it will remain.

Local Government finance is about more than council tax--

Mr. Barry Field: I am interested in the Liberal Democrats' policy on education. I have seen a copy of the resolution passed at their conference which says specifically that the additional penny in income tax that they have said for some time should go to education would be spent on education for the over-16s and under-fives, which would not be relevant to this education debate at all. The resolution is quite clear.

Mr. Rendel: I understand that the motion that thehon. Gentleman mentions was on nursery education and did not cover the whole gamut of what we expect the extra money to pay for.

Local government is about more than council tax: it is about local services that are vital to the quality of life of ordinary, decent people. While local authorities have

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attempted to shore up funding for education, it is inevitable that other services have suffered. If local authorities now try to boost education spending by the proportion that the Government suggest, other services will have to be squeezed even further. The adjusted spending assessment for social services has been cut by2 per cent. in real terms, so it seems that the Government regard social services and the vulnerable people whom those services exist to protect as expendable.

The neglect shown by the Government in their funding of social services naturally manifests itself in some sad examples of how vital services have declined. I will give the House the opportunity to hear about two of them.

I recently received a letter from a doctor in Hungerford, in my constituency, referring to what he described as the "sorry state of affairs" that the underfunding of community care has brought about. His patient had been trying to secure bath aids through social services. The House will appreciate that providing handles to enable somebody to get in and out of the bath safely and comfortably can be an essential ingredient in maintaining that person's independence. It is a vital safety measure, and may even save money in the longer term by enabling an elderly person to remain at home rather than having to go into residential care. The response from social services was that the gentleman would have to wait for up to a year--not to obtain the aids, but for a care manager even to visit his home to assess his needs. Goodness knows how much longer it would have taken to have the bath aids fitted. But the real sting in the doctor's letter comes in the last sentence, which reveals that the patient is 90 years old.

Another case was brought to my attention by a special school in Hampshire which caters for a constituent of mine. The boy is described as

The young man is now approaching his 19th birthday, and once he is 19 he must move on from the school and will no longer be funded by Berkshire education authority. Responsibility then shifts to social services, which must find a suitable placement.

The school has been pressing social services to place the young man for the past 12 months, but social services have been unable to do so. Meanwhile, the school has provided a place for the boy at a community care home and merely wants social services to agree to fund the placement. But social services have been unable to confirm funding for the placement, on the grounds that they need to find something cheaper. The interests of the young come second to the rigours of an underfunded budget.

In the words of the school:

Those two examples are but the tip of the iceberg, but both show how the Government have put short-term tax bribes before the provision of essential services. In the long term their policies will lead to greater expense, and the tax increases that we have witnessed since the general

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election. The Government have failed to provide the funding for local authorities to make community care work.

That is not the end of it. The Government are also cutting the funds for highway maintenance. I understand that Somerset, for example, is so desperate to safeguard education spending that it has imposed a cash freeze on highway spending, despite increasing numbers of claims for damage to vehicles, and to human beings as a result of falls. There is more: the Government are also cutting the funds with which local authorities attempt to protect the environment.

Those cuts in every area of local government services will be the prime concern of most ordinary people. In many areas, people will have to put up with cuts in services combined with steep increases in council tax.A further problem is that in calculating spending assessments no account has been taken by the Government of the burden of the landfill tax this year. I hope that local authorities will reduce their use of landfill, and as an incentive to that end I welcome the landfill tax, but in the short term many local authorities will face a considerable burden in terms of the landfill tax.

In Gloucestershire, for example, the impact will be £740,000 in the financial year 1996-1997. Where do the Government believe that cuts should be made to find that money? In a full year, the impact will be about£1.5 million. Even with the change in national insurance contributions promised for April 1997, the impact on Gloucestershire will still be well over £1 million.

What cuts do the Government recommend to find the money for the new tax? Should cuts be made in education? The county's spending on education is over the SSA, yet it has had to make significant cuts in school budgets for the past five years. Should cuts be made in social services? Only today, a demonstration took place outside shire hall in Gloucester about possible cuts in services, including child care provision and adult opportunity centres.

It is frustrating for us all that the Secretary of State has still not rectified the iniquity of the area cost adjustment. I was glad to hear the right hon. Gentleman say today that there is a possibility of future adjustments to the scheme, but that has not happened yet. It makes no sense to place a higher value on the educational needs of children living on one side of the Hampshire-Dorset border than on the other. After all, teachers' salaries are effectively identical in both areas.

The Government are simply starving local authorities of resources, and they are doing so deliberately. They are gambling for electoral gain. The Conservatives' strategy is clear: hammer local government to help pay for tax bribes and, if there is any backlash, blame the Opposition parties who run most councils anyway. They are making one last desperate effort to stop the Liberal Democrat tide sweeping the Conservatives from power right across the south of England in the May local elections, but it will not work. Nobody trusts the Conservative Government any more. Sleaze, incompetence and downright dishonesty have all taken their toll.

It is ironic that the party which promised tax cuts but delivered tax increases now attacks the Labour party for saying one thing and doing another. Tory Members who

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want to see evidence of what is happening need only look towards their own grass roots. The Conservative party's grip on local government has been decimated, not least by the Liberal Democrats, who have turned the political map yellow from Cornwall to Norfolk, from Cheltenham to Worthing and from the Isle of Wight to Harrogate.

Mr. Curry: The hon. Gentleman has his party's Treasury spokesman, the hon. Member for Gordon(Mr. Bruce), sitting beside him. As he has given a long catalogue of the deficiencies of the settlement--in social services, community care, education, environment and highways--perhaps he would like to suggest by how much he thinks the Government's grant to local authorities is deficient. If there is to be a "Liberal Democrat tide" people will want to know how much it will cost.

Mr. Rendel: The Minister should have heard by now that we want to put a penny on income tax to pay for increased funding for education. That is our clear priority, and always has been. We have also said that we wish to release housing receipts to enable local authorities to spend more in other areas, but particularly on housing. We also want to change the whole method of financing local government by introducing a local income tax and by removing the cap.

Last May, the Liberal Democrats relegated the Conservatives to third place in local government--not just in terms of the number of councillors we have across the country but, more importantly, in terms of the number of councils we control. When will the Conservatives get the message? They are not trusted to run local authorities and in a matter of months it will become clear that they are not trusted to run central Government either.

It is ironic that a key factor in the breakdown of trust in Conservativism at every level of Government will be the way in which the Tory Government have treated local councils and local services. The Conservatives will deserve all that they get in the local elections in May and in the general election whenever it comes. But even that will be poor compensation for the rundown of local services over which they have presided. It certainly offers no immediate solution to my 90-year-old constituent who cannot bathe in comfort or safety, or to the parents of the autistic young man for whom a sufficiently cheap placement cannot be found. This financial settlement is a disgrace, and the fact that Ministers and other Conservative Members have the gall to commend it to the House shows how shoddy their politics have become.

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