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7.5 pm

Mr. Michael Clapham (Barnsley, West and Penistone): The speech of the hon. Member for Brentwood and Ongar (Mr. Pickles) was interesting, but I shall not be led down the route that he would have taken the House. The hon. Gentleman referred to the fact that there have been no vicious cuts. I hope to be able to show him that there are cuts, but that they have been well hidden by the Government's presentation of the settlement.

In November, the Secretary of State for the Environment announced in Parliament the Government's financial settlement for 1996-1997, along with proposals for expenditure and capping-related matters. The

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Secretary of State today confirmed the announcement. I want briefly to examine the main direction of the national settlement, and look at the implications of that settlement for my local authority, Barnsley metropolitan borough council.

The local authority associations told the Government in July that there was an ever-increasing gap between the demands placed on local authorities by central Government and what the local authorities are allowed to spend to meet those demands. That puts in a nutshell the dilemma in which local authorities find themselves.

In July last year, the local authority associations informed the Government in two comprehensive papers that increased demand plus the new priority requirements for spending would mean that local authority spending needs, as far as total standard spending is concerned, would be some £47.97 billion for 1996-1997. The Government proposal that we have heard today, however, is for £44.923 billion. The Secretary of State claimed at the Dispatch Box today, as he did back in November, that that represents an increase of 3.3 per cent. on the previous year.

The Minister will agree--the Secretary of State did not in any way challenge me when I raised this point--that that 3.3 per cent. is not, in effect, an increase at all. When the figure is adjusted to take account of the provision for local government restructuring, community care and the police, the adjusted increase is 2 per cent.

Given the Government's forecast of an inflation rate of 2.75 per cent. in 1996-97, that means an overall decrease of 0.75 per cent. rather than an increase. That is a clear example of the Government saying one thing and doing another. Local authorities will be in an horrendous position next year. Moreover, as the local authority associations pointed out, authorities had calculated that they would require £3 billion more than the Government propose to provide.

There are three ways in which local authorities can deal with the problem. The hon. Member for Brentwood and Ongar (Mr. Pickles) said that many authorities could use reserves. Others, however--including mine--have no reserves to use. Because Barnsley's SSA is only 1.9 per cent. above the capping level, we cannot take that route, either. Therefore, like many other authorities, we are left with the option of cutting services year on year, and that has begun to affect people's quality of life.

Barnsley metropolitan borough council has again been asked to make large cuts. Following last year's cuts, which amounted to £10 million, it is estimated that this year's will come to about £7 million. Barnsley's provisional SSA for 1996-97 is £159.335 million. I admit that that is 6.5 per cent. higher than the 1995-96 figure, but, after adjustments for community care and rail support funding, the underlying increase is just 2.8 per cent. Given that Government inflation forecast of 2.75 per cent. for next year, it becomes a freeze in real terms.

Barnsley is now 31st in the SSA league table, whereas last year it was 32nd, but we are still at a considerable disadvantage in comparison with most other metropolitan boroughs. In other boroughs, the average SSA per head is 12 per cent. higher than ours, which is £687. The average is £770.

Furthermore, as in previous years, the level of tolerance of spending above SSA varies widely. It is generally accepted that this method of calculating local government

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finance involves considerable imprecision, and that is borne out by the fact that some authorities with SSAs implausibly higher than Barnsley's are allowed to exceed them by 12.5 per cent. Barnsley is permitted an excess of only 1.9 per cent.

The average level of tolerance for metropolitan boroughs is 5.5 per cent. Barnsley, however, is restricted both to a low SSA and to a low level of tolerance. The Minister will, I think, accept that any rational system would allow authorities such as Barnsley a much higher level of tolerance, so that they could be flexible in meeting local demand. As that is not built into the system, however, there is some irrationality.

The equation for education spending is somewhat imbalanced. The hon. Member for Newbury (Mr. Rendel) gave the figures. The education SSA is purported to have increased by £740 million, but the overall SSA has increased by only £677 million. If the Secretary of State's equation is to be balanced, it will have a far-reaching effect on local authorities. Resources will have to be siphoned from other essential services in respect of which--as I have pointed out--there is a negative inflation provision. In Barnsley, many services provided for elderly people will be hit.

Barnsley makes the delivery of effective education a priority--it spends 45 per cent. of its budget on education each year--but its position is very similar to the national position that I have described. Increases in education spending that match the purported increase in the education SSA will rob other essential services.

Barnsley is probably more deprived than most other metropolitan boroughs of a similar size--

Mr. David Clelland (Tyne Bridge): More deprived than Westminster.

Mr. Clapham: Indeed.

More than 8 per cent. of adults of working age are registered permanently sick, compared with a national average of 4 per cent. Because Barnsley is traditionally an area of heavy industry and contains an aging population, a large proportion of the adult population are informal carers--12 per cent., according to an estimate that I saw last year. The pressure on social services and care in the community is greater than it is in most other districts, and the Minister should ensure that that is taken into account in the allocation of resources.

Between 1981 and 1991, total employment in Barnsley fell by 19 per cent; over the same period, there was a national increase of 3 per cent. In the decade between 1984 and 1994, more than 15,000 jobs were lost, and the gross domestic product in the Barnsley and Doncaster training and enterprise council area is estimated to be 41 per cent. below the national average. Factors such as that should be paramount in the allocation of resources.

The Minister will be aware that Barnsley and hon. Members representing South Yorkshire have raised the issue of the supertram time and again. My hon. Friend the Member for Barnsley, Central (Mr. Illsley) will be discussing the subject in his Adjournment debate on Monday, so I shall not go into the subject in too much detail. I understand that the debate is a matter for the Secretary of State for Transport, but the Minister may want to ensure that one of his colleagues is present.

Mr. Curry: The hon. Gentleman will know that I have had extensive exchanges on the supertram with Mr. Mike

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Bower, the leader of Sheffield council. Equally, the other districts that are part of the transit authority have made representations. We are seeking clarification of some of the actions that might be possible and continuing that discussion with the authorities concerned--there has been a useful defining of options.

As the hon. Gentleman said, the Adjournment debate on Monday will hopefully give an occasion at least to clarify those aspects that fall within the remit of the Department of Transport. I shall continue to pursue the matter. The hon. Gentleman will acknowledge, as will all the local players, that the number of people using the tram has been disappointing. The fundamental problem has been that the take-up--the number of passengers carried--has fallen below the estimates. That is the heart of the matter, and we could discuss it at some length.

Mr. Clapham: I welcome the Minister's response. I will not take the issue further, other than to say that it has caused unexpected damage to services in the district. That has been all the more disappointing because we understood that assurances had been given.

The real challenge for an area such as Barnsley is trying to restructure after the enormous dislocation caused by colliery closures. It is a problem that the council is determined to overcome. We must recognise, however, that Barnsley has a narrow industrial base, which needs to be expanded and diversified. Traditional industries, such as coal mining, placed too little emphasis on personal development. Upgrading skills and educational attainment is a necessity and has become a key objective for the authority. The rebuilding of infrastructure, much of it worn out, is crucial if we are to attract investment to sustain the area.

Those are formidable challenges for the local authority, but each year, as we start to come to terms with some of the issues--I accept that city challenge money has helped to restructure the local authority--local residents find that their quality of life is worsened because of the system of central Government finance, which is, to say the least, not sensitive to the characteristics of the community. I ask the Minister to review the finance mechanism for local authorities, to ensure that authorities such as Barnsley, which are in most need, are adequately assisted to move forwards.

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