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8.9 pm

Mr. George Stevenson (Stoke-on-Trent, South): Despite Conservative Members' increasingly desperate attempts to cover up what is really going on, we should state quite openly what the proposals represent. They are a continuation of a Government policy that has systematically undermined local government for many years. The orders will further undermine local government's ability to provide vital services for local people. That is the reality of the situation, as exposed today in the contributions of my right hon. and hon. Friends.

I argue that that Government policy is motivated by two basic, and--I believe--flawed, political objectives. The first is a year-on-year reduction in the resources available to local government. I know that the Government would like us to believe that the world began in 1992, but some of us have longer memories than that. We have seen a year-on-year reduction in the resources available to local government, while at the same time the Government have embarked on what can only be described as a propaganda campaign. All hon. Members know that local government resources have been cut dramatically, yet the Government have tried to shift the blame on to local authorities. That is what Government Members have done this evening and no doubt the trend will continue.

The second fundamentally flawed political objective is the Government's desire to take control of local government activities. We hear constantly how Conservative Members are in favour of freedom of choice and of national and local accountability. Yet, over a period of time, the Government have taken control of the activities of local government--they have effectively nationalised local government--in a quite breathtaking manner.

The inevitable result of that systematic Government policy is the on-going crisis in vital services, such as education, social services and housing--to name only three very important areas. Central Government control of local government activities has resulted in historic blunders, such as the poll tax, for which generations in this country will continue to pay. That measure was a direct result of the Government's preoccupation with centralisation and their determination to centralise and nationalise local government activities. The Government's policy is based on the philosophy that central Government are best placed to determine local service provision.

We could compare the efficiency of local authorities, and I readily accept that many arguments could be advanced to develop such a debate. However, we should not allow such arguments to cloud the fact that the

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Government have made a fundamental mistake: they believe that the mandarins of Whitehall know best what the people of Stoke-on-Trent should have, what they should be doing and how much they should be spending. It has nothing to do with the Government's controlling the national economy--we accept that that is an important argument. However, when more than 80 per cent. of local government expenditure is controlled by central Government, that is not only damaging for local service provision but strikes at the heart of our constitution.

Government propaganda in the past 16 years has sought to discredit local government, and it has forced some very effective local government services into oblivion. The Government have also tried to convince people that the local authorities have caused all of the current problems, but they have failed in that endeavour.

I am particularly impressed by the way in which the Government have been hoist by their own petard. The Government have sought to blame local authorities for the successive reductions in education expenditure imposed on our schools--particularly last year's savaging of the education resource. However, parents are involved in their schools and I am sure that Government Members have been surprised by the way in which parents have turned round and said, "We don't believe the Government any more. We know what is going on here. We know that you are to blame and we are not prepared to tolerate it any longer." The parents know where the responsibility lies for the crisis in our vital services.

The local government finance proposals signal the Government's intention to continue to perpetrate an elaborate confidence trick on the public. The proposals do not suggest ways of dealing effectively with the anomalies in the system. Many such anomalies have been referred to in the debate today, but I shall refer to what I believe to be the most serious and discriminatory anomaly in the present system.

The right hon. Member for Horsham (Sir P. Hordern) referred to the area cost adjustment and the way in which it benefits the southern counties. He argued that it should not be tinkered with. I agree with the right hon. Gentleman: it should not be tinkered with, it should be changed radically. Before I detail that serious anomaly, I make it very clear that I accept that some cost differences must be reflected; no one is arguing that the area cost adjustment should be eliminated.

I have six secondary schools in my constituency, one of which receives £340 per pupil less than a secondary school in Surrey. I do not wish to pick on Surrey, but it has more or less the same urban-rural mix as Staffordshire and it is also very comparable in other ways. When there is a difference of £340 per pupil in the secondary sector and a difference of £220 per pupil in the primary sector, I believe that the system is not reflecting the legitimate differences in the cost of providing given levels of service. It is blatant discrimination, and that abuse should be adjusted--if not removed--as quickly as possible.

I welcome the fact that the Government have established an investigation into the matter. However, I am disappointed that, after all the banging on the Minister's door for three years, he has only now been forced, kicking and screaming, to set up the inquiry. The "Local Government Finance Report (England) 1996/972" contains the education formula:

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That is for primary education. There is another formula for secondary education, the result of which must also be multiplied by the area cost adjustment. The same applies to personal social services, other social services, the police, fire and so on. I estimate that if that serious anomaly were addressed, in my constituency alone, some £15 million would be available for education. One has to multiply by all those other vital services. We are talking about a loss of hundreds of millions of pounds in Staffordshire alone because of such discrimination.

I hope that the Government will tackle that serious anomaly quickly and act on the report. I hope that they do not postpone matters until after the next election. I hope that my cynicism does not get the better of me. It would be a tragedy if the Government were to succumb to that cynical view and defer any action.

As I said earlier, these proposals are a con trick. For example, the Government insist that the proposals represent an increase in resources over the past year. We should examine that claim in a little more detail. According to the Government's publication, there is an increase of 4.4 per cent. in the education SSA control total--that is about £754 million. That does not replace the savage cuts of about £860 million that were imposed last year. How can that be described as an increase? It bears no resemblance to what local authorities have been forced to spend on education simply to maintain the service. Many Conservative Members have claimed that there is to be an increase of 4 per cent. but, when one takes into account the figures I have mentioned, one can see that that is not true.

The hon. Member for Brentwood and Ongar(Mr. Pickles) referred to local authority reserves. I nearly fell prey to the temptation of agreeing with some of what he said--I resisted. However, he made one valid point when he said that his local authority--I believe that he was referring to his authority--had been spending out of its reserves. Presumably, like many other authorities, it was simply trying to maintain services in the face of Government-imposed cuts. It could be argued that using those reserves camouflages what the Government are doing to our services. However, when the resources available to local authorities simply will not maintain those services, they have little alternative but to use those reserves.

In Staffordshire last year, the county council used£7 million from its reserves to maintain something like an acceptable education system. This year, it will face similar problems. Staffordshire county council put in a bid for £17.5 million to maintain school buildings. The Government did not deny that the county council had made a good case. However, they simply drew a pencil line through it and said that the council could spend only £2.3 million to maintain its school buildings. So buildings that desperately need to be improved will continue to fall into disrepair.

Another important point is that, by using those reserves, local authorities show that they are attempting to maintain services in a responsible manner in the face of continued Government cuts in resources. I praise local authorities that do that. Like everybody else, I know that it is no solution, but it compares notably with what the Government did last year when, after agreeing to a

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teacher's pay increase, they ran away from it. That was a major contributor to the problems faced by local authorities last year.

Local education authorities, schools and parents are only now beginning to realise that the Government's promise of more resources for education is nothing more than cruel deceit. The Government will be made aware of that realisation when parents begin to recognise exactly what is in store for the education service.

I want to talk about social services where, if one could believe it possible, things are even worse. The SSA control total for personal social services is, according to the Government, to be increased by 0.7 per cent.--a miserly £51 million. I accept that there is £647 million of special transitional grant. The Government are actually saying that because they do not intend to provide any more resources for social services--there is to be a cut--local authorities will have to use some of the special transitional grant money to maintain the services demanded by the local population.

Stoke-on-Trent city council is in my constituency. During successive meetings with the Minister of State and others, for which we are grateful, they have accepted that it is a reasonable, effective and efficient local authority. Despite that, its rate support grant is to be cut by12 per cent. and its capping limit will, effectively, be frozen at last year's figure. When the Minister responds, I want him to explain why, when the Government are talking about a relaxation in capping limits, Stoke-on-Trent has the same figure as last year. That needs to be answered.

We shall ensure that the public are fully aware of who is responsible for the continuing attack on their services and they will not be conned any more by the Government's desperate camouflage. There is only one small light at the end of the tunnel, which is that these proposals, like other Government policies, will hasten the Government's destruction at the next general election.

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