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8.27 pm

Mr. Robert G. Hughes (Harrow, West): The nine people in the Strangers Gallery probably share the view that the Labour party's anger over this issue has seemed rather half hearted and that, if things were as bad as it has tried to claim, the debate would have been better attended. In its heart, the Labour party knows that this is really a fair settlement for local government, as it represents an appropriate level of revenue spending for local authorities for next year of £44.9 billion, which is a 3.3 per cent. increase.

It would be a good idea to look at how councils make their budgets. Twenty two years ago, when I was first elected to a council, I could not believe how they made budgets, and I still cannot believe it. I have with me Harrow's budget document. It is very pretty, contains many different colours and is very heavy. I have one recommendation to make to councillors--do not read it.

Mr. Dobson: Does the hon. Gentleman realise--after all, he has not been here all day--that if he votes for the rate support grant settlement it will mean substantial help for Westminster? If his borough of Harrow were to receive the same amount per head as Westminster, it could pay a rebate of £436 to each council tax payer. If it were to receive the same help per pupil as Westminster gets

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from the education settlement, it could employ an additional 470 teachers this year. Is it really a good settlement for those whom he represents?

Mr. Hughes: That is typical of the smug cover story we hear from the Labour party; it is the only act it has. Everyone knows that the cost of running services in central London is very different from that in outer London or anywhere else. If it were not, why would so many Labour boroughs get larger grants?

If the people of Wandsworth received the same level of grant as the people of Tower Hamlets, Wandsworth could rebate £1,000 a head. In Camden, where the SSA for the coming year is £219 million--

Mr. Keith Vaz (Leicester, East): Get to Harrow.

Mr. Hughes: I shall come to Harrow in a minute and deal with matters there in some detail. When thehon. Member for Holborn and St. Pancras (Mr. Dobson) intervened, I thought he would explain why, in 1994-95, Camden took £4 million out of its education budget to cover bad debts incurred from interest rate swaps--an idea invented by the then Labour party local government officer who now sits in this House. That action had nothing to do with education. Will the hon. Gentleman intervene again and tell us why Camden did that?

Mr. Dobson: If Camden is so bad in its spending on education, why are its education results far and away the best in inner London and about 10 times as good as Westminster's? Camden came second in the Government's national league table; Westminster came about 91st.

Mr. Hughes: The hon. Gentleman should keep that information from his Front-Bench colleagues or they will be flocking to Camden. I know of no Labour Member who has taken his children away from a Conservative authority to send them to a school in a Labour authority, although many of them--such as the shadow Home Secretary, the shadow Health Secretary and the leader of his party--have done the reverse.

Mr. Dobson: Does the hon. Gentleman accept that Camden council, with its excellent education service, is a net importer of a substantial number of pupils, including many from the Tory borough of Brent?

Mr. Hughes: I am sure that the hon. Gentleman's figures are right, but not many people have the same rosy opinion of Camden. Of course, he has always been satisfied with his own information.

Mr. Vaz: What does that mean?

Mr. Hughes: It is clear what it means. I welcome the hon. Gentleman to the Opposition Front Bench on one of his rare visits.

For people who have never been involved in the local government budget-making process, I should explain that it is a little like the notes my children send to Santa Claus. The difference is that at least their notes have pretty pictures on them. The similarity is quite stark; the budget-making process is a wish list, and everything that

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is not granted is described as a cut. A council thinks of something that it wants in the coming year and puts it on the wish list. When the Government say that it can have a relatively generous settlement, but not enough to cover everything on the wish list, that is translated as a Government cut. Everybody knows that that is not true.

In Harrow, the controlling Liberal group, with the support of the Labour party, has been banging on about a so-called programme for £20 million-worth of cuts. It is not true and no one believes it to be true. The Liberals are trying to frighten people and they are targeting the vulnerable. For example, they are saying that there will be a cut in the transport service that takes people to handicapped clubs and so on--at a cost of £67,000, from memory. To get people on their side, they are targeting vulnerable people and saying that the services they care about will be cut.

The Liberals are also saying that there will be a cut in the money for schools. Harrow's SSA this year is £147.9 million. For 1996-97, it will be £152.1 million--an increase of £2.8 million. No one is suggesting that that will give Harrow money to throw around, but if it cuts the money for schools on the basis of that settlement, it can only be because the Liberal group chooses to do so.

As a parent, I recognise the importance of good quality education. We all want to ensure that our children receive the best education possible. A starting point is the money that the Government allow councils to spend. For Harrow in the coming year, it will be just over £73 million, a 3.7 per cent. increase on 1995-96. I am pleased that, when money is tight, the Government are giving such a high priority to education.

It is for Harrow council, however, to decide whether to spend that additional money on schools, as I urge it to do, or to retain it at the centre. Some of the items on its great big wish list involve employing more staff at the centre. The council does not have the balance right. It is clear that the new money, as well as a larger share of the existing budget, should go to Harrow schools. It would then be for governing bodies to decide whether to purchase services from the education authority. The most important point to remember is that any cuts made to the delegated budgets for Harrow schools would be the result of the controlling Liberal group deciding to do that. I shall continue to do what I can to prevent it from doing so.

The council's story is that it already spends above SSA on Harrow schools. I am sure that that is right, but if it spends above SSA on education, it must spend below SSA in other areas.

Ms Armstrong: No.

Mr. Hughes: I am not quoting Government figures--they come from the Association of London Authorities, a Labour-controlled authority. If the hon. Lady disagrees with it, she must talk to her Labour party friends.

If Harrow spends more on education, it must spend less on other areas, otherwise it cannot get within the capping limits set by the Government last year. With the additional money, there is no reason for the Liberal group not to continue education spending at the same level.

The hon. Member for Stoke-on-Trent, South (Mr. Stevenson) tried to brush over the impact of the special transitional grant for social services. The effect on Harrow is not just the 0.7 per cent. increase in the personal social

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services element of the SSA--it will have £30.7 million to spend next year, an increase of 6.6 per cent. in cash terms. That is a £17.663 million, or 92 per cent., real-terms increase on 1990-91--a large rise over a short time. In two areas that everybody agrees are priorities, Harrow has been given extra money. It is for the authority to decide how to spend the money and whether to make nasty cuts in transport for the mentally handicapped and delegated school budgets or to review its expenses.

The first act of the incoming Liberal council was to increase councillors' expenses. The council has a choice.

Mr. Stevenson: The hon. Gentleman made a point about personal social services which related to my claim that the Government are trying to hoodwink the public. Does the hon. Gentleman accept that a 0.7 per cent. increase is a cut in real terms, and that to include the special transitional grant required to provide for services transferred to local authorities is dishonest?

Mr. Hughes: No, not for one moment. In cash terms, Harrow council will have 6.6 per cent. extra to spend on social services this coming year. It is fanciful to suggest that the council will have to cut certain social services. That claim is designed only to scare people.

My hon. Friend the Member for Harrow, East(Mr. Dykes) and I have been in discussion with my hon. Friend the Minister for Local Government, Housing and Urban Regeneration, and I place on record our gratitude for the courteous way in which he listened to our points and for the action that he agreed. Our discussions related not to the coming year's SSA but to Harrow council's belief that there has historically been an underestimate of the amount that it should spend.

Harrow has a large number of children approaching the age of five and the council is concerned about the associated expense of providing new classrooms or a new school. In the 40 years following the last war, the calculation of the number of five-year-olds who would present themselves at first school in the borough was broadly right, but for the past four or five years it has proved to be a gross underestimate. Nobody knows whether we are dealing with a prolonged bulge or a trend, which makes planning difficult. My hon. Friend the Member for Harrow, East and I made the point to my hon. Friend the Minister that that phenomenon should be taken into account in considering the money to be made available over the next few years.

Local authorities are concerned about the effect of changes to the benefit rules--which, when it is convenient to Labour, have cross-party support. Some current Department of Social Security expenditure will be transferred to local authorities. The Social Security Committee report published a week ago stated that local authority associations and the Secretary of State should quickly reach agreement, so that everybody is clear as to the source of the funding required.

Although that development is acknowledged in the SSA for the longer term, it does not take into account an influx of refugees into Harrow or any other borough. Most London boroughs, if not all, suffer from the same problem. My hon. Friend the Member for Harrow, East and I urged my hon. Friend the Minister to take account

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of that factor and to consider what could be done to help at the front end when local authorities have to meet the cost of persons who are given refuge.

Harrow council believes that the borough has the second largest elderly population in London. There is concern as to whether the SSA takes account of that fact. The cost of children in care seems to have escalated over the past few years, and Harrow's capital calculation is undoubtedly the lowest in London. That is historical, and due to the money spent previously.

I am delighted at yesterday's announcement of the capital challenge pilot scheme, in which all local authorities will start from an even base. They will be able to bid depending on the merit of their schemes. I hope that the pilot scheme proves successful and that a larger proportion of capital will be allocated that way. If Harrow is able to make a strong and technically proficient bid, as I am sure it will, it should do well.

My hon. Friend the Minister has offered a meeting at technical level between officials and representatives of the council, to determine the factual position in considering Harrow's SSA in coming years.

People who rely on local government services and parents with children in schools should be clear about the message from the two main Opposition parties. That message is, "No more money." Opposition Members complain about Government funding and follow the rather disreputable advice that used to be given by the hon. Member for Blackburn (Mr. Straw) when he was Labour's campaigns organiser, which was to describe Government policies in such terms as to lead the public to believe what they thought would be Labour party policy. Labour Members have been indulging in that strategy tonight. When one gets through the mire and sees through the Opposition's criticisms, it is clear that there would be no extra money from Labour or the Liberals. Labour's insistence on scrapping compulsory competitive tendering is disgraceful, and a capitulation to the unions that control the Labour party.

Even Sir Jeremy Beecham realises that substantial savings and improvements in the quality of services have been brought about by compulsory competitive tendering. It is a pity that it must be compulsory. Local government should have realised for itself the benefits that CCT could bring, but it did not and had to be compelled. Labour's irresponsible pledge to scrap CCT would increase bills, or reduce spending in other areas to compensate for the extra money that councils would have to spend on services taken back in-house.

This thinly attended, low-key debate is testimony to the fact that Labour's thin arguments have been rumbled. Everybody knows that the Labour party is embarrassed by its record in local government, that it has no strategy, that it would not put any extra money into local government, and that, after this debate, it will crawl away and hope that people will forget everything that it has said.

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