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Mr. Maclean: I have had to keep going, because the hon. Lady chose to misrepresent the facts. If this evening is an example of how accurate the hon. Lady can be in quoting from something in Hansard, how accurate was she when she said that there was a commitment--a promise by the Home Secretary--that every force would get a minimum increase of 3.6 per cent? There is no such commitment. She said that there are fewer bobbies on London's streets. That is not so. She alleged that there is less money for London police. Again, that is not so.
Then we had the wonderful, magical pronouncement that Labour supports secure training centres. No wonder the hon. Member for Cardiff, South and Penarth (Mr. Michael) had to leave the Opposition Front Bench. The hon. Lady's pronouncement is patently not true.
I move on to police numbers in London, which has been the crux of the debate. What is the Labour party's quibble? What is the castle that it has built from which to make its case? Labour Members say that, in March 1995, there were 131 fewer officers overall in the Metropolitan police than in 1994. Let us put that in perspective. It seems that Labour is now the great defender of police numbers.
In 1979, the Metropolitan police was3,797 bobbies under strength. That shortfall was brought about by a Labour Government. England and Wales were7,500 short. In 1979, the Metropolitan police had only16,500 constables. We have steadily increased the number of bobbies in London with the result that, at the end of March 1995, the Metropolitan police had 21,433. The Metropolitan police now has 5,000 more constables--bobbies on the beat--so we shall not take lectures from the Opposition about 131.
The hon. Member for Blackburn (Mr. Straw) quoted from the report of Her Majesty's chief inspector of constabulary. Again, he quoted only the table. He did not go on to quote the paragraph that says:
The Labour party does not seem to understand that.
Opposition Members do not understand that the Met has deliberately streamlined its senior management. It has cut 260 senior management posts and 429 sergeant posts. With the cuts at senior level, there are 600 more constables in the Met. That is the truth--
It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.
Motion made, and Question proposed, That this House do now adjourn.--[Mr. Streeter.]
Mr. Eric Illsley (Barnsley, Central):
My debate relates to the Sheffield light rapid transit railway, otherwise known as the Sheffield supertram. The purpose of the debate is to draw the Government's attention to the problems that surround the supertram project, particularly those that are experienced by my local authority and its council tax payers as a result of the somewhat complex funding formulae that apply to the supertram. The supertram is funded through the South Yorkshire passenger transport authority, which is made up of representatives from the four local authorities in South Yorkshire--hence my speaking on a subject that is perhaps more in line with Sheffield.
The light rapid transit railway is located in Sheffield but funded by the South Yorkshire passenger transport authority. I should like at the outset to make it clear that the project was entered into by all concerned in good faith and with a commitment to ensure its success. That good faith extended to the local authorities, the passenger transport authority and, of course, the Government, who gave a commitment to fund it in full. Indeed, the rationale for supertram that existed when the Government agreed to finance it was accepted by all the parties involved. The Government made a financial commitment to supertram on the evidence available at the time, as did all the other parties involved. They accepted the original business plan and assumptions in terms of construction, operation, financing and the timetable for the project.
Although the system currently has problems, it is important that we do not to lose sight of the fact that the project was completed on time and within its budget. Despite the problems, that is something of which we can be proud. The Government's commitment to funding the supertram system has not been disputed by them or by local authorities other than when certain problems have arisen. Successive Ministers have reiterated and given assurances that the revenue support grant funding--the local government funding--would cover the costs that would not eventually be reimbursed through the sale proceeds or through operational revenues.
At the moment, however, there are no operational revenues, and the sale prospects, or the sale value, looks very poor. That has caused debt to accumulate which was not envisaged throughout the construction of the project. Supertram is not currently profitable. Because there are no operational revenues, the sale prospects are looking bleak. That is where the problem lies, and it is where my local authority--and perhaps one or two other local authorities in South Yorkshire--faces difficulty. I am sure that the Minister will agree that it was never intended that the construction costs of the project would fall on the local authorities, but the fear is that that is precisely what will happen. Those costs were to be financed by operational revenues and, of course, the sale.
The Government may say that they committed themselves to funding the construction only, but, as I have said, even that cost is now falling on the local authorities. With the Minister's permission and yours, Madam Speaker, my hon. Friend the Member for Sheffield, Central (Mr. Caborn) may say a little about the construction period shortly.
The project was delivered within its budget of some £240 million, of which about £80 million took the form of trading credit approvals. It was envisaged that those would eventually be repaid from operating profits; the interest and minimum revenue provision would come from operating revenues, and the rest from the sale proceeds. During the construction period, the interest payments on the trading credit approvals were capitalised--they had to be, because no revenues were available--and that built up further heavy debts.
I understand that the total cost of the trading credit approvals and the capitalised interest is currently around £97.5 million. So far, the Government have funded the trading credit approvals, but that is now ending because, in the Government's eyes, the construction period is over. The bulk of the figure would have been met from the sale proceeds; the sale was expected to take place soon after the completion of the project, and the proceeds from a profitable operation would have been substantial. Now, however, there is some doubt about whether the profits of the operation would meet anything like a third of that £97.5 million.
Even if the sale proceeds produced £35 million--a figure that has been mentioned to me--other costs of privatisation could leave as little as £17 million, landing local authorities with unfunded liabilities amounting to more than £80 million. My authority's share of that, in terms of interest payments, would be between £2 million and £3 million per annum--assuming that no further debt is incurred by the system this year or next year.
The Government have refused to issue further trading credit approvals to fund the interest payments. Because no profits or revenues are available, the position may become even worse. I understand that the cost of operating losses is also unfunded by the Government, and that the interest on those losses has also been capitalised. It seems that local authorities must bear the cost of interest on operating losses as well as the construction costs. The sale value is not looking too clever, and there are no operating revenues to pay off what should have been paid off from the end of the construction period.
The Government's current deadline for the sale of supertram is early next year. That does not allow much time in which to turn the position round and make the system profitable. If the losses continue, the sale value is likely to be minimal, and it is feared that very little will be recouped to bite into the construction debt and the interest on the capitalised losses.
If the sale proceeds are insufficient, the local authorities will be left with a huge debt--anything between £40 million and £100 million--which they will have to service in future. As I have said, a debt of £2 million to £3 million will fall on Barnsley district council. Similar amounts will fall on the other local authorities in proportion to their share of the total debt. Moneys from the council's revenue support grant and its council tax, and money available to the local authority will be spent every year on interest to fund supertram, depending on how long the council is left with that debt burden.
That means that services in my local authority, which are being and have been cut for the past five years because of the shortfall in funding against budget, are likely to be cut further simply to fund the supertram system. The sum of£2 million to £3 million will be paid with no benefit to Barnsley council tax payers because the supertram system
does not extend to Barnsley, although the council accepts its responsibilities in the South Yorkshire passenger transport authority. The worry is that we are facing the debt, but have nothing to show for it. We entered the system in good faith, as did all the other local authorities, and we never envisaged that that level of debt would fall on us.
I understand that revisions to Supertram's business plan are being made to determine when or whether it will make a profit. Without that profit, it will be unattractive to buyers and cannot pay its way. The local authorities involved and the SYPTA must take on board the fact that it is essential that someone now does a feasibility study to determine how soon the system can be brought into profit to ensure that it is saleable before it is offered for sale, to maximise sale revenues and to reduce the debt.It is essential to show that the system may make a profit.
If the system is to be sold next year, I fear that it will be too soon to generate any repayment of the debt, and that, because of the losses and the system's lack of profitability, the sale will be at a low value and will not recover sufficient money even to cover the operating losses, let alone the debt on the construction costs, bearing in mind the projected figures that have been supplied to me by my local authority.
It must be accepted that any new system has teething problems. I accept that this is the first tram system, running side by side with motor vehicles, to be built for the past 50 years. There is therefore the novelty of the new system. There are the traffic systems in Sheffield. There has been substantial construction in that city to accommodate supertram. Obviously, there will be a need for time to allow the system to bed in and to operate properly. Traffic priorities may need to be altered and some co-operation must take place with the other public transport systems in Sheffield to ensure that the project runs at a profit, but that will take time. I ask the Minister whether the sale timetable is realistic, given the debt level and the need for the project to show a profit and to generate a sale value.
No one disputes that the project should be sold, as was envisaged by the original business plan. The questions are when--whether we sell it now and cut the losses or wait and give it a timetable to achieve profitability and hope that it generates a sale value. At the same time, we must determine how the local authorities will fund the debts that they face. Difficult decisions need to be made as to whether to wait for profitability or to stop those losses now, to stand the losses and not to allow them to generate any further, or to find a way of getting round the debt burden that is placed on the local authority. I understand that Sheffield district council is taking steps to examine the operation of supertram, traffic management, car restraint, and pedestrianisation, and that the SYPTA and supertram are working hard to improve its marketing.I believe that steps are being taken to try and deal with the problem.
"The impact of the reorganisation programme is beginning to become more apparent, with further reductions in the number of senior and intermediate ranks . . . This continues the trend since 1992, which has seen an increase in constable strength of 1,892(up by 396 constables in 1994)."
10 pm
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