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Mr. Edward O'Hara (Knowsley, South): My hon. Friend, as a Merseyside colleague, may be aware that Merseyside fire and civil defence authority, on the advice of the chief fire officer, has just set a budget of£52.7 million, which is £2.139 million above the cap.Her Majesty's chief inspector has agreed with the chief fire officer's assessment of these needs of the service.

Mr. Howarth: Merseyside is dear to both our hearts, and my hon. Friend has put his finger on the problem. Statutory obligations and expectations are not matched by resources--that is true across the country.

The Government simply have no way left to explain their case. The only argument they have been able to produce so far is based on selective quotations from the Audit Commission's report last year, entitled "In the Line of Fire". On that, they base their idea that there is scope for saving £29 million. A more realistic figure, quoted by my hon. Friend the Member for Woolwich, would be£7 million, which, in a global service of this type, does not add up to much in the way of efficiency savings.

Fire authorities in Tyne and Wear, Cheshire, Manchester and Merseyside--and many other places--are having to make reductions that will have a measurable impact on services. It will mean that fire engines will be mothballed, stations will be closed and there will be job losses among firefighters.

Similarly, capital expenditure was reduced last year by 50 per cent., and it is forecast, from what we know about basic credit approvals, to do so again by an average of 35 per cent. The Government say that the private finance initiative can bridge the gap, but they have not yet been able to point to a single case in which the PFI could be made to work in the fire services.

The Audit Commission report "In the Line of Fire" shows that there are many in-built problems with the SSA formula: pensions, as my hon. Friends have mentioned, the assessment of risk, the application of minimum standards and special services, which are not covered by the formula. None of that is covered. What we have is a working party here, an inquiry there, a special investigation elsewhere. Government by working party does not add up to proper management of our fire services.

I ask the Government to look further at transitional costs, particularly those in Wales and the shire counties, because they are a serious problem. We have government by

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working party, a Government who have failed and refused to face up to the in-built problems in the fire service.I suspect that it will take a change of Government before anybody with responsibility faces those problems. The sooner we have a Labour Government prepared to accept these responsibilities, the sooner we can start moving again.

12.20 pm

The Parliamentary Under-Secretary of State for the Home Department (Mr. Timothy Kirkhope): The recent tragic events in Gwent and Avon have reminded us yet again of the risks that firefighters take every day of their working lives. I share hon. Members' feelings about that, and pay sincere tribute to the dedication and selfless courage of all those who work in the fire service.

Mr. Llew Smith: Will the Minister give way?

Mr. Kirkhope: No, I have only about eight minutes.

The service performs an essential public duty; whether it is operating as an emergency service or responding to a more routine call for assistance, it is rarely, if ever, found wanting. We are all profoundly grateful for that.

The fire service has been a local authority service since the second world war. Local "fire authorities" have a statutory responsibility to provide an effective and efficient fire service. As a result, funding for the fire service is included in the local government finance settlement, which my right hon. Friend the Secretary of State for the Environment announced in January. It is,I believe, a fair settlement.

In 1996-97, central Government support for local authorities will increase by £966 million. Total standard spending in England for 1996-97 has provisionally been set at £44.9 billion. That is an increase of 3.3 per cent. on 1995-96. The fire service standard spending assessment for England in 1996-97 has been increased by£17 million. But it is ultimately for local authorities to decide how much is spent on individual services, in the light of their local circumstances.

It is true that the fire service is being asked to make efficiency savings, but so is virtually every other public service. It is essential that we ensure that the taxpayer gets the best value for money, as was said by my hon. Friend the Member for Surbiton (Mr. Tracey), who has explained to me the reasons why he has had to leave us.

When the Audit Commission looked at the fire service, in its report published last year, it concluded:

"There are local opportunities that can be taken now within the current framework. The locally achievable savings identified by this study are £67 million a year. This represents 5 per cent. of the total expenditure on the fire service".

Although some people--some hon. Members, even--may take issue with the Audit Commission's conclusions, I stress that it is totally independent and has an excellent track record in this area. Moreover, its report highlights specific areas in which efficiency savings can be made.It suggests that

"reducing sickness rates in all brigades to the level of the lower quartile would save £17 million a year nationally."

Bringing the level of leave in all brigades down to the level of the lower quartile would lead to savings of£8 million a year; and moving all brigades' management costs to the performance of the most efficient quarter would save about £29 million a year nationally.

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The fire service element of the SSA is distributed to individual authorities via a formula that is reviewed every year in consultation with local authority associations. The Government carefully considered the formula for the fire service element of SSAs for 1996-97. We decided that it should be adjusted to include factors for fire safety enforcement, fire safety education and firefighters' pensions. That is in line with recommendations by the Audit Commission.

The process of reviewing the SSA formula for the fire service for 1997-98 has just begun. To help inform the review, the Department of the Environment has commissioned research on the costs of providing services in densely and sparsely populated areas and the area cost adjustment. That adjustment is included in the formula to compensate for the additional cost of providing services in south-east England.

The Home Office is also participating with local authority associations in a technical group, which is exploring the possibility of an alternative formula based on the number of fire stations in each brigade area. Any change to the formula must not unreasonably increase the grant to some brigades and disproportionately reduce it to others. However, the Government are always willing to see what improvements can be made.

The provisional council tax capping criteria for 1996-97 set by the Secretary of State for the Environment allow an increase in net budget of 2 per cent. for metropolitan fire authorities and 3 per cent. for shire authorities as the norm. However, in many cases, authorities were permitted an increase above that norm if the result otherwise would have been to prevent them from receiving the full benefit of agreed increases in SSA.

If an authority believed that it could not set a budget for 1996-97 that would allow it to meet its legal obligations, it had the option to set a budget higher than the proposed capping limit, and to apply to my right hon. Friend the Secretary of State for the Environment for redetermination of the cap. Some authorities have taken that option. The outcome of such applications will depend on the quality of the case that is made.

Many hon. Members referred to London, the SSA of which will increase by £1.1 million in 1996-97. Under the proposed capping criteria, the authority was able to set a budget of up to £5.1 million--or 2 per cent.--more than in 1995-96. In setting its budget, the authority would have taken these factors into account, as well as the scope for savings and the availability of its reserves.

Mr. David Congdon (Croydon, North-East): As£27 million of reserves have emerged only belatedly after the consultation period by the LFCDA, will my hon. Friend urge our right hon. Friend seriously to consider rejecting these unnecessary proposals from the London fire brigade?

Mr. Kirkhope: My hon. Friend is right to raise that, as was my hon. Friend the Member for Surbiton. The relatively high reserves of about £27 million were referred to even by the authority's own director of finance as needing to be reduced. It is important that the Labour party should remember that so much political activity, which has been referred to by my hon. Friends, is not particularly in the interests of the fire service for London. Indeed, I am aware that my hon. Friend the Member for

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Brentford and Isleworth (Mr. Deva) has asked that an investigation take place into the activities of the authority in that regard.

Mr. George Howarth rose--

Mr. Kirkhope: I shall not give way.

As hon. Members will know, the authority has decided to set its budget for 1996-97 at the capping limit. It has decided not to proceed with the closure of four fire stations, recommended by its own fire cover review.Nor does it propose to seek approval to withdraw appliances from seven stations, which was also recommended. It has, of course, applied to my right hon. and learned Friend the Home Secretary for approval to withdraw pumping appliances from 15 fire stations. The authority also intends, as I understand it, to provide an additional appliance at two fire stations. As hon. Members will know, that does not require approval, and was mentioned by Opposition Members.

Under section 19 of the Fire Services Act 1947, my right hon. and learned Friend's approval is required if a fire authority wishes to reduce the number of its fire stations, fire appliances and firefighting posts. My right hon. and learned Friend has a specific but limited role in considering applications, and grants approval when the conditions are met.

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