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8.4 pm
Sir Anthony Grant (South-West Cambridgeshire): I certainly have sympathy with the people of Cambridgeshire, but my sympathies are with the people who pay the bills--the council tax payers. The hon. Member for Cambridge (Mrs. Campbell) made a valiant attempt to defend Cambridgeshire county council under its current regime. The council certainly needs some defending! She made the council out to be a paragon of financial virtue. As I shall demonstrate, the very opposite is true.
We can at least agree, as I have argued here and elsewhere for ages, that the area cost adjustment is ludicrous and grossly unfair to Cambridgeshire. It is absurd to suppose that taking one step over the border from Bedfordshire into Cambridgeshire takes one suddenly into a poorer area with lower costs. Anyone who shops in Bedford and Cambridge can testify to that. Without the area cost adjustment, a large sum of money would have been available to authorities to spend on education and other services in Cambridgeshire.
As for the review, the Minister of State has been the first Minister to apply careful thought to the matter. The hon. Member for Cambridge and I, together with other representatives of local parties, attended a useful meeting at which we put our case. The Minister promised a review, which means exactly what it says. It does not mean that we will like its results or that the Government automatically have to accept them. Nevertheless, the Minister sincerely undertook, for the first time ever, to review this ludicrous system.
I am disappointed that the review did not report as soon as it might have and that it was delayed for a year, but there is no justification for a well-resourced, responsible county council to pre-empt the result of the review, to believe that everything will be fine and to plan its affairs accordingly. That is like Mr. Micawber at his worst; it is
a ludicrous way to carry on. Far from being paragons of financial rectitude, the county councillors showed complete irresponsibility if they operated on that basis. They should have conducted their revenue affairs more prudently.
Strange things have come to light. It has been found that a large sum was wasted by Cambridgeshire county council. The transportation department made a loss on its direct labour organisation estimated at £1.9 million--at least. The money has gone down the drain. What is more, the council has just announced bonuses for its staff amounting to no less than £400,000. It has had to call in Price Waterhouse and pay over a fee of £43,000 as a result of all this chicanery. The cost of sending out a new set of council tax bills is estimated at £300,000.
Mrs. Anne Campbell:
Will the hon. Gentleman accept that the loss by the transportation department--it is not condoned by anyone--began in 1992-93 under a Conservative administration? Will he further accept that the bonuses paid to staff were started by his noble Friend Lady Blatch when she led the county council? Finally, will he accept that Cambridgeshire complied with the call for an inquiry into the loss of the £1.9 million by bringing in Price Waterhouse, and paying the price for its services?
Sir Anthony Grant:
With great respect to the hon. Lady, I do not care whether the system was set up by Winston Churchill, Disraeli or Campbell-Bannerman. That means nothing to me. We are discussing local authority finance and Cambridgeshire county council is responsibility for all its affairs. It is responsible for its books and it is in charge of the transportation department. The information that I read out was wrung out of the county council with great effort.
I calculate the grand total of the loss to be £2,643,000. That is equivalent to no fewer than 150 or 160 extra teachers, who could be employed in the education department. When the Lib-Lab county council was found out, it started whingeing and whining about party politics. Cambridgeshire local politicians of the Lib-Lab persuasion have never been shrinking violets about party politics--nor should they be. Having been hoist with their own petard and made a hash of their finances, they thought that they could pull a fast one on the council tax payers and the Government. An extra £11 million was undoubtedly made available for education in Cambridgeshire and diverted to other uses.
The Minister without Portfolio, my right hon. Friend the Member for Peterborough (Dr. Mawhinney), was absolutely right to say that the county council was treating parents and teachers with contempt. It deliberately set a budget exceeding the limits laid down by the Government because it hoped to use the loudest, most vocal clamour--that of the education lobby. The hon. Lady said that she had received many letters and so did I. Many of them had been dictated to children. People were told to keep writing to their Members of Parliament and all the letters were exactly the same.
The county council thought that by whipping up the education lobby, it could bully the Government and extract more money. When its financial incompetence and mischief were discovered, it tried to involve other councils in the same monkey business. Now that the council has been found out, the rights of council tax payers, which should have been the prime concern, have been protected by the order that we are debating tonight.
I shall undoubtedly continue to fight against the unfair area cost adjustment. I hope that the review will do justice to the cause of Cambridgeshire. Having said that, I support the Minister's decision tonight, as do all Members representing Cambridgeshire--excluding the hon. Lady of course--and the opposition in all Cambridgeshire councils. They will continue to fight that cause and their case will be made clear at next year's elections.
Mr. Hurd:
Will my hon. Friend acknowledge that the Minister without Portfolio, my right hon. Friend the Member for Peterborough (Dr. Mawhinney), who cannot intervene, is in his place and supports what my hon. Friend is saying?
Sir Anthony Grant:
I am grateful to my right hon. Friend. I had spotted my right hon. Friend the Member for Peterborough. I read the powerful letter that he wrote and that the hon. Lady dismissed. It made sense to me and I quoted it with approval.
Mr. David Rendel (Newbury):
I begin by making two brief points about previous speeches. First, I thought that the Secretary of State made a bad mistake that I would not have expected of him when he said that, because a particular budget was possible, it must also be right. It is possible for Oxfordshire and Cambridgeshire to set an even lower budget than they will be forced to do if the order is approved tonight. It is possible for them to cut the number of teachers further, to make more teachers redundant and to make class sizes even larger, but that does not make it right. So that was an extraordinarily weak point for the Minister to make.
The second point that I would like to take up was made by the right hon. Member for Witney (Mr. Hurd). There is all the difference in the world between a theoretical increase and the theoretical amount of money that the Government apply to education and the actual decrease in the amount of cash that an authority has to spend.
It is somewhat ironic that the only two authorities being capped tonight are the Oxbridge counties. In the past, the Government have used only two excuses for introducing capping. One is to reduce the overall level of public expenditure and borrowing, and the other--this was referred to by the hon. Member for South-West Cambridgeshire (Sir A. Grant)--is to protect the public from outrageous increases in local taxes, including those levied by loony left authorities in the 1980s, but that is not the case today.
Let us consider those two possible excuses. It is worth examining some of the facts relating to public expenditure. The total of £13 million that the Secretary of State wishes to slice off the Oxbridge budgets amounts to 0.06 per cent. of the public sector borrowing requirement. It amounts to a mere 0.017 per cent. of the total spending by local authorities. As a proportion of total Government outlay, it represents not 1 per cent. or 0.1 per cent.
but 0.000046 per cent. In macro-economic terms, it is a spit in the ocean, but for Oxfordshire and Cambridgeshire it will make an enormous difference to service provision.
The second excuse for capping is the need to protect the public from excessive taxation. Hon. Members will agree that, whatever else we say about Oxfordshire and Cambridgeshire local authorities, they are not loony left councils.
Members of all political parties now agree that capping should be lifted. Indeed, the Conservative party agreed that at its conference last year. Our motivations may differ, but the basic reason for cross-party opposition to capping is and always has been that capping inhibits the accountability of local councillors, as well as the ability of local authorities to respond to local needs. Surely that is the whole point of local democracy.
Councils should be free to adopt policies and budgets that match the priorities of their local people. Nobody likes a heavy tax burden, and the iniquities of the council tax are well known. However, if the people of Cambridgeshire and Oxfordshire are willing to pay a little extra to provide their children with the education they deserve, and to ensure that community care is properly funded, who are the Government to deny them their wishes?
There has been a test of local opinion--the local elections only three weeks ago. In Cambridgeshire, the Conservatives suffered a net loss of four councillors. In Oxfordshire, they had a net loss of 14 councillors. The public know who is to blame for the cuts in services and the increases in council tax--the Government--and they have demonstrated their support for the position taken by the current Liberal Democrat and Labour administrations.
Anyone who comes to the House and whines about the difficulties that the poor old taxpayers will have to suffer if they are made to pay such a huge amount of council tax should look at the results of those local elections and realise that that is precisely what the council tax payers voted for. The council tax payers clearly rejected the Conservative alternative. Therefore, it is undemocratic for the Secretary of State to seek to overrule the local decision-making process in those counties. He is clearly not doing so for the sake of local people, who have made it clear that they do not want his solution.
Local people in Oxfordshire and Cambridgeshire clearly do not need protecting from a spendthrift local authority by an economical central Government. On the contrary, they need protecting from central Government and their refusal to follow the wishes of local people as they have expressed them through the ballot box.
Moreover, the argument that Oxfordshire and Cambridgeshire should be capped because central Government should protect people from big spending councils is flawed in a another important way. Let us look a little more closely at how much the counties are spending.
Such things are, of course, relative, so I have chosen, as it happens, the one Conservative-controlled county, Buckinghamshire, for comparison. Buckinghamshire has just under 657,000 people and a budget of £413 million. In 1996-97, the county will therefore spend about£629 a head. Cambridgeshire has a proposed budget of£408 million--£5 million less than Buckinghamshire--but it has 687,000 people, which is 30,000 more than
Buckinghamshire. Spending per head is £594. Cambridgeshire spends £35 a head less than Conservative-run Buckinghamshire.
Oxfordshire has a proposed budget of only£344 million, and has 590,000 people. Spending per head is £583. Oxfordshire spends £46 per head less than Conservative Buckinghamshire. We are told from the Government Benches that, in practice, Oxfordshire and Cambridgeshire are expensive councils. The Government should look at their own councils first.
I am not suggesting that Buckinghamshire is spending more than it should; that is not the point. The point is that the Government are using Parliament to impose Whitehall-calculated budgets on two counties on the basis that those counties are spending too much. Yet the evidence is clear: their spending is well below that of the only comparable Conservative authority. Their proposed budgets are moderate to low in terms of pounds spent per head, and they are the minimum that each county needs to maintain quality services.
Let us be under no illusions. The Government are going to impose severe cuts on both counties, which will hurt. We ought to bear in mind just what those cuts will mean. The pain will be felt most by children and their parents and by those who rely on social services--almost certainly, the most vulnerable members of both the communities.
Under the proposed budget, Oxfordshire would spend almost £4 million above the education standard spending assessment. With the cap, it will spend only £300,000 above the SSA. The impact on schools will be acute. As a result of the capping order, at least 160 Oxfordshire teachers are likely to lose their jobs, resulting in redundancy costs of £3.7 million at a time of rising pupil numbers, and increasing burdens being placed on schools by central Government.
One principal summed up the predicament of her Banbury school:
Oxfordshire's social services are also reeling from cuts made last year, and more cuts this year are the last thing that is needed. I have received details from one woman in Abingdon who suffers from acute arthritis. She can barely move her hands and can walk only short distances, yet she still manages to look after her severely disabled husband. They have the help of a home carer twice a day, but the length of visits has been steadily reduced to less than half an hour. That lady is haunted by the fear that more social services cuts forced by central Government will stop home visits completely. As she says:
If the order is passed, there will be up to 116 teaching redundancies. That will be on top of last year's horrendous settlement. Already, secondary school options have been dropped from the curriculum, and class sizes have risen to the point where sixth-form science students are working in classes of 30. Cambridgeshire's largest secondary school is making every effort to protect its teaching posts this year. Its contingency reserve has been reduced to just £464--not £464,000--and the school has 1,800 pupils.
Social services in Cambridgeshire are also being squeezed, but the order will cut a further £800,000 from its social services budget. Those cuts will have an impact on the 5,000 people who receive home care, the 2,500 people who receive meals on wheels and day-centre meals, and the 500 elderly people who have day care.
"This September, we had 60 more students with eight less teaching jobs and next September we will have 30 more, plus more in the sixth form."
That Banbury school is set to lose another five teachers.
"They always ask about family. But we do not have anyone. I have been pressing for more help this year. But I am always given the same answer--there is not enough money in the budget."
Cambridgeshire has the fastest growing population of any English county. Nevertheless, it has had to make real-terms cuts in departmental budgets. Environment and heritage resources have been cut, direct and support services have been cut, transport services have been cut, and social services have been cut. The county has
budgeted for additional expenditure on education, but that will be wiped out by the order, which will knock£5 million off its education budget.
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