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The Parliamentary Under-Secretary of State for Scotland (Mr. Raymond S. Robertson): That was the council's decision--it was disgraceful.
Mr. Bruce: The hon. Gentleman is not replying to the debate or taking part in it, and I should be grateful if he would let me develop my argument in my own way. Indeed, if he interrupts, he will intrude on the time of his colleague the other Under-Secretary of State, who wants to reply to the debate.
I am demonstrating that there have been real cuts in real services used by real people, who voted for those services and have had them for many years. Those cuts are not being implemented by councillors who were elected to make them or who believe in them. They are being forced to do it. No one is denying that councils can always review what they do and find savings--councils have done. However, it is absurd for Ministers to suggest that the scale of the shortfall can be anywhere near met by efficiency savings.
In Aberdeenshire, the education budget accounts for more than half of council expenditure. Non-exam swimming has had to be cut altogether, which is
controversial and the council does not wish to do it. There has been a reduction in supply staff. [Interruption.] That the hon. Member for Aberdeen, South should find that funny is a fair indication of just how callous a Minister he is and how uncaring he is about the services that his constituents require and for which they voted.
Supply staff have been cut, which increases pressure on permanent teachers. Transport above the statutory minimum for travel to schools has had to be reviewed. A complete halt has been proposed on staff and curriculum development, which should have concerned the hon. Gentleman as Minister responsible for education.
School meals charges have been raised. Some community education centres have been closed, while others have had their hours restricted at exactly the times when community groups are likely to want to use them. There has been a reduction in funding for schoolchildren to travel out of their schools and reduced support for playgroups, and no new nurseries have been opened.
It is a little rich that local Members of Parliament who are Ministers should turn up to support demonstrations on issues that arise out of those cuts. I saw the hon. Member for Aberdeen, South standing among a group of parents demonstrating about the travel-to-school reduction. He chose to champion those people. It is understandable that those people feel the way they do; I have no problem with that. He refuses to accept any responsibility for his Government's policy of reducing the funding, miscalculating the reorganisation costs and forcing councils to review services that they developed and that were not required by statute.
The same applies to the hon. Member for Kincardine and Deeside in respect of his support for the opening of a nursery school in Newtonhill. No one would like that nursery to open more than me--except perhaps the parents of Alford, which was ahead of Newtonhill in the objective assessment of need. It is ridiculous for a Minister not to acknowledge that councils in these circumstances have to stop all new developments to protect the core services they already provide.
It was because the council had a policy of development that, when the new school in Newtonhill had to be rebuilt because of subsidence, it decided to incorporate a nursery class. It wished to ensure the continued development of nursery education. Unfortunately, it was unable to fund that, because the local Member of Parliament became the Minister responsible for local government, and provided the council with funding inadequate to carry out the project. He knows that to be true.
The record of Grampian regional council in developing nursery education is second to none in Scotland. It was only when the Conservatives were removed from office that the policy of developing nursery schools took off. Nursery school development was consistently frozen while the Conservatives were in control of the council. They never believed in it, funded it or provided it.
Other controversial cuts have been made. The council has shown that it is responsive to local pressures on matters such as the pool at Stonehaven. It has given the community an opportunity to find other ways of funding it. It has reviewed the warden charges in sheltered housing because of concern about those affected by it. Nevertheless, it is cutting home helps, and cutting voluntary services across the board. It is cutting a variety of services that the entire community regards as essential.
In such circumstances, Ministers would serve their constituents better if they were prepared to turn up and fight constructively for the resources the services need, and recognise that we have cost-effective councils that have delivered those services efficiently over many years. The councils would like constructive engagement about improving efficiency, if Ministers have constructive ideas. They do not want megaphone abuse that does not tie in with their records. Those Members should fight in government for their constituents to get a fair crack of the whip. Instead of fighting for their own communities, they are the very instrument of savaging the quality services built up over recent years. What is the point of having local Members of Parliament in government if this is the way in which they behave?
I refute the Government's claims that this year's settlement is adequate. Almost all the extra money was eaten up by reorganisation costs, which were underestimated, by care in the community transfers and by priority allocations for police, fire and the courts. On the Government's own calculation, the provision for roads, environmental services, planning, leisure, recreation and the urban programme was cut. The Government cut the allocation to them, and presumably wanted those services to be cut, but they have never owned up to it in any publicly acknowledged way. The cuts were based on a miscalculation of what was actually spent, and they are even deeper in reality than was at first thought.
The situation will get worse unless the Government rethink their policy. Ministers talk of local government as if it was a thing apart. In fact, councils deliver services that most people use every week, and on the whole they do it well. It is the Government's own mismanagement that is to blame, as is the fact that they have removed councils' independent financing in order to put the bite on them.
Local services efficiently and cost-effectively delivered, which Ministers' and my constituents voted for, valued and until now enjoyed, are now under threat. I contend that those local services are not safe in Tory hands. The voters know that. That is why there are no Tory councils in Scotland and very few Tory councillors.
Now, we need fewer Tory Members of Parliament and no Tory Government, because it is clear, unless the Minister changes his tune in reply to the debate, that a recognition of what people want and have voted for and the requirement that those services be properly delivered requires a rethink of the way in which the Government fund local authorities. They must give them more access to their own finance, and a more realistic financial settlement. Otherwise, good-quality services will continue to be cut, and something that has been built up over the years, of which the north-east people are proud, and which people move to the north-east for, will be put at risk.
The Parliamentary Under-Secretary of State for Scotland (Mr. George Kynoch):
Let me start by congratulating the hon. Member for Gordon (Mr. Bruce) on his success in securing this debate. As he said, I have a dual interest in the topic of tonight's debate; not only as the Scottish Office Minister with responsibility for local
I am delighted to see tonight the Under-Secretary of State for Scotland, my hon. Friend the Member for Aberdeen, South (Mr. Robertson), in his place to show his interest on behalf of his constituency in the debate tonight, and the hon. Member for Moray (Mrs. Ewing) in her place.
The hon. Member for Gordon has been very vocal, both tonight and in the past few months, in his criticism of the Government over the financial position facing the three new councils in the north-east, and particularly the position of Aberdeenshire, within which my constituency and his lie. That shows his total lack of understanding of local government finance, but that is something that I would expect of the hon. Gentleman, who seems more interested these days in matters south, rather than north, of the border. I reject his criticism, and during the next 10 minutes or so, I shall try to explain why.
I start by reminding the House of the key features of the overall 1996-97 local government finance settlement. This year's overall settlement provided, first, for an increase of 2.3 per cent. in the level of Government-supported expenditure, which is the Government's view of what authorities need to spend to pay debt charges and to deliver services. This increase of 2.3 per cent. is before any account is taken of the scope for efficiency savings.
Secondly, the settlement provided for an increase of 3.6 per cent. in the level of Government support. This increase of 3.6 per cent. compares with 2.8 per cent. for England and 2.7 per cent. for Wales. In cash terms, the increase in the level of Government support for Scottish authorities is more than £186 million, which is almost £65 million more than the formula consequences of the English settlement.
As a result of this generous settlement, the level of Government-supported expenditure for Scottish authorities is now 30 per cent. higher per head of population than the comparable amount for English authorities, and the level of Government support for Scottish authorities is no less than 44 per cent. higher than that for English authorities.
If Scottish local authorities ever found themselves in the unfortunate position advocated by the hon. Member for Gordon, of looking to a Scottish Parliament for their financial support, it is most unlikely that they would ever receive a settlement which was £65 million more than the Barnett formula consequences of the English settlement. That is the measure of the extent to which this year's settlement was, in fact, an extremely generous one.
I shall be specific about what the 1996-97 settlement has meant for the three councils formed out of the former Grampian region area. For Aberdeen city council, the settlement permitted an increase in expenditure of £8.8 million, or 4.35 per cent., over its notional 1995-96 budget. But that, it said, was inadequate: it wanted to increase expenditure by around £33 million, or more than 16 per cent.
For Aberdeenshire council, the settlement permitted an increase of £14.8 million, or 7.34 per cent., over its notional 1995-96 budget. Again, it said that that was
inadequate: it wanted to increase spending by £40 million, or nearly 19 per cent. That is despite the fact that senior officials, in the past 10 days, have confirmed to my officials that the notional budget figure was a fair starting point. For Moray council, the settlement permitted an increase of £4.3 million, or 5.06 per cent., over its notional 1995-96 budget. Once more, we were told that that was not enough: it wanted to increase spending by £12 million, or 14 per cent.
At a time when inflation is expected to remain below 3 per cent. throughout this year and local authorities are expected--like the rest of the public sector--to fund any pay increases from efficiency savings, those three councils claim that they needed to increase expenditure by 16, 19 and 14 per cent. I find that absolutely astonishing, and I suspect that council tax payers throughout the area are greatly relieved that my right hon. Friend the Secretary of State for Scotland, notwithstanding his general desire to devolve power to local authorities, decided to retain his power to cap local authorities.
The hon. Member for Gordon referred to Newtonhill nursery in my constituency. He seems to be more concerned about matters in my constituency than in his own. If he is not worrying about Stonehaven hospital, he is worrying about Newtonhill nursery. That nursery has been built and equipped, but, sadly, not opened. That, we are told, is one of the consequences of Aberdeenshire council having to cut its education budget by £11.5 million.
I note, however, from the council's own leaflet that it has increased its education budget by virtually £2 million over last year's level, from roughly £108 million to £110 million. I take it that, if the council had not made cuts of £11.5 million, it would have pitched its education budget £11.5 million higher--an increase of 12.5 per cent. [Interruption.] The hon. Gentleman is making comments from a sedentary position. He shows his total lack of understanding of financial matters, but I would expect that from the Liberal Democrats. I find it astonishing that any council would dare to suggest that it needed to increase spending by 12.5 per cent. at a time when inflation is below 3 per cent.
The council might have been better advised to spend the £26,000 that it spent this year on producing a new logo on opening the new nursery class at Newtonhill. I suspect that the children in the nursery would have been only too happy, and able, to design the council's new logo for it.
Given the generosity of the settlement and the specific assistance for particular areas, one might be excused for wondering why there has been so much talk of councils having to make cuts in their level of service provision. I can assure the House that it is not because we made an inadequate settlement, nor is it a direct result of reorganisation per se. It is wholly due to the irresponsible actions of the outgoing councils over the past couple of years, and particularly during their last year of tenure.
It has been clear since the old councils across Scotland set their last budgets, in March 1995, that they were storing up problems for their successors. They budgeted to spend some £140 million from balances rather than fund pay rises from efficiency savings. At that time, the new councils stood to inherit balances totalling £45 million.
However, the enormity of the old councils' disregard for the plight of the new councils has become clearer as time has passed. It now appears that the old councils went far further even than they had planned. The new councils have inherited a collective deficit of £11.5 million. So, having set out to spend £140 million from balances last year, the outgoing councils actually spent about £200 million. In so doing, they have handed over the legacy of an artificially high level of expenditure. It is artificial in the sense that it could not possibly be sustained by the new councils, even with an extremely generous settlement.
Further confirmation of the irresponsibility of the old councils is now available. Provisional outturn expenditure figures for the outgoing councils demonstrate that they spent some £143 million more during 1995-96 than they budgeted to spend at the start of the year.
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