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Mr. William O'Brien (Normanton): Has the Secretary of State received from his hon. Friend the Under-

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Secretary of State for the Environment a report about the deputation that he received from the Webber Craigh group, which includes Wakefield, my own authority? The group explained to the Minister, without any doubt, about the unfairness involved in the financing of education. Other issues could have been raised, including social services and community care, but the group concentrated on education.

According to the report, the increase in Wakefield's budget for this year, in comparison with last year's budget, is less than 2 per cent.--1.9 per cent. Is the Minister taking seriously the point that has been made about the reduction in education resources in the Wakefield area, and will he give us some definite ideas about how he intends to assist local authorities in the Webber Craigh group?

Mr. Gummer: The record of the Webber Craigh group is particularly good, although its dominance is not one that I share. The hon. Gentleman has noticed on several occasions that its propositions have been carried through into the SSAs. On this occasion, we looked carefully at my hon. Friend the Under-Secretary of State's very full report of the discussions in which he engaged. We were not able to reflect some of the points that were raised, even after extensive investigations, but I shall be happy to look at the report again. There is no doubt that the group put its case seriously and properly.

Mr. David Shaw (Dover): Why, after 25 years of Labour control in Islington, does that borough have the lowest educational standard in the country? Conservative Members are fed up with the fact that this local government expenditure, while it is relatively generous to many areas, is overly generous to Labour areas such as Islington. We are not seeing payment by results. Can we have a "payment by results" system for local government expenditure in future?

Mr. Gummer: My hon. Friend raises an issue that must be a real concern to many people. It is quite clear that the leader of the Labour party decided that they were not getting payment by results in Islington, which is why his child did not go to school in Islington.

Mr. Graham Allen (Nottingham, North): Yes, he did.

Mr. Gummer: It is quite clear that his child was moved from a school in Islington, and that is the point. He went to school in Islington, and they decided that it was not good enough--[Interruption.] No secondary school was good enough. In defending his leader, the hon. Member for Nottingham, North (Mr. Allen) fails to remind the House that his leader passed over several boroughs before finding a school that he considered satisfactory. Some of those are Labour-controlled boroughs, and one of them is the borough in which he lives. Islington receives a great deal of money for education, but it does not provide value for that money.

Mr. Jack Thompson (Wansbeck): May I suggest to the Secretary of State that he or one of his civil servants--whoever drafted his statement--might take a short course in plain English? Hon. Members on both sides of the

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House have had a great deal of difficulty understanding what he was saying. Obviously we will have to get the documents and study them very carefully to identify what he really means.

It is fine making a presentation on issues of local government funding to right hon. and hon. Members, but, some time in the near future, will he find the time to visit a shire county such as mine, for example? I do not ask him to visit the politicians there, but to sit down with the local authority's officers in that county--not here, in London--to discuss financing that authority.

He can look at the books--for as far back as he wishes to go--to discover how those officers have dealt with funding, and he will find that money allocated for the road system, for example, has been diverted to support the education system. If he were to visit in late January or early February and examine the system in my county of Northumberland, which is a very rural county--there are 4,500 miles of roads, with a sparsity factor of 0.6 person per acre--he might find that he had to stay a lot longer than he had planned, because he would probably be snowed in.

Mr. Gummer: I must tell the hon. Gentleman that Northumberland is among the top-ranking counties in SSAs, because it has particular problems. He should examine very carefully the administration and running of Wansdyke, which is certainly not an authority to which I would look as an example.

Mr. Jack Thompson: On a point of order, Madam Speaker. Wansdyke--

Madam Speaker: Order. I have to take points of order after the statement. Does the Minister wish to come back on that point?

Mr. Gummer: Inadvertently, I did not say "Wansbeck", which is the authority I was referring to.

Mr. Roy Thomason (Bromsgrove): Will my right hon. Friend confirm that, year on year, local authority revenue balances are consistently replenished by underspending by local authorities? Does he agree, therefore, that the Labour party's claims that revenue balances are continuously being denuded make a hollow sound--when, in fact, that replenishment is taking place? Does he agree that one of the prime reasons for the replenishment of revenue balances is that Labour-controlled local authorities consistently overestimate the inflation level achieved by the Government?

Mr. Gummer: My hon. Friend is perfectly right. He did not mention, however, that many local authorities could have more money to spend if they more efficiently collected their council tax. Most councils that inefficiently collect council tax are run by the Labour party. When my hon. Friend was explaining the system, he might also have said that the Labour party is not prepared to recognise that one gets better services and does not have to push up the council tax if one saves money by obtaining better value for money. It is true that many of those authorities have very considerable balances, which have arisen from past underspending.

Mr. Jeremy Corbyn (Islington, North): May I ask the Minister to get off his high horse on housing policies and

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start encouraging and allowing local authorities to build and buy housing at affordable rents? That is not only a method of solving the housing crisis and taking many people out of bed and breakfast and other accommodation, but a way in which we can save a great deal of public money, which is currently lining the pockets of private sector--often millionaire--landlords through spending on the housing benefit system. That money should be spent on local authority housing, so that we can have low rents and decent housing for people to live in.

Mr. Gummer: Obviously, the hon. Gentleman has not looked at all our programmes, such as those that are improving bad estates, especially through LSVTs.

Mr. Corbyn: What about building?

Mr. Gummer: I want to improve the bad ones as well, because many of them are hard to let, even in difficult areas, because they are so bad. Through LSVTs we shall be able to improve the condition of buildings. We have been putting a great deal of money into housing associations so that they may build more.

I remind the hon. Gentleman that the Labour party has not committed itself to spend any more on that. It has simply said that it will allow local authorities with receipts to spend those receipts. It does not mention that Birmingham, Blackpool, Bolton, Dudley, Gateshead, Hackney, Lancashire, Leicestershire, Milton Keynes, Newcastle, Oadby and Wigston, Southwark, Sunderland, Wear Valley and Wolverhampton, among many others, have no receipts to spend.

The Labour party would allow local authorities that have no real need to spend, to spend their receipts, and it would not allow those that do have a need to spend. We put the money where the need is.

Mr. Barry Field (Isle of Wight): Will my right hon. Friend, with his well-known reputation for moderate language, help me to formulate a reply to Liberal councillors on the Isle of Wight who say that the settlement is not adequate, given the thousands of pounds that they spent on a Mori poll, trying to convince my constituents that they should leave the UK? Including the capping limit, nearly £100 million for 100,000 electors does not appear to be a deal that anyone except Don Quixote--who I presume must have been a founder member of the Liberal party--will want to leave the UK for.

Mr. Gummer: There are good reasons why people might want to leave a local Liberal-run authority. Only the fundamental attractions of the Isle of Wight keep people there. As usual, the local Liberals are chasing after unnecessary expenditure to pat themselves on the back and inflate their egos. If the local Liberal party really wanted to help the people of the Isle of Wight, it would save money, ensure that the council tax was lower, and hold no more referendums on whether to leave the United Kingdom.

Mr. Stephen Timms (Newham, North-East): The Secretary of State is aware of the difficulties in which several local authorities--including mine--find themselves, arising from the fact that the capital financing element of the SSA reflects notional, not actual,

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borrowing. Disappointingly, that anomaly has not been addressed; that part of the SSA for Newham has fallen this year. Can the Secretary of State hold out any hope that his calculations will reflect actual borrowing, especially where, as in the case of Newham, the borrowing was incurred long before the current financing system was introduced?

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