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8.3 pm
The Parliamentary Under-Secretary of State for the Environment (Mr. James Clappison): My hon. Friend the Member for Brentford and Isleworth (Mr. Deva) has raised some important issues relating to the way in which the standard spending assessment applies to the London borough of Hounslow.
I am sure that my hon. Friend's constituents, and especially the elderly, the vulnerable and the infirm who depend on the Isleworth day care centre and the Chiswick families centre will take a great interest in what he has said. It is clear from what my hon. Friend said that those centres provide a valuable service to the community, and I am sure that those who benefit from them will have taken a special interest in his speech and in his clear plea on their behalf to Hounslow borough council.
My hon. Friend spoke about SSAs, and I should like to show how the Hounslow SSA fits into the overall system. My right hon. Friend the Secretary of State for the Environment outlined in a statement on 27 November our proposals for local government finance for the coming financial year. Local government accounts for about a quarter of general Government expenditure. It would be absurd to imagine that, within this large total, there is no room for greater efficiency. Therefore, I make no apology for the fact that we have pursued such efficiencies vigorously, but I can also assure the House that we have approached our assessment of what is needed to maintain key services with equal vigour.
We have provided for an increase in total standard spending of 2.5 per cent. on a like-for-like basis. In allocating this total between services, we have given priority to education, social services, the police, and the fire service. We have proposed capping arrangements which ensure that virtually all authorities can spend the whole of any increase in SSA on those services. These proposals represent a sound balance between the need to sustain local government services, the scope for increased efficiency, and the scale of public expenditure which the country can afford.
The mechanism by which the public expenditure proposals are translated into figures for individual authorities is the SSA. Standard spending assessments form the basis for the distribution of the revenue support grant. Standard spending assessments are the Government's assessment of the appropriate amount of revenue expenditure which would allow any authority to provide a standard level of service, consistent with our view of the appropriate amount of revenue expenditure for all authorities.
The calculation of an authority's SSA follows general principles applied equally to all authorities, taking account of each authority's demographic, geographic and social characteristics. Differences in SSAs between authorities with the same service responsibilities are thus due to differences in their underlying characteristics.
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My hon. Friend and the residents of Hounslow will be interested to know where Hounslow stands within this system, which is designed to bring about overall fairness in the distribution of revenue support. My hon. Friend gave an interesting account of how Hounslow has fared in recent years. Standard spending assessments were introduced in 1990-91, since when Hounslow's SSA has gone up by 51 per cent. The SSAs for outer-London boroughs have gone up by 42 per cent. on average over the same period. For local authorities overall, SSAs are up by 39 per cent. I know that my hon. Friend will find that of great interest.
For 1997-98, Hounslow borough's provisional SSA has been increased at about the average rate for outer-London boroughs--a 2 per cent. increase compared with 1.9 per cent. for outer london as a whole. In terms of total SSA per head, Hounslow ranked fifth out of the 20 outer-London boroughs. This increase in SSA is more than reflected in the provisional cap limit for the borough, which has risen by 2.1 per cent. Budgets can rise by £3.95 million if the authority feels that that is necessary.
I hope that shows that increasing needs in Hounslow have been recognised by the Government and reflected in the SSA over several years and again for next year's local government finance settlement. I am grateful to my hon. Friend for his wise words, which were founded upon his analysis of how Hounslow has fared and his judgment that it has been treated fairly with SSAs.
We have ensured that, among other things, by developing indicators to track spending needs. For instance, Hounslow has a relatively large ethnic minority population--extra costs arising from that are reflected in the measure of additional educational needs. As a London borough, Hounslow faces high employment costs--allowance is made in the area cost adjustment from which the borough benefits.
I drew attention to the priority that the Government were placing on education for next year. My hon. Friend will wish to underline to his authority the fact that
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Some concerns have been expressed about funding for personal social services. The year 1997-98 will be tight for social services funding. The average outer London borough faces an SSA reduction of 0.4 per cent. However, even in a difficult year, Hounslow's social services SSA has risen by 0.5 per cent., or £190,000. Hounslow also receives an extra £1.46 million for 1997-98 from the special transitional grant for community care. Such funding is appropriate in the light of my hon. Friend's comments about people with particular needs.
On asylum seekers, on 26 November, my right hon. Friend the Secretary of State for Health announced that local authorities will be reimbursed the reasonable costs that they incur in supporting adult asylum seekers. The exact details of the funding have yet to be finalised, but I assure my hon. Friend that other local services should not suffer. Separate funding arrangements have been made for children seeking asylum.
In the light of the important conclusions that my hon. Friend has drawn, I hope that that factual account of Hounslow's SSA, how it has risen and been dealt with this year, and how it compares with those of other authorities in this and other years, is of interest to him. I agree with him that the settlement for Hounslow is fair. The authority still has considerable discretion within a budget of more than £190 million to allocate resources on what it considers to be its priorities. If Hounslow uses its resources well and pursues efficiencies vigorously, there is no reason why it should not provide good-quality local services without excessive increases in local taxes.
Returning to my hon. Friend's main point about how Hounslow chooses to spend its funds, I believe that its decisions are matters for Hounslow borough council, but I am sure that it and my hon. Friend's constituents and Hounslow residents will have listened with great interest to his powerful plea.
Question put and agreed to.
Adjourned accordingly at eleven minutes past Eight o'clock.
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