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5.40 pm

Mr. David Rendel (Newbury): It is sad that the debate is a depressing one for all those who are involved in local government, not least because of a sense of deja-vu. There have been similar debates in previous years, and I recall particularly the debate that took place on 31 January 1996. The same points had to be made in January last year because the Government were doing very much the same thing.

The settlement this year will lead inevitably once again to cuts in local government spending and, at the same time, to higher council taxes. The spending assessments determined by the Government are increased in total by about 2.5 per cent. while the grant that the Government are providing for local authorities is increased overall by only about 1.5 per cent. That means that even if local authorities were to do no more than spend at the rate at which the Government expect them to spend, there would have to be huge increases in council taxes. It is a choice, perhaps, between huge increases in council taxes and cuts in local authority services, but I suspect that most local authorities will find that they must do both.

The Secretary of State said that in every area of Government spending we need regularly to undertake a review to ascertain whether things might not be made more efficient. When I asked him whether that had applied to central Government spending over the period of the Conservative Government, it was interesting that he failed effectively to reply. He merely said that central Government had apparently become more efficient and that any extra savings had immediately been spent on further central Government services.

I wonder why the Secretary of State thinks that it is so important for central Government to spend more on new services out of their efficiency savings while demanding that local government makes those savings and does not introduce any new services, especially when central Government are insisting on local authorities introducing new services year after year.

Central Government spending is up while, on the whole, central Government have been shedding their responsibilities to local authorities. Local government spending is down while, on the whole, it has been receiving extra responsibilities from central Government. How can the Secretary of State complain, when that is the position, that local authorities are inefficient? Clearly central Government must be more inefficient than local authorities.

This year, nine out of 10 of district councils throughout the country have had their standard spending assessments reduced in real terms, and rather more than that have received a reduced grant towards that spending. It is clear that districts will be under immense pressure. One of the extra responsibilities of which the Government have taken all too little account is the extra costs this year of reorganisation in those areas where that is taking place.

There is another factor that has not been mentioned so far. It is that to pay for local authority pensions, which were underfunded at the time of the poll tax,

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all authorities are now having to put extra sums into their pension funds. Many of the local authorities that received an undue bonus as a result of underfunding pensions at that time were then Tory controlled. Now, when they are run by Labour or Liberal Democrats, they must find extra money from the council tax payer. At the same time the Government have the cheek to try to blame those councils for raising council tax, when the fault rests with the Conservatives in their decision on pensions. For example, Waverley in Surrey has decided this year that an extra £25 per head is due as a result of the underfunding of pensions when the council was Conservative controlled in previous years.

Education always lies at the heart of local government spending. It is the most crucial area of that spending as well as the largest total amount. Most local education authorities are spending above the standard spending assessment. Why is that? The answer is that traditionally, local government has put a much higher value on education than have central Government.

I shall give an example. Last year, the budget for schools in Kingston upon Thames was £46.45 million as against an SSA which was nearly £2 million lower. This year, Kingston believes that it will have to cut its spending on schools by about £1 million. That will be a real cut in spite of the fact that there will be higher pupil numbers and many other needs. Nevertheless, the reduced spending of £45.3 million will still be larger than the Government believe that Kingston should be spending. Its spending will be greater than the Government-set SSA. That demonstrates clearly how any Government pretence that more money is being provided for education now by central Government than in the past is incorrect.

What is more, the Government have failed properly to take into account rising pupil numbers and rising special needs. All the time, more and more people realise that special needs are not being properly met. The problem of the early retirement of teachers is now being thrown on to local authorities. I can give an example of the result of these increased costs. In Northumbria, there will be a gap of about £10 million between a real-terms, stand-still budget and the capped limit. In other words, Northumbria will not be able to achieve a real-terms, stand-still budget. Instead, it will have to cut its spending on education by about £10 million.

A further example is close to my heart. A school in my constituency--Enborne Lodge--is run not by the LEA of Berkshire but, for some time, by Lambeth. It is an old Inner London education authority school. It is a boarding school for those with severe emotional and behavioural difficulties. The school has done brilliant work, achieving results with students who have had the most unbelievable difficulties. It has enabled them to experience a happy and worthwhile childhood while having a proper education and achieving some excellent exam results. It has enabled them also to lead useful lives in society, as perhaps they never could have done otherwise.

This year, the school had to close. Not only that, but the plan of the governing body to enable Enborne Lodge to continue as a grant-maintained school--I thought that the Government would like that--run by a charity has collapsed. Why is that? Lambeth has decided that it must sell the school on the open market for the best price rather than allow such a brilliant school to continue to do that which it has so successfully undertaken.

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That is a tragedy. The school has been much valued in the community and by the London boroughs that have sent pupils to it. It has had a huge value to society as a whole. It has enabled its pupils to receive a decent education and then to return to the community to lead happy and normal lives thereafter.

It is a tragedy that that school has been closed, but before anyone gets the idea that it was the Liberal Democrats' fault--we are now the largest party on Lambeth council--let me say that the decision to sell on the open market was taken last Friday night as a result of a Con-Lab pact.

Way back before the last general election, the Liberal Democrat party said that education was a priority. We are delighted that the other two parties now agree with that point of view, and claim to have made education their priority, too. But the Prime Minister's pledge to put education first is seen in this settlement to be a sham, and he should never have made it.

Social services is another crucial area of local authority responsibility. Every year, local authorities are given further responsibilities for social services, but without the funding to match. In the debate last year, I referred to a 90-year-old resident in my area who was trying to obtain bath aids to enable him to remain in his own home. He was told that it would be as much as a year before he would be assessed for those aids, and that it would take a great deal longer than that before they would be installed in his home.

This year I did something rather different: I went to a meeting of people whose family members have learning difficulties. It was a fascinating meeting, and it showed me that there is a real need for the provision of further respite care. Such people should be given a chance to keep members of their family at home, but should be relieved of those duties for a short period each year.

As a result of that meeting, I agreed to spend a day visiting four such families. It was a fascinating and emotional day, and it showed me the difficulties that those families have to cope with. One child with autistic tendencies spent his whole time running round the house destroying it. He tore the paper from the walls, tore at the chairs and knocked over the crockery so that it fell on the floor and smashed, and his parents could do very little to control him. They have to live with him day after day, and they love him dearly. It is unfair for society to decide that such a family cannot have any respite care month in and month out, because of cuts in local government funds. Some councils find it almost impossible to meet even their statutory responsibilities for social services.

Many other areas of local government funding are being cut. Even the Government, in their SSA figures, have accepted that spending in other areas will have to be cut; and that is before they have taken account of the extra costs to local government of the landfill tax.

Transport will be cut, which will mean worse road maintenance year on year. Environmental services will be cut: it will be more and more difficult for local authorities to establish recycling schemes. Recreation and the arts will be cut: they draw tourists into this country. Today, I went to the launch of an appeal by the Watermill theatre in my constituency--I hope that many hon. Members

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have been there--which is desperately short of funds. I was told that it provides to the Government more in VAT on its ticket sales each year than it receives from the Government in subsidy. None the less, that theatre faces closure because of the Government's policies.

A cut in those areas of local government spending will produce short-term savings, but there will be long-term costs. That is the tragedy of the Government's spending settlements. It is the old story of knowing the price of everything but the value of nothing.

Today's announcement on capping will be a great disappointment, particularly in Oxfordshire. It is interesting that even the local Conservatives are saying that the capping limit is unsustainable and must be broken. All three parties seem to agree--although I understand that the Labour party has refused to propose a budget. The other two parties agree that the budget to be set must be above the capping limit. [Interruption.] If the hon. Member for North-West Durham (Ms Armstrong) wants to intervene, she is welcome. I understand that the Labour party has proposed two budgets, but has said that they are for consultation purposes only.

The Tory policy has been to abolish capping: that was agreed at the 1995 Tory conference. The Tory conference produces one or two weird ideas, but it is a great pity that the Government did not listen to what Tory party members told them on that occasion. Capping means that virtually all council spending is, in practice, determined by central Government. It is interesting that the Secretary of State said that his proposals for local government were supported by the local government associations, whereas all those associations have been saying for a long time that capping should go; and so it should.

It saddens me to say that I now regard the Labour party as little better than the Tories when it comes to local government. Labour Members have made a great fuss today, but will they follow up their words with actions? They seem terrified of Tory attacks on their tax policies. They failed to oppose this year's income tax cut, and thereby forfeited their right to demand more central Government grant this year--to be fair to the hon. Member for Holborn and St. Pancras (Mr. Dobson), he admitted as much. They say that they will stick rigidly to Tory spending and taxation levels in what appears to be yet another Con-Lab pact. They seem to be trying to prove that there is no longer any point in voting Labour.

The cut in income tax, which must be paid for by a rise in council tax, is at the heart of this settlement. The Tories are replacing what is undoubtedly a fairer form of taxation with a less fair tax. Pensioners and people on low incomes do not pay much income tax, but they will be just as hard hit--perhaps harder--by the rise in council tax that the Tories propose. It is hardly a surprise that the Tories have fallen to third place in local government. Why have they not learnt their lesson? Why have they not learnt where they have been going wrong in local government all these years? If they had listened to those of us who have been telling them where they have gone wrong, they might have done better in local government elections.

The council tax is unfair to the elderly and the poor. The real tragedy is that spending cuts will also hit those who are most in need. They will hit children, the elderly, people with learning difficulties and all those who depend on social services. It has been reported in the press today that the Government are prepared to allow the sick in our

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hospitals to go unfed. Is this really Britain in 1997? This is the shame that the Government have brought on our country. They should go, and they should not be allowed to return for many years.

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