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8.58 pm
Mr. Robert Ainsworth (Coventry, North-East): I shall not follow the hon. Member for Twickenham (Mr. Jessel) in speaking about sleeping policemen, statues, atriums and
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fancy bricks, although there was a serious point in parts of his speech. Once upon a time, local government had much greater control over how it raised money and dealt in the money markets. Perhaps his council would have been saved some of the debt incurred if it had that degree of autonomy today.
I shall start my speech on a note of thanks--although it may not continue throughout my speech--to the Parliamentary Under-Secretary of State for the Environment for meeting a delegation from Coventry during this year's standard spending assessment review. We came, as we have for the past four or five years, to talk about specific issues affecting Coventry. We will not necessarily fall out about those issues politically, but they can nevertheless have damaging effects on the SSA and on the grant made to Coventry. He received us courteously, and I hope that the issue that we raised will be taken on board by his officials, if not by himself--as I rather hope that he will not be in office for very much longer.
It was a constructive meeting, and I hope that the exchanges that Coventry has conducted on many matters have been helpful not only to the city but to the Department. There are problems with the SSA--as it is a complicated issue--although not all of them are equally controversial. At the meetings we attempted to raise some relatively non-controversial issues. I hope that the Minister will confirm that he will examine, for example, Coventry's problem with nursery voucher numbers, as it could easily cost us £100,000. According to the response that we have received from the Department's officers, double-counting has occurred, although it was unforeseen and they thought that they were dealing with accurate numbers.
Although we have raised such issues as homelessness year after year, I hope that the Minister will seriously consider whether it should be a factor in the SSA formula. There are so many different methods of assessing homelessness. Moreover, a perverse disincentive can be provided in that local authorities that truly and successfully deal with the problem of homelessness may lose money.
I also hope that the Minister will deal seriously with the issue of whether owner occupation is a genuine measure of deprivation. There are very high levels of rented accommodation in some areas, particularly in parts of the capital, such as Westminster, whereas there are very high levels of owner occupation in Coventry, which does not mean that we are a rich city by comparison. I do not believe that owner occupation provides an adequate measure in determining deprivation. If we were to sort out some of those smaller problems and clear anomalies over time, I am sure that Ministers would not leave themselves and the system open to the type of ridicule poured on them so well by my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson).
At meetings we do not raise the issue of the area cost adjustment, because there is no point in having a political row over it. However, there is no excuse for a 29 per cent. gap in consideration of payments to teachers between the midlands and London, because the actual gap in teachers' salaries between London and the midlands is more like 10 per cent. There is a definite skew against areas outside the south-east, which cost them a great deal of money.
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Ministers get annoyed when we mention Westminster and say that it is an irrelevance to mention it. However, we mention it for a very simple reason: it is the most blatant example of the way in which the area cost adjustment is deliberately fiddled--I cannot use any other word to describe what happens. We raise it because it is the most blatant example. Why should we talk about percentages and get into complications when we are trying to spell things out in a way that people understand on this difficult issue?
The Audit Commission's figures show that Westminster is one of the least efficient councils in the country. Its refuse services cost £55 a head; Coventry's cost £12.44. Street cleaning in Westminster costs £36 a head; in Coventry it costs £5.51. Westminster spends £241 per claimant on benefit administration--the most expensive benefit system in the country.
Why is Westminster's council tax so low? We have shown that it has wasted huge sums of money on gerrymandering. It is so incompetent that it cannot get insurance for much of its housing because of the asbestos problems that it has imposed on its tenants. I am reminded of the television programme that investigates interesting topics--"How Do They Do That?" How does Westminster council manage to behave in that way, waste so much money and yet have a council tax that is so low in comparison with Coventry? How do they do that? The answer is simple. Westminster's council tax is so low because it is fiddled. The Department of the Environment does not just turn a blind eye to that fiddling, it actively participates in it.
Westminster has recruited consultants at fantastic costs to make its case, not under the rules in the way that Coventry and other authorities make their case every year, but by putting pressure on Conservative Members and Ministers suggesting what they could do for the council, making the case politically for help to maintain control. If Coventry got Westminster's level of grant, we would hand back a £212 rebate to council tax payers instead of charging them. If we got that much grant, we could employ another 1,496 teachers. If all councils got Westminster's grant, 334 of the 356 councils would charge no council tax, but would pay rebates. That is why we expose Westminster--it is the most blatant fiddle of the standard spending assessment.
I have one other point to make, not about the distribution, but about the total grant. The Secretary of State made great play of his argument that if council taxes go up in May, everybody will know who is to blame--he wants people to believe that it will be the Labour councils, not the Government. In the same speech, he tried to say that he consults local authority associations and does business through them. When it suits him, he puts the blame for decisions on the local authority associations.
Mr. Peter L. Pike (Burnley):
I want to turn the clock back to what the hon. Member for Bury, South (Mr. Sumberg) said at the start of the debate. He said clearly that the difficult decisions that would be taken in Bury as a result of its financial position would be blamed on Bury local authority. He said that the Labour council would be blamed for increasing council tax and cutting services. The hon. Gentleman is not living in the real world.
People know that the Tory Government are to blame for the position of local government; they know what the Tories have done to local government over the past 18 years. Whether they are in Blackpool, Bury, Lancashire generally or anywhere else, they know that the council tax will go up because of what the Government have done. People know that services will be cut because of what the Government have done and they will tell the Government that it is time to go as soon as they get the opportunity to vote at a general election. The Government have kidded the people for far too long and their time is now up. People know the truth.
The hon. Member for Bury, South referred to the importance of education. We all accept that education is the most crucial service provided by local government. However, the Government were misleading and dishonest last year, even about education. They increased the grant for education, but they did not increase the overall revenue support grant by the same level. That meant that if the increase was passed on to schools, as the Government expected, local authorities had to make cuts in their other services. Virtually the same is happening in 1997-98.
It is no good giving increases for education unless they are matched fully throughout the funding for local authorities. As several hon. Members have said, three quarters of local authorities already spend above the level of their standard spending assessment. The Minister looks dismayed when I say that, but it is the reality. He has said that spending is up to local authorities and that the system is flexible. We accept that, but if the Government believe that a good local authority should spend at a certain level, it is time that the SSA reflected that.
The reality is that councils cannot spend above the SSA under every heading so they have to make cuts, whether in social services or in other equally important services. That is the problem with the SSA system. We all know about the difficulties with previous systems, such as the grant-related expenditure assessment, and we know that we have moved to a simpler system. It involves fewer factors and it is easier to work out, but because it is easy, it can sometimes be flawed. I believe that if we are serious about education, we must ensure that the SSA level contains adequate provision for it throughout local government. We all know that the reality is that for1997-98, the increased provision for education is £20 million less than local authorities are spending this year. That illustrates the problem.
Many hon. Members have referred to the area cost adjustment; I have met the Minister to discuss that and I accept that the figures will be examined again. We all
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The Department of Transport admits that this year's allocation of £146 million for local road maintenance is inadequate to comply with the code of practice and citizen's charter commitments. Ofsted reports that standards in more than 5,000 schools have been adversely affected by shortages of books or equipment. Those are just two of the condemnations. After 18 years of Tory Government and despite what they have called, certainly in the past few years, an economic miracle, there are major flaws in local government and an inability to maintain services.
The Association of District Councils points out:
Having been a local councillor, at times I wonder why people serve on Lancashire county council or Burnley borough council as their ability is now so limited. They can only touch things at the edge and that is a major problem.
"The local government finance settlement is particularly bad for non-metropolitan districts. Provision for spending and the amount of grant they will receive for 1997-98 will severely restrict district councils' ability to respond to the demands on their services. This extremely poor settlement follows a run of bad settlements in recent years."
That is important. We cannot look at 1997-98 in isolation. We have to consider what the Government have done over many years, causing tremendous problems for local government.
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