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Mr. Gallie: Picking up on that point of order, I should like to talk about councillors' allowances. The number of councillors in Scotland has been reduced in recent times by about one third. We now have 1,245 councillors, of whom 739 receive special allowances. One might think that the level of special allowances would have reduced, but the level of councillors' allowances has gone up from £7.1 million to £13.3 million--the figure has almost doubled. We are told that there is not a lot of money in local authorities. I should have thought that councillors would have considered those special allowances.
The situation in East Ayrshire astounds me. The council has 30 members--almost all of whom are Labour--and 29 special allowances are available to councillors. There is something wrong there. Authorities should consider that issue when complaining about lack of funds.
The independent Peida report, put together with Coopers and Lybrand, shows that planning departments in Scotland cost 60 per cent. to 70 per cent. more than those in England. I accept the comments by the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) that sometimes more detailed analysis is needed. I have considered the planning development department in my area of South Ayrshire. Small shopkeepers who have tried to put up reasonable signs in a way that would enhance town centres have been constantly badgered by planning officials to stick to petty, small-minded rulings. There is something wrong there.
Mr. Kirkwood:
What has that got to do with it?
Mr. Gallie:
Planning departments spend a heck of a lot of local authority money. They are getting involved with petty matters and having a major effect on the expansion of town centres.
At Towans hotel in my constituency, the council insisted on keeping a dilapidated building occupied--it was empty but occupied by an owner. Demolition and
redevelopment of the site would obviously have been a better course. The inevitable happened--the building burnt--but the site remains dilapidated. Opposition Members are always shouting about the need for more houses. Additional houses are being missed out on that site.
South Ayrshire council did not seek to operate a pilot project for nursery vouchers. Instead, it has provided its own nursery scheme, building on the number of places available. Will my hon. Friend the Minister tell me whether that means that when cash is allocated for the voucher scheme in the coming year, South Ayrshire council will miss out because there will be a removal of previously funded amounts for nursery schemes provided in local authorities that have nursery places?
I am particularly concerned about community care. I do not understand how local authorities can be providers, competitors for places in nursing homes and residential homes and decision makers on spending plans for community care. My hon. Friends in the Government need to look carefully at that. There is considerable waste in the current workings of community care. The costs of keeping individuals in their homes are not always fully considered. Health costs are totally ignored. We must take that on board. I very much regret that community care funds have not been ring-fenced.
Mr. Andrew Welsh (Angus, East):
I am disappointed and angry about the way in which the debate has been conducted. The hon. Member for Midlothian (Mr. Clarke) talked about people knowing when they had been short-changed. In many ways, that is what has happened to them. The debate has been reduced to issues such as who has not contributed to the debate and some stuff about whether councillors have gone on foreign trips. We are discussing the most important subject facing the Scottish people. The decisions will affect the essential daily services for every man, woman and child in Scotland. They deserve a better debate.
The debate should have been about the kind of local government system that we all seek, about the level of local government services and about employment. It should also have been about democratic control of local decisions. Instead, public opinion has been ignored and dismissed. The Government have never admitted the consequences of their actions, but the people know who is to blame for cuts in services and employment. The Minister has dwelt on trivia, probably deliberately, rather than on substance.
The truth is that local government is totally controlled by central Government. Some 75 per cent. of its services are determined by central Government, as is 85 per cent.
of its revenue. Central Government place capping limits on local government and control its capital spend. Local authorities are not free to take decisions, because they are dominated by central Government decisions. The Government have created the current local government crisis.
We are debating next year's local government finance orders just days before local authorities announce their budgets in the light of what is widely recognised to be the worst local government settlement on record. Throughout Scotland, services are being squeezed, while, at the same time, councils are having to contemplate huge rises in council tax and huge increases in service charges. Even the better-off councils--there are now only a few--are running simply to stand still.
The cash crisis is primarily the result of the accumulated effect of long-term underfunding coupled with the failure of the Scottish Office to meet the costs of reorganisation or provide the resources necessary to meet the new statutory obligations that it has placed on local authorities. Although the Secretary of State continues to build into the settlement assumed savings from reorganisation, his assumptions have been totally discredited by the Chartered Institute of Public Finance and Accountancy study, which remains unchallenged. It found that, since 1995-96, the botched attempt to gerrymander has cost Scottish local government £281 million--almost four times the Scottish Office's estimate. Yet again, the Government's figures have been shown to be pure financial fantasy.
Even the Scottish Office has had to admit that new statutory obligations faced by local authorities, including those under the care in the community policy, the landfill tax, the Children (Scotland) Act 1995 and the Disability Discrimination Act 1995, total more than £90 million. The Government have failed to provide new resources to meet those new obligations. As a result, councils are faced with having to make staggering cuts of about £350 million--even before taking into account the effect of the 75 per cent. housing debt repayment rules, which have so devastated Scottish council housing provision.
The Minister repeated the Tory boast that grant-aided expenditure next year would increase by 2.2 per cent., with a corresponding rise of 1.1 per cent. in grant support. That is a blatant and foolhardy attempt to mask the extent of the cuts. The Minister has failed absolutely to convince anyone. When transfers, new burdens and pay awards are left out and like is compared with like, it becomes clear that grant support is being reduced by 2.1 per cent. in cash terms. His increase is in reality a reduction.
The Secretary of State tried to steal the show at the Scottish Grand Committee with the announcement that he would permit 15 councils, including my own Angus council, to increase their spending levels by £10 million under the capping regime. He was, however, much less up-front about the fact that the capping relaxation was not accompanied by any new resources. So, it is good news for us but bad news for the others. It is a simple case of divide and rule.
The Secretary of State is trying to dictate to local authorities where the money will go, prioritising spending on the police, fire services, education and health without providing any additional resources to match those priorities. To increase spending according to Scottish Office directions while remaining within capping limits,
local authorities will have to reduce expenditure on every other service. Those are the actual consequences of the Government's proposals.
Surely it is not for the Secretary of State to decide how local authorities should spend public money. Councillors are not Government appointees on quangos, however much he would wish them to be. I accept that the notion of democratic accountability might seem rather peculiar to the Government. The Scottish National party believes that central Government should work in partnership with local government. Instead, the Tory Government seem determined to demolish local democracy at every turn. When the budgets are announced on Thursday, showing an increase in council tax that is estimated to be about 13 per cent., the Scottish people will know that local authorities are not to blame. The electorate will soon have the opportunity to show their contempt for the Government.
By means of a shameful party political propaganda exercise that cost taxpayers £235,000, the Secretary of State tried to argue that local government in Scotland is favourably treated; yet even the consultants who were commissioned to write the report gave it a health warning, urging "extreme caution" in making comparisons at any level of detail. In fact, when comparing like with like, there may be little difference at all in expenditure between Scotland and England.
Most of the expenditure variation is explained by differences in statutory responsibilities and funding mechanisms. Unique Scottish circumstances, such as its geography, climate and levels of deprivation, also lead to differences in need and the cost of meeting it. Any difference that remains is explained--even in the Coopers and Lybrand report--as the result of local councils' policy priorities. The priority in Scotland has clearly been to provide better services of higher quality than in England and Wales, particularly in education. The cuts imposed by the Government are leading to school closures and compulsory redundancies of teaching staff.
The Government should be ashamed of themselves for using the smokescreen of the per head of population figures to try to prove something that the Coopers and Lybrand report shows is fundamentally a sham. Given the spending of £235,000 on the report and £800,000 on nursery voucher propaganda, it is a great pity that the Secretary of State is not half as willing to defend Scotland's record of better standards as he is to squander public money on shameless Tory propaganda. As well as reflecting councils' policy priorities, the higher standard of service provision must surely also reflect the policy priorities of the Scottish people. In that regard, what the Secretary of State's propaganda report may explain above all else is why there are no longer any Tory councils in Scotland. The money would have been better spent on services.
It is nonsense for the Government to rant about relative spending without considering relative revenue. The Chief Secretary to the Treasury admitted that, when Scotland's share of oil revenues is taken into account along with our share of privatisation proceeds, far from being subsidised, Scotland has paid a massive £27 billion surplus to the London Treasury since 1979. The Government's figures give the lie to the Tory subsidy myth. Over the next five years, a surplus of £12.5 billion will be generated. Why are we talking about cuts when such resources would be available to an independent Scotland?
Regardless of the debate over the reports, the findings of the report of the Planning, Industrial and Economic Development Advisers, which was commissioned by COSLA, highlight the devastating impact of the Government's cuts on the Scottish economy. It is perhaps significant that COSLA used the same consultancy firm as that commissioned by the Scottish Office. Perhaps the Secretary of State should accept the Pieda report, which points out that the cuts about which the Minister avoids talking will result in as many as 17,000 job losses in Scotland and the loss of £315 million from Scottish household incomes. That puts into context the trivia that the Minister has introduced into this debate in trying to avoid the reality. The cuts will be made regardless of the outcome of the debate on comparative expenditure and are a direct result of Government cuts. In a wealthy nation, there can be absolutely no justification for running Scottish local government services into the ground.
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