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Lord James Douglas-Hamilton: We are virtually at the stage at which a PFI project can go ahead. If the hon. Gentleman favoured that--I see that he does not, so I cannot make him an offer, given the election rules.

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The PFI will greatly benefit the national health service, because it will ensure that public sector funds go much further. The PFI is new territory for the NHS and the private sector, and both have much to learn about each other. The deals are long-term partnerships of 20 to 25 years, involving millions of pounds of capital and significant revenue streams into the future. Partnerships--I deliberately use the word "partnership" because this is a partnership between the public and private sectors--involve provision of health care environments, and as such are not the sort of schemes that should be hurried into agreements. The NHS is too important for that. We have to get the details right.

The hon. Gentleman asked about trust vires. We have clear advice that NHS trusts have the power to sign PFI contracts. Some banks have expressed concern about that. The issue has been discussed with them, but the calling of the general election has prevented any conclusion from being reached.

Mr. Foulkes: The Minister in his reply to my earlier intervention seemed to be about to make an offer. Although I was wincing a little, I was not shaking my head. It may be that what he was about to say would have been acceptable. That could be explored with my hon. Friend the Member for Hamilton, and my hon. Friend the Member for Edinburgh, Leith (Mr. Chisholm), who is present. If there were a way forward to ensure that there was no further delay, I should be grateful if it could be explored.

Lord James Douglas-Hamilton: We are close to the possible signing of a contract, but under general election rules we are not in a position to do that. If the hon. Gentleman spoke to the shadow Secretary of State and received his support, and believed it to be in the public interest that the project should go ahead, I would certainly raise it with the Secretary of State for Scotland. However, both Government and Opposition are bound by the Cabinet rules. I shall endeavour to ensure that he has all the available information. It will be a few days before we are in a position to do that. If he wants to come back to me, he is welcome to do so.

Ayrshire and Arran health board has consistently received higher than average resources per head in recognition of its population profile, and an increasing share of the national total. For 1997-98, it will receive an extra 5.4 per cent. over the 1996-97 figure. We believe strongly that the development will mark yet further progress in health care facilities for Ayrshire and Arran. Just as the new hospital will be geared to meet the health needs of East Ayrshire, so has the Scottish Office made sure that the same principle holds true for the people of the whole of Ayrshire and Arran by ensuring that they receive funding much higher than inflation, and above the national average.

I thank the hon. Gentleman for his contribution. On 18 December 1996, he asked me in the House why the proposals have been delayed by the PFI, and why public funding was not being made available immediately. I told him that the trusts were confident that, with further negotiations, the hospital could be provided under the PFI. That remains the case, with the PFI looking increasingly likely to provide the fastest solution.

Contrary to speculation, the scheme has a far better chance of getting up and running quickly under the PFI than it would if it joined the queue for the limited public

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capital resources available. If negotiations are concluded soon, I expect building to be completed by the end of 1998, which is probably faster than could be achieved by any other route. The sooner we can deliver the hospital, the better.

The East Ayrshire hospital project has been able to learn the lessons of other PFI schemes, such as the most effective period over which to let a contract, the need for flexible output specifications, and the need to ensure the right balance between debt funding from banks and equity input from investors. For many reasons, the PFI looks like the best mechanism to deliver the desired improved quality of services to those who need them.

I congratulate the hon. Gentleman on securing the debate. If he wishes to come back to me, he is welcome to do so: I would look into the matter speedily and effectively. He has served a valuable purpose by raising the subject.

Mr. Foulkes: I am grateful to the Minister for the way in which he has dealt with the debate, and for his offer. I shall talk to my hon. Friend the Member for Hamilton. My hon. Friend the Member for Leith, who also has an interest in the matter, has been present for the debate today. I am grateful for the Minister's offer of further discussions. I do not want dogma to decide the matter--I want the health needs of the people of east Ayrshire to decide it. As the Minister rightly said, they have particular health needs, because they are disadvantaged. I am grateful to the Minister for that help.

Lord James Douglas-Hamilton: In the half minute that remains, as the hon. Member for Edinburgh, Leith (Mr. Chisholm) is here, I repeat that I have made it clear that PFI projects would not be pursued unless clinicians and local management wanted them. In relation to the question that the hon. Gentleman asked some time ago--

Mr. Deputy Speaker (Mr. Michael Morris): Order. We now move to the next debate.

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Education (Vale of Glamorgan)

1 pm

Mr. Walter Sweeney (Vale of Glamorgan): I am grateful for the opportunity to inform the House about the difficulties that are being caused to all schools in Vale of Glamorgan by the incompetence of the Labour-controlled Vale of Glamorgan council.

At the end of last month, schools were told that the council was about to impose budget cuts of £3.13 million on education. The effect on schools would be catastrophic. Some schools would face cuts of as much as 15 per cent. It was not surprising that about 200 worried parents, teachers, governors and pupils appeared at my advice surgery in Llantwit Major on Friday 28 February expressing their demand that the savage proposed cuts be reversed by the council and seeking my help to achieve that end. Since then, I have visited various schools and have had discussions with head teachers, staff, parents and governors.

I was appalled to find that there seemed to have been little or no consultation with any of those people about the necessity for such a high level of cuts or about the way in which savings could be effected in administration or elsewhere in the council's budget. On 4 March 1997, I faxed a letter to the chief executive of Vale of Glamorgan council, the director of education and the leader of the council, Councillor Shaun Stringer. I suggested that, before the budget was fixed, a series of consultative meetings should be held throughout the vale so that everyone could have a say on how best to protect their children's future.

I also requested sight of the council's budget to enable me to work constructively with the council to identify potential savings which could be used to relieve the heavy burden of cuts on schools. Unfortunately, the reply from Councillor Stringer was less than helpful. He stated:

I am appalled at the unwillingness of the leader of the council to co-operate with the local Member of Parliament in the best interests of all the people, of whatever party, whom I and the vale councillors represent. Councillor Stringer's negative attitude contrasts unfavourably with that of council leaders in the former Vale of Glamorgan borough council, including Councillor Stringer, who showed a more positive attitude in those days to working with their Member of Parliament for the benefit of the community, even if that Member of Parliament was of a different political persuasion.

Mr. Rod Richards (Clwyd, North-West): Is my hon. Friend aware of a similar scandal in my constituency? Conwy county borough council has told deliberate lies to the schools in my constituency in order to cover up the reason for cutting school budgets. It has calculated the expenditure required for schools and deducted from it the income that schools expect to receive from nursery vouchers. Where in any accounting practice does one deduct income from expenditure and use the net figure to calculate the budgets, which will inevitably show a cut that they should not show?

Mr. Sweeney: I was not aware of that circumstance, but I am grateful to my hon. Friend for bringing it to the

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attention of the House. I am sure that everyone will be interested to learn about that further example of duplicity and incompetence on the part of a Labour-controlled authority.

Perhaps I should not have been too surprised at Councillor Stringer's petulance, as he appears to have been equally unhelpful to the head teachers in the vale, who were given a similar brush-off. I understand from them that, at meetings on Monday 3 and Tuesday 4 March, they were told that the proposed cuts were all the fault of the Government and that not an extra penny could be found for school budgets. If that is the way in which the leader of the council treats top professionals when they are seriously worried about education standards for children in their care, it should come as no surprise to me that he puts party politics before the interests of children.

Within 24 hours, Councillor Stringer was singing a different tune. I presume that he was overwhelmed by the strength of public opposition to his proposals. First, it was announced that the council would put back into the schools budget approximately £2 million. It was planned to raise half that figure by confiscating the reserves of schools and redistributing them. The effect would have been catastrophic for thrifty schools which had created reserves. Some of them were planning to spend their reserves in order to keep on teachers or other staff who would otherwise have been made redundant as a result of the cuts. The effect of the revised proposals would have been to punish thrifty schools--a typically "old Labour" idea. Unfortunately for Councillor Stringer, but fortunately for the schools, it was pointed out to him that the proposals were illegal. The proposed budget cut, which had been reduced by about £2 million, was immediately increased again by about £1 million.

It has been impossible for me to establish precisely by how much school budgets are now to suffer. There is an atmosphere of confusion. Councillor Stringer appears to be making policy on the hoof. My telephone inquiries this morning have revealed that the best estimate of the final level of cuts is about £1.7 million. I have no doubt that head teachers throughout Vale of Glamorgan have spent many anxious evenings poring over their school budgets, deciding who will have to be sacked in order to balance the books.

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