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Sir Paul Beresford: Judging by what is on the face of the Bill, I am sure that my right hon. Friend is right. It is subjective and selective and it is in the hands of the Secretary of State. However, the schedule is as crude and across the board as ever.
Mr. Curry: I am about to come to that. My hon. Friend, who has much experience of these matters as a giver and a receiver, is certainly right. It is not a new liberal regime; it has two differences from its predecessor. First, the Government can cap over more than one year. As I understand from the extremely complex Bill and the schedule, which is infernally complicated as my hon. Friend said, that is a notification procedure. Secondly, the Secretary of State can be more selective over the terms on which he caps local authorities. It will still be open to the Secretary of State to announce capping criteria in advance, which is a facultative ability under the legislation that the Government propose to repeal.
The explanatory notes do not make clear how the legislation will operate in practice. Some of the Secretary of State's powers are on the face of the Bill, others are not. In fact they stop half way through a sentence. The explanatory notes emphasise that the Secretary of State must have regard to principles, but do not say what those principles are. I am referring to paragraph 10 of the explanatory notes. We need to see the principles, as yet again it is not stated what the principles are. Yet again, the devil is in the detail; how it will operate in practice is what matters to people.
I agree with doing away with pre-announcement as it will force local authorities to make choices. The Minister saw representatives of North Yorkshire county council this morning while I was in a Select Committee meeting. My local authority explained that because of the change in methodology on the social services side it faces a serious problem. As a result, it is consulting the community on
increasing the council tax precept by 7.5 per cent. to make good some of the deficit. As my hon. Friend the Member for Wantage (Mr. Jackson) said, an interesting early test of the Government's intentions will be whether or not they decide to live with that if it receives the approval of the local people.
There is quite a difficult distinction between designated and nominated authorities. As I understand the Bill, nominated authorities can have a notional budget which is below their present level of spend. They are then left to work out how to meet their capping requirements.
I now turn to the foggy bit of the Bill which deals with council tax benefit proposals. The provisions depend on regulations that have not yet been announced, so in a sense the Bill contains the gravy, but we do not yet have the meat which is the main course. As I understand it, each tier of authority when it calculates its own precept will have to take account of the extra benefit cost that it will entail and include it in the charge. The district will bill and pay to the county its share of the revenue, but the county has no power to hand back the extra element of the revenue that it raises through the benefit rules.
However, as the hon. Member for Birmingham, Selly Oak (Dr. Jones) made clear, local authorities with a preponderance of properties in the lower bands will find that those living in such properties will be subsidising the poorest people who live in social housing. There is no escape from that. There may be a good intellectual argument for doing that and for sharing responsibility, but the idea that it has anything to do with more effective accountability simply does not stand up. It is so complex in nature that that line of argument is absolute baloney and the Minister would be well advised not to pursue it. The impact will be much tougher in some areas than in others.
If the legislation is carried out effectively, if people want to make it work, if there is a commitment on the part of councils and councillors, and if the regulatory framework is sensible--and if the Audit Commission, a sound body, applies it properly--there is no reason why the Bill should not be effective. The danger is that that will not happen, and that there will be slippage between existing and new requirements.
Before we exult too much at the liberation that the Bill represents, it is worth while pointing out that the Bill retains capping, that the Government have deferred on the regional assemblies--which are more important to the Liberal Democrats than to me--and that the Bill will not restore the business rate.
Mr. David Heath (Somerton and Frome):
I am sure that the right hon. Gentleman will recall our annual pilgrimage to see him when he was in his previous occupation. What is most depressing to some of us is that the three elements about which we complained the most--capping, the uniform business rate and the standard spending assessments--are to persist. The Government came to office with a massive majority to abolish those elements, but they are persisting with them--to the detriment of local democracy and local accountability.
Mr. Curry:
I am surprised that the hon. Gentleman did not mention the area cost adjustment. To have got this far in a debate on local government without mentioning the area cost adjustment--or, for that matter, additional
Prescription underlines the Government's attitude in the Bill. I have read every single line of every single local government White Paper--there have been a whole string of them from the Government--and the attitude that comes through is permeated with the frustrated spirit of a colonial power exasperated at the antics of the natives, who must be brought under some firm government. There can be self-government in the little principalities, but the imperial framework will remain in place. Following my own experience, I do not necessarily disapprove because, in politics, people often have less choice than they think. We are more honest if we admit that.
Mr. Eric Illsley (Barnsley, Central):
I welcome the Bill, and I hope to keep my comments relatively brief as a consequence. I wholeheartedly welcome the abolition of universal capping, although I realise that the alternative is to give powers to the Secretary of State. However, anything that this Government come up with will be a lot better than what we had from the previous Government in terms of capping.
In 1990, 20 authorities were capped under the new financial regime imposed by the previous Government. One third of those 20 authorities were coalfield authorities, all of which finished up with very low standard spending assessments. Despite many complaints during the past eight years about the standard spending assessments--and many speeches in this House--there has been little adjustment to them. As a consequence, the low starting point for authorities with historically low SSAs, such as mine--Barnsley metropolitan borough council--has meant that we have had difficulty catching up.
We have had low and unfair revenue support grant settlements. Tory Members of Parliament have previously classified Barnsley--where unemployment levels are traditionally 2 to 3 per cent. higher than the national average--as more prosperous than Kingston upon Thames and, on one occasion, Runnymede.
The most recent settlement from the present Government has been much fairer to Barnsley and has recognised our particular problems. However, my local authority still faces £10 million of cuts in this year's budget, on the back of £40 million to £50 million of cuts since capping was introduced in its present form in 1990.
Even when standard spending assessments were increased for my local authority by about 6 per cent., it made very little difference to our problems because we were still subject to the capping criteria. The hon. Member for Somerton and Frome (Mr. Heath) referred to annual pilgrimages to Government Departments. I can recall pleading with Ministers in the last Government to increase our SSA in relation to the fire service, because the Home
Office was telling us that South Yorkshire was below the Home Office's required standards for fire cover. That is how bizarre the system became.
I welcome many of the Bill's initiatives, such as the power to nominate and set targets for future years, or to use them as a baseline. In 1990, the cap came well into the financial year, and it was difficult for the local authority to adjust to the new budget once the financial year had started. It is a good idea for the Secretary of State to have the power to give local authorities a target to achieve in the present year or, alternatively, a target for the following year.
I hope that the Secretary of State will make good use of his power in the Bill to take into account anything he feels relevant in determining any future caps, in terms of designating or nominating authorities. In particular, I hope that he will take into account coalfield authorities where there is a history of low SSAs and low RSGs. In the past few years, colleagues and I have asked successive Governments to review the SSA methodology. It is unfair and arbitrary, and we have provided research from various universities to highlight the problem. The original Webber-Craig authorities looked at the matter, and the Special Interest Group of Metropolitan Authorities (Outside London) is doing so.
SSAs should reflect need. If the methodology introduced by the previous Government had been fair, some of the capping regimes that have been in place might not have been needed. My local authority is not a high-spending authority, and it is not profligate. It always features well in the performance indicators, but it has particular problems. It has low educational achievement and high unemployment, but it has no ethnic minority population, and we lose out under the SSA methodology because of that. Barnsley has been a prudent authority. However, after eight years of cuts, it is having to look at cuts in education and social services--the two areas where we have the greatest pressure.
Like my hon. Friend the Member for Denton and Reddish (Mr. Bennett), I welcome the abolition of compulsory competitive tendering. In my opinion, it was not a success--it failed miserably. It was intended to bring private enterprise and private sector dynamism into local government. However, the hon. Member for Billericay (Mrs. Gorman) let the cat out of the bag when she talked about her local authority bringing services back into public control which had been successfully privatised. The latter was of course the idea behind CCT. However, it lowered standards and cut the quality of services dramatically.
The only way in which the private sector could profit from taking on contracts in areas such as cleaning was to cut the hours of work, the holidays and the wages of those employees involved in the contracts. Some of those private companies made vast profits--basically at the expense of the work force and the taxpayer. Those contracts had low quality specifications, and standards and quality fell. Wages and holidays were cut, and there were redundancies. At the end of the day, many employees had to turn to benefits--particularly family credit--to top up their earnings. So taxpayers were subsidising CCT and putting money straight into the coffers of private companies. In addition, the Equal Opportunities Commission produced reports detailing
gender inequalities: many of the employees in those service areas were female and CCT discriminated against them.
I hope that best value will lead to a return to good-quality local services. Quality should be our byword and standards should be raised to the level of the best. The emphasis should be on quality, not on cheapness. We want to go back to having quality services in local government. I welcome the duty to consult that is placed on local authorities, because the public will have their say about the type and quality of public services they want. My local authority has in place mechanisms such as community partnerships whereby it can consult the public; it also regularly consults local business. Such consultation will provide information about how the local people want their services to be run and, more importantly, about whether they want a cheap and nasty service or a quality service to be provided in their area.
Clause 4 relates to performance indicators. My local authority has nothing to fear in that respect, because it is a hard-working and low-spending authority. However, an article in this week's issue of the public sector finance magazine suggests two interesting performance indicators. My hon. Friend the Member for Denton and Reddish spoke about electoral turnout, making the good point that local authorities should not be burdened with having to deal with turnout. However, we have to give consideration to electoral registration because, over the past few years, many electoral registration officers have ignored their responsibility to produce an adequate register. My local electoral register contains duplications and the number of omissions runs into the thousands.
Even if this is not included as a performance indicator, local government should be given encouragement and, perhaps, financial assistance to improve electoral matters in the local area. Some of the issues relating to elections, such as having a rolling register or different voting days, do not fall within the scope of this or any other local government Bill, but we have to improve the turnout in local government elections because it is important that people should participate in local democracy.
I welcome the provisions in respect of a five-yearly review and benchmarking. If, at the end of the process, the benchmarking shows that a local authority is not achieving the level of the best and that leads to privatisation or some other means of providing a given service, so be it. I especially welcome the duty to review whether a given function should be exercised by an authority: it is high time local authorities were given a duty to examine the services they provide and to decide whether it is necessary that they provide those services, or whether they should be provided in some other way. Only by reviewing and comparing can we promulgate best practice.
I welcome the performance plans and agree that the public should be able to see what the local authority intends to provide and how it intends to do so. My local authority recently compiled the responses to a survey to which there was a good public response and which asked the public what services they thought the local authority provided. The local authority and I were devastated to learn that some members of the public still thought that the local authority was responsible for health care intheir area. The results of that survey came as a big
disappointment, showing that we have to educate the public about what services are available from local authorities and what a local authority is obliged to provide. If people are to understand why their council tax is being increased, decreased or capped, they have to understand the services on which that money is spent.
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