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Mr. Curry: My point is that, at the moment, we have a mechanical indicator. Ethnicity plays a heavy part throughout the school scale. I am looking for an indicator which is more sensitive to the identification of real problems in education and which moves away from that rather mechanistic background. I am not predisposed to say that we should give less money to the hon. Lady's constituents or to those of another hon. Member. I want to reflect need more effectively. That is what is important.

The hon. Member for Normanton (Mr. O'Brien) made some sensible remarks about the council tax benefit schemes. I hope that the Secretary of State has listened to them, and I endorse entirely the points that the hon. Gentleman made about the need to look at the schemes much more carefully before they are introduced.

I want to address the particular situation in North Yorkshire, and, first of all, the fiction that there has been a real increase in resources in education. I say that having seen the letter from the Secretary of State for Education and Employment--the usual threatening letter--saying, "This money has all got to go to education." There is a dangerous tendency: more and more, the Government want to hypothecate expenditure to individual services.

Secondly, North Yorkshire has taken a cash hit of £3.1 million on social services. The Secretary of State unveiled £30 million extra at the beginning of the week and I immediately rang North Yorkshire with the glad tidings that that was supposed to compensate local authorities that had taken a hit on social services, but the distribution is not related to the hit on social services. It is related to the overall position on standard spending assessments.

That means that there is a perverse outcome. North Yorkshire has taken a bigger hit than West Sussex, for example, but West Sussex comes out with an extra £2 million while North Yorkshire has nothing. Wandsworth has been given £6 million; Westminster, which has clearly been rehabilitated in the Government's sights, has been given £4 million; and Brent has been given £2.4 million. North Yorkshire, which has taken that severe hit, has been given no additional resources at all.

Social services are in a serious position, and--

Mr. Willis rose--

Mr. Adrian Sanders (Torbay) rose--

Mr. Curry: I will not give way, because of the time limit. I am sorry about that. The hon. Member for Harrogate and Knaresborough (Mr. Willis) will agree that, because of way that social services are framed in North Yorkshire, and because of the number of homes in Harrogate and Scarborough, we have suffered particular difficulty. The hon. Member for Scarborough and Whitby (Mr. Quinn) was in the Chamber, but is here no longer.

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The education SSA has gone up by nearly £13 million. The county council will make sure that all that money goes to education, but we must look at what comes out of it, if we are to make a sensible assessment. We must take into account the increase in school pupil numbers, the overhang of last year's teachers' pay settlement and this year's pay settlement. The county budgeted for 3.5 per cent., but, because of the particular increase for primary school head teachers--the necessity for which I accept--and because we have 327 primary schools in North Yorkshire, that settlement has been pushed up to almost 4 per cent.

The standards fund, which used to be called GEST--grant for education support and training--and which met the requirements for special educational needs also has to be taken into account. Even if all that money goes to schools, there will be a 1.5 per cent. cut in each school budget. That is under a scheme that the Government keep telling us represents the priority "education, education, education". [Interruption.] There is no point in the Minister for Local Government and Housing muttering from a sedentary position. The fact is that that is a real cut for education in North Yorkshire. She blathers about this matter, as the Government do about so many other things.

In social services, all the voluntary organisations are facing cuts. I could wave the bleeding stumps around the Chamber, as Labour Members used to do when the positions were reversed, and I could throw at the Minister a sheaf of letters from voluntary organisations complaining about the cuts. Voluntary organisations are indispensable to delivering social services--they are not delivered only by the county council. The council depends enormously on the good will and co-operation of voluntary organisations to make sure that services work in practice.

The county will try to bail people out by lending £1 million from the reserves, but it has also taken a hit on the landfill tax and the withdrawal of tax relief on investment dividends will cost the pension funds £500,000. How do we get out of that? The Secretary of State's guideline for council tax increases works out at4.9 per cent., but the proposal from the Conservative ruling group--which, I think, has the support of all the parties--is for a 9.6 per cent. increase.

The crisis in education and the cuts in social services mean that that increase will not even maintain the level of services, but they mean that North Yorkshire has been badly let down. Every teacher, every child, every social worker, every pupil and every elderly person needing help has been badly let down by the Government.

Is there a margin for manoeuvre? No, because North Yorkshire's working balances are the third lowest in English counties and are already close to the point at which the auditor will get extremely nervous about their low level. However, there is one thing that the Minister could do to help. The county council was awarded nearly £1 million of grant in respect of European schemes last July, but the Treasury still has not paid the money. That is a monstrous failure of administration on the part of a Government who talk constantly about the need for big companies to ensure that their debts to little companies are paid on time. The sooner the money is paid, the better.

This is a scandalous situation and a bad settlement. The Government have funked the major indicators, which will have an impact on everyone. There is a three-year

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moratorium which freezes the amount, and which, apparently, will not even be subject to discussion. All that has been accompanied by the usual glib and partial presentation. The people of North Yorkshire will know who is to blame, but the taxpayers will be stuffed by a Government who are big on rhetoric, but miserably threadbare when it comes to any form of delivery.

5.16 pm

Mr. Jim Marshall (Leicester, South): I do not think that it will greatly surprise my hon. Friend the Minister of State for Local Government and Housing to learn that I cannot share all the Secretary of State's enthusiasm for this year's settlement. My hon. Friend will know from her discussions with councillors from my city of Leicester of the difficulties that the city is likely to face as a result of the settlement. She has listened, and she has been very generous to local representatives; she has not been so generous in the additional support that she has announced, but the extra £1.7 million is nevertheless welcome.

May I point out to my hon. Friend a mistake that the Deputy Prime Minister--the Secretary of State--may have made in referring to the £1.7 million which, I think, will go to Leicester as additional benefit? I understand that not all of it is a consequence of "damping" on the reduction in social services, but that £1.3 million arises from that, while the other £0.4 million arises from an update of data. It is not all additional relief, as the Deputy Prime Minister seemed to suggest. While I am referring to my right hon. Friend, let me add that I think he is right to take pride in the settlement that he has achieved on a global scale, although it is unfair in the particular case of Leicester. I think that the right hon. Member for South-West Norfolk (Mrs. Shephard) has a cheek to criticise this Government, who have sought to listen to local representatives, who--notwithstanding what was said from the Dispatch Box--will doubtless continue to listen to them, and who have tried to introduce at least a greater degree of transparency in decision making this year than we saw under her party's Administration.

I am one of those described by the right hon. Member for Skipton and Ripon (Mr. Curry) who used to wave sheaves of letters at him when he was replying at the Dispatch Box. We all know that, under the Conservative Administration, the revenue settlement was manipulated on purely political grounds. That is the only way to explain the benefit that was given to Westminster and other city boroughs, and the way in which inner-city areas outside London were treated.

Let me return to my basic point, which concerns Leicester. Leicester's settlement is very poor. Our standard spending assessment increase is lower than that of any other unitary or metropolitan authority, and it is the third lowest of all SSAs. It is particularly harsh, given that--the House will know this, as I mentioned it in the two preceding years--it follows hard on the heels of difficult years in 1997-98 and 1998-99. Since Leicester became a unitary authority in 1997, it has had lower SSA increases than any similar authority. Over that two-year period, Leicester has been forced to make cuts of some £20 million. To show the perversity of the Tories' crude capping system, which, unfortunately, we inherited last year, at a time of £20 million cuts, in the first year--1997-98--council tax decreased by 13 per cent., but, last year, it increased by 26 per cent.

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As I have already said, this year's settlement compounds the difficulties that Leicester faces. As the Minister knows, one of the big problems is the methodology changes to the funding of children's social services. Previously, funding was determined largely by ethnicity. As Leicester has a large ethnic population, this year's change has a profound effect on its allocation. As a consequence purely of those methodology changes, it will lose £2.7 million.

The second big item is the continuing fall in school rolls; that trend has been apparent in Leicester for a number of years. In previous years, I have urged the Government to introduce a damping factor, but they have failed to do so. I hope that they will consider it in the overall review. As a consequence of falling student numbers, Leicester loses £1.7 million for education alone. We have one of the lowest increases in the SSA for education of any local authority.

The Deputy Prime Minister is absolutely correct. We are not suffering a reduction, but the increase that we are being given is hardly sufficient for the service to stand still. Just because pupil numbers are falling does not mean--

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