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Ms Armstrong: Is the hon. Lady saying that there is no national interest for central Government in what local government does?

Jackie Ballard: The Minister will know my answer to that because we have had that debate many times during our happy hours on the Local Government Bill. Liberal Democrats believe that local authorities have their own electoral mandates and that they should be able to carry them out without being clobbered by national Government.

The Minister, and Labour Back-Bench Members who have spoken, may bandy about statistics. We have heard them repeat words about the same pot of funding over and over in the hope of fooling people into believing that they are generous to local government. However, local people will see the real impact on their services, not the fantasy figures put out by the Government. For example, in a survey conducted by Liberal Democrats in Brecon and Radnorshire--

Mr. Burns: Oh, yes.

Jackie Ballard: It is a very good survey, and surveys are one of the many ways in which we keep in touch with local people. In that survey, 90 per cent. of schools said that they were struggling with a standstill budget this year. They said that that was putting strain on staff, and that schools were having to cut back on books, equipment and staffing.

Mr. Richard Livsey (Brecon and Radnorshire): I am very pleased that my hon. Friend has mentioned my constituency. One factor there is that the Government and the Welsh Office failed to take account of the number of small schools. They did not calculate the impact that the number of head teachers would have on a standstill budget for education in the county. It is a classic example of centralised control.

Jackie Ballard: I thank my hon. Friend for that intervention. In the survey, 70 per cent. of schools said that they had to rely on fund raising by parent-teacher associations to finance delivery of the curriculum. We are talking not about extras, but about the basic curriculum. [Interruption.] I should tell the hon. Member for Milton Keynes, North-East (Mr. White) that that is the reality on the ground. Nothing has changed with the change of Government.

Mr. White: The reality in many schools up and down the country is extra money for books. In my constituency, a secondary school that has campaigned for years for a library finally has one. That is the reality: schools are getting the extra services and capital investment that they need.

Jackie Ballard: Is the hon. Gentleman telling my hon. Friend the Member for Brecon and Radnorshire (Mr. Livsey) that the 90 per cent. of schools that responded to our survey by telling us their reality did not know what they were talking about?

The hon. Member for West Chelmsford (Mr. Burns) attacked the council tax benefits subsidy limitation, as did Conservative members of the Standing Committee on the

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Local Government Bill, but they forget that their 1992 legislation enabled the Government to introduce the scheme. Indeed, the Conservatives thought up the housing benefit subsidy clawback, which was opposed by Labour Members when in opposition, but now that they are in government they have done nothing to end it.

In her opening speech, the Minister queried why we had called this debate. We did so to call the Government to account. That is one of the main purposes of opposition. The debate has been called to demonstrate that this Government are as centralising as the previous Government, that they do not believe in local democracy and that the local government finance system does not help to make local authorities accountable to their electorate. It has also been called to persuade the Government to reject new Labour dogma and to get back in touch with their local activists and local people who want their locally elected representatives to decide on the priorities of their communities.

We Liberal Democrats are optimists. We had hoped that the Minister would listen to the debate and take note of it. We still hope that she will take the shackles off local government and reverse the years of Conservative centralisation. If she does not do so, she knows that her party will suffer in the ballot box in May and she also knows that, as the hon. Member for Southampton, Test (Dr. Whitehead) said, Liberal Democrats will continue to expose the difference between what the Government say and what they do.

6.52 pm

The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Alan Meale): Contrary to what the hon. Member for Taunton (Jackie Ballard) said, my right hon. Friend and I have listened carefully to the points raised in the debate. My colleagues and I sometimes wonder whether Opposition Members, in particular the Liberal Democrats, have taken any notice whatsoever of the facts.

First, on the 1999-2000 settlement for local government, I repeat what my right hon. Friend the Minister for Local Government and Housing said--this is the most generous settlement for years. I commend the speech by my hon. Friend the Member for Liverpool, Riverside (Mrs. Ellman), who used the example of Liverpool to illustrate that point.

I agree with Liberal Democrat Members who say that, to some extent, local services have been underfunded for years, but that was not the fault of this Government--it was due to 18 years of misrule by the previous Administration. Total standard spending for 1999-2000 is up by 5.5 per cent. That is more than twice the average increase under the previous Government. Last year, we put an extra £835 million into education, over and above the spending planned by the previous Government.

Until the hon. Member for Taunton referred to education, the whole debate had been lacking any mention of that important subject--perhaps one of her hon. Friends referred to it briefly. As right hon. and hon. Members know, the Government have made education a priority. We want to improve the education of all children in the country. Funding is one important strand in achieving that aim. We have increased local government funding for

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education. Every council with responsibility for education will receive at least 1.5 per cent. more grant than last year--most will receive much more.

Furthermore, we are working closely with local government, so that it can improve and deliver best value to local people. As my hon. Friend the Member for Milton Keynes, North-East (Mr. White) stressed so avidly, that must be a continuing process. He said that the discussions, the debate and the help must continue. We are working closely with local government because we realise that local authorities want best value to work and they know that they can deliver better services. We are providing the funding that they need to do just that.

However, it is not merely about funding, but about improvements to local services. Throwing money at services will not improve them--indeed, it can and often does encourage waste. As my right hon. Friend the Minister and my hon. Friend the Member for Milton Keynes, North-East said, the Government considered carefully how much the country could afford to spend on local services when we carried out our comprehensive spending review last year. We will provide real increases in funding in the next three years, as well as stability in council funding to help local authorities to plan their spending.

Therefore, we do not accept that local services are underfunded.

Mr. Tony Baldry (Banbury): When will counties such as Oxfordshire know whether they will be capped this year?

Mr. Meale: My right hon. Friend the Minister referred to that matter and said that we had only just received all the various calculations today. I can only advise the hon. Gentleman that it will be in due course. I know that he will not appreciate that answer, but it is the only one that he will get at the moment.

We do not accept that local services are underfunded and that there is any need for large increases in council tax. Furthermore, the figures that were published this morning bear that out. Indeed, the average increase is 6.8 per cent., which is down from last year. We gave local authorities the freedom to decide their budgets and we asked them to behave responsibly--most of them have done so. Most authorities will be considering how to use the increased funding to improve the services that they provide to local people--the people to whom they are accountable.

For those authorities that do not behave responsibly, we have said that we will take action. By that, I do not simply mean capping. We will certainly consider this year and in future whether we need to use our capping powers. However, contrary to what Opposition Members seem to think, we do not want to cap councils. We believe in local responsibility. Hon. Members must recognise that the Government also have a responsibility to the taxpayer. There is even more to it than that, as my right hon. Friend the Minster stated. Under best value, councils will have to review their performance and publish their plans to improve. Those plans will be audited and, where local authorities are not delivering best value, the Secretary of State will have the power to take the appropriate action. That combination of measures will ensure the best use of the additional resources that we are providing to deliver

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high-quality services. I was asked for a direct answer about building on the settlement to achieve future consensus. I can assure the House that that work will continue.

Opposition Members raised a number of queries. First, the hon. Member for West Chelmsford (Mr. Burns) said that the shire areas had done badly out of the settlement. We have treated all authorities fairly, whether urban or rural and in whatever part of the country. I cannot accept that we are biased against shire areas. In fact, they have had an overall increase in SSA of 4.9 per cent. compared with 4.8 per cent. in England as a whole. Shire counties did better than the average--they had a bigger than average increase in both SSA and Government grant. Their SSAs were increased by 5.2 per cent. Therefore, I cannot understand the hon. Gentleman's argument that they needed particularly large council tax increases. They have taken decisions locally and come up with an 8.3 per cent. average increase, which is well above the English average. I also find it hard to reconcile the good settlement for shire counties with the large increase in council tax there. I realise that they do not have any elections this year, but I am sure that the electorate will give their resounding response if the counties carry on in that way.

In response to the hon. Member for West Chelmsford, I should like to say that we promised to end crude and universal capping, and we have done so. Even the hon. Gentleman has admitted that we have not pre-announced capping limits. That is not arbitrary and retrospective. It has given councils an opportunity to consider carefully their local needs and resources when setting their budgets.

The hon. Member for Torbay (Mr. Sanders) illustrated all too clearly the Liberal Democrats spend-and-blame mentality. As he knows, most councils have disposed of surplus assets to the benefit of the people and of local taxpayers. Torbay council decided not to sell assets and has forgone the income that that would have generated in the belief that Ministers would increase grant distribution for the higher taxes that someone would pay in Torbay. We have not agreed to that at all.

The hon. Gentleman asked us to reconsider grant distribution. We made it clear from the outset that we do not intend to alter the distribution formula over the next three years, and that decision will stand. Although I am more than willing to accept the hon. Gentleman's invitation to visit Torbay and meet local representatives, I am not prepared to discuss that subject. He referred to changes in the standard spending assessments; those changes were justified by extensive research--some of which was tested and refined over three years--and will give fairer distribution. I hope that the hon. Gentleman will take that point into account.

The hon. Member for Hazel Grove (Mr. Stunell) implied that there would be cuts in policing and that the numbers of bobbies on the beat would be reduced. That is not the case. I have been given local information by the chief constable of Greater Manchester, who assures me that those numbers will not be cut.

As the Liberal Democrats took up so much time in the debate, I have gone slightly beyond the allotted time, and I formally close the debate.

Question put, That the original words stand part of the Question:--

The House divided: Ayes 40, Noes 309.

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