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6.34 pm

Mr. Peter Brooke (Cities of London and Westminster): The hon. Member for North-East Derbyshire (Mr. Barnes) and I share an interest in Northern Ireland and we shall both be here at 7 o'clock. I do not propose to take him up on his remarks about Westminster, save to say that if he re-examines his speech he will see that he made a further initial mathematical error before he made the one that he spotted and corrected.

I shall be brief and unashamedly make a constituency point. The Government are well aware of the effect on Westminster of the settlement in 1998-99, which reduced its SSA by £26 million. I shall not revisit that issue but it is a backdrop to the problems I shall set out.

I want to allude to the special grant of £50 million from the Department for Education and Employment, the balance of its extra £64 million after £14 million had been bestowed on "Excellence in Cities" local education authorities. The Secretary of State for Education and Employment mentioned the distribution mechanism for that grant in his letter of 25 November to councils, which was copied to Members of Parliament. It said that officials would follow up in January to seek confirmation that the Government's additional funding had been carried through into relevant local authorities' education budgets.

In Westminster, I have seen the whole of the subsequent correspondence, culminating in the Secretary of State's letter of 31 January, summarising his conclusions, which was quoted by the hon. Member for Torbay (Mr. Sanders). To distil the correspondence, the Government are asking Westminster to spend 6 per cent. more on education because its proposed education standard spending assessment has risen by that amount.

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Westminster's overall grant increase is only 1.1 per cent., which already puts it behind the game, but in addition it was already spending 11 per cent. above its education SSA last year. It has conspicuously been supporting education, which is of course a Government priority, and is suffering from the squeeze to which my hon. Friend the Member for Christchurch (Mr. Chope) referred.

I infer from the correspondence that Westminster will receive no grant from the Department for Education and Employment and its £50 million because, confronted with the massive gap between a 1.1 per cent. increase in grant and a notional 6 per cent. rise, when it is already spending 11 per cent. above its SSA, it cannot guarantee that it will raise its education budget by a further 6 per cent. this year. I am a bear of very little brain, but it seems to me that the Government's proposal within such an equation could be a recipe for cutting rather than increasing the budget, as, if one concentrates on sticks rather than carrots, one offers no incentive to an authority whose heart is patently in the right place.

At this hour, I cannot bring in the other variables alluded to by the Association of London Government, not a Conservative-controlled body, in its briefing on the cost to some inner London boroughs, plus Brent--the hon. Member for Brent, North (Mr. Gardiner) made that case--of not raising the central support protection grant threshold from 1.5 per cent. to 2 per cent. Nor will I allude to the ALG briefing on the costs of homelessness, asylum seekers and unaccompanied children in London, although those children and the families of asylum seekers--because of the diverse languages--add to the educational challenge that Westminster has to face.

I am genuinely left wondering whether the Government really have an education priority. The ALG says that what are technically known as the passporting criteria for distributing the extra £50 million do not take account of local circumstances; but perhaps to a centralising Government, local circumstances are of no account.

6.37 pm

Mr. Neil Turner (Wigan): Coming so late into the debate, it is difficult to say the good things that one wants to say, because one has to concentrate on some of the critical points, so I hope that Ministers will accept that I broadly welcome the settlement that we have had and especially the fact that, for the third year, my local authority is able to increase both the quality and quantum of services in Wigan.

There is a problem with the £50 million for teachers' pay. I have no difficulty with the fact that the Government want to ensure that the full amount given for education is passported through to schools--that is perfectly reasonable--but unfortunately the formula takes into account the number of failing schools. A local authority with failing schools gets more than an authority such as mine, where the schools are very good. Failing schools should be dealt with by different methods. The additional money for the teachers' pay rise should be passported through to schools in proportion to the number of teachers.

I support what my hon. Friend the Member for North-East Derbyshire (Mr. Barnes) said about the area cost adjustment. I accept that some authorities have cost differentials, but the fact that some get twice as much as others for providing the same services cannot be right.

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The council tax benefit subsidy--the clawback--cannot be right. It is inequitable and unfair. It is inequitable because two authorities, with the same increase, will not have the same amount of money taken away from them, and it is unfair because the authority that has the most money taken away from it is the one with the greatest problems. That issue has to be addressed, and I hope that the Minister will do so.

6.40 pm

Mr. Robert Syms (Poole): Let me say to the hon. Member for Wigan (Mr. Turner) that some of my best speeches have been two or three minutes long as well, and I am glad that he managed to make his points before the end of the debate.

In the previous Parliament, debates on local government took on average five and a half hours, allowing Members on both sides of the House to express their real concerns about the grant settlement and what was happening in their locality. Not only do we, in this Parliament, have much shorter debates, Ministers no longer see delegations from local councils and Members of Parliament. My hon. Friend the Member for Mole Valley (Sir P. Beresford) said that when he was a Minister, he saw more than 90 delegations last time.

There are some very important issues to do with local government. Members of Parliament spend most of their weekends visiting local authority institutions and schools. They also spend a great deal of time in surgeries, seeing constituents with problems to do with local government. I think it a great pity that the Government have adopted an extremely arrogant view when it comes to seeing delegations from local authorities and Members of Parliament. Many Labour Members have said in this debate that they would have wished to go to the Department to make points on behalf of their authorities. It is a pity that they have not had the opportunity to do so.

In November, the Minister for Local Government and the Regions forecast that council tax bills would go up by 4.8 per cent if Whitehall kept to spending guidelines. The Times has already said that local government experts believe that the rise could be as high as 6 per cent., and many other people predict rises of 10 per cent. or more. Local authorities and town halls have many burdens on them--next year there will be an additional 24,000 school children, high public sector pay settlements and a rise in demand for long-term care for the elderly. Labour is proving to be no friend of local government. It promised to give councils more autonomy, but it is centralising power while cutting funding and increasing taxes for many councils.

Labour is trying to play down the significance of the settlement, as based on its three-year comprehensive spending review announced last year. But central Government funding is set to rise by less than the average spending commitments of local authorities. The result will be three years of higher council taxes, cuts in services and a continuation of the bias against shire counties.

Labour talks about spending more money on education, but it says one thing and does another. To fund the £1 billion that it costs to introduce performance-related pay for teachers, Labour is reducing the increase in education standard spending assessment by £150 million

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in 2000-01 and £280 million in 2001-02. Rather than giving more resources to teachers, Labour is simply recycling existing money--top slicing.

The Local Government Association has said that the 3.3 per cent. teachers' pay settlement announced on 1 February will mean fewer staff if the Government fail to give the local education authorities extra resources. There are warnings that while most LEAs have put aside up to 3 per cent. for pay rises, many will have to find the extra £110 million through council tax rises. As that well known Labour chairman of LGA's education executive, councillor Graham Lane, put it:

The key issue is that the Government are switching resources away from local authorities, particularly those in rural areas, their political allies in Labour-controlled metropolitan areas. Barnsley seems to be the exception. We had an eloquent plea for south Yorkshire and Barnsley from the hon. Member for Barnsley, Central (Mr. Illsley), who set out the problems that he faces with his local authority and the fact that the three-year settlement has set in stone some of the difficulties in funding his area.

Rural areas have already lost more than £500 million. That is in spite of the fact that they face specific problems, particularly over lack of transport. Labour has little interest in improving living standards for those in the countryside.

Before the election, Labour promised that it would end crude and universal capping. But this is just another example of the great Labour lie. Labour has replaced it with reserve powers to cap budgets. The Government now practice arbitrary and retrospective capping--they decide, after councils have set their budgets, whether to cap them. That is blurring accountability and transparency. It does local authority planning no good. By contrast, we have made it clear that the next Conservative Government will not cap councils. We are now the friends of local government.

Labour is centralising power, shifting resources from the block grant towards specific grants. Specific grants for education and personal social services have increased by more than 50 per cent., even before we take into account the effects of performance-related changes. Councils consequently have less discretion over how to spend resources, and that is weakening local democracy. Labour is cutting councils' environmental protection and cultural budgets. This year's increase of 1.9 per cent. represents a real cut of 0.6 per cent. That will hit district councils in particular, as that area represents a significant part of their overall budgets, and it will result in higher council taxes and service cuts.

The Labour party manifesto committed the Government to a fair distribution of grant. The settlement confirms that over the past three years, they have funnelled £425 million away from county councils and £180 million away from London boroughs to subsidise the wasteful antics of mostly Labour-controlled metropolitan authorities. This year, the SSAs for shire counties will be £160 million lower than they would have been if the Government had not changed the funding formula.

The Government are presenting the settlement as a great triumph. In reality, as we have heard in speech after speech, most hon. Members have real concerns about their local authorities. The Government claim to be increasing

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grant to every local authority, but that has been achieved only because of a large surplus in the business rate pool from last year, which the Government are obliged to transfer to local authorities. Without that money, many councils would face cuts in overall grant.

Council tax has already risen sharply under Labour. Last year's increase was 6.8 per cent., which came on top of a record 8.6 per cent. increase in 1998-99. Band D households are paying considerably more than they did when the Government came into office.

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