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Baroness Masham of Ilton: My Lords, before the noble Baroness sits down, perhaps she could give some assurance that sexually transmitted treatment services will remain confidential when GPs have total funding?

Baroness Blatch: My Lords, I have just taken a whispered aside from my noble friend who has responsibility for that. I understand that confidentiality will be honoured.

On Question, Motion agreed to.

Standard Spending Assessments: East Midlands

7.49 p.m.

Lord Varley rose to ask Her Majesty's Government whether they will take action to ensure that the standard spending assessment is applied consistently to local authorities in the East Midlands.

The noble Lord said: My Lords, I am particularly pleased to have the opportunity of initiating this short debate and delighted that the noble Lords, Lord Boardman and Lord Kimball, and the right reverend Prelate the Bishop of Lincoln are also taking part in it. All three have a long and deep commitment to the East Midlands and I am glad of their support this evening. I am also pleased that the noble Baroness, Lady Hamwee, will speak from the Liberal Democrat Benches and my noble friend Lord Williams of Elvel will speak from the Opposition Front Bench. I look forward to listening to the Minister and hope that at the end of what we say he will be able at least to give us some assurance that the adverse situation which we face in the East Midlands will soon be rectified.

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I raise the issue of the standard spending assessment not in any party political or partisan manner, but on the basis of what I and many others believe to be the unfair way in which it operates in relation to the East Midlands. I became interested in this subject after reading a report of a conference held in Derbyshire on 11th October which 120 representatives attended from the five counties which form the East Midlands: Derbyshire, Leicestershire, Lincolnshire, Northamptonshire and Nottinghamshire. The representatives at the conference came from business and commerce. The Confederation of British Industry was represented, as were the Institute of Directors, the Churches and the voluntary organisations. The Lord Lieutenants of Derbyshire and Nottinghamshire and the High Sheriff of Derbyshire also attended, as did the local politicians from all the political parties. At the end of the conference, the representatives, covering all shades of opinion, pledged unanimous support for a fairer grant settlement for the region.

As I understand it, the standard spending assessment was designed to allow councils sufficient resources to provide a standard level of service. But there are wide and increasing discrepancies between the standard spending assessments of different local authorities.

Since the system was introduced in 1990-91, the East Midlands has consistently lost out to other regions, particularly to the south of England. Compared with the English county average, the region has been deprived of (or some would say has lost) £94 million in this financial year alone. Since 1990-91, the figure is over £300 million. Counties in the south east and south west of England and, to a lesser extent, in East Anglia, have all received much larger increases in the standard spending assessment than the East Midlands. For example, local authorities in the south of England have had increases of over 40 per cent. compared with the East Midlands on 28 per cent. with, so far as I can see, no realistic justification for the difference.

The main problem with the standard spending assessment system is the area cost adjustment factor which over-compensates counties in the south east for supposedly higher employee costs. But that argument, or alleged argument, in favour of the difference is not valid. Local authority pay scales are nationally based and outside the London weighting area there is little, if any, difference in employee costs between the East Midlands and the counties in the south east. In fact, it could be argued that with the greater turnover of staff in the south east, with new employees starting at the bottom of grades, there is some evidence that average costs can be lower.

This point is clearly illustrated by a comparison of education standard spending assessments. The major cost in education is the employment of teachers. Teachers are employed on national salary scales. So why does Hertfordshire's educational SSA provide £240 per secondary school pupil more than the corresponding SSA in Derbyshire? The same point arises with just as much force in the other four East Midlands counties.

The standard spending assessments are important because they are used to determine the amount of government grant that councils receive, and also because

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they are used to control the total amount of spending on local services. Councils are allowed by the Government to spend only a certain percentage above their SSA before being capped. Being forced to spend up to their capping limit so soon after the introduction of the system gives a very good indication of the inadequacy of the assessment they receive. In stark contrast, only in this financial year have most of the south east counties come close to spending at their cap limit.

Despite the unfairness of the area cost adjustment being acknowledged by 27 out of 39 English counties, and consequently taken up by the Association of County Councils as a major issue, a government review of the system this year served only to exacerbate the problems. It brought about a 15 per cent. increase in the area cost adjustment, while the SSAs as a whole only increased by 2.7 per cent. As a result, even more resources are now being diverted towards the counties in the south of England, widening the gulf in resources between them and other parts of the country. There is about £1.5 billion at stake across the country as a whole.

If implemented, the changes to the area cost adjustment system, supported by the majority of the Association of County Councils--and I am sure that the Minister is aware of this--would provide a fairer deal for all; and for the East Midlands it would return more than £37 million to the region. The East Midlands' difficulties have been compounded by the Government's strict controls over the expenditure in the region. Over the past three years, the amount the Government have allowed the East Midlands counties to borrow to fund capital projects has declined by over 25 per cent. compared with the national total.

The East Midlands counties emphasise--and it goes for the vast majority of authorities throughout the country--that they are not necessarily seeking extra resources for local government as a whole, just a fairer distribution within the overall total. I know that it is always difficult to say, "We want more overall", but that is not what we are arguing for in the East Midlands at this stage. We do not think the distribution is fair. I looked at what the Secretary of State for the Environment said today in his Statement in another place and tried to wade through some of the weighty documents which are available. I do not think that he has addressed the matter at all.

So I ask the Minister in his reply to recognise the problems of the SSA system, particularly the area cost adjustment factor, and to act as quickly as possible to make amendments. If the Government stick to the present arrangements, I am afraid that it will mean further cuts to the essential services and to the infrastructure within the East Midlands. It will deprive areas such as the declining coalfield in the north east of Derbyshire--in fact, I do not think there is any longer a coalfield in north east Derbyshire. A reduced coalfield exists in Nottinghamshire, but certain parts of those two counties which I know well are utterly devastated. There are communities, former mining villages, with unemployment levels of 50 per cent. It is essential that we obtain help from the centre so that economic regeneration can take place.

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If the Government do nothing, that will perpetuate what I believe to be an injustice which is acknowledged across the political spectrum, in all elements of the community and all sections of the economy. So I urge the Government to take action now to rectify the unfairness in the system for next year at least and for future years. I believe that the East Midlands has an entirely legitimate case and I hope that the Minister will acknowledge that tonight when he replies to the debate.

7.59 p.m.

Lord Boardman: My Lords, I am grateful to the noble Lord, Lord Varley, for raising the matter, as it is one on which I share his concern. He said, quite rightly, that it was not with a matter of overall totals that we were concerned but with the distribution. I share that view and I suspect that the right reverend Prelate the Lord Bishop of Lincoln will raise similar problems relating to the area of Lincolnshire. I am sure that my noble friend Lord Kimball is likely to raise similar difficulties with regard to Leicestershire. My home area is Northamptonshire. It is to that area that I shall largely confine my remarks, although I am sure that they are equally applicable to the other parts of the East Midlands.

I recognise clearly the problems in the allocation of resources. The last time that I had any experience of this matter was a very long time ago when, as Chief Secretary to the Treasury, I had the problem of trying to agree what I believe was then the rate support grant, the various grants that were paid to local authorities. I must confess that I did not understand them; nor did I think most of my advisers understood them. I felt that the Secretary of State for the Environment had little idea of what they were all about. The matter was left until one man somewhere in the bowels of the Treasury who knew something about it appeared. So it was with some hope and confidence that today I went along to the other place to hear the Secretary of State for the Environment making his Statement on the expenditure for next year. I must say that I was disappointed and I came away rather more confused than I was when I went. But I was fortified by the knowledge that there was a large bundle of papers in the Printed Paper Office. I went along and collected them, and they added to my confusion. If I have to disappoint my noble friend, it will be to say that he will not be asked to reply to me on any question that arises from that large bundle of papers which I am sure he has studied carefully and with great experience.

My complaint is that Northamptonshire, like the other parts of the East Midlands, has a loading against it. Superficially, the standard spending assessment (SSA) for Northamptonshire looks as though it is probably about right for the average of the shire counties. But that is only a superficial figure. It ignores entirely the average percentage of population in the statutory education system. I do not want to quote a large number of figures; but I think it is important to give an example to make this point. In 1994-95, for children in education between the ages of five and 11, Northamptonshire is £59 per pupil worse off than the average of the other shire counties. It is £145 per annum worse off per pupil

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than England as a whole. Out of 39 shire counties, Northamptonshire stands 31st in the list of disadvantaged counties. Moving up the age scale, to age 11 to 16, the county is £84 per pupil per year worse off than the other shire counties; £194 worse off than the average for England; and 30th in the list of disadvantaged shire counties. When we come to the post-16 age group, it is £270 per pupil worse off than the average for the shire counties; and £454 worse off than the average for England; it is 37th in the list of 39 counties.

The position of Northamptonshire has deteriorated over the years since 1990-91. Over that five-year period, population percentage increases were some three times greater than in the neighbouring counties of Buckinghamshire, Bedfordshire and Oxfordshire. Yet the SSA has not increased nearly as much as it has in those counties. Again, to quote an example, in Northamptonshire, where the population has increased by 3.47 per cent. against Bedfordshire's 1.09 per cent., Northamptonshire's SSA increase has been only 22.5 per cent. against Bedfordshire's 30 per cent. Similar figures could be produced for other counties in that area south of the Northamptonshire borders. I am not just talking about education. It applies right across the social services.

I am told--and indeed the noble Lord, Lord Varley, made reference to this--that the main problem seems to be in the Area Cost Adjustment. The three counties that adjoin Northamptonshire--Bedfordshire, Buckingham-shire and Oxfordshire--all participate in this on the assumed basis that they have to bear increased cost of services. The noble Lord, Lord Varley, is absolutely right. This really is nonsense. It costs no more to employ a teacher in Buckingham than it does to employ one in Northamptonshire. If we compare Banbury in Oxfordshire and Brackley in Northamptonshire, for example, one has the area cost adjustment while the other does not. The difference made is very significant. The majority of costs that come into the calculation are for wages and salaries--yet for example the teachers have a national scale for all those who are outside the London outer weighting area. I ask that my noble friend, when he replies, will regard the unfairness of what is happening to those East Midland counties as a matter of very considerable concern. I am afraid that he will only be able to say that today's announcement may have made slight differences in some particulars but has not in any way affected the principle, and the complaint which I have --as does the noble Lord, Lord Varley; and other noble Lords may well make--as to the unfairness that operates against those counties that have a loading against them which is monstrously unfair. I hope that my noble friend will take some steps to ameliorate that situation.

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