HC Deb 12 May 1903 vol 122 cc468-74

[SECOND READING.]

THE PRESIDENT OF THE LOCAL GOVERNMENT BOARD (Mr. WALTER LONG,) Bristol, S.

said that in moving the Second Reading of this Bill it would only be necessary for him to say a few words to tell the House what the object of the measure was. Under the Education Act, 1902, the local authorities were called upon to take over the management of schools—either Board schools or voluntary schools. They found that owing to the variations in the educational financial year, and also to the fact that in the case of voluntary schools a proportion of the money now payable would be due to the managers, and not to the new authorities, the local authorities would in some cases at one period or another in the first year, possibly also in the second, find a deficiency between the receipts and the necessary expenditure. The Government had endeavoured to meet this difficulty by advancing sums payable to the local authority both through the Education Department and the Local Government Board, and paying them earlier than they would otherwise be paid. But still there were cases where the local authority would possibly find themselves in a difficulty. If they were unable to borrow, it was quite obvious that they must obtain the money by an additional rate in the present year, which would be undoubtedly a hardship on the ratepayers. Therefore, the Government proposed that the local authorities should be given powers, additional to the powers they already enjoyed, to enable them to borrow, and spread the loan over a period of years. The conditions of the loan and the period over which it would run would depend on the sanction and approval of the Local Government Board. The loan itself could only be obtained with the approval of the Department, and the object of the Government was, while enforcing the principles with regard to loans which they had hitherto maintained, to do all they could to spread the payment over a sufficient period of years to prevent the burden being too heavy. He begged to move.

MR. ALFRED HUTTON (Yorkshire, W.R., Morley)

said he supposed the Bill would not prevent the local authority levying a rate, if they close, instead of borrowing.

MR. WALTER LONG

Certainly.

MR. ALFRED HUTTON

said that in certain cases there might be balances existing and yet it might be necessary for the local authorities to raise a loan or a rate in order to carry out their responsibilities. It was very well known that a great many schools, mostly of a voluntary character, had now or would have at the end of the school year, considerable balances accruing to them out of the annual grant and the special aid grant. He thought it was rather an extraordinary thing that the local authorities taking over the responsibility for these schools, should either have to levy a rate to carry on the work of the schools or ask for powers to raise a loan, while actually there were balances which would not be handed over to the local authorities remaining in the hands of the treasurers of schools. They ought to have a promise from the right hon. Gentleman that those balances should be handed over to the local authorities, in order that they might be credited to the funds for carrying on the schools. It was an anomalous proposition that the local authorities should have to borrow, while balances were held by the managers of the schools to be used for purposes other than the carrying on of the schools.

MR. WALTER LONG

said that the hon. Gentleman did not altogether apprehend what the case was. He referred to certain schools where he believed there would be balances. He himself did not know whether such cases actually existed, but he would point out that there was an easy way to avoid that state of things; and that was by the authorities responsible for these schools taking care that during the time at their disposal the money was expended. The question was settled not by any action on the part of the Government, but by the section of the Act of last year which governed the matter, viz., paragraph twelve of the second Schedule. Under that the money payable was apportioned as between the then existing education authority in the case of voluntary schools and the new education authority coming into existence on the appointed day. He did not see any reason for the apprehensions entertained by the hon. Member. They had had numerous representations on behalf of the local authorities from all parts of the country and all pointed to deficits. He had heard nothing of balances up to the present.

MR. HENRY HOBHOUSE (Somersetshire, E.)

, who was almost inaudible in the gallery, was understood to say that the provisions relating to the disposal of the first Parliamentary grants under the new system were not fully discussed last year in the House, or possibly a better arrangement might have been made. The result to the counties had been that in some it had resulted in a large deficit which had to be made up out of the rates. In his county it had necessitated a rate of 4d. in the £, and it was for that reason that the County Councils Association and other bodies had approached the Education Department of the Local Government Board, and afterwards the Chancellor of the Exchequer, to get some provision made whereby the heavy weight on the ratepayers might be lightened. Their proposal was that during the first year the Government, and not the ratepayers, should be called upon to provide the means for starting the new education machinery. The Government had given some grants under this Bill, but not any particular grant for the purposes of starting education, and they thought the Government should have started the new system by greasing the machinery in the first instance. Such a policy would have given the Act a much better start in most counties, and have given the local authorities a great deal of relief. What the local authorities required was working capital to start the work, but the Government having arrived at a different conclusion they must accept with what gratitude they could the introduction of this Bill, which would enable them to spread the deficit over a number of years. He would ask, if he might be allowed, whether four years would be allowed for the 4d. rate to which he had alluded. If some such period was not allowed the burden would be too heavy for the County Council to support.

MR. WALTER LONG

said, although he would not commit himself to any definite statement which might be held to govern every case, his idea was that in a case where the rate amounted to 4d. the period given should be four years in order that the amount every year should be as small as possible. That was his general idea.

MR. BRIGG (Yorkshire, W.R., Keighley)

said the concession now set forth with regard to this loan being made to the County Councils was most desirable, though it would have been much more satisfactory if the money could have been found at once for setting this Act into operation. Having no money to begin with would result in a certain amount of borrowing, for which interest would have to be paid; but some of the County Councils declined to borrow money at all, and until they obtained sufficient funds from other sources no start would be made at all. If the Government could have seen their way to have advanced the money, as they had done under other circumstances, it would have been far better. He trusted that the extension of time for repayment would be made as long as possible.

MR. BRYCE (Aberdeen, S.)

said that this was a serious difficulty in which a good many of the local authorities found themselves, and the work was retarded in consequence. In places where new schools ought to be provided owing to managers giving up the old schools, the local authorities found great difficulty in providing requisite accommodation for the schools, and he did not see how they were to avoid borrowing to enable the educational work to be carried on. These troubles and dangers were all pointed out when the House was discussing the Bill last year, and it was expected that an opportunity would be given on the schedules to deal with temporary provisions and to endeavour to work out a scheme whereby, in the transition from the old system to the new, provision might be made to prevent the difficulties which had now arisen. Owing to the guillotine they had not been allowed to do that, and the result was, that there was this amending Bill to get the local authorities out of the difficulties they ought never to have been placed in. These difficulties ought to have been foreseen, and they might have been avoided if proper consideration had been given to the Bill. This was one result of the method that had been adopted, and as time went on they would see other results which it would also be necessary to deal with by an amending Bill, owing to their not having done what they ought to have done last autumn.

MR. LAMBERT (Devonshire, South Molton)

said the Government were now finding out what an expensive Act this was. The provisions of this Bill, he assumed, would not apply to any loans for building purposes.

MR. WALTER LONG

pointed out that the local authorities had already power under the Act of 1870 to raise loans for building. The necessity for this Bill was that the law officers of the Crown advised that purposes for which power was given to raise loans under the Act of 1870 did not cover this purpose.

MR. LAMBERT

said that being so covered that point. He would like to emphasise the fact that there were considerable balances in the hands of the diocesan associations which were not grants earned by them, but grants made to them in support of the voluntary schools. A large amount of these voluntary grants were now going to be used for the upkeep of the voluntary schools, in order to relieve the managers from applying for any further voluntary subscriptions for the next few years. That, he submitted, was not quite fair. The proper method for the Government to have adopted would have been to have taken the unexpired balances now in the hands of the diocesan associations for this purpose. But it appeared to him that the Government had so manipulated it that the voluntary subscribers would not subscribe for the next few years, and that the voluntary schools would be kept up by means of these balances. He did not oppose the Bill, which was the natural result of the hasty legislation of last year. Had they been permitted to discuss it without the guillotine being applied these difficulties would have been pointed out, and there would have been no necessity for this Bill. He would only suggest to the right hon. Gentleman that some provision should be incorporated in it by which these unexpired balances might be brought in to aid the local authorities, and be devoted to education, and not to the relief of voluntary subscribers.

SIR JOHN GORST (Cambridge University)

said that this difficulty had existed for many years, and it was entirely a financial one. In the case both of Board and voluntary schools, three-fourths of the cost was paid out of the National Exchequer. That money, however, was not paid in advance, or even at the end of the year; some little time always elapsed before the schools received the money. Consequently the School Boards and the voluntary subscribers in the past had had to finance their schools themselves and provide the money necessary for carrying on the schools for a whole year, before they received the money with which the Government assisted them. That was the case with the whole of the money except the fee grant, which was paid quarterly. It had been a great grievance for many years, and the only way in which it could have been redressed was by the Chancellor of the Exchequer paying the whole grant in quarterly instalments, to do which would have required in the first year an extra sum of over £2,000,000, an amount which no Chancellor of the Exchequer in recent times had been in a position to provide for such a purpose. The new authorities were about to start under the same conditions, and it was to supply the working capital required, until they received the Government grant, that this Bill was needed. He would have, been glad if the Government had been able to find the working capital themselves, but as they could not, or would not, it was necessary that the new local authorities should be empowered to obtain it by borrowing for a short time. The matter had really nothing to do with the balances in the hands of managers of voluntary schools or of diocese associations, because those balances were applicable to years gone by. There were no balances applicable to future expenditure, and, therefore, these borrowing powers were necessary.

MR. GEORGE WHITE (Norfolk, N.W.)

said the difficulty they were in was that they did not see why the balance in the hands of the correspondents of voluntary schools and of the diocesan secretaries should not be handed over to the local authorities in the same way as the School Board balances would be. He regarded both as public funds granted for the purpose of education, and he believed that a great many others held the view that these balances ought to go to the new local authorities. In the diocese of Norwich the Secretary of the Diocesan School Association had calculated that there would be £35,000 in the hands of correspondents of voluntary schools on the appointed day when the schools were to be passed over to the new educational authority, and he was endeavouring to get those balances pooled, for the purpose of assisting denominational managers to maintain the fabric of their schools. They had already passed several regulations by which denominational managers were relieved of practically the whole of their responsibilities, but now, in addition, they were to have these large balances in the hands of correspondents who had, until now, pleaded that they were in great poverty. They, further, had reason to know that the balances were being increased by starving the schools in the matter of the necessary appliances for educational work. By these encroachments the local authorities, on taking over the schools, would have to meet a much larger expenditure than the normal amount for the purpose of supplying teaching appliances. While he could not oppose the Bill, which was necessary in the difficult position in which they were placed, he must say that it seemed a great injustice that the whole of this money for public funds should be diverted to denominational purposes when the local authorities were in need of money with which to commence the work of the schools.

Bill read a second time and committed for to-morrow.