HC Deb 19 July 1935 vol 304 cc1434-56

Motion made, and Question proposed, That the Statement of the Estimated Income and Expenditure of Greenwich Hospital and of Travers' Foundation for the year 1935 be approved."—[Mr. Kenneth Lindsay.]

1.34 p.m.


It is a, little unfortunate that it is necessary to raise the matter which I propose now to raise, having regard to the fact that it is obviously inconvenient for hon. Members to be present to hear the discussion. It is, however, imperative that we should discuss this matter to-day. The subject is one which ought perhaps to have been discussed before. We cannot allow this discussion to be postponed any longer, and, therefore, I hope the House will extend their indulgence to me while I call their attention to some facts which should be placed before it. I absolve myself from the necessity of giving an historical review of the Greenwich Foundation and its accounts, except to say that the Royal Greenwich Hospital School has its roots right back in the reign of William III, and that it actually took the form of a school as we now know it in 1821. In 1870 the school was re-organised and divided into what are known as the nautical school, and the upper nautical school in which naval uniforms and naval regiments were introduced.

In connection with this foundation there is another foundation called the Boreman Foundation, also an old one, going back to 1672. In 1887 about 100 boys under the auspices of the Boreman Foundation were admitted as day boys to the upper nautical school for education. That arrangement has now ceased. It is not for me to inquire what other arrangements have now been made for the Boreman Foundation boys, that does not concern us to-day. It is more particularly a matter for the hon. Member for Greenwich (Sir G. Hume) and I know that he has already taken considerable interest in the matter. But I am wondering whether a certain preference which has now been exercised in the new arrangements with regard to the Boreham Foundation is justifiable as far as it is a preference to the Royal Navy, the Royal Marines and the Royal Air Force. However, that is not my business, and I will come to the particular point which concerns us to-day.

The House is invited to confirm a Resolution in the name of the Civil Lord of the Admiralty that the statement of estimated income and expenditure of Greenwich Hospital and the Travers Foundation be approved. It is obvious that a school founded in 1821 must in the course of time come up against the proposition of reorganisation and equipment to meet modern requirements. This problem, in due time after the war, confronted the Governors who were responsible for the foundation, and it was decided that a new school should be provided. Happily, their decision in this matter was facilitated by a very remarkable act of generosity on the part of a gentleman, Mr. Reade, and hon. Members will find a succinct summary of the details of Mr. Reade's munificence in the statement of the accounts of the school. Mr. Reade came to their aid by providing them with a very large tract of land, an estate in Suffolk of over 850 acres, a very substantial piece of charity. It was then decided that the school should be transferred to this estate. I must direct the attention of hon. Members at this point to the fact that the proposal to build a new school was naturally circumscribed by the amount of money available, and it was decided to build a school at a cost of not more than £700,000. Contracts were invited. All contractors who were asked to submit an estimate were specifically invited to give an assurance that the work could be kept within the figure of £700,000. As a matter of fact, the lowest tender I believe was over £1,000,000, and in the face of that those responsible naturally had to reconsider the situation.

Two courses were open to them, either to reduce the extent of their scheme and bring it within the limit of £700,000 or postpone some portion of the scheme. Unfortunately as I think, other people have different views, they took the course not of amending their scheme but of postponing the operation of the scheme. That was the position until 1928. Fortunately, the Admiralty were able to have recourse to their good fairy Mr. Reade. They were naturally reluctant to abandon their plans and so once again they had recourse to Mr. Reade, who saw the original design, and was so captivated by it that he assured them, he was in New Zealand at the time, that he would make provision in his will which would enable them to complete the school as originally designed. Mr. Reade died in 1929, and his will fulfilled the assurance which he had given to the Admiralty. But it is important to remember this significant fact, that though Mr. Reade fulfilled absolutely the promise he made, the money which he left to the authority was not to be available until the year 1940.

In the presence of that new situation those responsible had to determine what to do, and the decision was taken to proceed with the scheme as originally designed, in the knowledge, of course, that in 1940 this money would be available. But since the money was not available immediately and there was not enough money in the funds at the time, it was necessary for those responsible to determine how they could defray the intervening cost between that time and the year 1940. It was decided that the cost in the meantime should be defrayed from the Hospital funds. An alteration was made in the design for the chapel, and two extra houses for the masters were decided upon. The moment those responsible knew that the Reade money would be available in 1940 a decision was taken to proceed with the original design of the chapel, which had been postponed, and two extra houses for masters were to be built. The chapel was altered on the recommendation of the Fine Arts Commission, I think, to the tune of £11,000 additional expenditure.

That is briefly the story leading up to the decision to erect the school. Let the House note these points: First, the Admiralty when first confronted with the financial problem in relation to the original design merely chose to reduce the scheme. Secondly, when the Reade money was in prospect they reverted to the original design. Thirdly, they proceeded to execute that design at once. This is very important, and is a matter of vital public concern. It was obvious that there were details of the original design which could, without doing violence to Mr. Reade's bequest, be postponed until a more favourable opportunity arrived. Let me give two illustrations. A chapel and an infirmary were to be built. Surely it ought to have been apparent to those responsible for this expenditure of money that they could have postponed building the chapel until the Reade money was available in 1940. When I speak of the chapel hon. Members, of course, think of a very modest building, but I am speaking of nothing of the sort. I speak of a chapel which costs £57,787. There was put into the chapel an organ which cost £7,098.

I beg the House to pause for a moment upon those two facts. What was the immediate urgency for a chapel? I am not against providing a chapel—far from it. After all, if you have 700 or 800 boys it is proper that you should provide for their spiritual needs. But I do say that that provision could have been postponed and arrangements made in a practical way meanwhile for using the school hall. I believe I am right in saying that even now during the week the school hall is being used for prayers. An expenditure of between £60,000 and £70,000 in the aggregate was embarked upon. I have no sort of criticism to make of the chapel. It is a magnificent structure; I was almost saying that it is a dream of a place. I speak for myself when I say that in my judgment it is for too elaborate a place for a school of this sort. In any case what was the point of having an organ worth £8,000 installed, an organ which challenges comparison with any not only in England but probably in Europe?

My argument is not against either of those things. My argument is that since there was the need for the postponing of expenditure, having, regard to the fact that the money would not be available until 1940, here was a chance of postponement. Take the case of the infirmary. I am not sure that I would agree as to the necessity for providing this very fully equipped infirmary. Of course I know that 700 or 800 boys in a, school must necessarily have small ailments and meet with accidents from time to time, but this infirmary is the most up-to-date thing. It has its X-ray apparatus and all the rest of it, though there is not a resident doctor on the premises. If a very serious accident takes place and a doctor has to be summoned, it must be a private doctor in Ipswich, some miles away. He may be at home when called up, or he may not. It would be an infinitely cheaper method for a motor ambulance to take a patient to the Hospital at Ipswich, and if necessary there would be ample money available to give a retainer to the Ipswich Hospital in return for this exceptional expense. The school hospital, as I have said, is completely equipped; it is the last word in equipment. I have no criticism to make of the provision of such a hospital, but I very much question whether it ought to have been done at this stage, even if it had to be done later, having regard to the fact that the Reade money was not immediately available.

The House will see in a moment what the consequence of this expenditure was in other directions. I come now to some details of expenditure. I ask the House to look at the statement of accounts up to April, 1935, in which the Auditor-General makes his own reflections on the expenditure. "The total capital expenditure on the school on 31st March, 1934, was £999,507, and the latest estimate of the total cost is £1,077,000. The original estimate was that the total cost of the school would be less than £750,000. Now we are in the region of £1,100,000. Take some of the details. The building contract was formally completed on 31st October, 1933, and the chartered surveyors employed by the Admiralty report the final cost to be £832,299, compared with the original contract price of 2629,585. The extra cost, £202,714, is stated to be due mainly to: erection of a chapel, £57,787; erection of 24 additional houses, £40,000.

Can anyone suppose that reasonable people, thinking clearly of what they were doing, would shift 800 boys out to an estate, far away from any town, and would fail to anticipate the need for providing houses for the masters? In any case 24 additional houses had to be provided. The houses, alone, apart from costs of road-making, drainage and so forth cost £40,262. Roads and so-forth cost £38,000 and drainage, subways, mains etc., cost £29,000. What astonishes me is this. They had the contractor on the spot and had given him a contract, at a given figure. It became necessary to spend more money on additional work. I speak subject to correction, but I believe I am right in saying that the extras amounted to a sum approaching £200,000. Will it be believed that that extra work, involving that vast sum, was actually given to the contractor, on the ground that he was there on the spot? The story is one which challenges the attention of this House.

It is not a party matter. It is not a matter in regard to which I indict the Civil Lord of the Admiralty or his colleagues. I am sure the hon. Gentleman is just as uncomfortable as I am about it and I am sorry, seeing that he has just entered upon his office, that he should be called upon to answer on behalf of the Government on this matter. I should have been glad to have seen the First Lord of the Admiralty in his place. But, however that may be, it is not, as I say, a party question. It is a matter of vital public interest regardless of party and I feel sure that when the public read the details of this transaction they cannot but be exceedingly disquieted in regard to the administration of these funds which are, after all, of a charitable nature. Let me read a further passage from the report of the Auditor-General: Capital expenditure outside the building contract amounted at 31st March, 1934, to £223,507, and expenditure subsequently incurred or anticipated will bring the total to £244,700." This total includes in round figures £90,000 for fees to architects And other consultants; "£31,000 for general equipment (including £7,098 for the chapel organ), £13,000 for laying out grounds and playing fields, £31,000 for building and developing the Home Farm and £24,000 for estate charges. As it appeared that prior Admiralty approval had not been obtained for certain items of expenditure under the above heads I inquired as to the authority under which the payments had been made and was informed that covering approval had since been given. I observe, moreover, that certain of the expenditure was incurred without obtaining competitive tenders and that furniture and other equipment to the amount of £5,300 was purchased, in part without competition, from the firm referred to in the next paragraph.What does the next paragraph say? Here is a story of something which I think ought to incur the censure of every decent minded person: It was decided that on transfer of the school to Holbrook a new style of dressing the boys on week-days should be adopted and orders amounting to over £6,000 were placed without competition with a well-known Departmental Store for the initial supply of certain articles of the new outfit. It was subsequently found that miscalculations had been made in the sizes of articles required and further non-competitive orders amounting to some £4,300 were placed with the same firm. That is to say, that £6,000 was spent upon misfits, and when they discovered that the articles were misfits they went back to the same firm and ordered another £4,300 worth. That is not the fault of the firm, but the point is the apparent lack of any consideration in the matter. The Report goes on to say: The clothing thus purchased for the complement of 860 boys included 2,400 raincoats, 5,000 pairs of shorts, some 4,500 each cellular and woollen vests and drawers and 11,300 pairs of stockings. Lest I should be unjust to anybody let me say that, with some of my colleagues, I went to see this school a fortnight ago, and I am bound to say that I found the boys very well and neatly dressed. I have no complaint to make about the quality of the clothes which they were wearing during my visit, but I suggest that the details I have quoted indicate that this is a matter calling for some explanation. May I also mention that in his evidence before the Public Accounts Committee this year, the present director, who is not responsible for this business in any way, assured us that in his judgment this expenditure need not be nugatory or ineffective. It is fair to make that statement.

I turn now to the question of where this money comes from, and in dealing with this matter I am not going to use my own words but I am going to take some observations from the evidence of the witnesses who were examined on behalf of this Greenwich Foundation. I quote from the volume containing the first, second, and third Reports of the Committee on Public Accounts ordered by Parliament to be printed on 13th February. I take the evidence of Mr. Smallwood on page 395: Next year and until the Rea-de Estate comes in, we shall meet any unavoidable excess of expenditure over our income by reducing our contribution to the age pensions. On the assumption that the age pensions total amount remains the same, that will, of course, increase the proportion paid out of Navy Votes. The age pension, I believe, amount to a liability of about £260,000 a year out of which this year Greenwich Hospital is paying £70,000. I cannot say what we shall be able to pay next year, but if there is any variation that will reflect itself in what the Navy Votes pay."' What are we to deduce from that statement? It means that because of the failure to postpone expenditure which was necessary to complete the full design until the Reade money was available in 1940, in order to find some of the money there has been to a degree—I must not use an unkind word, but I am not sure that the word "raid" is an unjust one—a raid upon certain pension funds and a consequential extra burden upon the Navy Votes. I ask the House, as a matter of fairness, do they think it is a just thing that a school of this kind, desirable and splendid as it is, should be proceeding with this scheme in the knowledge that the money will not be available till 1940 and, by the very process of proceeding with it, mulcting the Navy Votes in an extra expenditure that might easily have been avoided? I do not know who is going to justify it, but I have not heard it justified to my satisfaction yet, and I do not think I shall hear it justified either.

Let me turn to the effect upon the boys. The total number of boys who went to be educated at this school in 1928–29 was 930. The total number of boys in the new school in 1933–34 was 789. A commitment of nearly £1,100,000 has been entered into, and up to date, instead of providing an equal number of places compared with those provided in 1928–29, we have now got there only 789 boys. I ought to add that it is the intention that the full complement of the school shall ultimately be 1,120. That can only be realised by erecting extra buildings. You will have to build two extra hostels, and if they are built, they must necessarily be buildings in keeping with the rest of the buildings, otherwise you will ruin the whole design, but if you build the two extra hostels comparable in design with the present buildings, I wonder what the expense is going to be. The cost will be, not £1,100,000, but it might easily be substantially more.

Again, I apologise for detaining the House, but this is a matter of first-class importance. I have seen the buildings, and I venture to say that there is not a more magnificent school, either public school or any other school, in any part of the country. It is a magnificent structure. After all, it ought to be. I could build a magnificent structure myself for £1,000,000. Give me the money, and I will design a place, or get someone to do it for me, and if I cannot do it myself, there is a pretty good margin out of this £1,100,000 with which to employ an architect to do it. It is a wonderful place. It is, in the first place, something in keeping with the intentions of that good, generous donor, Mr. Reade, and secondly—and I say this quite willingly—it indicates the generous intentions of those who designed this building in relation to the provision for the boys who would attend the school. But when I have said that, I must say one or two other things as well, and I doubt whether, having got your £1,100,000 to spend, you could still justify this expenditure.

There are going to the school every term or even more often a number of new boys. Those who have experience of teaching in schools will know that it is not at all a desirable thing to have a new stream of boys coming in two or three or more times in the year. I ought also to add in fairness that the new boys are very carefully provided for on the physical side. Some 300 of them go into a quarantine hostel, called Nelson House, in a school within a school, with proper medical attention, with their teeth, their eyes, and so on attended to, and I have no criticism to offer on that score; I should say also that on the average the boys go in at the age of 12. On the other hand they go out, not after a given period of time, but as the Navy requires them, and so you have not spent £1,100,000 in providing a school of a secondary character or of a public school character with a definite course or curriculum covering a period of time. Not only are they coming in irregularly, but they are going out irregularly, and the consequence is that, in my judgment, far too much money has been spent upon the school, having regard to the nature of the function which the school is to perform.

Let the House notice also on what scale this school is staffed. There is a Matron, a very excellent lady, receiving £350 to £450 a year, with furnished residence and an allowance of £107 for provisions and servants; there is an assistant matron, receiving £180 to £220 a year, with furnished residence and an allowance of £107 for provisions and servants; there is a house sister, receiving £110 to £135; there are 10 house sisters receiving a little less; there are two infirmary sisters and three staff nurses. All that is in this year's Estimates. Let us pause for a moment. Here is a staff of considerable size to deal with 800 boys. It is a colossal expenditure, and I will say more: it is an unjustifiable expenditure. Other arrangements might and should have been made for providing for the physical well-being of these boys without this vast scale of expenditure. They are all most excellent people, and I am not saying a word against any of them.

Let us look at the spiritual provision for these boys. There is a chaplain, with an unfurnished residence, who receives £928 a year. There is an asterisk against this item, and the footnote says that he is an officer who receives the full pay and allowances of his rank. The same applies to the assistant chaplain, also with an unfurnished residence, and his allowance is £470. In addition to that, there is a Methodist Minister for the Nonconformist boys, and there is also a Roman Catholic priest. That would be a pretty stiff proposition if there it stood. The chapel is a magnificent structure which you would not expect to find in any place except where there were almost unlimited riches. It is a perfect dream. Lovely, I admit; very attractive, I admit, but utterly indefensible, at least until the Reade money was available in 1940. There are also a superintendent with £800, a chief officer, an assistant chief officer, a headmaster, divisional masters, with unfurnished residences. There are 10 assistant masters, with allowances. There are 23 assistant masters in addition to these. There are a temporary teacher, a paymaster and an assistant paymaster. The people who embarked on this thing just acted as if they had carte blanche. I do not want to use unkind terms, but, if this kind of provision were made in other parts of the country by other people, the roof of this House would be off. I wonder what would have happened if it had been done in Poplar. The thing is intolerable.

What is the finding of our Public Accounts Committee in this matter? I challenge the House to say that we have exceeded in our judgment the merits of the case. We say: On reviewing the evidence before them, Your Committee have come to the conclusion that the conception and carrying out of the plans for the new school were marked by insufficient regard for the effect on the accommodation provided, and on the financial resources of Greenwich Hospital and its other obligations. I have taken a good deal of time discussing this matter, but it was necessary in the public interest that it should be ventilated. My colleagues and I on the Public Accounts Committee have discussed this matter two years running, and we have devoted one whole sitting to it. Speaking for myself—I do not commit my colleagues—I am not satisfied now that I know the whole of this story. I am not satisfied now that this House has access to all the information which it should possess. I might have asked my hon Friends here to put down a Motion for the appointment of a Select Committee. I have not done that, because I did not want to deal with this in a party way, but I do suggest to the Government, not as a Member of the Opposition, that a Select Committee would not be inappropriate in discussing this matter. There should be somebody who has plenty of time to devote to it; you cannot devote enough time to it in the Public Accounts Committee.

Lest I be deemed unfair, let me pay this tribute to the school. I met the officers of the school, and they treated me and my colleagues with the utmost courtesy, and I am glad to acknowledge it. I am an old teacher, and I flatter myself that I know a school when I see it, and I am bound to say from my observation of the school that it is equipped in a most excellent way, that it is staffed by people who desire to and who do perform to the utmost of their power all that is possible in the educational interests of the boys. I could criticise it, but the Board of Education's inspector has already done that. The manual instruction really requires attention. There is a tendency to regiment the boys a little too much, and a slight danger of their individuality being suppressed by the over-emphasis on routine. I do not think that there is quite enough opportunity for the boy to express himself in his own individual way. But these are small criticisms. On the whole, it is a magnificent place and a splendid school, and all there, I am quite sure, wish to do their best by the boys.

But that does not absolve us from saying that the financial arrangements in connection with this school leave a good deal to be desired. I will not put it higher than that; I could, but I will not. When public funds such as these are being administered on behalf of interested people, it is right and proper that the nation at large should feel absolute assurance that the very best economy is being practised in connection with the administration of the money. I hope that I have not spoken too strongly or unkindly, but I deem it my duty as a member of the Public Accounts Committee and of this House to call attention to what I am quite sure is something that requires ventilation.

2.23 p.m.


The hon. Member for Caerphilly (Mr. Morgan Jones) has given a very detailed and, I am quite certain, a very accurate account of the history of this school and, as far as we know it on the Public Accounts Committee, of the history of the construction of the school. I do not propose to go over the ground that he has already covered, but I would like to ask the Minister who is going to reply whether the following facts can be considered. It seems to me obvious that there has not been adequate supervision over the financial arrangements in connection with the construction of this school, and there are certain elements in the whole thing which probably of themselves would tend to make it not too easy and to make it quite possible that there should not be proper control. First of all, there is the benefactor who has given a large sum of money, and who no doubt had ideas in his own mind as to what, he wanted to achieve; and no doubt that to some extent was a guiding influence and rightly a guiding influence. But then there are other influences. There are the funds which Greenwich Hospital had available, but in addition they had obligations to these age pensions. The whole thing is mixed up.

It seems to me that if we want to get it properly tidied up in future it is highly desirable that the whole of these financial arrangements should be considered. Would it not be possible to come to some definite arrangements with Greenwich Hospital whereby a certain proportion of their funds remained available to them for school purposes and certain other charitable objects for which the funds were originally endowed, to separate entirely the age pensions by some agreement as to what proportion the hospital funds can afford to bear in future, and to transfer the balance for all time to the Navy Vote. I cannot see how the present arrangement can possibly continue to be satisfactory.

As regards the school, like the hon. Member for Caerphilly, I cannot help regretting that when this school was being put up sufficient attention was not paid to the fact that fewer boys would be accommodated than were originally accommodated in Greenwich. We have heard that there are certain tests which the boys have to pass and that lately there has not been a sufficiently large number passing the test for the room available. That is not very convincing, because one cannot help feeling that these tests should be to some extent in accordance with the room available, and that if the room was not available the tests should be more severe. We have also learned that the cost of the boys during the first year of the opening of the new school, which was considerably higher than before, is being reduced. I do not want to say a word against adequate economy, but I should be sorry to think that we have spent all the money which we have spent on making this beautiful building if the only economies were at the expense of the boys who go to the school afterwards.

2.28 p.m.


It occurred to the Members of the Public Accounts Committee when going through these accounts that reasonable precautions had not been taken with regard to the ultimate cost under the heading of capital. The original plan and, in fact, the appointment of the architect were dependent upon the school being built for a certain sum. When the estimates came in, we have been told, they were beyond the figure that was originally contemplated, and the school was started on amended plans and an amended figure. As time went on, however, more money was spent. There is one thing that strikes me as strange. It is that very little attention apparently has been given to maintenance costs. While it may be true that certain unforeseen things happen that necessitate extra capital expenditure, there does not seem to have been any real thought given to the ever-increasing running costs of the school. Therefore, there is not only the large capital sum that has been spent, but there is the enormous figure which it is going to cost to maintain it in an efficient manner. The whole outlook of those who have been responsible for the school seems to suggest that they have lost a sense of proportion. The number of pupils has been reduced, but the number of staff has been enormously increased, and the cost of running per boy per annum, taking all the expenses, has gone up considerably, although, it is true, it has fallen slightly since the first period of accounts.

I feel that this way of spending money ought to be looked into very closely. It appears that the money was spent first and that then the Treasury were consulted. I should have thought that the Treasury would have kept a closer hand upon those responsible and would not have waited until this huge sum of money had been spent before awakening to the fact that a greater sum had actually been spent than it was anticipated would be spent. It strikes me that someone is very much to blame for the extravagant and loose way in which money has been disbursed. I do not wish to emphasise the many points that one could emphasise in this connection, but I will give the House one example. In the ordering of the clothes that were wanted for the pupils of the school, there was not even sufficient attention given to the sizes of the articles that were wanted. A large number were ordered and for the time being they cannot be used. It is said that they will be ultimately used, and that was the mentality in which apparently the whole of this scheme was carried out. I would ask that the Admiralty should go into this matter very thoroughly, because I feel that when money is being spent, although a large amount of it has been given by a generous benefactor, there is no reason why it should not be spent to the best possible advantage. I am sure that the Treasury and the Admiralty must recognise that if they had to deal with this matter again greater precautions would be taken. I hope that the observations of the Public Accounts Committee will be taken very much to heart and that we shall see less of this extravagant way of spending money.

2.33 p.m.

The CIVIL LORD of the ADMIRALTY (Mr. Kenneth Lindsay)

I do not think that anyone will complain of the tone and temper with which the hon. Member for Caerphilly (Mr. Morgan Jones) has approached this problem. Indeed, it is only right and proper that the Public Accounts Committee should act in the way he represented as the watch-dog for the taxpayer. This is not, however, a very simple question. It is a very peculiar and interesting old charity with a long history, which it would be out of place to discuss now at any great length. It dates back to William and Mary in 1694, and it has done a great work during the intervening years. Our concern to-day is with Greenwich Hospital School—that is the first point—and the second is this quite peculiar arrangement with regard to age pensions. I confess that a few weeks ago I was not aware of the peculiar position of these age pensioners, and I doubt whether many of my hon. Friends are aware of them, and perhaps the House will bear with me if I explain them. The key point which it is well to remember, is that these old charities—some hon. Members may know the history of Christ's Hospital—have been for a good many years past moving their schools from the more crowded districts of London into the countryside, and I could quote figures from other schools to show that the cost in this case is not quite as excessive as the hon. Member for Caerphilly has suggested.

I think we are all agreed that the move to the country was essential and overdue. The criticism is directed towards the cost, the capital cost and the inevitable running costs, as the hon. Member for Harrow (Sir I. Salmon) has pointed out. This business has gone on during five Governments, and at least five of my predecessors, including the hon. Member who is now Under-Secretary of State for Home Affairs and the hon. Member for Aberdare (Mr. G. Hall) were in some way connected with it. The main job was done during the years 1925 to 1929. As is to be seen from the accounts, the total estimates this year are about £221,000 and the expenditure £216,000, leaving a balance of just under £5,000. There is a net saving on the previous year of £11,605. The essence of the whole question is, Was Holbrook School an extravagant venture? The hon. Member for Caerphilly says nobody is really prepared to defend the position, and I certainly shall not stand here and defend every individual item, but let us look at the whole facts. The actual cost of the school was £1,077,000. The running costs are £78,000 a year, which is £91 a head for the 860 boys who were there last year, a saving, again, on the previous year of over £6,000. The cost in the last year of Greenwich, in those more contracted quarters, was £61,000 for 821 boys, the figure for 1932, though previously there was a larger number of boys, or £74 per head. How is the difference of about £18,000 a year in running costs made up? It is accounted for by a variety of reasons. First, there was the introduction of the house system, familiar to all those who have been at some of the public and secondary schools, which necessitated house masters and, incidentally, house matrons.

There was also extra expenditure on what the hon. Member for Caerphilly calls the infirmary, but what I should call adequate medical and dental provision for the children. At Greenwich, for a thousand boys, there was a part-time dentist who was paid £75 a year. I think it will be agreed that that provision was inadequate. The expenditure in the first year in this direction—it is these small items that matter so much—amounted to something like ten times £75. The reason for that—and this occurs right the way through the story—is that a great many dental defects were found in the children when they were moved out, and attention had to be directed immediately to this problem. The expenditure now is half that figure, about £350. At Greenwich the children were given 2½ square meals a day, and now they are given three square meals a day.


Did the hon. Member say the dental expenditure was now half?


The figure of £750 come down to something like £350. Another item of expenditure is for grounds and playfields. There was 800 acres left by this generous benefactor, and some of the fields, which had previously been ordinary hayfields, could not provide a good wicket or be used immediately for football; naturally, they had to be adapted, and they have to be kept up, and that runs into an extra figure of about £1,500 a year. Then there is certain heating, lighting and sanitation work, which involves an additional annual cost, because the whole estate extends over some half mile and there is a considerable increase in general overheads. Most of these overheads—the house system, with the extra provision as to housemasters, medical and dental treatment, food and so on—are hardly the expenditure which I should have expected my hon. Friend the Member for Caerphilly to object to to any great extent.


And I did not.


I do not think any hon. Member opposite, or elsewhere, would take serious objection to boys being kept in proper health and having proper food and proper recreation. I do not think that any hon. Member with a knowledge of education will deny that in the case of a residential school in the countryside there is a need of importing and providing services which are at hand in a great urban community. These children when sick were sent to the Seamen's Hospital at Greenwich at a cost of 2s. a day. Now they are out in the countryside, and I do not think there is any hon. Member with any knowledge of the old-fashioned type of industrial school, with 60 to a class and in cramped conditions—nobody has been more eloquent in condemning such conditions than the hon. Member for Caerphilly—who will deny that it would have been criminal folly to reproduce those conditions in the new environment in the country. So far, I think, we are all more or less agreed. Now we come to the estimates and contracts, and the cuttings-out and additions; and in some cases, I am afraid, there were some definite under estimates. After a very careful examination of these figures and of the buildings on the spot I must make this confession—and perhaps I am now taking on the work of the Public Accounts Committee—that I cannot trace any superfluous or extravagant expenditure, but I think there is room for a very legitimate difference of opinion on individual items. I am prepared to take the chapel as an example. There was one figure mentioned by the hon. Member. I think that sometimes he dramatised the situation. He said: "£90,000 for fees." I am informed, and I have had it confirmed that that is the regular amount, eleven per cent., which is charged both by Government and outside firms. It is the total commission. Another expenditure which might have been foreseen was really the result of the very peculiar position at Holbrook. A sum of £25,000 had to be expended, and I think it was inevitable, on the sea wall, repairing the dilapidated condition of the farm buildings and some of the houses. We were not taking over in this case an up-to-date site, as was the case with Christ's Hospital, in Sussex. If hon. Members will look at the cost per head and compare it with similar types of schools which have moved out to the country, they will not find the figure excessive. I am referring both to the capital cost and the cost per head as compared with comparable schools which have moved from urban centres in London to the country.

I have nothing but praise for my predecessors. This was an extremely difficult job, and has taken 15 or 16 years. The importunity with which they pursued the problem of getting the school built is a credit to all parties, and has resulted in the erection of this very simple and, in essence, very beautiful school. We can never forget the patriotism which led Mr. Reade, a New Zealander, to hand over this estate of some 800 acres, and a legacy which by 1940 will have amounted to about £750,000. The capital to provide for this school was derived from three main sources. There was the surplus income from Greenwich Hospital for over 10 years, which amounted to £422,000; then there were three Prize Fund grants, which amounted to £231,000, and the re- maining capital realised from loans falling in, and so on, which amounted to £424,000. That is how this £1,000,000 has been realised. In 1940 or thereabouts, this bequest will become due, and the extra £750,000 will, if confidence remains the same in the country, bring in a reasonable income to the hospital.

I come to the thorny point of the age pensions. Age pensions were based, before 1919, on need. It means that the man of 55 gets 5d. a day and at 65 he gets 9d. a day if he is in receipt of the ordinary service pension. Up to 1919 the pensions were given on a needs basis and not on a basis of right. After the report of the Jerram Committee, the Army, Navy and Air Force received this additional 'age pension as a contractual right. It is no longer a selective benefit, but, if you like, may be regarded as an addition to wages. It is a change from a charitable award to a covenanted Naval emolument. There is all the difference in the world between them. Every soldier and every airman gets this emolument from the Army Vote and the Air Vote. In the case of the Navy, for a considerable number of years this old charity has supplemented them to the tune of something like £100,000 a year. The reason why this question of the school has become something more of a public matter than it might have been, is that it is a charity under an Act of Parliament. The accounts are presented each year, generally as a matter of form. In the last two years the pension contribution of over £100,000 has been reduced to £70,000, and the consequence is that there has been an extra charge of £30,000 or £40,000 on the Navy Vote.

The hon. Member for Gravesend (Mr. Albery), in a very helpful suggestion, asked whether is was not time that the whole matter was cleared up and made a little more definite. I entirely agree, and I think the hon. Member for Aberdare will also agree, that it is high time that the matter was cleared up. There is no particular reason why this added amount should be given each year. I would remind the House that there are three ways of amending the position. You can either give a fixed sum, in which ease it would be a lower figure; you can take it over entirely by the State—in other words, the Navy would bear the whole of the extra age pension of the Army and the Air Force—or you can say: "We will give you what we can afford." After looking through the previous history, there is no question, so far as I can see, of any specific amount, whether of £70,000 or £100,000, being definitely laid down in any arrangement between the Treasury and the Admiralty. That is all I have to say on the question of the age pension.

I have one or two remarks about the rest of the finances. The year 1929 was that in which Lord Snowden made the issue of £300,000,000 of war loan stock including a conversion from 5½ per cent. to 5 per cent. It was also the year of the death of Mr. Reade, and the year when payments began to fall in for the school. For several years before 1929 there had been a surplus Greenwich Hospital income of some £40,000 a year, and it was that accumulated surplus which made it possible to do these things. There would have been £7,000 a year surplus if it had not been for the extra expenditure and reduced interest. Since 1929, the rates of interest have fallen, and this has reduced the income of Greenwich Hospital by. £20,000 a year. That is a very considerable amount.


That figure was mentioned in the Public Accounts Committee and there was discussion about it. I ought to say that the reduction of £20,000 was not entirely accepted as being due to the conversion.


I have read the minutes very carefully, and the whole of that £20,000 is, I am still persuaded, due to reduced rates of interest. The expenditure of the school has gone up by something like £18,500 a year and other benefits by £8,000 a year. There is thus a total increased burden on the charity of something like £47,000, and at the same moment you have this remaining surplus of £7,000 which makes a total deficit of £40,000, which has been met by reducing the contribution for the age pensions from £110,000 or thereabouts to £70,000. I think hon. Members will agree that that was an unavoidable reduction. The age pension is no longer a charitable benefit from Greenwich Hospital. Greenwich Hospital contributes, to what is now a State contract, a sum which it can afford. That is why the contribution has decreased from over £100,000 to £70,000.

This school, as every Member who has spoken agrees, is a magnificent place. I have been interested for years in education, particularly of boys who go to this kind of school, and I have inspected it as carefully as I can. I agree with other hon. Members that it is a first-class institution from top to bottom. There are small points which we might criticise, such as the hon. Member for Caerphilly has criticised. A point struck me about the manual training centre. There are other points about the education which are not under discussion. The personnel of the Navy is not 150,000 but more like 100,000. Every year from this school some 200 boys go out, fit and well educated, the finest type that you can find, to join the Navy. I did not see the boys with raincoats on; I saw them with nothing on. I saw them going into the swimming-bath just when the weather was changing, and when they were brown, and I can assure the House that in the case of this charity the country is getting very good value for its money. Moreover, this is only the start; the school is in its very early days. Some hon. Members were present at the Naval Review, and saw the rockets and illuminations—the spectacular side; but I would like to remind the House that behind all this is the human factor of the personnel of the Navy. This money was not spent for any man's aggrandizement; it was spent on youth, and I do not think there could be any better expenditure. This is a charity, and a charity must be well administered. It is no good going back to the type of the old industrial school; you want to get away from that.

I hope that this work reflects some of the consideration of the Board of Admiralty for the lower deck. The first years of such a place are bound to be experimental, and I am quite persuaded—and in this I think I shall have the agreement of my immediate predecessor, who was just as keen on this project as any other of my predecessors—that rigorous economies can now be pursued without doing injury to the main edifice and the main character of the school. These economies have started, and personally I hope they will continue. At any rate, as long as I have anything to do with the administration I shall make it my business to see that they are continued, so that we may get maximum value for this expenditure. I believe that this school is going to leave a mark on education. I do not think that that is putting it too high. But, at the same time, I am not blind to the criticisms which the hon. Member for Harrow and the hon. Member for Gravesend have implied. All I can say is that, as long as this matter is under my care and administration, I shall see that two main lines are followed—the one that the school continues in this great pioneer educational adventure on which it has started, and the other that the costs are reduced and that the expenditure and running costs are rigorously examined year by year, so that we may get full value for the money which has been spent.

2.59 p.m.


I do not propose to pursue this matter at any length. I rise simply to say that I and my predecessors feel that we should have been there instead of the hon. Gentleman to conduct the defence against the charge which has been made in connection with this school. The House is indebted to the hon. Gentleman for the very frank statement which he has made. This is his first statement in his new office, and I must say that he has not had a very easy task in undertaking the defence against charges, which as he rightly said, have been made against four or five of his predecessors in the office which he now occupies. I should like to point out, without attempting to apportion blame to anyone, that I and my colleagues in the Government of 1929–31 came in in the middle of this question. The preliminary work, the planning and, indeed, the building of the school, had commenced before we came in, and the work was completed after we left. I do not say that in any way to excuse us from any responsibility which might rest upon us.

As the hon. Gentleman has rightly said, the school is a magnificent school. It has cost a considerable amount of money. I am not sure, but I think it was my colleagues on the Board of Admiralty at the time I was there who were really responsible for the construction of the chapel, or rather, for adding the work which was left out in 1927, and for going on with the completed scheme. We did that because we felt that it was in accordance with the bequest of the late Mr. Reade, who, as has been already said, was a very great benefactor of the Greenwich Hospital School. We felt that the completed scheme should be proceeded with. We took the very best advice as to the best methods of proceeding with the work, and, whatever responsibility might be laid at the door of any previous Board of Admiralty, we must take our responsibility in the matter. I am not going to enter into the detailed work of the last three or four years; the hon. Gentleman has dealt with it very fully. I simply conclude by saying, and I am requested by my hon. Friend to say, that, quite apart from anything he has said concerning the capital cost and the lavish expenditure on the building, he and others will watch with interest the economies to which the Civil Lord has referred, and will see that they are fully carried out. It is not our intention to divide the House on this matter, but simply to say that it will receive our attention as far as the future administration is concerned.

Resolved, That the Statement of the Estimated Income and Expenditure of Greenwich Hospital and of Travers' Foundation for the year 1935 be approved.

The remaining Orders were read, and postponed.

Whereupon Mr. SPEAKER adjourned the House, without Question put, pursuant to Standing Order No.2.

Adjourned at Two Minutes after Three o'Clock, until Monday next, 22nd July.