LOCAL GOVERNMENT (GENERAL GRANT) (Hansard, 16 December 1959)

§ The Parliamentary Secretary to the Ministry of Housing and Local Government (Sir Keith Joseph)
I beg to move, That the General Grant (Increase) Order, 1959, a copy of which was laid before this House on 3rd December, be approved. Under Section 1 of the Local Government Act, 1958, the Order must be accompanied by an explanatory report, and this has been published as House of Commons Paper No. 36 and laid at the same time as the Order.
The Local Government Act enables my right hon. Friend by way of an amending Order—made in the same way as a General Grant Order—to increase the annual aggregate amount of the general grants for the current grant period, if it appears to him that an unforeseen increase has taken place in the level of prices, costs or remuneration, and that its effect on the cost of providing the general grant services is so large that it ought not to fall entirely on local authorities.
1514 The first General Grant Order made last year prescribed the aggregate amounts of general grant for the years 1959–60 and 1960–61. The primary justification for an amending order now is the effect on the level of remuneration of the recently settled Burnham award to teachers, which had effect from 1st October and will add nearly £9 million to the costs of local authorities in 1959–60 and twice that amount in the following year.
The local authority associations concerned—the County Councils' Association and the Association of Municipal Corporations—and also the London County Council have been consulted. They sent to my right hon. Friend a list of items which in their view should be taken into account in an amending order, together with estimates of the increases in cost caused by each item. Agreement was readily reached with the associations on the items which were eligible for consideration within the terms of Section 2 (4) of the Act, and the local authorities' estimates of expenditure were accepted in all cases except one, in which it was clear to Departments that, because of the way in which the local authority figures had been estimated, they were too low.
The various weightings in the formulæ set out in the General Grant Order, 1958, for the distribution of general grant need revision in order to distribute the increased amounts. The Order contains amended weightings to ensure so far as possible that proportionately the same amounts are distributed through the basic and supplementary grants as before. I commend the Order to the House.

§ Mr. Michael Stewart (Fulham)
This is the first occasion on which the House has had a piece of business of this nature. We were told when the Local Government Act, which contains the block grant provision, was before the House, that one of the advantages of the block grant arrangement was that it would enable the central Government to know where they were in terms of expenditure, that it would fix the amount which they would grant to local authorities over a period of years and that that would give financial security to the central Government.
1515 It is interesting to find, therefore, that the very first General Grant Order introduced under the Local Government Act has not been in operation a year before it is found necessary to bring in an increase Order. It suggests that the degree of security given to the central Government is possibly not as great as was claimed by the advocates of block grant at the time the Local Government Act was passed.
Naturally, we on this side of the House will be the last to object to there being an increase Order. We may, however, reasonably raise the question of how far this increase Order is adequate to the situation. It meets certain inevitable increases which have been laid on local authorities as a result of wage and salary agreements. The Parliamentary Secretary did not attempt to claim that it did more than this. That means that certain criticisms made of the original General Grant Order a year ago are still valid and that the Government have not taken this opportunity to deal with those criticisms.
In the first place, the amount of the original General Grant Order was framed on the basis of estimates made by local authorities as to what their expenditure was likely to be during a two-year period, but they had to make those estimates in an atmosphere of Government restrictions on expenditure in the relevant fields. They had been bombarded shortly before they made those estimates with Government circulars cutting down capital expenditure in education and most of the other fields with which the block grant is concerned. They were first told by the Government, "As a result of Government policy, your expenditure will be severely limited." On that basis they were invited to make estimates of how much money they would need and would be able to spend in two years, and they were then provided with the appropriate general grant.
In this increase Order no attempt is made to remedy that situation. Are we to take it that the Government are of the opinion that for the remaining year for which this general grant is current the same restrictive circumstances in the development of education and the other services will prevail as prevailed in the spring and summer of 1958? That 1516 seems a reasonable deduction from the fact that no opportunity was taken in introducing this increase Order to do more than meet the quite inevitable increases brought about by rises in wages and salaries.
We might possibly develop this a little further, and here we are up against the fact which I mentioned at the outset, that this is an unprecedented piece of business in the House and the House has still to establish, by usage and by Rulings from the Chair, exactly what is and what is not in order in debates of this kind. I sought your guidance, Mr. Speaker, and you were kind enough to give me some guidance as to what might be in order in this debate.
I think I am right in saying that if I were to develop at length my view of what things ought to be done in the educational services and cannot be done unless the increase Order is made a good deal bigger than it is, I should, unfortunately, be transgressing the rules of order of the House. I regret that very much, because I could have said a great deal about it.
I have recently been reading the Crowther Report, as no doubt have other hon. Members, and its insistence on the need for an adequate supply of teachers and that this is something which we ought to set about at once. It is something which local authorities could to some extent set about at once in the greater recruitment of part-time teachers if they had the money available, but the original general grant limited what they could do in that respect and made no provision for any extra efforts. This increase Order does not remove any of the fetters in that direction which were put upon them by original Order.
I therefore wish merely to state the matter and to say that the fact that we on this side of the House shall not prolong the debate is not to be taken as committing us in any way to the view that the provision for education and the other services concerned is adequate or that the whole method of doing it by block grant rather than by percentage grant is desirable.
I want to refer to certain features of the Order which I had hoped the Parliamentary Secretary would explain a 1517 little more fully. For the year 1959–60 the aggregate amount of the grants payable to the authorities is increased by £9 million, which is about 2½ per cent. of the previous total. In general, therefore, for 1959–60 there is a 2½ per cent. increase. That is achieved by increasing the various sums of money referred to in the several parts of the very complicated formula which determines the general grant. I find, for instance, that the sum which relates to the number of children in schools in the area of the authority is increased from £0.058 to £0.060, an increase of about 3½ per cent. On that aspect of the formula, we have an increase larger than the whole increase of the grant. That is to be expected, because that is a part of the formula connected with the number of schoolchildren in the authority's area. The cause of the increase is largely bound up with teachers and, therefore, with numbers of schoolchildren.
When I look at the part of the formula concerned with the number of persons under 15 years of age in the population of an area, I find that that is to be increased from £0.52 to £0.53. That is an increase of rather less than 2 per cent., rather less than the average of the general increase of the grant. Why should that be so? The number of persons under the age of 15 is also a factor affecting especially educational expenditure. I am rather surprised, therefore, to find that that figure has not been more greatly increased.
I could pursue this by examining the extent to which each factor making up the total grant has been increased, but that would be wearisome and I do not propose to do it. The Order, as it now stands, is written in a peculiar language of its own. To understand it, one has to refer to its special dictionary, which is the Local Government Act, 1958. If we have future increase Orders of this kind, I hope that the report accompanying them will be a rather fuller document, more understandable without special and detailed knowledge, than the report we have had on this occasion.
We should have in the report attached to an increase Order a statement of how much the aggregate of the amount is being increased and a statement of how much of that money is attributable to each factor in the grant formula, 1518 that is to say, how the whole of the new weightings work out to produce the aggregate figure mentioned in the increase order. It might be useful if we also had a rather larger paper setting out the amount of grant payable to each authority under the increase order. We had that information available at the time the original General Grant Order was published. The little paper which we have now means that different sums of money to those originally planned will be paid to each authority affected by the Act. It would be useful to know what the sums of money are in the case of each authority.
I make the point for future reference that, if we are to have further of these interim Orders varying the amount of the grant, the report should be rather more full, that it should set out the full effect of each change in the various factors making up the grant formula and that we should know what will be the sums of money receivable under the altered grant Order by each of the authorities concerned.

§ The Minister of Housing and Local Government (Mr. Henry Brooke)
I am obliged for the brevity and clarity with which the hon. Member for Fulham (Mr. M. Stewart) has spoken. I appreciate that he still does not like the general grant. That is not a matter under debate today, though he is in a minority which is dwindling all the time.
The hon. Gentleman criticised this procedure, or at any rate the general structure which we are seeking to implement, on the ground that the Government must now withdraw the claim that they had made that the general grant system would enable the central Government—I think he meant primarily the Exchequer—to know where they stood financially. There is nothing in that argument.
Unquestionably, if we proceed by way of general grant rather than by the old specific percentage grants it is clearer throughout to the central Government what the cost of the grant to local government during each year will be. I, as the Minister in charge of the original Bill, made it crystal clear, both in Committee and in the House, that there might well be amending general grant Orders from time to time if there was some 1519 substantial change, such as a big new Burnham award, which would thrust on local authorities a burden which it would not be reasonable to ask them to carry without an additional grant aid from the Government.
The hon. Gentleman sought, next, to show that it was a reasonable deduction from the Order that educational provision in the coming fifteen months or so would be inadequate. He should have discovered by now that that old argument is being used by but few in the educational and local authority world. The general grant system, with additions to the annual grant which may have to be made if there is such a thing as a general Burnham award, are not found to be restrictive. When the outturn of this year is known, I have no doubt whatever that a high level of educational expenditure will be seen to have been incurred by local authorities both this year and, so far as one can forecast, in 1960–61. But time will show that. I take the hon. Gentleman's point, but I do not think that it is a good one. I certainly rebut his charge that the general grant system imposes fetters upon education authorities.
I will look carefully into the hon. Gentleman's detailed points about improving the presentation. I am obliged for suggestions from him or from any other quarter about means by which we can improve our presentation. One must try to steer a middle course. If the explanatory White Paper were very brief it would be inadequate. If it went into enormous detail it might make this difficult subject still more incomprehensible, because one can get drowned in figures.
These changes in weightings are designed, so far as possible, to secure 1520 for the individual local authority the same percentage increase throughout. If it seems, as the hon. Gentleman said, that in certain cases the increase is X per cent. and in another case Y per cent., I assure him that those are not arbitrary figures. They have been carefully worked out to secure the result I have described. All this has been presented to the local authority associations and the London County Council, as the Act directs, and those bodies have been satisfied with the figures suggested.
That brings me to the hon. Gentleman's final point. He asked whether, when bringing in an increase Order such as this, we could set out, as we did with the original General Grant Order, the effect on the individual authority. Frankly, we did not feel that was necessary on this occasion, because the whole purpose of the distribution was to secure substantially the same percentage increase for all local authorities, and we had in mind the difficulty which I mentioned, that one could make these things more difficult rather than more translucent by adding to the material which one published.
I promise the hon. Gentleman that I will have regard to his speech. I will see whether, on future occasions, we can make the presentation any clearer. I am glad to note, from the fact that no other right hon. or hon. Member has risen to speak, that it appears that the way in which we have presented it on this occasion has given reasonable satisfaction to the House.