Local Government Finance (Hansard, 13 November 1974)

§ 12. Mr. Hurd
asked the Secretary of State for the Environment what advice he is giving to local authorities on the pre 396 paration of their budgets for 1975–76 pending the conclusion of his negotiations with local authority organisations on the level of rate support grant for that year.

§ Mr. Crosland
In my speech last July to the Association of County Councils I warned local authorities that they should do any preliminary budgeting on the basis that there could be little, if any, real growth in their expenditure for 1975–76.

§ Mr. Hurd
Does the right hon. Gentleman agree that because of the amount of growth built in to existing programmes the only way that most local authorities can comply with the Government's policies on public expenditure is to make extensive cuts, including cuts in education? Would it not be more honourable for the Government to set out the position plainly, to accept their responsibility and not to muff the point and to hedge, as the Chancellor of the Exchequer did yesterday, on the practical effects of the Government's policies?

§ Mr. Crosland
I read an excellent book by the hon. Member for Mid-Oxon (Mr. Hurd) when I was on holiday in August. It is sad that the standard of his interventions in the House is so far below the standard of his writing. The trouble is that his writings are a bit longer. I do not know what he means by talking about hedging. I issued an extremely severe warning to the Association of County Councils and I have quoted a brief passage from it. When we conclude the rate support grant settlement with the association I shall make plain to the local government world what is involved in their expenditure next year. There will be no hedging of any kind.

§ Mr. Cant
Does my right hon. Friend accept that it is extremely difficult for local authorities to go from one phase in which over a long period, rightly or wrongly, they have been spending at a rate of increase of 7 per cent. to 8 per cent. to a phase in which they are subjected to the traumatic experience of having their current expenditure hoisted by threshold payments and a number of other considerations, only to be told by my right hon. Friend and the Chancellor of the Exchequer that local government expenditure is in for a no-growth period? I hope that the Government, even the 397 Government of my party, will be a little more realistic in their consideration of the grave problems that confront those responsible for local government finance.

§ Mr. Crosland
I accept that all those difficulties exist. In the rate support grant negotiations I think and hope that we, the Government representatives, are acutely conscious of them.

§ Mr. Arthur Jones
Does the right hon. Gentleman accept that it is a matter not only of percentage reductions but of curtailment of services? I think that the right hon. Gentleman is avoiding the point if he is thinking only in percentage terms.

§ Mr. Crosland
No. I hope that the settlement will not be such as to involve a curtailment of services. However, I am afraid that it will be such as to prevent growth obtaining next year at anything like the rate of growth in recent years.

§ Mr. Tomlinson
Does my right hon. Friend accept that my constituents, although grateful for the relief they were given in the mini-Budget, cannot endure the kind of increases that are being expected of them, and that local authorities cannot for ever continue to have an expanding programme in the present economic climate entirely cushioned by the central Government?

§ Mr. Crosland
I entirely agree.