HC Deb 16 December 1980 vol 996 cc145-56
The Secretary of State for the Environment (Mr. Michael Heseltine)

Local government is responsible for about one-quarter of public expenditure and employs more than 2.5 million people. Its financial decisions are an integral part of the national economy. The rate support grant settlement must reflect this.

The settlement is the first for England under the provisions of the Local Government, Planning and Land (No. 2) Act 1980 and I therefore thought it right, exceptionally, to make a statement to the House. Documents relevant to my statement to the Local Government Consultative Council are being placed in the Vote Office. I am also laying before the House this afternoon copies of the RSG reports and orders, which will be debated in the House in the normal way. My right hon. Friends will make separate statements about Wales today and about Scotland tomorrow.

As part of our policy on public expenditure, the volume of local government current expenditure for RSG purposes will be 3.1 per cent. below the figure for 1980–81. The cash limit on grant will provide for increases of 6 per cent. in earnings from annual pay settlements in this round after 1 November 1980 and provisionally for the next pay round beginning on 1 August 1980. It contains an allowance for price increases of an average of 11 per cent. between 1980–81 and 1981–82. The grant percentage for England and Wales will be reduced from 61 per cent. to 60 per cent. At 61 per cent., the effective grant for England is 60.1 per cent. The effective grant for England in 1981–82 will be 59.1 per cent.

The aggregate Exchequer grant for England will be £10,895 million at estimated outturn prices. Specific grants are estimated at £1,447 million. Transport supplementary grant will be £416.5 million. A copy of my right hon. Friend's statement to the consultative council is being placed in the Library.

National parks supplementary grant will be £4.5 million. The remaining amount available for the rate support grant is, therefore, £9,027 million.

There are two new features of the grant distribution this year. First, the new system is based on a new method of assessing the needs of authorities which relies on service-by-service appraisal of the factors which affect local authority expenditure. The system is fair, rational and open to scrutiny. The change leads to some significant alterations to the entitlements of some local authorities in the first year.

The second feature is the introduction of block grant, which will replace the old system, with its inbuilt bias towards authorities that increase their spending at the expense of more prudent authorities. These changes are both moderated by safety nets. Authorities retain exactly the same freedom to reach their own expenditure decisions as at present, but block grant ensures that a greater weight of the consequences of high spending is borne locally and not at the expense of other authorities. For the first time, there is a fair and consistent incentive not to overspend. In particular, the recent drift of grant to London at the expense of the provinces is reversed.

The House will remember that pending the introduction of the new system next year I took transitional powers, for this year only, to limit Government support to high spending authorities. Of the original 23 authorities liable to penalty, 14 have qualified under the waivers which I set out in my statement of 18 September. There remain only nine authorities liable to abatement of their grant. The House will shortly be invited to approve the appropriate order. Authorities have only a limited time, therefore, to make the necessary reductions in their expenditure if they are to qualify for exemption and thus avoid imposing this unnecessary extra burden on their ratepayers.

I have repeatedly stressed the essential part that local authority manpower levels have to play in meeting our public expenditure targets. The joint manpower watch figures for the year ending September are published today and announced to the House in a written answer to my hon. Friend the Member for Reading, North (Mr. Durant). These figures show a seasonally adjusted reduction over the last quarter of 15,446, making a total for the year of 36,500 on a full-time basis.

Local government manpower is now back to its lowest level since the manpower watch began in 1975. But, although the annual and quarterly reductions are the highest ever achieved, the fall is still only 2 per cent. from the all-time record level when we came to power. I reaffirm today that the volume of current expenditure, particularly manpower levels, must continue to drop.

I turn now to the question of rates. The local authority current expenditure volume target is 5.6 per cent. below the spending in 1978–79. If local authorities plan for that target and budget in line with the cash limit assumptions, increases for ratepayers should be contained within reasonable levels and be much lower than this year. I shall be talking to the associations shortly about action to secure that the expenditure targets are met.

The announcement that I have made this afternoon represents a significant contribution to the Government's public expenditure policies. It is a major challenge to distribute £9 billion to 413 authorities administering over 20 major national services. The new system that I have announced today achieves this through a system that is fairer, more visible and more comprehensible. This is particularly important when the lower volume of expenditure and the reduction in grant percentage will in any case present local government next year with a major challenge.

Mr. David Alton (Liverpool, Edge Hill)

On a point of order, Mr. Speaker. Is it in order for the Secretary of State for the Environment to make a statement in the House this afternoon before undertaking the consultation procedures with local government which are laid down in section 5 of the Local Government, Planning and Land (No. 2) Act 1980?

Mr. Speaker

Order. I can save the hon. Gentleman going further. The statement is in order. I called the Secretary of State to make it, and he has made it.

Mr. Gerald Kaufman (Manchester, Ardwick)

This is a black day for local government. [HON. MEMBERS: "Hear, hear."] The Secretary of State has made a cover-up statement, which will leave local authorities, ratepayers and borough treasurers in the dark about their rates for next year. No ratepayer, council or borough treasurer has any idea of the effect that this will have on the rates for next year. If the Secretary of State denies that, will he give examples of rates for next year as a result of his statement?

The Secretary of State said in his statement that local authorities retain exactly the same freedom to reach their own expenditure decisions as at present. Is he aware that grant is no longer assessed on the basis of past spending patterns but on arbitrary spending patterns for local authorities laid down by the Secretary of State, regardless of real life in the areas that are affected? The Secretary of State has constructed a theoretical model to which he expects local authorities to conform, regardless of their obligations and problems. He assumes that every child is white, healthy, well-housed and living with both parents and that both parents are in work. He assumes that pay and inflation will fit into his pattern, and so much the worse for local authorities if they do not.

Will the Secretary of State, who has built into his grant announcement a 6 per cent. pay increase and an 11 per cent. inflation forecast, compensate local authorities if the 6 per cent. pay increase and the 11 per cent. inflation forecast are not met? Is he aware that his statement attacks all cities that are suffering from deprivation? He said in his statement that the recent drift of grant to London will be reversed. Is he aware that by doing that he is striking at the heart of inner London, whose problems are worse than elsewhere and will now be made even worse? He has appointed himself as commissar of local government. His edict for local government is higher rates than ever and fewer jobs and worse services than ever. His statement today is a recipe for social injustice and urban decay.

Mr. Heseltine

I shall try to answer some of the questions put by the right hon. Member for Manchester, Ardwick (Mr. Kaufman). He asked me to give examples of the rates that will be set by individual authorities. As I have constantly pointed out to him, local authorities have to decide their individual expenditure levels. Until they have fixed those levels, I cannot know what rate levels they will fix to meet them. However, I can tell the House that from the documents that are published today and are available to local authorities throughout the country, they will be able to calculate what they will receive in grant, depending on the level of expenditure and the rates that they decide to achieve. They have a certainty as far as we in the Government are concerned. As a result of the documents that have been published today, they can make their calculations.

The second charge that the right hon. Gentleman made was that somehow or other the system and the concepts with which we are dealing in respect of the new arrangements are decided behind closed doors. When he has a chance to go to the Vote Office and to the Library, he will find there a detailed and comprehensive explanation of how we have achieved a service-by-service breakdown of the allocation of £9 billion in taxpayers' support. That contrasts markedly with the practice of the previous Government in reaching decisions behind closed doors, with an arbitrary selection of factors that had little to do with the real service provided by local government and much more to do with the political objectives of the party in power.

As to the question whether the 6 per cent. or the 11 per cent. components of the cash limits will be enhanced if there is an increase in those figures on the outturn, the answer is "No". If I were to say anything else, it would prejudice the ability of local government to calculate entitlements under the grant system. I am intrigued to listen to the right hon. Gentleman talk about the hardship that will arise in local government as a result of the changes that are taking place. I happened to look up the figures for local authority employment when the right hon. Gentleman served in the Department of the Environment. He will be pleased to hear that there are 16,000 more people in social services today than when he was in the Department. In recreation and parks there are 2,000 extra people; in housing there are 7,000 extra people, and in town and country planning there are 400 extra people. I do not see how he can describe that as a social disaster.

Mr. Kenneth Lewis (Rutland and Stamford)

My right hon. Friend will appreciate that until we see the effect of this announcement on our individual councils we are not sure what the result will be. Will he, therefore, assure me that councils that have not overspent in the past but have taken full account of the need for economy will not be unduly hit? If some councils are hit, regardless of the fact that they have not been overspenders, will my right hon. Friend arrange for some of the obligations that have been placed on them by this Parliament to be relieved for some time in order to help them through the coming year?

Mr. Heseltine

I fully understand that all hon. Members will want to look at the precise effect on their constituencies and the authorities within them. That is why the rate support grant is not normally the subject of an oral statement, because right hon. and hon. Members want to see it before the traditional debate takes place.

I have tried to protect the worst effects of the conclusions underlying this year's grants with safety nets at two stages in the calculations. I have also introduced the most comprehensive attempts to measure the needs of individual authorities, and I have set out for the House and for local government at large the way in which that is being done. For many local authorities, this is the first time that any real attempt has been made to measure independently the realistic levels of spending that they should achieve. I believe that when the House considers the details it will find that this is a helpful advance.

Several hon. Members


Mr. Speaker

Order. I remind the House that the main business of the day is Supply and that the subject for debate is steel. It was indicated clearly in exchanges last week that the Opposition lay great stress on this debate. There is another statement to follow this one. I therefore propose to allow questions on this statement to continue until 4.15 pm, which is a reasonable run. I cannot call every hon. Member who wishes to speak. Afterwards, we shall return to the Welsh statement.

Mr. Alton

Will the Secretary of State please explain how he intends to discharge the responsibilities that are laid upon him by the Local Government, Planning and Land (No. 2) Act to consult local authorities before making these orders and before making a statement on the block grant settlement? Further, will he tell hon. Members what advice he has for ratepayers in Liverpool who, as a result of this statement, will have a further £2 million reduction in their rate support grant settlement? Is he aware that it will mean more rate increases, more unemployment among local authority workers and bankruptcy for small firms, which will not be able to pay the massive increases in rates?

Mr. Heseltine

The hon. Gentleman might want to study the documents that are available. He will remember that a 1 per cent. reduction in the grant available means 2.6p for ratepayers at large. The hon. Gentleman will want to take that into account in relation to both his area and the country as a whole. It is demanded that I should have consultations with local authorities. Although controversial, there have been the widest consultations. I shall meet the local authority associations immediately after this debate. I have two difficult obligations: to consult the House and to consult local government. In these circumstances, it seemed appropriate to make a statement to the House first and to have a formal meeting with local government representatives immediately afterwards.

Mr. Kenneth Baker (St. Marylebone)

Is my right hon. Friend aware that the Opposition spokesman for the environment is one of my constituents? Is my right hon. Friend further aware that as a resident of Westminster the right hon. Gentleman will not fare too badly as a result of this rate settlement? He is the resident of a borough which, despite considerable pockets of poverty, has conducted its affairs for the past few years both prudently and responsibly.

Mr. Heseltine

In some ways I sympathise with my hon. Friend. Apparently, we share the right hon. Gentleman. My hon. Friend will he aware that during the past few years there has been a significant shift of resources away from the urban and the rural provinces and towards London. In present circumstances, the broad effect is that about £300 million has been shifted to London. There is bound to be an effect when a system is introduced that depends on independent measurement rather than on the arbitrary decisions of politicians

Mr. Guy Barnett (Greenwich)

Does not the right hon. Gentleman realise that previous Governments, both Labour and Conservative, have used the rate support grant mechanism as a means of compensating inner city areas for their massive social and environmental problems? Does not the right hon. Gentleman's statement demonstrate that he has thrown the White Paper entitled "Policy for the Inner Cities", which was issued by the Labour Government, straight into the dustbin?

Mr. Heseltine

I am glad to tell the hon. Gentleman that the total amount available for inner city policy under the urban development corporation and next year's urban programmes will be significantly higher than ever before. He will know that the programme has been significantly bent towards urban areas as a result of the housing investment programme allocation. He will also realise that the shift to London is not only towards inner London but on a significant scale towards outer London. I have had to consider whether one should take note of the result of measuring independent factors affecting the services provided by local government rather than the judgments made about where real need lies. The House will be able to judge for itself that once one starts to measure all the factors that underlie the specific services dealt with by local authorities one realises that a powerful argument can be made for distributing along those lines rather than in accordance with the judgments that the hon. Gentleman mentioned.

Mr. Peter Emery (Honiton)

Does not my right hon. Friend's statement mean that local authorities that have been economical will not have to see spendthrift councils receive a larger percentage grant than they were able to obtain? In addition, does not the statement mean that many of the county areas, which have been most unfairly treated during the past seven or eight years, will begin to see a balance between themeselves and the cities?

Mr. Heseltine

My hon. Friend is quite correct. As we examined the factors in detail, we realised the needs that county authorities often have to meet. It is important to proceed with the new system as a matter of urgency, because I have to cope with the fact that, as a result of their overspending patterns, a relatively small number of authorities persist in pre-empting an increasing share of the grant. In particular, this year I have had to claw back £200 million indiscriminately from the whole of local government in order to compensate for that overspending. I need new weapons to ensure that if there is an overspend next year I shall be able to allocate the penalties more specifically and not direct them at the whole of local government. Indeed, the bulk of local government tries to achieve the Government's objectives.

Mr. Ernest Armstrong (Durham, North-West)

Does not the Secretary of State recognise that there is genuine concern throughout local government? Does he not accept that he is using his new weapons to transfer accountability away from the electorate and to his Department? That is where the decisions will be made. What advice can the right hon. Gentleman give areas such as Durham, where unemployment runs at 20 per cent. in some district council areas? Does he not realise that the district council has become the main employer? Are district councils to suffer further redundancies in order to meet his targets?

Mr. Heseltine

The right hon. Gentleman will want to consider the underlying assumptions for those areas. The House must realise that there is a relationship between the level of local authority consumption and the community's ability to provide the capital investment on which so many new jobs are bound to depend. Perhaps the most serious indictment of the Labour Party's record is that although it increased local government current expenditure by about £1 billion in constant money terms it reduced local government capital expenditure by half in the same period.

Mr. Tony Durant (Reading, North)

Does my right hon. Friend accept that we welcome his statement despite the pained look of the hon. Member for Liverpool, Edge Hill (Mr. Alton)? It is right that the House should have a statement on this matter. Will my right hon. Friend bear in mind that industry feels that it has played its share and that it is time that local government considered its excessive payments and accepted some curbs on its expenditure?

Mr. Heseltine

My hon. Friend is absolutely right. This year particularly needed an oral statement to the House. However, hon. Members will realise that this is not the best subject for presentation in this form, because right hon. and hon. Members want to see the details before a debate. Local authority manpower has fallen by 2 per cent. since the Conservative Party came to power. The private sector, which has to pay the rates and taxes in order to finance local government, is suffering incomparably harder pressure as a result of our economic difficulties. There must be a balance in these things, and local authorities should recognise that.

Mr. Bruce Douglas-Mann (Mitcham and Morden)

Do the calculations on which the right hon. Gentleman's statement is based have the backing of his Department, or are they like those contained in the White Paper reply to the report of the Select Committee on the environment, as alleged by this morning's issue of The Guardian? The Guardian alleges that the calculations about the effect of council house sales, repeated in the White Paper, are no longer accepted by the Department and that they had no adequate authority. Does the right hon. Gentleman accept that if the calculations on which Government statements are based no longer have the support of the relevant Department, the right hon. Gentleman's reputation in the House will decline even further?

Mr. Heseltine

The hon. Gentleman will be aware that I employ 47,000 people in the Department of the Environment. It is ridiculous to think that I can canvass the views of individuals in order to discover what a person thinks. My job is to take the advice provided by officials, to make a judgment on it and to account to the House. It is a most novel concept that the views of officials should be superior to those of Ministers.

Mr. Eldon Griffiths (Bury St. Edmunds)

Does my right hon. Friend agree that in addition to urban deprivation something called rural deprivation exists? Will he confirm that the new block grant formula will go some way towards redressing the balance? Rapidly expanding rural councils, whose authorities have sought to hold down expenditure, have been penalised because of excessive expenditure in urban areas that in some cases have had lesser needs?

Mr. Heseltine

My hon. Friend is correct, but he does not go as far as the realities of the case. Not only have those areas been penalised as a result of keeping down their expenditure; they have been penalised as a deliberate political act of the party in power. It is because our new system shows what the factors are, explains the route by which we allocate money and does so in public that it is a far greater protection for local government than anything that it has had before.

Mr. Kenneth Marks (Manchester, Gorton)

Is it not true that the authorities likely to be hardest hit are the metropolitan districts, such as Tameside and Rochdale, which have the highest rate of increase of unemployment? Does the right hon. Gentleman agree that increasing unemployment means additional expenditure for councils, and has he used unemployment as one of his criteria?

Mr. Heseltine

Until we know the final allocation, which depends on the level of rates and expenditure chosen by local government, I do not want to give precise percentage figures. However, I take the hon. Gentleman's question as seriously as it deserves to be taken. The evidence is that, broadly, the distribution to the large towns and cities outside London will be in line with what it is today in percentage terms.

Sir William Elliott (Newcastle upon Tyne, North)

Following the remarks of the right hon. Members for Manchester, Ardwick (Mr. Kaufman) and for Durham, North-West (Mr. Armstrong), does my right hon. Friend agree that in areas such as the North-East there are some authorities that have grossly overspent and some that have not? Will he confirm that his new criteria on heads of expenditure will apply equally and fairly over England as a whole, North and South, and to Conservative and Labour authorities?

Mr. Heseltine

I know how much my hon. Friend cares about and understands these problems. The methods that we have chosen and the factors, which are available to the House, are general rules, which will apply across the country and to all authorities. It will not be possible for a politician to change those factors without accounting in public for what he intends to do. My view is that there will be the widest and most profound debate about the scale and quality of services provided by local government that we have ever had. It will focus not on the assertions of individual authorities about how well they have done or about their need but on the facts of the services that they have to provide. That will be extremely helpful.

Mr. John Grant (Islington, Central)

Why does the right hon. Gentleman not admit that today's statement and the one that he made yesterday add up to the murder of inner city policy, particularly in respect of inner London? How does he equate that with the sort of statements that were made by Conservative Members in Opposition, particularly by the present Minister of Agriculture, Fisheries and Food? In addition, how does he equate it with the Prime Minister's statements about labour mobility? How will the right hon. Gentleman's statements help labour mobility?

Mr. Heseltine

I was interested to hear the questioning of my right hon. Friend the Prime Minister when I was waiting to make my statement. She explained the consequences of the economic policy that we inherited. I repeat that the Labour Government halved the level of capital expenditure by local government. That was a direct consequence of their incapacity to contain consumption. Until we get a better balance between consumption and investment, we shall go on with an ailing economy, which will never provide the wealth that alone can support the enhanced services that we want.

Sir David Price (Eastleigh)

Will my right hon. Friend accept that he has the unanimous support of the Government side of the House for his strategic aims but that many of us will have to remain agnostic until we see the details of what he calls his service-by-service appraisal? Will he ensure an opportunity for the House to discuss in detail the criteria upon which, it seems, everything will depend?

Mr. Heseltine

My hon. Friend is right to ask about the factors. They are available in the Vote Office and the library for consideration. I have always made it clear that in trying to move from the incomprehensible system that has hitherto governed the distribution of the rate support grant there were bound to be areas of controversy about the factors that we chose. My view is that we have made a considerable advance. In the course of the next 12 months, there will be a wide debate and we can see whether we have got each factor and each weighting right, in order to make such adjustments as seem appropriate next year.

Mr. David Watkins (Consett)

What, if anything, does the Secretary of State propose to do to make good the loss of rate revenue caused to local authorities by massive industrial closures in, for example, County Durham?

Mr. Heseltine

I am aware of that problem. The Government are considering it and discussing it with, for example, the British Steel Corporation, although the difficulty is that, whereas there may be a particular concentrated problem of closures, it is an argument that spreads more widely when one faces industrial closures. We had that problem under the previous Government, just as we have it today. We are considering the matter. We do not think that the solution lies in the RSG system, but it is something that we want to look at.

Mr. David Mellor (Putney)

My right hon. Friend will know that those of his hon. Friends who represent inner city areas appreciate the pressure on him to readjust Government support to local government, following years of partisan manipulation by the previous Government in favour of spendthrift Socialist authorities. However, can he reassure those of us from inner London that he has taken account of the problems facing local authorities such as Wandsworth, which was once run by profligate Socialist councillors but which for the past two years has been prudently and sensibly run and faces considerable financial problems in coming to terms with some of the announcements that have been made?

Mr. Heseltine

I sympathise with my hon. Friend. I realise that there is a 1 per cent. reduction in the grant and that I am adjusting backwards some of the massive shift to London that has taken place over recent years. That is hound to have certain consequences. I entirely agree with my hon. Friend that the fundamental assumption of so many inner city authorities that if they increase expenditure and rates they will improve the local environment does not stand up to examination. In fact, they drive more and more people and firms out of the area, thus aggravating the problems that they are trying to cure.

Mr. Jim Marshall (Leicester, South)

The Secretary of State said that the settlement announced today would permit rate increases of reasonable orders of magnitude. If that is the case, can he share with the House and local authorities his understanding of the words "reasonable rate increases"?

Mr. Heseltine

I considered the possibility of announcing an average figure and discussed it with local authorities, which are deeply concerned in the matter. The House will understand the problems. Last year, rate increases varied between 6 per cent. and 60 per cent. There is nothing gained in announcing an average figure between those two. All, that one does is sometimes to put some authorities with particular difficulties in an embarrassing situation, because they are likely to have to be above the average, and those which are minded to be below the average feel a pressure to trade up to it. It is more responsible to leave individual authorities to fix their own rate levels in the light of the judgments that I have announced. Of course, I must repeat what they have heard me say before, namely, that there is a direct connection between those rate levels and the overriding need to beat inflation.

Mr. Anthony Steen (Liverpool, Wavertree)

Does my right hon. Friend agree that the Government side of the House is as deeply concerned about the plight of urban areas as are the Opposition? Does he agree that the real problem in our cities is no longer the inner areas but the middle and outer areas, where the people live?

Mr. Heseltine

My hon. Friend has made a study of these matters and I understand his concern on this issue. It is because we are trying to get away from the arbitrary allocation of money on the basis of expenditure and to move to an allocation on the basis of factors that can be measured that I believe that we are doing something that will be broadly acceptable to my hon. Friend.

Mr. Leslie Spriggs (St. Helens)

Is the right hon. Gentleman aware that the St. Helens borough council area is having to meet increasing social and environmental needs coming in from other parts of the Merseyside area day by day? Why does he refuse to meet a deputation from the local authority, which wishes to discuss the matter with him?

Mr. Heseltine

I am sorry that I should appear to have overlooked the opportunity to meet the leaders of St. Helens for the third time since I took office. I have been to St. Helens to look and consider two questions—the Enterprise Trust, for which I have the greatest admiration, and the wish of the Countryside Commission to improve environmentally the outlying area. So I have had a very close relationship with the St. Helens authority and would have every wish, if possible, to maintain that.

Mr. Fred Silvester (Manchester, Withington)

Does my right hon. Friend agree that the new formula takes account of the special needs of urban areas? In particular, will he confirm that under the new system the city of Manchester will have the highest qualification for grant of any metropolitan district?

Mr. Heseltine

I think that my hon. Friend will want to look at the details, because it could be misleading for me to answer the question only in terms of the grant-related expenditure assessments that have been made. Related to that are the levels of expenditure, which may be significantly above the levels of the grant-related expenditure. Both sides of the coin have to be balanced before reaching a judgment about the performance of individual authorities.

Mr. Christopher Price (Lewisham, West)

The right hon. Gentleman mentioned earlier the indiscriminate grant that has hitherto existed as between outer and inner London. Will he tell us of one thing in his statement that is calculated to benefit the very real inner urban needs of inner London? Will he further tell us whether his new arrangements for funding the Inner London Education Authority—which he might care to explain to the House—will mean a 14 per cent. cut in that authority's expenditure?

Mr. Heseltine

The precise implication of the education changes will be a matter for my right hon. and learned Friend the Secretary of State for Education and Science.

With regard to the hon. Gentleman's first and very relevant question about the needs of inner city authorities in London, I can think of nothing more likely to galvanise and change the prospects for those areas than an announcement by them that they intended to pursue a low rate increase policy. They would then attract back the jobs and people that they are losing in very substantial numbers.

Mr. John Farr (Harborough)

Although at the moment it is very difficult to assess the impact of what my right hon. Friend said, may I ask him to assure the House that he has respected the position of local authorities whose affairs have been economically and frugally conducted in the past, in the best interests of their ratepayers, and that they are not being disadvantaged by what he has told us today?

Mr. Heseltine

I think that my hon. Friend will want to look at the work that we have done. The difficulty with which we were faced in considering this task was that no one could make an objective assessment about the way in which individual authorities had been run, because there were no objective measurements for the needs of the individual authorities. This was particularly true at the shire district level. We have had to put forward for our own decision—and ultimately for the House to consider—a method of assessing the independent needs of each authority. The transitional period through which we are now going reflects the need to reconcile this independent measurement with the past levels of expenditure.

Mr. Stanley Cohen (Leeds, South-East)

During the course of his statement, the Minister indicated that a number of local authorities—if my recollection is correct, it was nine—are, because of their failure to comply with Government policy, likely to be subject to penalties. Will he extend to the House the courtesy of indicating which local authorities he had in mind?

Mr. Heseltine

I shall be very pleased to do that. They are Southwark, Haringey, Swansea, Newham, Manchester, Doncaster, Wandsworth and Merthyr Tydfil. Those were the original authorities—[Interruption.] May I give the answer to the question in my own way? Those were the authorities that were allowed out under the waiver about conforming to the—[Interruption.] I shall answer the whole question, if I may. Those were the authorities that qualified for the waiver that came from keeping their levels of expenditure more closely in line with the Government's budgets.

Islington, Newcastle-upon-Tyne, Hammersmith and Fulham, Afan and Sheffield then reduced the levels of their expenditure in order to qualify for the second waiver.

There are then nine authorities, the names of which I shall now give the House, which have so far not qualified for any waiver and thus are volunteering to pay the penalties provided by the legislation. Those authorities are Greenwich, Hounslow, Waltham Forest, Brent, Lewisham, Hackney, Lambeth, Tower Hamlets and Camden.

In case the House should have any doubts about what goes on in those authorities, I happen to have here a quotation from what was said by the local newspaper when the director of housing in Camden resigned. This is what it said as to why he and others were quitting: They have voiced blistering criticisms of council leaders and chief officers for running away from the need to cut Camden's overstaffed bureaucracy, whilst allowing services to decay.

Mr. Albert Booth (Barrow-in-Furness)

Will the Secretary of State accept that in view of the crisis facing very large areas of public transport it would have been much more appropriate if his right hon. Friend the Minister of Transport had made a separate statement to the House on the transport supplementary grant?

Is the Secretary of State aware that the figure that he gave for the transport supplementary grant contains within it a cut of 25 per cent. in the revenue support for South Yorkshire, and that this will be seen by many of us on the Labour Benches as a vicious, doctrinaire attack on the democratic right of that metropolitan authority to protect its own public transport services?

Does the Secretary of State realise that the figure that he has quoted also involves a cut of 10 per cent. in the revenue support grant for West Midlands, where passengers and public transport workers are already desperately worried about the prospective cuts in their services?

Finally, will the Secretary of State tell the House when we shall have an opportunity to debate both the rate support grant that he has announced today and the transport supplementay grant?

Mr. Heseltine

The right hon. Member knows full well that there is a debate on the orders. It will be arranged by my right hon. Friend the Leader of the House after Christmas, in the normal period. I imagine that if my right hon. Friend were to consult me I would suggest that there is a need to proceed quickly, so that local authorities have the certainty to which they are entitled. But there is a statutory provision about the number of days that have to elapse before these things can be dealt with in that way. I shall see that my right hon. Friend the Minister of Transport is made aware of the right hon. Member's views, but I remind him that I cannot remember a Minister responsible for transport in the last Government making a statement in the House on transport supplementary grants.