HC Deb 17 December 1980 vol 996 cc277-8
7. Mr. Dubs

asked the Secretary of State for the Environment what will be the effect of his present policies on the balance of local government expenditure between inner city areas and the rest of the country.

Mr. Heseltine

Local authorities are responsible for deciding on their own level of expenditure, and it is ultimately their decisions which will determine the balance between urban and rural areas.

Many Government policies—for example, rate support grant, capital allocations and the urban programme—have some influence on this balance, and in all of them we pay due regard to the differing needs of urban and rural areas.

Mr. Dubs

Is it not a fact that the Secretary of State made the decision to transfer resources to shire counties and away from cities—especially away from inner London—before he finalised the block grant formula? Does not that suggest that his motives were political rather than springing from a genuine consideration of disadvantaged inner city communities?

Mr. Heseltine

I think that the hon. Gentleman will realise that there are many inner cities outside London which receive many of the major local services provided by the shire counties. Such counties provide about 80 per cent. of the total expenditure of local government outside London. When the House has had a full opportunity to consider the grant-related expenditure factors that we issued yesterday, I think that it will realise that I was trying to measure on a more independent basis the real needs of individual authorities. Having done that, and having taken into account the various levels of expenditure, I came to realise, as I had often suspected, that the shift of about £300 million from the provinces to London over the past five years was not warranted by the calculations.

Mr. John Townend

Does my right hon. Friend agree that there is a view among county councils that they were victimised by the Labour Government? May I assure him that they will welcome his start to reduce that wrong? Will he be good enough to tell Labour Members that all the problems in local government are not restricted to inner cities and that there is such a thing as rural deprivation?

Mr. Heseltine

My hon. Friend has a real knowledge of the workings of local government and, therefore, produces an informed comment on what has happened. We have now produced a series of factors that indicate how we think local government entitlement under the rate support grant should be broken down. If there is a wish to be involved in the debate on how the factors should be altered, adjusted or improved, we shall offer the first opportunity ever for politicians, the national press and experts in every area to become involved in the widest and most profound debate about local government that Britain has ever seen.

Mr. Dobson

When the right hon. Gentleman is taking part in the academic exercise of considering all these factors, will he bear in mind that the people of inner London will be suffering, despite the fraudulent figures that he circulated yesterday, because the target figures for expenditure for the Inner London Education Authority and the inner London boroughs will be £320 million less than is being spent this year?

Mr. Heseltine

I only hope that the hon. Gentleman will be able to persuade the majority of his colleagues that my figures are fraudulent and that there is no justification for reversing the drift to London of recent years. If his right hon. and hon. Friends come to the conclusion that the factors that I have introduced are wrong, they will doubtless advise me where I should change them. The hon. Gentleman will understand that every time the factors are changed one authority will gain and another authority will lose. All that I am doing within the block grant scheme is to readjust the distribution. Those in the provinces are as entitled to say that they have need as are those who live in London.