HC Deb 12 November 1980 vol 992 cc473-5
18. Mr. Hardy

asked the Secretary of State for the Environment if local authorities are keeping within their estimates of expenditure for the current year; or, if not, by what percentage these are likely to be exceeded.

20. Mr. Wheeler

asked the Secretary of State for the Environment if he is satisfied with local authorities' forecasts of their likely expenditure in 1980–81.

Mr. Heseltine

The revised budgets submitted by local authorities in August showed that for current expenditure they were still planning to spend in aggregate some £350 million at 1979 prices above the level envisaged in the 1980–81 rate support grant settlement. I took the view that there is a risk at outturn that they might be overspent by about £200 million. I therefore announced on 18 September the measures which I believe are necessary to bring expenditure back on course.

Mr. Hardy

Will the Secretary of State accept that the level of overspending by local authorities is far less than overspending by central Government and that the level of competence in the management of their affairs by most local authorities is far higher than that displayed by the present Administration? How does the right hon. Gentleman propose to reply to the leader of Rotherham borough council who has written to him suggesting that the right hon. Gentleman would be elated if he could keep his expenditure within 1 per cent. of estimates, something which the Rotherham authority has managed to achieve without inflicting extra redundancy or unnecessary cuts?

Mr. Heseltine

I am sympathetic to the claims of local government that it has managed its affairs a great deal better over the years than central Government. Undoubtedly the figures show that this is the case. It is true of the last five years—

Mr. William Hamilton

This year.

Mr. Heseltine

This year the situation broadly indicates that there is more likelihood of an overspend than in previous years. It still remains the fact that local government has a record of keeping to its capital and revenue budgets which is better than that of central Government. That is no argument for saying that, now that there is a risk that they will overspend this year, I should ignore the risk.

Mr. Wheeler

Will my right hon. Friend confirm that the overspenders are to be made to pay the cost of the extravagance?

Mr. Heseltine

I am delighted to tell my hon. Friend that, when we have the new system of distributing taxpayers' money through block grant, there will be much more of a relationship between the measured need of an authority and the amount of central Government support. It will be possible for central Government to ensure that, if there are levels of overspend in certain authorities, those authorities are likely to suffer most, as opposed to the present system where it is largely those which have kept within the Government's guidelines which suffer.

Mr. Snape

Will the Secretary of State confirm that the borough of Sandwell is exactly on target in its housing expenditure and is not an overspending council? Is he aware that two weeks before his moratorium regional officials of his Department met officers of the borough to discuss the borough taking up allocations not taken up by other authorities? Does his Department know what is going on in the right hon. Gentleman's mind? Is he aware that many people in local government—officers and elected members—feel that the best service he could provide to local government would be to tender his resignation?

Mr. Heseltine

The hon. Gentleman might take into account that someone else in my place might demand even greater sacrifices.

Mr. Peter Bottomley

Does my right hon. Friend recognise that housing expenditure by local authorities is a balance of income and outgoings? Will he repeat the invitation to the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) to give his view on the decision by Greenwich borough council not to abide by the law and sell homes to those tenants who want to buy?

Mr. Heseltine

The whole House would appreciate it if the right hon. Gentleman made clear that he thinks that all local authorities should keep within the law.