Rate Support Grant (Hansard, 22 January 1982)

§ Mr. Martin Stevens (Fulham)

In introducing the Adjournment debate on the relationship between the rate support grant settlement and the Inner London Education Authority, I wish to make it clear at the outset that I am not one of those inner London Conservative Members who have cried out for the abolition of ILEA. Indeed, I am not sure that any have done so. Nor have I sought the closure of the GLC.

When the House debated the ILEA rate support grant last year, I urged the Government to allow the authority to reduce its budget by stages. I argued that, however extravagant ILEA may have been in the past, and notwithstanding the sharp drop in school rolls, it was not practicable to expect it in one year to make the substantial cuts demanded by the Department of Education and Science.

As I speak, ILEA is debating whether to reduce its 1982–83 budget, which calls for an expenditure level of £800 million compared with £734 million in the present year, by 7.2 per cent. as desired by the Government. The Government would provide the increased grant of 4 per cent. for salaries and 9 per cent. for inflation. That cut would not bring ILEA into grant but, according to the Government—and I agree—it would be a prudent and reasonable step in the right direction, having regard to falling rolls.

An option being considered by ILEA is to reduce its 1982–83 budget by 8.5 per cent., which would bring it into grant. In cash terms that would mean a budget cut of £130 million, at which point grant would be receivable. If the budget were reduced by a further £50 million, ILEA would receive rate support grant of £45 million. A third option being considered is to reject both possible avenues of thrift by sticking to a level of expenditure that ignores the sharp reduction in the numbers of children.

Although there was a drop of 17 per cent. in British school rolls between 1973 and 1980, non-teaching staff in ILEA rose by 2.4 per cent. Between 1980 and 1982 there has been a further drop of more than 15 per cent. in the school population. In spite of that enormous reduction in the school population nationally and locally, the national education budget for 1982–83 is to fall by only 2 per cent. In the light of those figures, anyone who argues that the Government are making war on education is blind to reality.

Like London Members on both sides of the House, I recognise the special problems of ILEA and the unique education needs of children and adults in inner London. It goes without saying that we all wish education standards to continue to rise, and I believe that that can be achieved without yielding to the ILEA's budget demands, pillorying the ratepayers or damaging the quality of inner London education. I hope that wise statesmanship will prevail and that our citizens will not be made to pay for anybody's political scalp, whether of the Conservative Party or the Labour Party.

A new and unwelcome phenomenon has made an appearance in this year's discussions and it must have a 591 direct effect on public attitudes to the ILEA budget. It is the shameless use of untrue and scaremongering propaganda by those who ought to know better.

On 23 December last year my hon. Friend the Under-Secretary of State for Education and Science described the Government's proposals to strengthen the nation's adult education services. He pointed out that an increase of £52.3 million in the original programme had been agreed.

I shall not repeat the arguments made in that debate, which was admirably introduced by my hon. Friend the Member for Ealing, North (Mr. Greenway), but the Under-Secretary referred to ILEA's "distressing scare campaign" which upset many of the thousands of students at inner London adult education institutes.

If we are to make financial provision for education in a sane and rational atmosphere, the arguments on both sides must be put fairly. Campaigners who boast of their concern for standards, the status of teachers and the welfare or pupils have based their case on obvious lies—a new phenomenon in British political in-fighting.

Some teachers in schools and colleges in my constituency regularly wear political badges in class. What status does that give them? It is certainly not a professional one. What is one to say when teachers give 10-year-old boys and girls dishonest leaflets to take home to their parents? I have handed the Under-Secretary one example distributed in primary schools in my borough. It starts: Michael Heseltine's Bill will mean no adult education. One can argue whether it is the job of primary schools to fight the adult education battle, but, even if it is, the suggestion that the Local Government Finance Bill will mean no adult education—and the same leaflet said that the Bill will mean no nursery education—is outrageous. The leaflet should not have been put into children's hands.

I have already reminded the House of the facts of the matter, which are in direct contrast to the far Left's fairy tales. Not only Conservative Members are sickened by such practices and the hysterical letters that they engender. At least one inner London Labour Member found that sort of mindless pressure among the last straws that drove him out of his party.

Other hon. Members will have had experiences of such propaganda. When I addressed the west London branch of the National Union of Teachers just before Christmas, it distributed an elegant broadsheet which, as I took leave to say, was mostly untrue. "Of course", said one respected person, a former member of ILEA, "we all know the difference between propaganda and reality." Do we? Goebbels did, of course.

These people are teachers seeking to implant a code of decent values in their charges. Many of them are also good people whom I esteem. The deputy chairman of ILEA came to a party for pearly kings and queens in Fulham—scarcely a political occasion. Sharing a microphone with me, he said "The Tories plan to close every school in inner London." Need I say that he got the bird, but the words were uttered, and by one of the individuals who want us to accept that the ILEA budget figures are not exaggerated. Over half the total of ILEA schools—623—had to suspend classes because teachers chose to participate in the absurd campaign, backed by 400, 000 broadsheets and 5, 000 four-colour posters printed by ILEA with ratepayers' money. Is it for this that Ministers are urged to fork out?

592 If such excesses were being exploited by sleazy professional agitators, it would not perhaps matter so much. However, teachers are lending themselves to such evil tactics. What is the inevitable result? It is that ordinary decent people will be persuaded that it does not matter what one says or does, how many old ladies are terrified, how many parents are deceived or how many children are corrupted in promoting a cherished cause.

That is not what teachers are for. It is a new and sinister trend in the hateful politicisation of our young people. By undermining Parliament's confidence in their spokesmen, educationists are not helped to achieve the rate support grant that they desire.

§ The Under-Secretary of State for Education and Science (Mr. William Shelton)

My hon. Friend the Member for Fulham (Mr. Stevens) as an inner London Member, has a genuine concern for his constituents. He has previously raised matters in connection with the Inner London Education Authority. I listened with interest to his comments on the ILEA budget, which has not yet been finalised, as he said. I understand that the recommendation of the Labour leadership group for 1982–83 will be for a budget of about £800 million, which will mean an additional rate on inner London boroughs, and therefore on the ratepayer, of about 9p. I understand that ILEA claims that that is about the same in real terms as the current budget for 1981–82. Most people would challenge that. It is an increase in real terms. The difference comes in relation to the inflation rate in the coming year.

It is interesting to note that Labour's own ranks are divided on the budget. I understand from press reports that Labour council leaders have urged moderation on the ILEA leadership.The Standard of 15 January 1982 said that Labour council chiefs were desperate that ILEA should at least hold spending at its current level. A council leader was quoted as saying that with ILEA's size of budget it was unacceptable to say that no savings could be found without affecting services. I am sure that that is right.

Proposing to increase spending in real terms for next year shows an extraordinary insensitivity to what is happening. The country is in the middle of one of the greatest depressions in the Western world since the 1930s. Many sensible cuts are being made, yet ILEA is increasing expenditure. As my hon. Friend says, the number of pupils has declined over the last three years by 13 to 15 per cent. The truth, as The Economist said on 12 December, is that The greater part of the excess that ILEA spends beyond other education authorities is due simply to the decision to spend more. The 1980 HMI report on the Inner London Education Authority referred to clear instances of inefficient management of finance in individual schools. It added: It is common to find under-use or neglect of resources". It might not be so galling to London ratepayers if ILEA had first class education for London's children. I agree that many ILEA schools are outstandingly good and that they can hold their own, or better, with schools throughout the country. I refer to the same HMI report, which referred to ILEA's "blinkered support" for mixed-ability teaching and added that such teaching often left the least able unheeded, and the most able unchallenged". 593 What an indictment of dogma. The result of this financial imprudence is that the Inner London Education Authority next year will almost certainly receive no Government grant. I say "almost certainly" because its budget has not yet been fixed. If, however, the intended budget goes through, it will certainly not receive any Government grant. This will not be due to the Government ignoring the needs of inner London. It is because the Inner London Education Authority spends at a far higher level than any other education authority in the country.

The amount of block grant that an authority receives depends on how much it spends and the amount that it raises in rates. An authority will be penalised under the legislation and receive a lower rate of grant or, indeed, in the case of ILEA, no grant at all, if it spends more than it needs to give a level of service consistent with Government plans, arrived at by an objective assessment. I have explained the present GRE assessment, which the hon. Member for Newham, South (Mr. Spearing) knows.

In the grant-related expenditure assessment for ILEA, the Government have taken into account the higher salaries in London and the large number of children who have special needs. They have also taken account of the fact that rolls in inner London have been falling. It would be entirely reasonable, under the grant-related expenditure assessment, for ILEA to spend, for instance, one-third more per primary pupil than most shire counties. If it did this, it would be matching its GRE assessment. It is not, however, spending one-third more. It is spending nearly half as much again. In 1981–82, it spent more than 40 per cent. above its GRE assessment. The result, inevitably, and unhappily for London ratepayers, is that it will receive no Government grant if it proceeds with its recommended budget.

No other local education authorities are spending at this level. Many inner cities spend within 5 per cent. of their GRE limit. Rolls have fallen some 13 per cent. or more in the last three years. If ILEA had cut, by just half, the amount that its pupil numbers have fallen by, it would be receiving grant and would thereby remove the intolerable burden that it is now placing upon London ratepayers.

In the year ahead, 1982–83, the Government have set individual expenditure targets. As my hon. Friend says, with ILEA having reached the level of expenditure it has, it would not be realistic to expect it to reach its GRE target in one year. A target of 7.2 per cent. below its current budget—its 1981–82 budget—was set by the Government. This is certainly realistic.

I urge ILEA to reconsider its budget and to accept this target of 7.2 per cent. I recognise that if it did so it would still not be eligible for grant in the first year, but I urge it strongly to make a long-term plan for two or three years to get back to a position where it receives Government grant and removes this burden from London. I am sure that it will be possible. ILEA should look at this and move towards it.

I was also interested to hear what my hon. Friend said about adult education. Recently, the Government announced the national budget for 1982–83 of £52.3million, which is an increase over previously planned expenditure. I take this opportunity of saying how grateful I am to local authorities which, despite budget cuts, have coped so extraordinarily well.

I agree that one of the results of the budget cuts has been an increase in the average hourly fee to about 51p. But this must still be very good value, and I say that loud and clear 594 because attendance at adult educational institutes has held up very well. In 1979 it was 1.7 million, in 1980 it was 1.6 million, and in 1981 there was an estimated fall of only 3 per cent. With the increase in the planned budget, I hope that adult education will continue on a strong and viable basis throughout the country.

Adult education in inner London is excellent. There is no question about that. It is extremely popular and it meets a very wide range of needs. It makes special provision of a high standard for those people who are disadvantaged or handicapped in one way or another. In consequence I, too, was especially distressed by ILEA's recent campaign against proposed Government legislation. My hon. Friend called attention to the campaign waged in ILEA against the original Local Government Finance Bill.

I say clearly that the Bill was widely misunderstood and misrepresented. The main attack of ILEA and others centred on the fact that the Bill proposed the holding of a referendum by a local authority before levying a supplementary rate. It meant merely that voters would be asked to express a view before they had to pay additional money. It has always seemed to me that ILEA took it for granted that it would lose every referendum that it held and that there was some message to it in that.

The present Bill omits the referendum provision. Among other things it will ban supplementary rates, as I understand is the case in Scotland. Every hon. Member knows the great hardship that supplementary rates have caused to individuals and companies.

ILEA's campaign against the first Bill was without doubt political. It was waged in the classroom, at the expense of the ratepayers. Their money was used. In my view, its claims were exaggerated beyond the bounds of acceptability. It was designed to mislead, and that seems to be proven. I refer the House, for instance, to the ILEA press release of 14 January which set out various budget options. The "worst case" budget option in the press release showed a cut of £110 million—far more than the 7½ per cent. target which the Government are recommending.

The press release listed various consequences which would flow from a cut of £110 million. One of them was increasing adult education fees by 20 per cent. If I tell the House that the average adult education fee in the country is £10 per course and that the average for ILEA is £6, I am sure that hon. Members will agree that the consequence of this "worst case" budget option is very far from closing adult education, as was claimed in the leaflet handed to me by my hon. Friend.

I and a great many colleagues have received a vast number of letters, some extremely pathetic, pleading that we should not close adult education. I have received letters from old ladies saying that it was the one thing to which they looked forward in their lives. I have had letters from people who were innumerate and illiterate, written on their behalf, saying that adult education was the way towards earning a living and getting a job. If we took it away from them, they would be in great difficulty.

It is not surprising that so many people believed that misleading campaign by the Inner London Education Authority. I remind the House that ILEA is in charge of children. It is believed to be an honest and responsible organisation, and, indeed, it is an honest and responsible organisation. I suggest that in this case, under the urgings of its political masters, it fell short of its normal standard of conduct by introducing politics into the classroom in 595 such an hysterical fashion. I sincerely hope that never again shall we see such a political campaign waged among the children, students and adults of inner London.

I make the point again that ILEA is a vastly wealthy authority. It has increased its budget regardless, and at the expense of London's ratepayers. I remind the House that the ratepayers are also the commerce and industry of London. Such action has a drastic and damaging effect on jobs and employment in London.

596 I repeat what I said to the House on 23 December about inner London: Any cuts or closures in adult education will be the decision of the ILEA, because it has given lower priority to adult education than to good housekeeping."—[Official Report, 23 December 1981; Vol. 15, c. 1031.] I hope that many people who have been misled by ILEA's campaign will find time to read this Adjournment debate, for which I thank my hon. Friend.