Local Authority Finance (Education Costs) (Report) (Hansard, 27 January 1982)

§ Sir Brandon Rhys-Williams (Kensington)

I beg to move, That leave be given to bring in a Bill to require the Secretary of State to carry out a further review of the reform of local authority finance; to prepare proposals for the introduction of a special rate support grant to bear the full cost to local authorities of providing public education; and to report to Parliament not later than 31st July 1982.

The House has had acrimonious discussions recently on local authority finance. I am seeking leave to introduce a Bill to deal with the cost of education and to ask for a report on that subject before the House rises for the Summer Recess.

Although there is much controversy over local authority finance, there is general agreement on both sides of the House on the need for a major reform of the present rating system. The plain fact is that over the years Parliament has placed burdens on ratepayers that are greater than they can bear. We have recognised that fact in that we agree that we must accept a large part of the cost of local government expenditure as a charge on the national budget.

If we consider services that are analogous to education, we see that the decision has been taken already. I am thinking of the services that we provide to pensioners, particularly the payment of pensions. I am also thinking of the National Health Service. These services are now accepted as proper to be paid for mainly by central Government. But although education has become a national service with, to a great extent, nationally regulated standards, it is still administered locally and the ratepayers contribute a net figure—as I calculate it—of at least £4, 000 million to £5, 000 million. That is much too heavy a burden to continue to place on the rates. It is an item of expenditure which has to be brought on to central Government resources.

I have already advocated on a number of occasions that the entire cost of education should be taken over by central Government. The Government's recent Green Paper looks at this possibility in annex B. This is the reform that could be implemented most quickly and simply of all the possibilities that are analysed in the Green Paper. It should have the general effect of halving the rates in one single reform. There is much still to be said about the responsibilities of ratepayers in respect of other services, but I hope that I shall have the agreement of the House that the time has come for education to be made a genuinely national service.

If the burden of finding the money for education fell on to income tax instead of on the rates, it could be said that what the ratepayers would gain the income tax payers would lose and that there would be no significant difference. But there would be a significant and worthwhile improvement in the way the burden of the cost of education would be spread. The reform would bring help precisely to those ratepayers who are finding the rates most onerous, that is, those on the lowest incomes.

Inevitably in making a recommendation of this kind one is bound to arouse consideration of the future of education policy. I am not in this Bill seeking to do that. I am not trying with this reform to change the total amount spent on education, only to spread the cost more acceptably. 901 Annex B to the Green Paper deals with various options that could be adopted by the House to implement the reform. First, education could be made entirely a central Government responsibility and taken away altogether from local authorities. That would be highly controversial and there would be little support for it on either side of the House. So I would not suggest pursuing that idea.

A proposal that has often been recommended, and which has something to be said for it, is that teachers' salaries should be paid for centrally, but that local authorities should remain responsible for the rest of the cost of education. I have thought for some time that this was an attractive and reasonable suggestion, but I note that the Green Paper says that it would probably prove unsatisfactory.

As for the third possibility, which is dealt with in the annex, the introduction of a special education block grant, I shall not take up the time of the House by reading the whole section of the Green Paper. It is only 10 to 12 lines and I had intended to read it; but I will leave it to hon. and right hon. Members who are interested in the idea to look at it. It puts the proposal succinctly. In effect, it would mean that Government would introduce a special block grant that would bear the whole or a large part of the national education standard cost, but local authorities would still be free, within reason, to add to that if they chose. That would be a matter between them and their ratepayers.

The purpose of my Bill is to add urgency and direction to the consideration of the Green Paper and to show the strong feelings of the House that reform is overdue. Because of the rules of order, I have not been able to bring in the Bill in such a form as would implement the proposal in due course on the passage of the Bill, but I am content that the House at this stage should simply ask for a further report, supplementing what is written by the Government in the Green Paper.

To prevent any delay, however, I have specified in the long title that the report should be presented to Parliament by 31 July this year. That gives a reasonable length of time. I hope that the House will make it clear to ratepayers that something positive has to be done before the Summer Recess and that hon. Members are aware of it. Then we would still have time to introduce a major reform of the rates in the lifetime of this Parliament. That is my aim and I hope that the House will give me leave to introduce my Bill.