§ 3. Mr. Wigleyasked the Secretary of State for Wales, following the recent meeting of the Consultative Council on Local Government Finance, Wales, what changes he requires in local authority spending patterns in Wales during the current financial year; and if he will make a statement.
§ 12. Mr. D. E. Thomasasked the Secretary of State for Wales if he will estimate the likely spending above his Department's ceiling by local authorities in 1982–83; and if he will make a statement.
§ The Secretary of State for Wales (Mr. Nicholas Edwards)Local authority returns of expenditure and rates show a total budgeted expenditure excess for the 1982–83 financial year of £57 million over the settlement provision.
I have asked all authorities to submit revised budgets to me by the middle of July and have not taken any decision on withholding.
§ Mr. WigleyIs the Secretary of State aware of the chaos that is caused to local authority budgets by having to rethink a year's budget when the year is only a month or six weeks old? In assessing the overspend, can he give an assurance that none of the additional expenditure on road programmes arising from the phenomenal snow this winter, which has hung over into the current financial year, will be taken into account when penalising counties for the expenditure levels that they are now incurring?
§ Mr. EdwardsThe local authorities had adequate warning that if their expenditure went above the figures that we had laid down. I would have to ask them to re-examine it and that I might have to withhold. They had plenty of warning. Indeed, the Welsh counties made substantial provision in their budgets, on the assumption that there would be withholding.
I have told the local authorities that I shall take a number of factors into account. Although in 1981–82 the special expenditure on the snow emergency has been excluded, I noted what they had to say to me on Friday about expenditure which runs into the following year. I said that I would take note of that with all the other factors that I put to them.
§ Mr. ThomasDoes the Secretary of State accept that the proposals for close ending and holdback for Welsh authorities in the paper produced by the Welsh Office for the consultative committee are completely at variance with the statement made to the Standing Committee that considered the Local Government Finance (No. 2) Bill when this issue was discussed? Is not the Welsh Office now attempting to introduce in Wales a scheme which has not been introduced in England? Are not Welsh authorities being further penalised as a result?
§ Mr. EdwardsThe hon. Gentleman should not confuse close ending and withholding. The undertakings given in Committee applied only to England.
§ Mr. ThomasWhy did the Minister not say so?
§ Mr. EdwardsWhen my hon. Friend made that statement, he referred specifically to England. The position is wholly different in Wales. We have not had to go down this route before because of the co-operation of the Welsh local authorities. I hope that Welsh local authorities will continue to co-operate so that I shall not have to withhold. I am surprised that the hon. Gentleman is arguing that I should treat Welsh local authorities in exactly the same way as English authorities.
§ Mr. Roy HughesWhat contingency arrangements will the Government make to assist local authorities to meet the increased cost of wage applications following the abrogation of the so-called Luxembourg compromise by our Common Market partners? Will that not increase the cost of food to the people of Wales by £1.50p a week for an average family? Will the right hon. Gentleman also consider the effect that this will have on the competitiveness——
§ Mr. SpeakerOrder. The hon. Gentleman has asked several questions.
§ Mr. EdwardsThe anticipated increase in the cost of living arising from the agricultural settlement is less than ¼ per cent. in a full year, which will be rather less than that which we used to suffer every month under the Labour Government. Welsh local authorities have made a provision in their budgets that appears to be excessive when considered against the actual outturn of wages and costs.
§ Sir Raymond GowerWelsh local authorities were faced with great problems due to savage and intense weather conditions during the winter. Is my right hon. Friend satisfied that the help that his Department is giving under the present formula is satisfactory in all the circumstances?
§ Mr. EdwardsI am sure that all right hon. and hon. Members will want to welcome back my hon. Friend the Member for Barry (Sir R. Gower) after his illness. My hon. Friend knows that we made special provision at the time to meet the emergency. In making our assessment of any excess expenditure for 1981–82, that provision will be excluded.
§ Mr. Alec JonesThe Opposition are glad to see the hon. Member for Barry (Sir R. Gower) back in his place, looking both fitter and slimmer as a consequence of his absence. So-called overspending in England was about 7.7 per cent., and the Minister for Housing and Construction gave an assurance in Committee that the differential holdback would be no greater than that announced in December. In Wales, according to the answer given to my hon. Friend the Member for Swansea, East (Mr. Anderson), there was an overspend of only 5.1 per cent. Does the right hon. Gentleman realise that unless we get an assurance from him of the sort given by the Minister for Housing and Construction we shall be led to the view that the Under-Secretary of State, through his silence, mislead local authorities, the Committee and the House?
§ Mr. EdwardsThe answer is simple. English local authorities suffered a differential holdback, and no such holdback has been applied to Welsh authorities. The circumstances are completely different. When I saw the local authority representatives on Friday I told them that I would take into account whatever the outcome might be in England. I gave them an assurance that I would take careful note of the final holdback in England before taking any decision that would have an effect on Welsh local authorities.