HC Deb 10 April 1987 vol 114 cc611-8 12.30 pm
Mr. Tony Banks (Newham, North-West)

I see that the Linder-Secretary is staying in his place to answer this debate. He is certainly earning his Easter egg this year. I am sure that he will not be congratulating me on the subject that I have raised as he congratulated his hon. Friends on the subject that they raised. However, I am grateful for the opportunity to raise the subject of the cost of the abolition of the GLC in financial and service terms.

I remind the House that the abolition of the GLC was a prime example of political vandalism by the Government, and arose out of the Prime Minister's paranoia. The abolition of the GLC owed nothing to political rationality, local government efficiency or the needs of Londoners. From the outset, it was about the Prime Minister's malice and her particular detestation of one Labour local authority which dared to oppose her.

Since 1983, I have faced a fair number of Department of Environment Ministers across the Floor of the House —the Department of the Environment is something of a political high risk area. No doubt all those Ministers hoped that, once the GLC had been safely abolished by the sheer weight of the Government's elected dictatorship, that would he the end of the matter. By scattering the pieces of the GLC around over 70 successor bodies, Ministers clearly hoped that they would be able to hide the impact of abolition.

To a certain limited extent, Ministers have been successful, given the fawning, pro-Tory press that we have, especially in London. The London Evening Standard—or the London sub-standard as it has become known—has failed completely to defend the interests and services of Londoners that the GLC used to maintain. I welcome the advent of the London Daily News, which is speaking up much more forcefully for Londoners.

As Ministers know, the embarrassing truth keeps bubbling to the surface — issues such as Hampstead heath, Thamesmead, seaside and country homes, GLC mortgages, the Woolwich ferry, London scientific services, the GLC lorry ban, the London research centre, road safety, traffic control, strategic planning, waste disposal, arts funding and the voluntary sector. In all these, there is daily evidence of the inefficiency, disruption and chaos that are becoming the reality of GLC abolition. London is muddling through, as we always knew it would, but the strains are clearly showing. I shall return to some of the issues—although I will not be able to deal with them in depth; there will be other opportunities to do so before this Parliament ends.

I start with costs. When the Government were finally pushed into saying how much they believed abolition of the GLC and the metropolitan counties would save in terms of staff and money, they came out with the figures of 7,000 savings in staff and £100 million savings in costs. I believe that those figures were simply plucked out of the air; the Government refused at the time, and have consistently refused since then, to give a more detailed breakdown of the figures.

A reply to a question from my hon. Friend the Member for Copeland (Dr. Cunningham) on 18 December showed clearly that the 7,000 savings in staff had been reached by a rough subtraction of full-time staff in position in local authorities in June 1986 from those in position in June 1985. A figure of 1,100 was allowed for staff transferring to other bodies on abolition.

Will the Minister provide a breakdown of those 1,100 jobs and tell us how many were in London? Did that figure take into account staff transferring to, or recruited by, the Thames water authority, English Heritage, Government Departments, London housing units, the London strategic policy unit, the London waste regulation authority, waste disposal authorities and coroners and magistrates committees? We need that breakdown so we can test the Government's estimates.

The figure of £100 million of savings was given in 1984 and has never been revised; nor has it been analysed by Ministers, despite frequent requests that it should be. The figure has been reduced to £40 million for the first year, because of the impact of redundancy payments. Will the Minister tell us the amount paid in redundancy in the first 12 months, how many claims are outstanding and how much is involved?

The Association of London Authorities and the London strategic policy unit recently issued a document in which they calculated that the total cost of running services that used to be provided by the GLC is £178 million more than it was in the last year of the GLC's existence. They calculate that those services cost £1,011 million, compared with £833 million under the GLC.

I believe that the Government are dressing up the statistics to try to give respectability to their case. It is an example of the creative accounting which the Government spend so much time condemning Labour local authorities for using. Of course, those authorities have better reasons for their action, because they are trying to defend jobs and services in areas facing Government penalties and constant attacks.

I do not want and I am sure that no one in London wants— a sterile exchange of conflicting figures between Labour local authorities and the Government. Therefore, in the interests of London, fair debate and political objectivity, I challenge the Minister to commission an independent audit to assess the financial impact of the abolition of the GLC. I will accept any auditors that the Minister proposes—except, of course, any of those connected with the hon. Member for Ynys Môn (Mr. Best).

I now wish to develop some of the issues that I mentioned earlier. It is well known that the preferred option for Hampstead heath would be for the London borough of Camden to run it. For a start, 84 per cent. of the heath is within the borough's boundaries, but Camden is a Labour borough and the Government and their creature, the London residuary body, do not want to transfer the heath to a London borough unless it is prepared to pay the full cost of running it. That would be grossly unfair, because Hampstead heath belongs to London as a whole.

I understand that the latest proposal, which surfaced last month, is for the City to administer the heath, with £1 million of City cash and £800,000 which is to be raised from a £15 million trust fund set up by the London residuary body. If that proposal goes through, London boroughs will lose £15 million of capital receipts.

Does the Minister think that a return of £800,000 on a £15 million trust fund is value for money? If he handed the £15 million to me, I could raise more than £800,000 on it. However, the Government will accept the proposal because they would like to see the City take over Hampstead heath, even though it would be financially and politically unacceptable to the London Labour boroughs.

I have mentioned previously the 3,400 seaside and country homes built by the London county council and the GLC for retired Londoners. The situation is still one great mess. We had a debate on the London residuary body in December, when I asked the Minister what would happen to the seaside and country homes. He replied : I hope that satisfactory arrangements will shortly be concluded for the future of those homes." — [Official Report, 19 December 1986; Vol. 107, c. 1523.] When will the transfer from the LRB be effected? What new housing associations will be involved in taking over the homes, now that the deal with the Anchor housing association has come to a halt? The Minister must tell me, and, more important, the 3,400 tenants, what will be the average rent rises for those homes.

Will the homes still be available for Londoners after they have been split up amongst a plethora of housing associations? Will the Minister allow any of those homes to be sold off? As a large number of housing associations will be involved, what mechanism will the Department of the Environment use to make sure that those homes are still allocated to retired Londoners? When will all this be completed? That is what we need to know.

I do not want the Minister to do as he did on 19 December, and say that I am spreading alarm and despondency among the people in those homes. The Government started the whole business with the abolition of the GLC and they are responsible for those peoples'fears and worries. It is up to them to allay those fears by making an early announcement.

Thamesmead is another fine mess for London. It was to be transferred by the last Under-Secretary but one—or two, I do not remember exactly—who said that the transfer would be effected in a few days. Now, the Government have been forced to direct the London residuary body to dispose of Thamesmead at a price below the market rate—and, I hear, on hire purchase. I believe that the Thamesmead trust will have to sell off some 3,600 homes with vacant possession over the next 12 years to pay off the debt. That will change the whole nature of Thamesmead. Rents will rocket during the next few years and tenants will effectively be forced out of Thamesmead in order to make way for vacant possession sales.

I come now to the London waste regulation authority. Abolition of the GLC split up London's waste disposal arrangements by creating for statutory waste disposal authorities — three voluntary groups, plus Bexley in Kent. What a mess! It is, perhaps, appropriate to leave a mess to try to clear up London's mess, but it is an awful mess and the Government know that. All the experts told Ministers at the time that the GLC operated one of the world's most efficient waste disposal systems, but, as that meant keeping a Londonwide body in existence, the Government would not wear it. Therefore, we have this terrible mixture of authorities to run waste disposal in London. The health and safety of Londoners is now being put at risk merely because of political dogma emanating from the Prime Minister and working down to junior Ministers.

There are in London more than 1,000 known producers of special waste and the work that the London waste regulation authority is doing prevents it from giving full inspection cover to those known waste producing concerns. I have mentioned only known producers, but up to 20,000 tonnes of waste are illegally dumped in London each year. As many as 4,000 of those tonnes are special waste.

The situation is getting out of control. The director of the LWRA said that the authority could no longer manage the job. The failure to agree an increase in staffing at the LWRA now means that Londoners are being exposed to risks from toxic—perhaps lethal—substances, which are being illegally dumped in the Greater London area.

I am rushing to try to get through my speech in the few minutes left to me. I shall deal quickly with the voluntary sector. If I can catch the Minister's eye, I should like to show him a copy of the book, "After Abolition", and ask him whether he has seen it. It was published in January by the National Council for Voluntary Organisations and the London Voluntary Service Council. I intend to seek a debate on some future occasion to raise the whole matter of the voluntary sector in London and the impact that abolition has had on it.

The book lists 46 voluntary organisations that are known to have closed in London since abolition, a further 21 that are about to close and 120 that are facing eviction or increased rents on properties that now belong to the London residuary body. A new round of cuts has just been agreed under the London boroughs grant scheme. That was done a couple of nights ago. The cuts were imposed by the Tories with the support, on this occasion, of the Liberals. The Secretary of State has imposed a budget following the boroughs' failure to agree one after seven attempts. The position of the voluntary sector in London can only worsen as the Government steadily reduce the funds available.

An important feature of the voluntary sector is the arts. I know that the Minister is not primarily responsible for them, but there are impacts on the arts in London that arise from the abolition of the GLC. It has been discovered by those who operate the grants scheme for the London boroughs that the greatest demands come from arts organisations in London. One of the major demands that they are making upon the scheme is for the provision of capital resources. Unfortunately, the scheme is not permitted to provide capital grants. I understand that permission has been sought from the Secretary of State and that the Government have refused to grant it. I hope that the Minister will tell us why the Government have taken that approach and whether he is reconsidering the matter.

It is worth noting the effect on London when Liberals assume some control. Tower Hamlets has suffered badly as a result of the GLC's abolition, and it has now been decided by the Liberal council to cut the funding of arts clients from £228,400 to £7,400. That is what the Liberals do when they gain control of a London borough. This cut of 97 per cent. leaves 14 of 17 arts clients without any funding, including such well-known organisations as the Half Moon theatre, Camerawork and the East London African Arts Group. This is not directly the Government responsibility — responsibility rests with the Liberal-controlled Tower Hamlets council—but the council will say with some justification that the position has arisen because of the GLC's abolition, rate capping and all the other onslaughts that the Government have been making on local authorities in the capital.

The Government have sought to hide the impact of the GLC's abolition behind a welter of uprovable statistics which they refuse to detail in any way that will make them meaningful to us. They have set up a host of quangos and joint boards — which, together with the borough councils, have responsibility for trying to clear up the mess that has followed the GLC's abolition. All the time, the Government are steadily reducing the central Government funding that has been used to lessen the financial impact of abolition. As things drift from bad to worse, the Government hide behind the various quangos and successor bodies and say, "This is nothing to do with us. This is a matter for the successor bodies."

This will be one of the last occasions on which I shall have to raise these matters. Before long, there will be a general election and the Government will be out of office. The GLC will be brought back, and I believe that all London will rejoice.

12.48 pm
The Parliamentary Under-Secretary of State for the Environment (Mr. Christopher Chope)

I noted that the hon. Member for Newham, North-West (Mr. Banks) did not make his final remarks with much conviction. I have read in today's edition of The London Daily News—I do not hold prejudices against one newspaper like the hon. Gentleman; I read all newspapers—that the former and unlamented leader of the GLC is now in Australia. I think that there are many who hope that he will stay there. Apparently he has been promoted in Australia as the Lord Mayor of London. He has been talking to the people there about the inadequacies of post-GLC London. Even The London Daily News admits that the Australian public are somewhat mystified.

Even more oddly, Mr. Livingstone is talking about giving a lecture to a conference on the role of local government in sustaining urban renewal. Where urban renewal in London has been practised efficiently and well, Conservative-controlled authorities have been responsible. Since the transfer of housing responsibilities from the GLC to the boroughs, the quality of life in responsible, Conservative-controlled boroughs for tenants of houses and flats has increased immeasurably.

It is something of a seasonal ritual to have a debate on the abolition of the GLC. As memories become more cloudy and people become less concerned about the GLC, so the arguments become more jaded. The fact is that the GLC has been abolished and no one wishes to resurrect it in its old form. I understand that the Labour party has put forward a proposal for a revamped regional authority for London. The principal plank of that proposal is to allow the services that were transferred to the boroughs — to which the hon. Member for Newham, North-West and the Labour party objected — to stay with the boroughs. That is the wish of London boroughs, whether under Conservative control or under Labour control.

The hon. Gentleman made much play of suggesting that the GLC's abolition has led to increased costs. The facts say otherwise. Abolition has, emphatically, led to savings. In measuring those savings, it is important to distinguish between those that arise directly as a result of abolition, such as the initial savings in posts, and those that can be realised or thrown away according to the policy decisions of individual borough councils. I have not studied the ALA report in depth. I often think of the initials "ALA" as meaning the Association of Labour Authorities, but I am told that it means the Association of London Authorities. But, of course, they are all Labour authorities and have a particular axe to grind. The ALA was extremely reluctant to send the Department of the Environment a copy of the report. I cannot understand why.

Mr. Tony Banks

Perhaps the Minister will accept an Easter present from me afterwards. He can have my copy.

Mr. Chope

If the hon. Gentleman is going to offer me his marked copy of the ALA report, I should be delighted to receive it.

At first sight, the arguments are convoluted and based on sweeping assumptions. The report fails in any way to controvert the simple facts that more than 6,000 posts were saved immediately on abolition of the GLC and metropolitan county councils, with clear prospects of long-run annual savings of £100 million, and that significant financial resources have been released, notably in the form of some £431 million in cash now being distributed to successor authorities by the residuary bodies. The report attempts to compare expenditure by boroughs on services inherited from the GLC. It does not, however, reflect profligate spending by those boroughs that have chosen to pursue the GLC's spendthrift polices without a thought for possible savings.

On the first anniversary of the transfer to Wandsworth council of services that it had inherited from the GLC, I had the privilege to be invited to Wandsworth and to her how matters have progressed in that borough. Wandsworth council has reckoned that it has saved a substantial amount of money as a result of taking over services formerly run by the GLC and running them more efficiently. Would that that had been the attitude of all authorities that have taken over those inherited services.

Wandsworth council estimates that there was an initial reduction of £1.5 million in the running costs of the directly transferred services and that the repayment of balances from the London residuary body provided £2.7 million. The council said that those two savings equated to an 11.2p rate when Government grant entitlement on the money was added. Further savings amounting to a 2.8p rate have been generated for the current year via a reduction in the LRB and Western Riverside waste authority levies and a further 4.4p in LRB balances which have been distributed.

To those total savings of 18.45p, or £46.12, for the average ratepayer must be added further savings in 1987–88. Major new savings which are starting are the £99,000 a year on scientific services and £104,000 a year from London Research. With other savings immediately in prospect, the leader of the council reports that he envisages total savings of almost £50 for the average Wandsworth ratepayer. That would be equivalent to 17 per cent. extra on rate bills if the GLC were still in being.

Those are the facts that have been given by the leader of just one local authority. Those people who live in the vicinity of Battersea park can see how the park is now run much more efficiently and in accordance with the wishes of local residents. Seeing is believing.

The hon. Member for Newham, North-West will never accept that the GLC should have been abolished, if, indeed, he accepts that it has been abolished. Therefore, it is worth reminding everybody about the substantial savings that there have been. I shall summarise the main categories of savings that have come from abolition.

In manpower, in excess of 6,000 posts were saved immediately. We predicted 7,000 posts in the long run and I am confident that that will be achieved as residuary bodies wind down their remaining activities. A total of 7,000 posts equates to a £100 million saving to ratepayers every year and about half of that is in London.

Secondly, there are savings in financial resources. Abolished councils had locked up vast amounts of ratepayers' money and that is now being released. In London, the London residuary body is distributing to the boroughs in its first two years £129 million in revenue balances, £141 million in capital receipts and £634 million in capital spending power. The cash distributed amounts to around £100 for every household in London. There is more to come as the residuary bodies sell off additional surplus land and property.

Thirdly, on the matter of land and property, one of the residuary bodies' principal tasks has been to sort out the property portfolio. It is clear that the GLC and metropolitan county councils were hoarders of property on a grand scale. The Government are encouraging residuary bodies to sell as much of the surplus as they can. The proceeds of those sales will be returned to the ratepayers of the abolished councils. The estimate by the residuary bodies is that by the end of the year, they will have generated some £300 million of capital receipts, mainly from the sale of surplus property. In the first year alone, the LRB has sold property worth over £30 million. Capital receipts are being generated, to the benefit of boroughs and their ratepayers.

The fourth major saving from abolition is the success in devolving functions. The chaos and disruption predicted by some has been conspicuous by its absence. The boroughs have absorbed their additional functions with barely a ripple. The new joint authorities, representing the boroughs, are working satisfactorily. Roads are still maintained and fire engines still turn out. That should bring benefits from leaner operation and avoidance of duplication. It is up to the successor authorities to grasp the opportunities that have been offered to them as a result of abolition.

Accountability to the electorate has also increased, because services have been brought closer to the people.

Mr. Tony Banks

In view of this enormous success story why will the Government not submit it to independent audit?

Mr. Chope

The figures on manpower savings, for example, are obtained from "Joint Manpower Watch", which are submissions by local authorities to the Department of the Environment. The figures for additional staff are provided by the boroughs themselves under section 56 of the Local Government Act 1985 and the figures for compensation payments are provided by the residuary bodies. Obviously, all those figures for the individual authorities are subject to the audit of those authorities. Certainly, if the hon. Gentleman would like, I am prepared to suggest that the document of the Association of London Authorities should be discussed by people to see the extent to which it represents a fair picture of post-abolition London. The hon. Gentleman's selective quotation from what has happened, fairly convinces me that it is a travesty of the truth.

Before I gave way, I was going to refer to the fifth major area of success following abolition — the effect on services. It is emphatically for successor authorities to decide how they wish to run inherited services and at what level. Some boroughs are doing so with only a minimum of additional resources and it is clear that some boroughs have chosen to seize upon the excuse of abolition to increase their staff even more than is necessary.

A prime example is the irrelevant London strategic policy unit, which I understand is referred to as the GLC in exile. That employs over 300 staff at a cost to the ratepayers of Camden and the other supporting boroughs of some £7 million annually. It is not a legitimate additional cost of abolition. It is a choice by those profligate authorities to increase the burden upon their ratepayers.

If one looks at what has happened in the responsible authorities, one can see the benefits that have flowed from abolition and the benefits that will continue to flow in the coming months. I expect that there will come a time when even the hon. Member for Newham, North-West will no longer lament the demise of the GLC.