Standard Spending Assessment (Cumbria) (Hansard, 31 January 1990)

§ Mr. Eric Martlew (Carlisle)
The Government's spending target for Cumbria is ridiculous; it reflects the classic north-south syndrome and indicates the inability of Whitehall to recognise the needs of Cumbria or of any other area outside the south-east.
Those are not my words, but those of the leader of the Conservatives on Cumbria county council. An article in the Evening News and Star of 16 January states: Tories attack Thatcher. County poll axed. It goes on to state that the group in Cumbria would not seek to meet the Government's target which would mean cuts of up to £33 million.
I wonder whether Mr. Gyngell and his colleagues on the county council now regret their enthusiasm for the introduction of the poll tax. They fought the 1989 election campaign on the basis of the poll tax. They said that it was a good thing. I wonder whether they are so sure now, when their electors must pay the price of the Government's policy.
The standard spending assessment for the county fails to respect or reflect the costs of providing services, particularly education and fire services, in a large and sparsely populated county such as Cumbria. It underestimates the significance of the cost of road maintenance and winter maintenance and it inadequately funds what is called "other resources". It grossly overestimates potential interest receipts.
I now refer to winter maintenance, to give hon. Members some idea of how the SSA was put together. Cumbria is the second largest county in England. It has within it the Lake district, with many of the highest passes in the country and very bad roads in winter. It was originally granted £90,000 for snow clearing, which is less than the London borough of Camden was granted. That gives some indication of the thought that went into the SSA. It was only through representations by Members of Parliament and a high-powered delegation from the county council that that figure was changed. It is still inadequate.

§ Mr. Michael Jopling (Westmorland and Lonsdale)
The hon. Gentleman made a good deal of the remarks of Mr. Gyngell at the beginning of his speech. I should think him unfair if he did not add that, besides criticising the standard spending assessment for Cumbria, Mr. Gyngell criticised unnecessary overspending by the county council. As the hon. Gentleman knows, the council is dominated by the Labour party. Many people think that there are considerable opportunities for savings so that ratepayers of Cumbria do not have to pay as much over the SSA as may be the case.

§ Mr. Martlew
I am sorry that the right hon. Gentleman did not tell the House which service he would like cut. People in his council—South Lakeland district council—will pay the highest poll tax in the area.

§ Mr. Cecil Franks (Barrow and Furness)
rose—

§ Mr. Martlew
If the hon. Gentleman wished to speak on this subject, perhaps he should have sought an Adjournment debate. I am glad to see that I am keeping up the Conservative Members for Cumbria.

§ Mr. Jopling
Will the hon. Gentleman give way?

§ Mr. Martlew
I have given way once to the right hon. Gentleman. I have only a quarter of an hour at my disposal.
It is deeply resented that Cumbria is being penalised to help the south-east. The Government came to the conclusion that they had to pay more to councils in the south-east. That was right and proper, but although it had to be funded the money did not have to come out of the pockets of people in the north of England.

§ Mr. Keith Bradley (Manchester, Withington)
My hon. Friend makes an important point about the distribution between the south-east and the north-west. He spoke eloquently about rural areas, but urban areas are equally hit. The city of Manchester—

§ Mr. Franks
A high overspender.

§ Mr. Bradley
For a standstill budget, Manchester would require £449.8 million. The SSA for Manchester is £366.5 million, a shortfall of £83.3 million. On top of that, each poll tax payer in Manchester will have to pay £71 to fund the safety net, or, in other words, the Tory marginals in the north-west.

§ Mr. Martlew
I agree with my hon. Friend. It was interesting that the hon. Member for Barrow and Furness (Mr. Franks) tried to make a sedentary intervention. He seems to talk in the House more about what happens in Manchester than about what happens in his own constituency.

§ Mr. Franks
Will the hon. Gentleman give way?

§ Mr. Martlew
I refuse to give way to the hon. Gentleman.
Had Cumbria been in Wales our SSA would have been £280 million. We have £244 million because we are not a Welsh county council. Cumbria has many similarities with some of the north Wales councils. We have sparsely populated, large areas. I hope that the Minister will not come to the Dispatch Box and get away with the lame excuse that he has nothing to do with Wales and has no responsibility. My constituents want to know why they must subsidise areas in the south and why they are not supported to the same extent as the Welsh county councils.
To go into the detailed estimates for the county, the Government say that Cumbria overspends on education to the tune of 11 per cent. They want the council to cut education by 11 per cent. That is nonsense. We do not spend enough on education in Cumbria. I plan to visit two schools in my constituency on Friday. No doubt, I shall be told that classes are large, that there are not enough teachers, that the buildings are shabby and that there are not enough books. That is a reflection of the amount of spending that is put into the county. The education system in Britain is a disgrace compared with the rest of western Europe. We should put more money into it, not take it out.
The Government say that we should cut education expenditure by 11 per cent. If that happened, the small schools in the Tory rural areas would feel the effect. They are already feeling it under local management of schools. 409 We see pictures of Tory Members in the newspapers presenting petitions and complaining about the threat to rural schools. It is time that they started to do something about that instead of just picking up petitions.
The Government say that we should cut social services spending by 7 per cent. The fact is that this week my county council has already decided to close six old folk's homes—not because they are empty, but because the county cannot afford to bring them up to standard. That is under the present assessment. What will we do if we have to cut the budget by 7 per cent.? Will we say to some old folks, "We have no place for you"? When children in this country are more at risk from sexual abuse than ever before, are we saying that we shall have to cut resources? That is what the Government are saying.
I turn now to the police. Six months ago the Home Office told us that we would get extra police. I was one of those who lobbied for that and I welcomed the announcement. However, the SSA for Cumbria says that we have 4 per cent. too many police. Therefore, on the one hand the Home Office is recognising that we have a problem with crime—indeed, we have near record levels of crime in Cumbria—but, on the other hand, the Department of the Environment is saying that we have to sack the police that we have taken on.
The funding of our fire service is also amazing. We have had a Home Office review and it is right that Cumbria overspends. We spend £500,000 more than the shire average. However, the Home Office review states that the high costs are not due to inefficiency or ineffectiveness. In fact, the main determination of fire costs is not population, but the nature of the fire risks to be covered. As the House knows, Cumbria has several areas of major fire risk in its boundaries. We have British Nuclear Fuels at Sellafield, the nuclear shipyard and the gas terminal at Barrow and a large ammunition depot near my constituency. They are all fire risks. The Home Office report states that there is a shortage of 16 firemen. Therefore, the force is below standard.
However, the SSA for Cumbria on fire services says that we are overspending by 28 per cent. It implies that we should cut the service by 28 per cent. But if we do, we shall be failing to abide by the law because the Home Office has set down statutory guidelines saying that we should maintain a certain level of fire cover. If we cut the fire service budget by 28 per cent., we would have only two full-time fire stations in the county—one in Barrow and the other in Carlisle. The right hon. Member for Westmorland and Lonsdale (Mr. Jopling), and his hon. Friends the Members for Barrow and Furness and for Penrith and The Border (Mr. Maclean) would be most concerned about that.
I have mentioned highways and the problem of winter maintenance. I concede that we received more than the £90,000, but only after a struggle with the Minister. While the Department of Transport says that we underspend on our roads by £1.5 million, the Government say that we are overspending and should cut our roads expenditure. If we did that, we would be cutting Cumbria's economic lifeline. It is a remote county and needs good roads. We do not have them now and we certainly will not have them if we make any cuts. When the Government announced that the poll tax for Carlisle would be £239, they were right. 410 However, they should have added that if we cut education expenditure by 11 per cent. and destroy our children's futures; if we cut social services expenditure by 7 per cent. and close old people's homes; if we cut 4 per cent. off the police budget and give the criminals a bonus; if we cut the highways budget by 19 per cent. and reduce our lifeline for economic viability; and if we cut the fire service budget by 28 per cent. and put lives at risk, then we could have a poll tax in Cumbria of £239. That is the truth. That is what would have to be done if we are to reach the SSA that the Government specify.
In reality, the Cumbrian councils will not make those cuts. Indeed, the Tories on the county council have said that they will not make such cuts, and neither will the Tories on the district councils. In fact, the Lake district special planning board, over which we have no control and which has put precepts on us, will not make any cuts.

§ Mr. Jopling
Will the hon. Gentleman give way?

§ Mr. Martlew
I have already given way once to the right hon. Gentleman. If he wishes to make a speech on this subject, he should ask for his own Adjournment debate.
A terrible burden has been placed on the people of my constituency. The poll tax in Carlisle, and probably in most of the south lakeland, will be between £300 and £400 rather than the £239 that the Government suggested.
I have asked for this Adjournment debate for three reasons. First, I want the Minister to change his mind on the SSA for Cumbria. I am sure that that is why Conservative Members are here. Secondly, I wish to place on record the terrible way that the county has been treated not only by the Government but by Conservatives representing constituencies in it. On 18 January, we had a debate and then a vote on a measure that would have given Cumbria and other councils extra money. The right hon. Member for Westmorland and Lonsdale and the hon. Members for Barrow and Furness and for Penrith and The Border all voted against it. That is the day that they deserted the people of Cumbria. Thirdly, I want to lay down a marker for the Government and the Minister. They have done it once to Cumbria. If there is any justice, next year they will give us a fair deal with the SSA.

§ The Parliamentary Under-Secretary of State for the Environment (Mr. David Heathcoat-Amory)
My hon. Friend the Member for Southampton, Itchen (Mr. Chope) wanted to reply to the debate, but, as the hon. Member for Carlisle (Mr. Martlew) has been told, my hon. Friend was called away at short notice to Southampton. However, the reason is a happy one. His wife is expecting a baby, and it is arriving early, so it is right that he should be there.
I congratulate the hon. Member for Carlisle on securing the debate and on the vigorous way in which he has put the case for a higher spending assessment for Cumbria. This is not the first time that there have been consultations and discussions between Ministers from my Department and representatives from the county council about the SSA. On 6 December last year, a cross-party delegation from Cumbria county council met my hon. Friend the Member for Itchen and put to him many of the points that the hon. Member has raised again tonight. The council put its case clearly and identified a number of aspects of the SSA where it did not do as well as it thought it should. The fact that Cumbria was able to identify so specifically where it 411 was not happy with the SSAs demonstrates that, at the very least, the new system is, as we had intended, much more understandable than the complex grant-related expenditure assessments that it replaces.
Ministers in my Department have met many other delegations, from local authorities throughout the country, about local authority grant settlement for this year. We have also received many written representations. Nearly every authority from which we heard put forward reasons why it should be treated as a special case and why some element of the SSAs was not appropriate to its circumstances. My righ hon. Friend the Secretary of State for the Environment considered all these sometimes conflicting representations and laid before the House the distribution report which defines how SSAs are calculated. He said: Excluding the parish councils, there are 426 local authorities in England, and the more deputations I have received concerning SSAs, the more I have realised that there are at least 424 special cases".—[Official Report, 18 January 1990; Vol. 165, c. 435.] Drawing up a means to distribute standard spending assessments between the 426 authorities is a difficult task. My right hon. Friend has reached a basis that is fair and strikes the right balance between the differing points of view put to him.
The basis of the distribution is in no way arbitrary and does not seek to reward or penalise particular authorities. It is set out very clearly in the distribution report, approved by the House, which gives a formula for each of a number of service blocks. These formulae apply in exactly the same way to all authorities providing particular services. The information which feeds into the formula is derived from nationally available data sources, so that these data are provided on a consistent basis for all authorities.

§ Mr. Martlew
Can the Minister explain what went wrong with the computer when it decided that Cumbria would receive £90,000 for winter maintenance but that Camden would get £125,000 for the same purpose?

§ Mr. Heathcoat-Amory
I shall come to that in a minute. It was a useful element of the earlier consultations that such factors were spotted and dealt with. I am entirely satisfied that the settlement that finally emerged was fair and was on a consistent basis for all authorities.

§ Mr. Franks
I thank my hon. Friend for giving way and thereby displaying far more courage than the hon. Member for Carlisle (Mr. Martlew), who saw fit to use up only 13 minutes of a 30-minute debate, yet chose not to let me intervene.
Will my hon. Friend bear in mind two points? First, the hon. Member for Carlisle said that Conservative Members representing Cumbria had deserted the county. Six Members of Parliament represent Cumbria, three Conservative and three Labour. All three Conservatives are in the Chamber tonight to hear the debate; two of the three Labour Members are not.
Secondly, I ask my hon. Friend to take into account the bloated bureaucracy of county hall. It is a shameful waste of expenditure. Should not the hon. Member for Carlisle direct his fire at his Labour colleagues on the county council instead of at the Government?

§ Mr. Heathcoat-Amory
My hon. Friend makes a characteristically telling point. I too have noticed that the 412 hon. Member for Carlisle is the only Cumbria Labour Member to attend, whereas all three Conservative Members from the area are here. I refer to my right hon. Friend the Member for Westmorland and Lonsdale (Mr. Jopling), my hon. Friend the Member for Barrow and Furness (Mr. Franks) and my hon. Friend the Member for Penrith and The Border (Mr. Maclean), who has taken time out of his ministerial duties to attend this debate. All three of my right hon. and hon. Friends have consistently and vigorously promoted the interests of their constituencies and the county. That has been more productive than the mistaken allegations made by the hon. Member for Carlisle.
If the Labour party ever makes progress in bringing forward alternative proposals for local government finance—we await them with interest—the hon. Member will still have to face up to the problem of how to distribute grant between local authorities. A balance must be struck between making the system reasonably simple and understandable—by limiting the number of criteria—and including ever more criteria to take account of every conceivable circumstance. The latter system would immediately become too complex and opaque—features of the system that we have replaced. It became too complex to be understandable even by those who work in local government.
I shall return to the details of the SSAs for authorities in Cumbria, but first I must mention the overall provision in the settlement for 1990–91 for England as a whole. The plain fact is that the total standard spending for 1990–91—the amount that we consider it appropriate for local authorities to spend in total from revenue to provide services—is a full 11 per cent. higher, at £32.8 billion, than the equivalent for 1989–90.
Perhaps I may now turn to Cumbria itself and put on record that for 1990–91 Cumbria county council told us that a budget of £278 million would, in its terms, be needed to maintain services. This represents a cash increase of more than 11.5 per cent. over its equivalent total expenditure for 1989–90, and seems to me to be rather more than should be needed simply to maintain services. It does not suggest that the council has made further efforts to find savings. My hon. Friend the Member for Barrow and Furness pointed out where it could start to look. I hope that, now that it knows its final standard spending assessment and the grant and business rates going to district councils in Cumbria, it will be able to look again and find further savings to benefit its charge payers. In broad terms, every £1 million by which Cumbria county council could reduce its budget could lead to a reduction in community charges in its area of almost £3 per charge payer. All savings that local authorities can make will now feed through, pound for pound, into reductions in the community charge.
As I have already said, my hon. Friend listened very carefully to the points that Cumbria county council made when it came to see him. One of the points that most strongly concerned it was its assessment for highway maintenance—a point raised by the hon. Member for Carlisle also—and in particular for winter maintenance. Several other authorities with climate and geography similar to Cumbria's also told us that the winter maintenance SSAs seemed out of line with expenditure. As I have said, we looked again at this and realised that the formula we published in the consultation documents on 6 November did not adequately reflect my right hon. 413 Friend's desired treatment of winter maintenance. On 8 December last we wrote to all local authorities informing them of this.
This has been of very considerable benefit to Cumbria county council—a point not made by the hon. Gentleman. Its SSA for highway maintenance in the final figures is £1.587 million higher than the figure published on 6 November. Taken with other changes—in particular, more up-to-date figures for credit approvals—Cumbria county council's SSA is now almost £2.5 million higher than the figures published in November.

§ Mr. Martlew
The Minister does me a disservice. I indicated that the £90,000 that had originally been given by the Government was increased. But that was not because of anything done by the Minister or any of his minions; an all-party delegation of councillors from Cumbria had to come and tell the Minister that in the winter it is colder in Cumbria than in Camden, and that Cumbria has many more roads and a lot more housing. Otherwise we would have received £90,000.

§ Mr. Heathcoat-Amory
Cumbria county council was not the only authority to raise that point with my hon. Friend and my right hon. Friend. It was as part of the wider consultation procedure that we took a further look at highway maintenance and, in particular, winter maintenance and came to the conclusion that an adjustment was necessary. I wish that the hon. Gentleman were rather less grudging in conceding that we moved very significantly to increase the subsequent SSA. All of this means that the SSA for Cumbria county council is now £246.476 million, which is an increase over its equivalent GRE in 1989–90 of 7.3 per cent. That figure is close to the current rate of RPI inflation, and well above our estimate of the GDP deflator, which is perhaps more relevant to local government spending. Not only does Cumbria have an increase of about the rate of inflation, but its SSA per adult is around the average for shire counties. Its SSA is £643 per adult and the average is £653. Some 19 out of 39 shire counties have lower SSAs per adult than Cumbria. 414 That cannot be construed as unfair treatment for Cumbria. The hon. Member for Carlisle stayed away from those figures.

§ Mr. Jopling
Those figures are all very well, but my hon. Friend must understand that many people other than those in Cumbria are complaining. The way in which the SSAs have been worked out taxes the loyalty of many of the Minister's supporters. As the hon. Member for Carlisle (Mr. Martlew) said, how can one possibly justify an SSA which says that spending on the fire service must be cut when the Home Office says that spending should be increased?

§ Mr. Heathcoat-Amory
I had hoped that in the closing minutes of the debate I could come to some of the specific points made. The review of SSAs for the fire service looked at many options. The approach that was finally adopted by my right hon. Friend the Secretary of State for the Environment has the support of my right hon. and learned Friend the Home Secretary, who is responsible for the fire services.
Although the SSA for an authority is made up of a number of elements, we do not ask authorities to compare their expenditure with those elements service by service. It is the overall comparison between spending and SSA that is important. Local authorities retain discretion to set their overall level of spending and to decide how that should be distributed across the services that they should provide. Cumbria will see a 7.3 per cent. increase between its SSA for 1990–91 and its equivalent SSA for 1989–90 GRE.
I welcome this chance to debate the matter in detail. I hope that I have covered all the points raised by the hon. Member for Carlisle, but I shall write to him on any that I have failed to cover. I am satisfied that the new system of SSAs is simpler and more understandable than the old system of GREs and that the result for Cumbria is fair. It is for Cumbria county council to examine its expenditure plans and to play its part in setting a reasonable community charge.