HC Deb 10 July 1991 vol 194 cc941-3
10. Mr. Simon Coombs

To ask the Secretary of State for the Environment how many local authorities would have been capped in 1991–92 if the £15 million limit on expenditure had not been in force.

Mr. Portillo

We now announce our capping criteria in advance. The result is that most councils take care to set budgets which will not be capped. Had capping applied this year to councils with budgets under £15 million, many of them, I am sure, would have set lower budgets than they did, to the benefit of community charge payers.

Mr. Coombs

Is it not good news for hundreds of thousands of community charge payers that the abolition of the £15 million limit on expenditure will force many councils to exercise proper restraint on their future expenditure? Can my hon. Friend quantify the harm already done to community charge payers?

Mr. Portillo

On my hon. Friend's first point, he may have seen in the case of his own local authority the effect beginning to operate last year. Thamesdown district council set a budget of £15.06 million, just above the capping threshold. The increase was 7.7 per cent. I cannot help thinking that the increase was so moderate only because the council was just coming into the capping criteria at that point.

My hon. Friend asked me to quantify the harm. There are 18 districts with budgets below £15 million that overspent their standard spending assessment by £40 or more per charge payer. There were 44 cases in which the overspending added at least £20 to the bills.

Mr. Bellotti

Will the Minister tell us what he expects local authorities that have been prudent in the past and will fall under the capping regulations next year to do about their services? Does he expect them to cut their services so that there can be no local economic generation? In areas that are dependent on jobs in tourism, such as the area that I represent, what advice would the Minister give a local authority that has been prudent in the past and which has set decent budgets, but which, under the new regulations, faces massive local unemployment?

Mr. Portillo

An authority that has been prudent for many years will not be capped because we will not cap below the standard spending assessment.

Mr. Patrick Thompson

Is my hon. Friend aware of the good effects for my constituents in Norwich of the capping of their overspending council and the resulting reduction in their bills? Will he seek an urgent meeting with the leader of Labour-controlled Norwich city council to point out the anger of my constituents about the politically biased and possibly illegal letters that she is sending out, which are distorting the effects of Government policy and concealing the imprudence of Norwich city council?

Mr. Portillo

I want to help my hon. Friend. If he absolutely insists that I meet the leader of Norwich city council, I suppose that I could be prevailed on to do so. My hon. Friend speaks loudly and clearly for his constituents. He is worried about the community charge burden that they have to bear. Those on Norwich city council are apparently indifferent to that matter and the Labour party is apparently flatly opposed to helping the community charge payer.

Mr. Flannery

Despite the smart Alec answers from the Minister, is not it a fact that the result not only of capping, but of the vast amounts being taken away from local councils—the total runs into hundreds of millions of pounds—is that beggars are being forced on to the streets and homelessness is created? We have a Minister who apparently treads on bodies when he comes out of the opera. The things that have come about under this Government had not existed for years previously. People are on the streets and, as a nation, not only as a Government, we should all feel deeply ashamed.

Mr. Portillo

The hon. Gentleman is deeply incredible and the whole House will have found what he said laughable. His first contention was that money had been taken away from local authorities. I remind him that the districts about which we are talking had the amount that the Government thought it appropriate for them to spend increased last year by 28 per cent.—vastly ahead of inflation. There can be no complaint that they have been underfunded.