§ 1.3 pm
§ Mr. Peter Hain (Neath)
I commend you, Mr. Deputy Speaker, on your stamina and energy.
I begin by welcoming the Minister of State, Welsh Office, back to the House after his short illness. I am sure that we are all pleased to see him.
West Glamorgan's net revenue budget for the current year is £242 million. Education accounts for £138 million, social services £28 million, and environment and highways £15 million. The county is renowned for providing nursery education for 90 per cent. of three-year-olds. It is also famed for its provision of music and drama in schools.
Although it has a reputation for financial prudence, the county is running into a brick wall with the Government's restrictions and cuts in spending. Next year it needs to spend an additional £11.1 million—6 per cent. real growth—just to meet the additional statutory obligations that the Government have placed upon it. They are not optional spending measures; they are requirements under the Government's legislation and directives.
The demographic changes resulting from school rolls beginning to rise again, together with a continuing increase in student participation in higher education, will account for an additional £1.5 million spending. National curriculum support measures will require an additional £500,000. Local management of schools and colleges, the provision of computer systems, extra administrative support, and training for staff and governors will require an additional £400,000. Special educational needs provision under the Education Act 1981—it is not discretionary—will require an additional £500,000. Maintenance of school buildings will require an additional £1.5 million, for which the authority has budgeted, against a £20 million backlog. In social services, the Children Act 1989 requires additional support for families, principally through increased preventative and assessment responsibilities for children at risk, and that will require an additional £500,000.
The community care that the Government have unceremoniously dumped on local authorities such as West Glamorgan, social care planning, assessment and case management will require an additional £700,000. Mental handicap and mental illness provision will require an additional £300,000, again under pressure from the Welsh Office. Training and staff development, the introduction of professional qualifications and management development for community care responsibilities will require an additional £200,000. On top of all that, the authority must spend an additional £5 million on upgrading highways and improving the environment to meet basic safety and maintenance obligations. Those are obligations that the authority must meet—it has no discretion—on top of the extra 6 per cent. that it needs to spend next year.
If there is no relative change in the standard spending assessments between Welsh counties, Tuesday's statement by the Secretary of State will mean that there will be an increased provision for West Glamorgan of only 6 per cent. on its current budget. Of that 6 per cent., 1 per cent. has already been committed by the full-year effects of this year's staff pay, principally teaching staff, working its way through. Some 4.5 per cent. has been assumed by the Secretary of State to cover pay and price rises. Therefore, 1330 5.5 per cent. of that 6 per cent. has already been swallowed up, leaving only 0.5 per cent. to cover any additional award above 4.5 per cent. by the teachers' pay review body.
The increase will be eaten up without any scope for essential and additional expansion of the sort which I have described and which is required by the Government. To meet that additional £11 million expansion in provision, most of it statutorily required, there will have to be a cut in spending on other services of about 6 per cent., which will mean cuts in teaching staff, larger class sizes and reductions in social services. That is already happening. Indeed, primary schools in the Neath area have suffered cuts in teaching staff and classes have had to be merged, resulting in larger class numbers.
Welsh Office Ministers, sitting in their ivory tower, seem oblivious to the savage impact of their policies on local communities such as those in West Glamorgan. One group who are affected are the elderly. There are 74,000 pensioners in West Glamorgan, many of whom depend on income support. Some of them suffered disgraceful cuts in the benefits that they received in April this year when retirement pensions for the over-75s and disabled pensioners were increased by 10.8 per cent. whereas income support was increased by just 8 per cent. That meant that those receiving income support lost access to benefits and rebates. Some of the most vulnerable sections of our elderly population suffered an additional cut in that way.
Many of the 74,000 West Glamorgan pensioners have small additional private or widows' pensions to supplement their retirement pensions and that group is often hit the hardest by the present situation. What the Government give with one hand they take away with the other in tax increases and loss of benefits.
Many pensioners in the Neath constituency and throughout West Glamorgan are without cars. Many live in valley villages and rely on bus transport which, even with the West Glamorgan concessionary fares scheme, they find costly. For example, a pensioner making a return trip from Ystalyfera to Swansea has to pay £2.20 and from Seven Sisters to Neath, £1.65. Such sums may seem small to the Minister on his salary, but, repeated day after day, they eat into the income of our elderly citizens, especially as they face exorbitant water charges, a colour television licence fee of £77, standing charges on all the main services of telecommunications, electricity, gas and so on, on top of high heating charges for electricity, gas and coal, and, in addition, the continuously rising cost of living.
That is why I believe that pensioners would be enormously boosted by a new free fares system in West Glamorgan. That would be an imaginative targeted measure which would directly assist some of the most vulnerable members of our community. It could transform the lives of elderly people living in West Glamorgan and have a liberating effect on them. It would not just give relief to our elderly citizens, some of whom are living on the poverty line; it would also enhance their quality of life and so ensure that they would be less of a burden on the state as they grew into old age.
In fact, the Government would save money by such a measure. If they did their accounting in terms of social costs and benefits, rather then with the tunnel vision of their profit and loss balance sheets in which people do not figure, they would find that even injecting the additional funding needed to provide a free fares scheme they would 1331 end up spending less money by having healthier citizens who were more at one with themselves, enjoying a better quality of life.
The existing West Glamorgan concessionary fares scheme commenced on 26 October 1986 and provides for a one third cut in bus fares. Under the Transport Act 1985, bus operators working the scheme may not make a profit from the concessionary fares available to them and reimbursement must come wholly out of local authority budgets. The problem is that, under current Welsh Office guidelines and spending targets, no flexibility is offered to local authorities. They do not have the flexibility to provide that additional service either in terms of free fares for pensioners on the buses or in their spending commitments.
The cost of the present concessionary fares scheme is just £0.8 million, so a free fares scheme would cost an additional £1.6 million—not very much. if West Glamorgan county council, Neath borough council, Swansea city council, Lliw borough council and Port Talbot borough council came to the Welsh Office with a specific request for funding for that additional £1.6 million, would the Minister agree to it? That is the question that I wish to put to him today.
Why should Neath pensioners, and pensioners throughout West Glamorgan, be deprived of a basic right enjoyed by many other pensioners in our society? According to a report published in 1988 by the transport and road research laboratory, 22 per cent. of the concessionary transport schemes available in Great Britain are free-fare schemes. Most are in metropolitan areas such as London, South Yorkshire and the west midlands. Many operate outside the rush hours, after 9.30 am or during the weekend. Millions of senior citizens throughout Britain can travel on the bus or the underground free of charge, but none of them is in Wales.
The Welsh Office should hang its head in shame. Why cannot the Government show some compassion and generosity for once and provide the funding necessary for Welsh local authorities which wish to do so to transform their present concessionary fare schemes into free-fare schemes? That will also have the benefit of improving revenues for the bus operators who at present, after deregulation, at times offer, particularly to residents in the valley villages, a shoddy service which runs out late at night and is very weak during the weekend. The additional revenue generated by carrying those extra passengers, although all the finance would be returned to the county, would make for a more effective service.
It is no use the Minister saying that it is up to local authority discretion whether West Glamorgan or any other Welsh authority spends part of its budget on a free-fare scheme. The fact is that their hands are tied by highly restrictive and in some cases punitive Welsh Office spending guidelines. Virtually all local authority spending in Wales, as elsewhere in the country, is centrally controlled—and tightly at that. Authorities do not have the discretion to operate such a scheme.
My simple and specific proposal could greatly enhance the quality of life for some of our poorest citizens, who have given their working lives to their communities but are now forgotten or ignored by the consumerist, materialistic, me-first culture in which the Government glory. I urge the Minister to respond positively to my proposal, and to provide the funding necessary to West Glamorgan and the boroughs within it, so that they may establish a free-fare 1332 scheme as soon as possible. In that way, our senior citizens could enjoy transport in reasonable comfort at a pace that suits them so that they might take advantage of the opportunities otherwise denied to them.
§ The Minister of State, Welsh Office (Sir Wyn Roberts)
I congratulate the hon. Member for Neath (Mr. Hain) on his success in raising the question of Welsh Office funding for West Glamorgan. His speech focused on local authority spending. On Tuesday, my right hon. Friend the Secretary of State for Wales announced a provisional local government finance settlement for 1992–93 that proposed a level of total standard spending in Wales of £2,639 million. That is an increase of £206 million, or 8.5 per cent. on 1991–92, and is the appropriate level of spending for the coming year, taking account of all relevant considerations. My right hon. Friend also proposed a level of aggregate external finance of about £2,383 million—an increase of 6.7 per cent. on the current year.
The settlement must be seen in the context of the Government's success in bringing down inflation. It is a realistic settlement, and one that provides local authorities in Wales with a firm foundation on which to budget prudently for the coming year. It builds on the settlement for the current year, which increased total standard spending by 8 per cent. on budgets, and increased aggregate external finance by 11.2 per cent.
The level of expenditure per Welsh charge payer for which the settlement allows is £1,207. If local authorities budget in line with our plans for 1992–93, charge payers should, on average, contribute just £118 per head of that through the community charge, before taking into account various benefits and relief. The settlement for the current year, 1991–92, provided for an increase of more than £31 million in West Glamorgan county council's standard spending assessment to £263.5 million; a rise of 15.1 per cent. on the level for 1990–91. That was the highest percentage increase in Wales, bar one county—Gwent—and represents an increase of almost 7 per cent. on the unnecessarily high budget set by the authority for 1990–91, which was £14 million over SSA. That decision resulted in a community charge for standard spending of £28 more than would have been necessary if the authority had spent in line with the Government's plans, and that placed an unnecessary burden on its charge payers.
This year, the authority is receiving an increase in grant support towards its expenditure of £18.5 million. Again, that is the second highest percentage increase in Wales. Charge payers in the county have also benefited directly from the £140 reduction in community charge liability which was announced by my right hon. Friend the Chancellor in his Budget. The aggregate increase in standard spending assessments for 1991–92 over 1990–91 for the four district councils within West Glamorgan is £8.9 million, a rise of 20.7 per cent. The aggregate increase in grant for those authorities in support of that spending is £5.9 million, which represents a rise of 16.7 per cent. over 1990–91. The increase in SSA for the hon. Gentleman's constituency is 16.6 per cent. over 1990–91, despite a slight decrease in population.
While Port Talbot, Lliw Valley and Neath set community charges in line with the settlement, it is unfortunate that Swansea city council chose to budget for 1333 a charge of £57, no less than 52 per cent. above the settlement level of £38. That placed a quite unnecessary burden on its charge payers.
The levels of expenditure and support that I have just described were sufficient to enable the authorities concerned to meet both inflationary and service pressures in providing an appropriate level of service. The provisional settlement announced by my right hon. Friend on Tuesday will build on the foundation that has been laid.
It would not be appropriate or possible to consider how the proposed settlement for 1992–93 will affect individual local authorities. My Department and the local authority associations in Wales are considering the grant distribution arrangements for the coming year and will make recommendations to the Welsh Consultative Council on Local Government Finance in due course. With the exception of certain specific and supplementary grants towards current expenditure, Government support towards local government spending in Wales under the settlement is unhypothecated. That means that, while the Government provide the appropriate level of resources, it is for individual authorities to make their own expenditure decisions in the light of their assessment of local expenditure requirements and priorities. That is entirely appropriate and accords with the wishes of the local authorities. It is against that background that the funding of specific services such as those mentioned by the hon. Gentleman must be considered.
The hon. Member for Neath talked at some length about the position of the elderly and, in particular, about their travel arrangements. I share the hon. Gentleman's concern about the mobility of our senior citizens and I note his view that they should be allowed to travel free of charge on local buses. Of course, the Transport Act 1985 gives local authorities powers to fund travel concession schemes for various groups of people, including persons of pensionable age. The local authority may determine the nature of the concession and its level.
It is right that this is a matter for local authorities as they are in the best position to determine the type of concession which best suits the needs of their areas. Costs are an important factor in this. In West Glamorgan, for example, senior citizens may apply for a pass which entitles them to a third off normal single or return fares. The cost of this concession to the charge payer in the current financial year is estimated to be some £810,000, of which £402,000 will be met by the district councils.
However, the provision of free travel would not merely increase those costs by a factor of three to £2.4 million. I 1334 understand that that is the correct figure, but it would generate much higher usage, as more people would take advantage of the concession. This would result in higher claims from the bus companies and extra costs to the council.
But there are points other than costs to bear in mind. The scheme run in West Glamorgan imposes no time restrictions on senior citizens who use it. This means that pass holders may travel at any time, including at peak hours. This is helpful to the pass holders and makes for economic and easy administration of the scheme. A penalty of free travel which the hon. Gentleman advocates would be the need to restrict the times at which concession holders could travel in order to ensure that adequate capacity is available on the buses for those who need to travel. The hon. Gentleman mentioned that restriction.
§ Sir Wyn Roberts
As I said, it is entirely a matter for the local authority to decide what best suits its locality. I imagine that, as the hon. Gentleman said, many free-travel schemes are to be found in heavily urbanised areas where fewer disadvantages may occur. Indeed, it is for each and every local authority to decide what type of concessionary scheme it can operate successfully and afford. In looking at concessionary fares schemes, local authorities have to consider what is affordable and the effect on other persons who, for whatever reason, need or choose to use the buses.
The hon. Gentleman concentrated very much on the needs of the elderly. He will be aware that, in our "Caring for People" White Paper and subsequent guidance, we have set out a comprehensive policy to ensure care in the community for elderly people. Each social services department is leading the production of a joint county social care plan for service development with health authorities and other bodies, including the voluntary sector, and in close consultation with service users and carers. The first plans will be published by next April.
We are supporting the implementation of those reforms with a unique programme of concerted action in Wales. The Welsh Office initiative began in 1987, and 56 demonstration projects testing innovative ways to care for elderly people in their own homes have been approved for grants. Four of those projects are in West Glamorgan, and the Welsh Office has allocated approximately £2.5 million for them. One of the projects, the staying-at-home initiative which started in January 1988, explores ways to improve community services and, in particular, enable dependent elderly people who would otherwise require residential care to remain in their homes.