HC Deb 14 December 1992 vol 216 cc41-52 4.35 pm
The Secretary of State for Wales (Mr. David Hunt)

With your permission, Madam Speaker, I should like to make a statement on local government finance matters in Wales.

On 12 November I proposed the levels of total standard spending and aggregate external finance for Wales. I am pleased to announce to the House today a further increase in TSS and AEF for 1993–94 of £1.6 million, in recognition of the additional responsibilities which local authorities will assume from next April following changes to the independent living fund. This increases the overall levels of TSS and AEF which I propose to provide in 1993–94 to £2,599.8 million and £2,344.2 million respectively.

The levels of council tax set in Wales will depend on the budgetary decisions of local authorities. I am, however, determined that local taxpayers in Wales should be protected from unreasonable council tax bills. I therefore announced in May that, for the first time, for 1993–94 I would issue provisional capping criteria to assist local authorities in their budgetary decision making. I consider capping criteria to be necessary because for both 1991–92 and 1992–93 the overall level of budgets set by local authorities in Wales have exceeded my plans by around 3 per cent., despite settlement packages for those years which together provided for increases in the level of revenue spending of almost 25 per cent.

I am today announcing my provisional capping criteria. However, because of changes in local authority functions in 1993–94—essentially the loss of further education and the acquisition of community care responsibilities—and other changes arising from the Local Government Finance Act 1992, it is not possible, for the purpose of capping, to make a direct comparison between budgets set by local authorities in 1992–93 and the budgets to be set for 1993–94. As a result, I will exercise my statutory powers to specify for each authority in Wales a base position, known as a relevant notional amount, to measure budget increases for the purposes of applying capping.

I intend to allow larger increases for authorities that set budgets closer to their standard spending assessments—SSAs—whose budgets are relatively higher. My intended capping criteria are: first, any increase of more than 2.5 per cent. over the 1992–93 notional amount will be considered an excessive increase if it gives rise to a budget requirement above the authority's SSA; secondly, any increase of more than 1.75 per cent. over the 1992–93 notional amount will be considered an excessive increase if it gives rise to a budget requirement over 1 per cent. above the authority's SSA; thirdly, any increase of more than 1 per cent. over the 1992–93 notional amount will be considered an excessive increase if it gives rise to a budget requirement over 5 per cent. above the authority's SSA; fourthly, any increase of more than 0.5 per cent. over the 1992–93 notional amount will be considered an excessive increase if it gives rise to a budget requirement over 10 per cent. above the authority's SSA; finally, any budget requirement more than 12.5 per cent. above SSA will be considered excessive subject to certain conditions. An authority that sets its budget at or below its SSA will not be capped.

I have placed in the Vote Office and the Library of the House full details of my proposed capping criteria, a draft of the report setting out each Welsh authority's notional amount on the basis of its calculation, and details of each authority's provisional standard spending assessment for 1993–94.

Provisional standard spending assessments have been calculated in accordance with distribution formulae that have been agreed with the local authority associations in Wales and ratified by the Welsh Consultative Council on Local Government Finance. Details of my provisional capping criteria and provisional standard spending assessments and a copy of the draft notional amounts report are being sent to every local authority in Wales. Authorities have the opportunity to make representations on notional amounts before I lay the report for the approval of the House.

My capping criteria are, of necessity, provisional. I will take account of all appropriate considerations in making my decisions on capping. Local authorities have all the information that they need to make progress in setting their budgets for the coming financial year. In the present economic climate, I consider my proposals for local government revenue spending to be reasonable.

I turn now to capital resources. Following the autumn review of public expenditure, I have decided to issue capital grant and credit approvals to local authorities for 1993–94 amounting to £483.5 million. This, coupled with the use by local authorities of their own resources as enhanced by the temporary relaxation of the debt redemption rules relating to capital receipts, is expected to deliver gross capital expenditure of £620.1 million.

In addition, I have made separate provision of £70.6 million for forecast receipts from the European regional development fund. To the extent that local authorities are successful in their bids for ERDF grant, they can expect to receive matching supplementary credit approvals additional to those in the local authority capital settlement.

Excluding the ERDF grants that it is estimated local authorities will receive in the present financial year, the expected gross capital expenditure of £620 million in 1993–94 represents an increase of £61 million or 11 per cent. on this year. That is a very generous settlement in this period of exceptionally tight control on public spending and complements the Government's strategy for growth in the economy. The continuing high level of investment in infrastructure in Wales will help to ensure that the ingredients for economic growth are in place.

My proposals include support of £23 million over the next three years for investment in 15 new schemes of special or regional significance. The schemes involved include the regeneration of Pembroke Dock; the introduction of new local rail services between Bridgend and Swansea; a further phase of development at the Redwither industrial estate at Wrexham; new headquarters offices for the Snowdonia national park; a sports and leisure complex at Brecon; and town centre redevelopment in Swansea and Wrexham.

The capital package also includes provision of £66.6 million for transport grant-assisted road schemes. This allows two important schemes to commence in 1993–94—the Tredegar bypass and the A4067 dualling in the Swansea valley. It will also allow Clwyd county council to spend a further £2 million on preparation work for the third Dee crossing. Further assistance for that scheme, which I will announce next year, will permit a start to the main works for the third Dee crossing in 1994–95.

Another key element in the package of support for local authority capital investment is the urban programme, for which today I have approved a package amounting to £28.4 million. Of this, I am allocating £26.4 million to 228 projects, 10 more than in 1992–93. The remaining £2 million will be allocated early in the new year.

The projects include £500,000 for major infrastructure development at Cwmcynon, £300,000 earmarked for regeneration of Tredegar town centre and £500,000 for crime prevention initiatives across Wales. Five new strategies are approved for Caernarfon, Ely, Barry, Amman valley and Coedffranc near Neath. They will receive a total of £2.5 million in 1993–94. The valleys programme area as a whole will benefit from £15.3 million. The 50 most deprived wards in Wales will receive £8.3 million, or 32 per cent. of the total allocation.

Further details of the full capital package and the allocation of resources to individual authorities have been placed in the Library of the House.

The proposals I have set out today will enable local government to maintain services and deliver them to the communities that they serve at a reasonable cost. Local taxpapers can be assured that I am determined to protect them from unreasonable levels of council tax, through recourse to my capping powers if necessary. My proposals also encourage local authorities to invest in capital projects that will improve the infrastructure of Wales, promote economic growth and create jobs. I commend them to the House.

Mr. Ron Davies (Caerphilly)

I thank the Secretary of State for delivering his statement. However, I express my firm disapproval of its timing. The Secretary of State knows full well that the Public Accounts Committee is sitting at this precise moment, and is questioning the chairman of the Welsh Development Agency. Therefore, three of my colleagues, my right hon. Friends the Members for Swansea, West (Mr. Williams) and for Llanelli (Mr. Davies) and my hon. Friend the Member for Pontypridd (Dr. Howells) are unable to be here to question the Secretary of State on the financing of their respective local authorities.

Despite the gloss that the Secretary of State puts on the statement, it will mean job losses and cuts in essential services in Wales, and will directly undermine the ability of Welsh local authorities to cope with the tragic consequences of his Government's economic failures. Despite the fact that the statement is supposed to be on the revenue settlement, the Secretary of State took half his allotted time to refer to capital works that he has approved in Wales. He is up to the old tricks of his predecessors—he has rejigged the capital programme and presented it as a new programme.

The detail of what the Secretary of State has done, has three elements. First, he will allow local authorities to borrow money so that they can take advantage of any ERDF grants they get as a result of their own initiative. That is not a Welsh Office programme. Secondly, he is taking credit for allowing local authorities to proceed with schemes that they have developed on their own initiative. Thirdly, he has rejigged the urban programme and presented it as a new programme with increased resources. If one compares last year's urban programme with this year's urban programme, one sees that he has cut it by 8 per cent.

We have massive problems in Wales which the statement should have addressed, but does not. Let me give two examples. First, at present there are nearly 10,000 homeless families in Wales. For the children of 600 families, Christmas this year will be spent in the back room of bed-and-breakfast accommodation or in a hostel for the homeless. Can the Secretary of State confirm that the statement will do nothing to enable local authorities to tackle that problem?

Secondly, 24 per cent. of 16-year-old school leavers in Mid Glamorgan leave school with no qualifications. The Secretary of State is keen on comparative tables for exam results. Let me offer him a comparison. The figure for Mid Glamorgan is the worst in the United Kingdom, and the figure for Gwent is the second worst in the United Kingdom. The Secretary of State's response has been to reduce in real terms the money available to those counties by giving a disproportionate share of the budget to further education colleges to sweeten their privatisation. In effect, the Government are stealing £14 million from Welsh local authorities.

Will the Secretary of State confirm that both the Council of Welsh Districts and the Association of Welsh Counties claimed in their submission to him that there was major underfunding of local authorities? They estimated that an increase of some 7.5 per cent. was required over last year's budget to meet inflation and their new statutory responsibilities. Will the Secretary of State explain how an increase of only 0.2 per cent. over the 1992–93 adjusted budgets for revenue expenditure provides resources to deal with the £70 million cost of last year's pay award for police and fire services, let alone the new responsibilities: the new national insurance increases, new pension costs, the Children Act 1989, the national curriculum, waste management and unforeseen emergencies such as the recent flooding, for which the Bellwin formula is entirely outdated?

The Secretary of State has previously announced the headline figures for the new council tax. Will he confirm that those figures are based on the assumption of a 100 per cent. collection rate and that the inflated house valuations on which the tax is based are not subject to widespread successful appeals? Does he accept that the new tax will be just as unfair as the poll tax and just as capricious and arbitrary in its application? Does not the fact that the Secretary of State is so adamant in his determination to press ahead with capping give the lie to his claim that he has developed a consensual relationship with Welsh councils?

This is a black day for democracy in Wales. It demonstrates clearly the clash between the aspirations of Welsh councils, which know and understand the needs of their communities, and those of a Secretary of State who does not share our concerns, is unaccountable and is hostile to our values. The only way in which he can achieve his objectives is by direction. The wishes of the people of Wales are being overridden. More than 90 per cent. of local authority expenditure is now determined by the Secretary of State. Will he accept his full responsibility for the job losses, declining services and hardships that the settlement will create? If he does not accept responsibility for that, the people of Wales will certainly know whom to blame.

Mr. Hunt

First, timing of statements is not a matter for me, as the hon. Gentleman knows. Secondly, the hon. Gentleman seeks to drive a wedge between the Welsh Office and local authorities, but he will not succeed. One of the most important features of Wales is that, rather than leaving matters to the initiative of one or the other, the Welsh Office and local authorities work closely together in a positive partnership. That is why I hope very much that I shall not have to use my capping powers. I have not had to do so until now. By announcing the detailed provisional capping criteria, I hope that local authorities will know exactly where they stand and will be able to budget accordingly.

The hon. Gentleman referred to children leaving school without qualifications. We inherited a position which was far worse, as the hon. Gentleman will know from the statistics. We are increasing the opportunities all the time through my right hon. Friend the Secretary of State for Education. The number of people receiving higher education has increased substantially.

As for further education, I was advised by my officials and I carefully examined the figures and concluded that the appropriate deduction was the figure that I announced. The hon. Gentleman will have to await my decision on funding for further education next year to find out whether the figure that has been transferred is the appropriate one. That announcement will be made in due course. I have met representatives of the relevant counties. They expressed anxieties about the size of the sum to be transferred. However, I believe that it will be justified by the announcement that is to be made in due course.

The settlement is a 3.1 per cent. increase in total standard spending for local authorities, following a 25 per cent. increase over the previous two years. In the present economic circumstances, it is a reasonable settlement, although I recognise that the figure that the hon. Gentleman used was for budgets. I am giving the appropriate figure compared to the figure that I announced this time last year.

The hon. Gentleman asked about collection rates. If he recalls, many dire predictions were made about collection of the community charge. They proved to be incorrect in Wales, because Labour Members underestimated the dedication and industry of all those involved in local government, who ensured that there was full collection. Of course, it is up to local authorities to predict the rate that they will collect, but many parts of Wales achieved 100 per cent. of what they budgeted to collect. Local authorities must make their own decisions on the anticipated collection rate.

As for inflated housing values, all the homes in Wales were valued on the same day. There may have been a fall in values in some parts of Wales, but that will apply to all properties in the area. It is unlikely that a property will move from one band to another. However, there is, of course, an opportunity to appeal.

The hon. Gentleman said that it was a black day for local government. I could hardly describe a record level of gross capital spending in times of economic crisis as a black day. I acknowledge that local authorities in Wales will have to make difficult choices about spending priorities and pursue efficiency savings to stay within my expenditure plans, but I believe that the settlement is realistic in the current economic climate.

The hon. Gentleman criticised the Government for funding 90 per cent. of local authority spending through aggregate external finance towards total standard spending. At the same time, he says that I am not giving enough money and that I am giving too much. It is about time that he got the message right.

Several Hon. Members


Madam Speaker

Order. Before we proceed further, I regret the need to inform the House that what we originally heard from the Secretary of State was a statement. This is not a debate. It is a statement following which questions must be asked. I want to call as many Members as possible, but I can do that only if questions are brief. I am sure that we shall receive brief answers from the Secretary of State.

Mr. Rod Richards (Clwyd, North-West)

I congratulate my right hon. Friend on the statement, which is clear and well thought through. It must have been gratifying for him to be described by the hon. Member for Caerphilly (Mr. Davies)—[interruption]—as up to the old tricks of his predecessor, who secured a firm—[Interruption.]

Madam Speaker

Order. Other hon. Members have asked questions today. I expect a question from the hon. Gentleman.

Mr. Richards

Is my right hon. Friend aware that his statement will be welcomed on two counts? First, it will be welcomed in my constituency in Clwyd for the urban programme funds which my right hon. Friend has announced for Rhyl, Rhos-on-Sea and Rhuddlan.

Secondly, the announcement of an additional £500,000 for crime prevention, which causes some anxiety in Wales, will be widely welcomed throughout the country.

Mr. Hunt

I am grateful to my hon. Friend, who recognises the significance of today's announcement. We have been able to support many projects throughout Wales in partnership with the relevant local authorities. That is good news for all of Wales and in particular for north Wales, as my hon. Friend says.

Mr. Alex Carlile (Montgomery)

For those who are not public finance accountants, will the Secretary of State confirm that the bell now tolls for small rural schools, many of which are excellent but have fewer than 50 pupils, especially as a result of the increase in the lower limit of pupils for the small schools allowance?

Although the £500,000 for crime prevention is welcome, as is any money for such initiatives, is it not pretty hollow when one sets it alongside the Home Secretary's refusal to allow any police force in Wales a single extra police constable in the next financial year?

Mr. Hunt

It is for the local education authorities to allocate the funding for small rural schools. However, such schools have opportunities to ensure that they can survive these difficult economic times by, for example, forming clusters.

I welcome what the hon. and learned Gentleman said about crime prevention schemes. Any money that I have allocated today is over and above what has already been announced by the Home Secretary.

Mr. Gareth Wardell (Gower)

On transport grant, why is it that, in Wales, local authorities and claimants for local safety schemes cannot get a grant for traffic-calming measures unless the project costs more than £5 million? In England, one can get grants for schemes costing much less than that. Will the right hon. Gentleman consider the matter to find out whether we can take traffic-calming measures to reduce the number of deaths and the serious injuries on Welsh roads?

Mr. Hunt

I have a great deal of sympathy with the hon. Gentleman's remarks, but the £5 million cut-off has been agreed with local authorities. It is for them to advise me whether they would like the limit to be reviewed. No doubt the hon. Gentleman will pursue with the local authorities his concerns and their advice to me, but in the meantime I shall consider the matter.

Mr. Barry Jones (Alyn and Deeside)

I am grateful to the right hon. Gentleman for his references to the River Dee crossing. Bearing in mind the fact that there is almost total traffic chaos in industrial Deeside, when will the project be completed—indeed, when will engineering work begin—and what will be the cost? Does the statement mean that Llay Park primary school and Penylag large school will be rebuilt and that Hope high school will be extended?

Mr. Hunt

That was quite a package of questions.

Madam Speaker

Just answer two.

Mr. Hunt

Very well. I shall announce detailed funding of the third Dee crossing next year, but in the meantime I have allocated £2 million to Clwyd county council for further preparatory work. As I know the area well, I agree with the hon. Gentleman's remarks about congestion. The schools are a matter for the local authorities concerned.

Dr. John Marek (Wrexham)

Since the Minister said that a high level of investment is continuing in Wales, will he explain to the House why there are more potholes in the roads than there were under Labour, why InterCity services to north Wales are at their lowest level ever—a lot lower than under Labour—and, most important, why no council houses are being built? If no council houses are being built, that must be the lowest possible figure. Why are the Government doing so badly, yet the right hon. Gentleman pretends at the Dispatch Box that the figures are fantastic? Does he realise that the people were not born yesterday and that they proved that by not voting for him or his party in Wales at the last general election?

Mr. Hunt

I notice that the hon. Gentleman has not queried any of the gross figures that I announced. They stand up to close consideration because they are true. That is the level of gross spending next year and it is a record. In gross terms, there has never been such a large capital programme in Wales before. Perhaps the hon. Gentleman ought to pay tribute to that. I do not mind if he attacks his local authority through me, but the potholes are a matter for the authority. Under this Government, there has been record spending on roads in Wales, and we are continuing those record levels.

Mr. Paul Flynn (Newport, West)

Why is there nothing in the statement to tackle the most serious threat to jobs in Wales—the threat caused by the changes in the defence industry? Jobs have already been lost at Trecwn, Brawdy and Caerwent, at Marconi in Newport and at Glascoed. If the Government are not prepared to set up a diversification agency, why does the Secretary of State not allow Welsh local authorities to take serious practical steps to find alternatives to present defence jobs in Wales?

Mr. Hunt

If the Opposition spent less time attacking the Welsh Development Agency, which I am very proud of—I have paid tribute to it on many occasions and it is the envy of many people in the United Kingdom—they would realise that it is a good diversification agency and that it is constantly looking out for opportunities for new investment. I refer the hon. Gentleman to the many announcements on new projects that I have been privileged to make in conjunction with local authorities and the WDA. I am delighted that Wales is winning record inward investment. I shall endeavour to ensure that we continue to do so. Am I wrong to look for a little more support from the Opposition?

Mr. Elfyn Lwyd (Meirionnydd Nant Conwy)

While I welcome the initiatives that the Secretary of State referred to in Caernarfon, Ely, Barry and so forth, may I remind him of the terrible state of the A470 in Meirionnydd Nant Conwy? He was there in August. What priority, if any, will be given to that much-needed scheme? Secondly, it is the view of both borough councils in my constituencies that the capping proposals come at the wrong time, bearing in mind the fact that for some years there has been a great deal of belt tightening.

The Secretary of State is careful to say that he wants to prevent unreasonable levels of council tax. I regret that one must reach the inevitable conclusion that a bad level of services will be offered to the community, at a time when extra spending is necessary as care in the community is on the horizon. Will he rethink the whole matter? I heard him say that he is open to representation, but when local authorities make representations they feel that they are not listened to by the Welsh Office.

Mr. Hunt

Again, I am afraid that the hon. Gentleman asked a large number of questions, but I shall try to deal with a few of them. I announced local authority expenditure on roads today. I have not announced the Welsh Office programme; that announcement will come later. May I therefore place in context the hon. Gentleman's remarks? On finance, my announcement represents expenditure per head in Wales for 1993–94 of £901 for every man, woman and child in Wales. According to the hon. Member for Caerphilly (Mr. Davies), at 90 per cent. I am funding too high a level of support as, for spending of £901, I am providing aggregate external finance of £812 for every man, woman and child in Wales. From whatever direction the figures are viewed, they represent a reasonable deal for the people of Wales.

Mr. Roy Hughes (Newport, East)

Does the Secretary of State appreciate that our local authorities play a major part in attracting new industries to their areas, and that that has been the case in Newport and Gwent in particular? Does he not feel that those efforts need to be stepped up, especially in view of the major Marconi closure in Newport? Yet, under his proposals, our local authority is faced with no growth. How can the borough council be expected to regenerate the town with such a limitation?

Mr. Hunt

The hon. Gentleman's first point echoes the remarks of his hon. Friend the Member for Caerphilly (Mr. Davies). I announced gross funding for the industry programme. I recognise the significant role played by local authorities, in particular in winning the QPL investment, which was the good result of a positive partnership with Newport borough council. I recognise that and constantly pay tribute to it, although hon. Gentlemen sometimes pretend that I do not. I take every opportunity to pay tribute to the efforts of Gwent county council and Newport borough council in winning investment, and, of course, I want that to continue.

Mr. Ted Rowlands (Merthyr Tydfil and Rhymney)

The hon. Gentleman referred to schemes of regional significance. May I draw his attention to two schemes of considerable significance to the heads of the valleys? The first is the beginning of a dual carriageway over the heads of the valleys, and the second is the beginning of the missing link in the A465. Both schemes have considerable regional signfiicance and would secure vitally important jobs at both Vaynor and Penderyn quarries. Can he make an announcement as quickly as possible on the start of both schemes?

Mr. Hunt

As I made clear to the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd), I am not announcing Welsh Office schemes today. That announcement will come. Today I announced transport grant-supported schemes. I shall bear in mind the matters that the hon. Gentleman has mentioned, but I ask him to understand that there has been record spending by the Welsh Office on roads, and it is not always possible to give priority to schemes favoured by individual Members.

Mr. Martyn Jones (Clwyd, South-West)

The Secretary of State will be aware that European funding was set in April at 1.43 ecu to the pound and is now 1.24 ecu to the pound, which means that the Government received a windfall of some 17 per cent., amounting to £260,000 in social fund spending in Clwyd alone. Will the Secretary of State assure the House that he will allow Clwyd to spend some of that money, or will it be used merely to reduce the public sector borrowing requirement for the United Kingdom as a whole?

Mr. Hunt

On the hon. Gentleman's direct question, I have made provision of £70.6 million, which is my forecast of the receipts likely to be forthcoming this financial year from the European regional development fund. However, it is now up to local authorities to put forward schemes —some have already done so—and see whether they are successful in their bids for ERDF grants. I have made it clear that they can expect to receive matching supplementary credit approvals in addition to those that I have announced in the local authority capital settlement.

Mr. Alan W. Williams (Carmarthen)

Will the Secretary of State confirm that his figure for total standard spending next year is a 3.1 per cent. increase on the TSS last year, but that local authorities spent 2.5 per cent. above their TSS figure this year? That 3 per cent. increase is, therefore, nowhere near enough for local authorities simply to maintain existing services. Does it not mean that they will have to make cuts or find their money from poll tax payers?

Mr. Hunt

Yes, I confirm the figures quoted by the hon. Gentleman, but that increase has been made against a difficult economic background. An increase in TSS of 3.1 per cent. is reasonable, bearing in mind that the figure has gone up by 25 per cent. in the past two years.

Mr. Peter Hain (Neath)

Why does not the Secretary of State admit that, through his underfunding and cutting, he is instructing West Glamorgan county council, Clwyd borough council and Neath borough council to cut services, school provision and jobs? I am disappointed that he has made no announcement about the future of Cwmtawe school, which is a crucial project dependent on Welsh Office capital funding. I am also disappointed that he has not announced when he will proceed with the A465 missing link construction.

Mr. Hunt

On the A465 construction, I thought that I had made it sufficiently clear earlier that we are dealing today with local authority transport grant-supported schemes, not Welsh Office road schemes.

Mr. Nick Ainger (Pembroke)

Is the Secretary of State aware that, irrespective of his feeling that he has a positive partnership with local government in Wales, the county councils are extremely angry with the formula that he has devised for transferring further education colleges to the independent sector? Will he confirm that that formula is based on assumed rather than actual expenditure and that, in the case of Dyfed county council, it will cost the general education budget £2 million? Will he also explain why, although he has a task force in place in west Wales, he has announced no specific capital allocation for Preseli Pembrokeshire district council?

Mr. Hunt

Again, the hon. Gentleman has asked a number of questions. On his first point about the further education allocation, I had to make a decision with the best advice available to me on the appropriate transfer of funds to meet the needs of further education colleges. I am not sure whether he has consulted the further education colleges—he may have consulted only local authorities—but I do not believe that the further education colleges regard that amount as sufficient. I must now consider adding to that figure to allocate proper resources for further education next year.

Mr. Dafydd Wigley (Caernarfon)

In welcoming the Secretary of State's statement about the new strategy, which includes Caernarfon and four other locations, I notice that the total sum earmarked is £2.5 million. Does he recall that, when he visited Caernarfon a few weeks ago there was talk of a package of £8 million for regenerating Caernarfon? Will he assure me that there has been no slippage from that and that the other moneys will arise from other programmes or be made available in the subsequent financial year?

Mr. Hunt

I refer the hon. Gentleman to the detail of my announcement which is only part of the package for regenerating Caernarfon. Other partners are making contributions. However, I shall look into the point that he raises.

Mr. Llew Smith (Blaenau Gwent)

Will the Secretary of State confirm that, when he visited my constituency just a week or so ago, he witnessed the fact that our bus service, bus depot and shopping complex had gone into receivership and that there was bad housing, record unemployment, low wages and under-investment in education? Although we welcome investment in the Tredegar bypass road and congratulate the local authorities and action committee on their support, does he accept that all the other measures that he mentioned are utterly irrelevant to the unemployed, those in bad housing and those suffering many other forms of deprivation?

Mr. Hunt

The hon. Gentleman was with me in Tredegar when we were presented with a regeneration strategy, which has only just arrived at the Welsh Office. I regard today's announcement as demonstrating that the Tredegar bypass is high on the list of Welsh Office priorities, as it was on Gwent county council's list of priorities. I hope that the £300,000 for the regeneration of Tredegar will be regarded by everyone in Tredegar as a down payment showing our good will, because those are the properly costed schemes that have been put to us so far. We shall now respond to the strategy that has just been received and shall consider it in consultation with the local authorities concerned.

Mr. Allan Rogers (Rhondda)

The Secretary of State's statement will be viewed with great dismay in the valley communities, because no substantial money is being made available for council and ordinary house repair and improvement grants. At the beginning of the 1980s, the Government poured a lot of money into those grants and it made a substantial difference to our communities. Unless they embark on a repair and improvement grant system to that extent, houses in the valleys will decay yet again.

Mr. Hunt

The sums that I have announced for home renovation grants are extremely sizeable. I refer the hon. Gentleman to the statement that I made earlier about the allocation being made to the valleys. Although the hon. Member for Caerphilly (Mr. Davies) tried to portray the urban programme as a cut, failing to take account of the special consideration of the national garden festival at Ebbw Vale and some other considerations, I ask the House to consider the package as a whole and recognise that it represents record gross spending in Wales. It is about time that the Labour party paid tribute to that. Although I recognise that the hon. Gentleman has done so, he will acknowledge that several Opposition Members have not been as generous in their praise. I hope that he has set an example. I remind the House that we are dealing with record capital growth spending in Wales and I am delighted to have been able to announce that today.

Mr. Win Griffiths (Bridgend)

Despite everything that the Secretary of State says about the amount of Government support for local authorities in Wales, because of the dispute over further education and the money already committed for the police and the fire service, little extra money will flow from local government coffers in Wales to support the services they provide. Will the Secretary of State make a special effort this year to look into the money being spent by local authorities to provide conversions or new central heating for old age pensioners and to provide money for disabled people who need their houses adapted? In many parts of Wales, the time that pensioners and disabled people must wait for those conversions to be undertaken is scandalous. I hope that he will look into the matter and provide extra money if the need for it can be shown.

Mr. Hunt

The hon. Gentleman will be aware of the substantial additional funds that I have put into the programme during the three-year period that I announced last year. It is a matter for local authorities, but I will check on the issue that he raised. However, he should see the matter against the background of the greatly increased level of funding.

Mr. Paul Murphy (Torfaen)

Does the Secretary of State recall that only two hours ago he was praising local authorities in Wales and talking of co-operation? How is it that he is now introducing for the first time in Wales the most detailed and draconian capping criteria, which must severely restrict council spending? Does he not realise that the quality of life of hundreds of thousands of Welsh men and women will be profoundly affected by the revenue settlement and capping criteria? Is it not ironic that, while the Secretary of State's appointed quangos can apparently spend as they wish, our democratically elected councils have to cut, cut and cut? Is that not a case of double standards?

Mr. Hunt

No, it is not. The hon. Gentleman has failed to recognise that we are talking against a background of an increase in total standard spending over the previous two years of 25 per cent. and, in addition, I am allocating 3.1 per cent. I thought that I had made it clear earlier that I regard the settlement as being difficult for local authorities, just as the overall settlement is difficult for central Government. However, I believe that it strikes the right balance. I repeat that the £2,599.8 million is a substantial settlement, which represents £901 of spending next year by local authorities for every man, woman and child, towards which central Government will be funding, through aggregate external finance, £812. I believe, when the hon. Gentleman examines the figures, he will see that they are reasonable, bearing in mind the present economic background.