HC Deb 19 February 1992 vol 204 cc320-1
7. Mr. Pawsey

To ask the Secretary of State for the Environment if he will consider the abolition of the area cost adjustment.

Mr. Portillo

It is important that standard spending assessments should recognise that pay and the costs of recruiting and retaining staff are substantially higher in some areas than in others. That is the purpose of the area cost adjustment.

Mr. Pawsey

My hon. Friend will be aware that there is much disquiet in Warwickshire and elsewhere about the standard spending assessment and the result of the revenue support grant—[Interruption.] At least I get support on some occasions from Labour Members. The area cost adjustment exacerbates that position. My hon. Friend will also be aware that a number of counties are now calling for the abolition of the area cost adjustment. Will he give careful consideration to the possibility of abolishing that unneeded and unnecessary measure?

Mr. Portillo

I do not think it would be reasonable to pretend that the cost of paying people, recruiting them and retaining them is the same in the south-east as in other parts of the United Kingdom. It would be unfair to pretend that, but I do not want my hon. Friend to be carried away by the importance of it. In a county such as Hampshire, recognising the extra costs, we give an extra 5 per cent. for teachers' pay, so the differential between Hampshire and my hon. Friend's county is only 5 per cent.

Mr. Flynn

A consequence of the area cost adjustment is to elevate finance to be the supreme consideration. Is the Minister aware that part of the result is that in my constituency today 14 classrooms have been closed in Bassaleg school? Parents were told last night that their children should not come to school due to the appalling standard of cleanliness resulting from the employment of contract cleaners. That state of affairs never occurred under the previous system. What do the Government intend to do about it?

Mr. Portillo

Not only have we enormously increased the standard to which schools and public buildings are cleaned, as a result of compulsory competitive tendering, but we have saved ratepayers and community charge payers huge amounts of money. It is disgraceful that the Labour party, in hock to the trade unions, is now threatening to sweep away compulsory competitive tendering, irrespective of the cost and the effect on services to the customer.