HC Deb 14 May 1992 vol 207 cc758-72 3.59 pm
The Secretary of State for the Environment (Mr. Michael Howard)

With permission, Madam Speaker, I should like to make a statement about local government finance and community charge capping in England.

Local authorities have now set their budgets and charges for 1992–93. The vast majority of budgets are at sensible levels reflecting what charge payers and the country can afford.

More than 400 authorities have budgeted within or very close to the limits implied by the provisional capping criteria announced last autumn by my right hon. Friend, the Member for Henley (Mr. Heseltine). This outcome clearly demonstrates that my right hon. Friend was more than justified in his belief that authorities would find his provisional criteria manageable.

In overall terms, the total of local authority budgets is about 1 per cent. over the amount for which we made provision in our settlement, and the average headline charge is £282, with the average amount of charge actually met by charge payers being less than £200. This result is in no small part a tribute to the good sense and responsibility of local government.

I have carefully considered authorities' budgets. In the light of these budgets and all other relevant considerations, I have now decided my capping principles—that is, the criteria in accordance with which I must designate authorities for capping.

The principles I have today adopted give effect, with one modification, to the provisional criteria announced last autumn. This modification is that I have included a de minimis proviso. This will avoid designation in cases where the reduction which could be secured by capping would be less than £1.50 per adult.

I have decided that the de minimis principle will be appropriate this year, having regard to a number of considerations. Those considerations include the provisional criteria, the budgets which all authorities have in the event set—bearing in mind that in the great majority of cases they reflect what charge payers and the country can afford—the scale of reductions in budgets, and the costs of rebilling and associated expenses which, but for this principle, would be required. It should not be assumed that in any future year we would judge such a de minimis principle to be appropriate.

On the basis of those principles, 10 authorities are to be designated: Basildon, Cheltenham, Gloucester, Gloucestershire, Greenwich, Hillingdon, Lambeth, Langbaurgh, Middlesbrough and Warwickshire.

For each of those 10 authorities I also propose caps —that is, the level to which we propose authorities should reduce their budgets. I have made available in the Vote Office, and shall be printing in the Official Report, a table setting out my principles and showing for each designated authority the cap that I propose and the budget reductions implied by it. In each case, on the basis of all the information currently available to me, I am satisfied that my proposals are reasonable and appropriate in all the circumstances of the individual authorities concerned, and that my proposed reductions are achievable this year. The reductions in charge range from £58 for Basildon to £3 for Gloucester.

Authorities now have 28 days in which to tell me whether they accept the amount proposed. They can also challenge my proposal, suggesting an alternative figure together with reasons for it. In such circumstances, it is open to me to set the final cap at a higher, lower or, indeed, the same level as the one I originally proposed. If an authority does not accept my proposed cap I have to set the final cap by order, a draft of which must be approved by the House.

Within 21 days of the final caps having been set, the authorities must set new lower budgets reflecting their caps which feed through to lower charges. How long the

Community charge capping 1992–93 Table of designated authorities and proposed caps
Column 1 Column 2 Column 3 Column 4 Column 5 Column 6 Column 7
Authority 1992–93 budget Proposed cap for 1992–93 Proposed reduction proposed cap change on 1991–92 budget Original average community charges for 1992–93 Community charge reduction implied by proposed cap £
(£ million) (£ million) (£ million) (Per cent) (Per cent) (£) (£)
Absolute Excessiveness
Basildon 27.01 20.15 6.86 25.4 -8.8 361 58
Langbaurgh 18.50 16.50 2.00 10.8 5.8 376 18
Middlesbrough 21.60 20.20 1.40 6.5 0.0 353 14
Excessive Increase
Cheltenham 10.84 9.91 0.93 8.6 6.6 330 12
Gloucester 10.34 10.15 0.19 1.9 10.3 310 3
Gloucestershire 327.80 317.91 9.89 3.0 6.5 279–347 25
Greenwich 228.81 220.04 8.77 3.8 3.3 287 56
Hillingdon 167.14 166.27 0.87 0.5 10.3 295 5
Lambeth 333.20 328.79 4.41 1.3 5.7 449 23
Warwickshire 299.76 292.99 6.77 2.3 6.5 290–353 19

Notes:

A. Designation is on the basis of the following criteria:

1. any increase of more than 6½ per cent. over the previous year's budget is an excessive increase if it gives rise to a budget over SSA;

2. any increase of more than 4½ per cent. over the previous year's budget is an excessive increase if it gives rise to a budget of over 5 per cent. above SSA;

3. any increase of more than 12½ per cent. over the previous year's budget is an excessive increase if it gives rise to a budget of over 10 per cent. above SSA;

4. any budget more than 12½ per cent. above SSA is excessive save that an authority will not be designated if:

(a) its budget is 30 per cent. or less above SSA and is a cash freeze or reduction on its 1991–92 budget

(b) its budget is 60 per cent. or less above SSA and at least 5 per cent. below its 1991–92 budget

(c) its budget is at least 10 per cent. below its 1991–92 budget

5. if the excess in an authority's budget over the above criteria is less than the equivalent of £1.50 per adult that authority is not designated.

That criteria for inner London boroughs are the same as for other classes of authority save that for the purposes of comparison the amount of inner London education grant is deducted from budgets.

B. Column 1 of the table lists those authorities designated since their budgets are excessive (criterion 4 above) or represent an excessive increase over the previous year (criteria 1 to 3 above).

C. Column 2 shows 1992–93 budgets set by the designated authorities.

D. Column 3 shows the proposed caps for 1992–93.

E. Column 4 sets out the reductions in budgets implied by the proposed caps both in terms of cash and percentage.

F. Column 5 shows the percentage change from the 1991–92 budget to the proposed cap.

G. Column 6 lists the original average community charge or charges in the area of each designated authority for 1992–93.

H. Column 7 shows the reductions in community charges implied by each proposed cap.

Mr. David Blunkett (Sheffield, Brightside)

This sorry statement is an admission of failure and a capitulation to those who believe that centralised Government should take precedence over democracy. The delay in delivering this sorry statement has already meant confusion and financial loss, and it makes it very difficult for councils to exercise their rights in appealing in the way that the Secretary of State spelled out this afternoon.

process takes depends in part on how authorities respond to my proposals, but I expect that by the end of June or early July all authorities will have set new budgets leading to reduced charges.

We and local government generally can rightly find satisfaction in the sensible and prudent way in which the vast majority of authorities have budgeted. But a few authorities are still failing to act responsibly. Parliament has given me powers that enable me both to secure as necessary the expenditure restraint by local authorities needed to meet our wider economic goals and to protect all charge payers against excessive budgeting. My decisions today reinforce our strategy of expenditure control, and will benefit about 1.8 million charge payers.

Following is the table:

Will the Secretary of State acknowledge that not one of his predecessors agreed with capping as a solution to the future relationship between local and central Government? Will he acknowledge that his immediate predecessor condemned capping as an act of centralised power outside our experience … On those grounds alone, it should be resisted"? Will the Secretary of State confirm his own words when he spoke as Minister with responsibility for local government when the capping regime was introduced for the poll tax? When introducing the legislation he said: We have made it clear on more than one occasion that we see the capping power introduced in the clause as a reserve measure … It is important that there should be such a reserve power … to protect the charge payers of an area against extreme cases of extravagant and irresponsible local authorities.—[Official Report, 25 April 1988; Vol. 132, c. 51.] Will the right hon. and learned Gentleman confirm to us this afternoon that he believes that the criteria of extravagance and irresponsibility can be applied to Conservative-controlled Warwickshire, to Conservative-controlled Hillingdon, to the people of Gloucestershire or to the city of Gloucester whose residents will save a staggering £3 a year as a result of the actions of central Government? Will the Secretary of State tell us whether he agrees with himself, whether he agrees with his predecessor or whether he agrees with the unknown Secretary of State who believes that authorities such as Warwickshire and Hillingdon are profligate and extravagant?

Will the Secretary of State acknowledge that this is the eighth year of capping and that the Government are still abusing local authorities as though they and not the Government were responsible for high bills and reduced services? Will he explain to the House why the people of Warwickshire, Gloucestershire, Greenwich and Hillingdon should not choose the level and range of education provision for their children and of the social services provided for the elderly and for disabled people in their area?

Why should people not be left to exercise their own responsibility, to determine the opportunities available to them and to have a real chance of partnership between governed and governing—a partnership between local and central Government based on diversity, pluralism and respect for democracy? We in the Labour party accept the verdict of the people. Why will the Conservative party and the Government not do the same at local level?

On what criteria has the Secretary of State the right to determine what should happen at local level when the standard spending assessments are universally acknowledged to be flawed, when the national non-domestic rate is determined centrally, when 86 per cent. of spending is directed by central Government and when the remaining 14 per cent., as we can see this afternoon, is fixed through the capping process by a Government heady with victory and contemptuous of dissent?

Why should district councils across the country have been allocated an increase of 50 per cent. in their standard spending assessments when a council such as Middlesbrough, which has been capped this afternoon, has had a standstill budget over the past two years? No wonder people regard this capping regime and this afternoon's announcement as a discredited act by a Government who have no other means than central power to determine what they do for the people of this country.

Does the Secretary of State not agree that this is another bad day for democracy and another example of intolerance, of elective dictatorship and of the Government determined to have their own way over the wishes of local people? The losers are not the councils to be capped this afternoon, but the communities whose services will be cut.

Mr. Howard

The hon. Gentleman engaged in the usual ritualistic condemnation of capping that we always hear from the Opposition. However, that carries no conviction. If capping is anathema to Opposition Members, why did they propose during the general election campaign a cap on the revenue-raising powers of the Scottish Assembly about which they were so keen? Where is the logic in proposing a cap on the Scottish Assembly but no cap on local authorities? If the hon. Member for Sheffield, Brightside (Mr. Blunkett) or any other Opposition Members want to attack our proposals, perhaps they will explain that incomprehensible inconsistency in the Labour party's attitude.

The only consistent theme to emerge from the remarks of the hon. Member for Brightside—a consistent theme also in the remarks of all Opposition Members—was that the Opposition display no concern about the need to control public spending. Local authorities spend about £60 billion a year. Any Government worthy of the name must be concerned that local profligacy is curbed. That message was clearly endorsed by the electorate on 9 April.

Basildon's proposed budget for 1992–93 is 114 per cent. above its standard spending assessment. Langbaurgh's is 52 per cent. above. Cheltenham proposed an increase of 16.6 per cent. over last year and Gloucester a 12.4 per cent. increase. Those budgets were excessive by any standard.

Two things are crystal clear: first, almost all local authorities have responded sensibly and responsibly to our guidelines; secondly, Conservative councils continue to deliver far better value for money than Labour or Liberal Democrat controlled councils. The average community charge in Conservative-controlled London boroughs was £86 lower than in Labour-controlled boroughs. In the metropolitan and non-metropolitan districts the average difference was £54. Those figures speak for themselves. That is why the Labour party suffered such a crushing defeat on 7 May and that is why the words of the hon. Member for Brightside sound so hollow.

Mr. Michael Shersby (Uxbridge)

Is my right hon. and learned Friend aware that Hillingdon is £1 million over the cappling limit because it has had to spend £936,000 this year caring for unaccompanied child refugees from Eritrea, Angola, Uganda and elsewhere? Those children come into Heathrow, are abandoned there and fall into the care of Hillingdon. The cost of that operation is not met by the standard spending assessment. Is my right hon. and learned Friend further aware that Hillingdon has reduced expenditure by £30 million since May 1990 and has reduced the number of staff by 1,400? Will he kindly tell the House on what basis Hillingdon can appeal and over what period? Will he assure me that he will give the most careful and sympathetic consideration to a very difficult human problem?

Mr. Howard

I certainly understand my hon. Friend's concerns. We have sought to take into account all relevant circumstances in dealing with Hillingdon's budget. I give my hon. Friend the assurance that he seeks and will consider very carefully any representations made to me by Hillingdon. The council has 28 days in which to make representations to me and I will give any such representations the most careful consideration.

Mr. Bill Olner (Nuneaton)

Has the Secretary of State taken into account the views of independent accountants and auditors who described my county as one of the most efficient in Britain? Why has he not taken into account the thousands of constituents who have written to him expressing concern about education, social services and all the other services that Warwickshire provides, including fire and rescue and the police services, which are under great threat? They are underfunded and have been told so by the Home Office. Why has he not taken those views into account? Why does not he agree that Warwickshire's standard spending assessment and the capping formula are flawed and work to Warwickshire's disadvantage? Warwickshire is a Tory-controlled authority, guaranteed to be one of the meanest in the country, yet it is still being capped. Why?

Mr. Howard

I have sought to take into account all the relevant factors affecting Warwickshire. Indeed, we changed the SSA for Warwickshire for this year to reflect some of the points that were put to us by the county council. The county council benefited from the changes which we made to the methodology. The effect of the cap that I propose will be to reduce the average community charge for the residents of Warwickshire by £19 a year. If the hon. Gentleman cared about the interests of his constituents, I should have thought that he would pay some attention to that proposed reduction. I shall, of course, carefully consider any representations made to me by Warwickshire. It has 28 days in which to decide how it wishes to respond to my proposals. I shall listen to what it has to say with great interest.

Mr. Olner

But what about services? Madam Speaker: Order.

Mr. Peter Bottomley (Eltham)

Will my right hon. and learned Friend confirm that, if he did not bring in a cap, each charge payer in Greenwich would have to pay virtually 25 per cent. more? Is he aware that only one council in the country has been capped every single time since Greenwich put its rate up by 59 per cent. in one year in 1983? Would my right hon. and learned Friend be willing to consider meeting a deputation from all parties to discuss the standard spending assessment, which is an outstanding problem for Greenwich? Will he also accept that most charge payers will welcome this news and wish that Greenwich would get on and make those who are not paying the community charge pay up so that those who pay do not have to pay for those who do not?

Mr. Howard

I am grateful to my hon. Friend for his remarks. My proposals for this year would produce a £56 saving on the average community charge paid by the residents of Greenwich. That would be over and above the total of £74 which capping has saved the average charge payer in Greenwich in the past two years. I can certainly confirm that I shall consider carefully any representations made to me on behalf of Greenwich. I shall be happy to meet the deputation proposed by my hon. Friend.

Mr. Alfred Morris (Manchester, Wythenshawe)

Is the Secretary of State aware that local authority leaders of all political persuasions now complain that they are no longer able fully to discharge their legal duties to disabled persons under sections 1 and 2 of the Chronically Sick and Disabled Persons Act 1972? Is not this a deeply serious matter both legally and in social policy terms? What does this afternoon's statement do to meet that complaint?.

Mr. Howard

This is a matter for the priorities which local authorities attach to the relevant demands which they have to meet from their budgets. That is something with which they are familiar and anyone who has been elected to office is familiar. Any responsible office holder has to make difficult decisions of that nature. I am satisfied that the proposals that I have made today are appropriate, reasonable and achievable, but, as I have said, I am prepared to consider any representations that are made to me by any of the affected authorities.

Mr. Paul Marland (Gloucestershire, West)

Is my right hon. and learned Friend aware that the huge overspending of Gloucestershire county council is as a result of the profligacy of the Liberal and Labour coalition? Whenever—

Mr. Simon Hughes (Southwark and Bermondsey)

But the Conservatives run Gloucestershire.

Mr. Marland

The hon. Gentleman is wrong. The overspending was historic when the Liberals were in charge with Labour party back-up. They gave the Labour party a slush fund with which to back its special projects. It is as a result of that profligacy that Gloucestershire county council finds itself in serious difficulties. When the Liberal leader of Gloucestershire county council was warned by Mr. Cockcroft, the treasurer of the county council, of the overspending, he waved it aside. In effect, he said, "We are not interested in this. We shall go ahead with this spending anyhow."

May I welcome my right hon. and learned Friend's determination to cap Gloucestershire? During the election campaign many of my constituents were begging me to ensure that the county council was charge-capped.

Mr. Howard

I am very grateful to my hon. Friend. I am sure that he is absolutely right in his description of the way in which my proposals are likely to be greeted in Gloucestershire. The effect of my proposals would be to reduce the average community charge for the residents of Gloucestershire by £25, which I believe they will warmly welcome. I believe also that they are convinced that they can have adequate services and good value for money at the lower levels that I propose.

Mr. Mike O'Brien (Warwickshire, North)

Bearing in mind that Warwickshire has one of the lowest expenditures per pupil on education of all the counties and that Her Majesty's inspectors of both the fire service and the police force have expressed their concern about the low expenditure on those services, how would the Secretary of State advise Conservative county councillors to deal with the problems of underfunding? He has virtually disowned them as overspenders and said that he will cut the amount of money that they have. Has he not brought into ridicule the policy of poll tax capping which was brought forward by the Government?

Mr. Howard

The hon. Gentleman's points are entirely misconceived. No doubt the first reaction that he would have if I tried to tell the leaders of Warwickshire county council how to spend their money would be to claim that I was interfering with local government and taking over their responsibilities. That is what would be said. I am announcing the appropriate discharge of the responsibilities of central Government. Central Government's role in these matters is to control overall public expenditure and to protect the community charge payer. That is the purpose of the proposals that I am putting forward. As I have said, I shall be prepared to listen to anything that Warwickshire county council may put to me over the next 28 days or beyond, and to take into account in making my final decisions any further factors that it thinks are relevant.

Mr. Terry Dicks (Hayes and Harlington)

In support of the comments made by my hon. Friend the Member for Uxbridge (Mr. Shersby), I must say that the Secretary of State's approach to Hillingdon is disgraceful to say the least. When he suggests that the authority is acting irresponsibly, along with the others, that is an insult to my Conservative colleagues on the council, who have made substantial savings over a period. I ask my right hon. and learned Friend to withdraw that comment, a blanket comment which included my friends on the council. Does he not realise that with Heathrow in Hillingdon, and in my constituency, there is no choice but to pick up these children? During the election campaign many people suggested on their doorsteps that we should send the children back or leave them there. My right hon. and learned Friend must understand that unless he takes an understanding view of a problem that is not Hillingdon's but which involves it because of the airport—it is a national problem—he will have a fight on his hands with myself and my colleagues on the Hillingdon council.

Mr. Howard

I understand the seriousness of the concerns which my hon. Friend has expressed, in common with my hon. Friend the Member for Uxbridge (Mr. Shersby). We have sought to take into account all relevant factors that affect Hillingdon. I shall listen with great care to anything that my hon. Friend the Member for Hayes and Harlington (Mr. Dicks) or Hillingdon council may say, and ensure that we give proper weight to all the relevant circumstances. However, my right hon. Friend the Member for Henley (Mr. Heseltine), the then Secretary of State for the Environment, set out some clear criteria, which were known to all local authorities when they came to set their budgets for 1992–93. The criteria were known to Hillingdon as they were known to other local authorities. I regret that Hillingdon was not able to comply with the criteria and I shall pay careful attention to any representations that it wishes to make.

Mr. Nigel Jones (Cheltenham)

Does the Secretary of State agree that his statement affects councils across the political spectrum, takes away local accountability and imposes central diktat? Does he recognise the arbitrary nature of the formula, which has brought low-spending authorities such as Gloucestershire into capping? That is illustrated, for example, by the fact that boundary changes made to Cheltenham last year have not been taken into account. Will he promise the House that he will be genuinely open to persuasion over the next four weeks by all the councils that are affected, and that any formula for next year will only be one that has been agreed by him and the local authority associations?

Mr. Howard

I can certainly give the hon. Gentleman the assurance that he seeks. I shall be genuinely open-minded about representations made to me on these matters. He is wrong to suggest that the boundary changes that affected Cheltenham were not taken into account in my decision. We made full allowance for the boundary change in our calculations. It was my duty to protect community charge payers in Cheltenham, as in Gloucestershire generally, but I shall listen to any representations that Cheltenham or Gloucestershire wish to put to me in the next few weeks.

Mr. Alan Howarth (Stratford-on-Avon)

Does my right hon. and learned Friend recognise that in Warwickshire we have full regard for the need for economy in public finances and that Warwickshire county council has run its affairs stringently? Does he accept that any formula designed to apply across the country as a whole is bound to be broad-brush and will throw up anomalies? Will he, therefore, on appeal look carefully and, indeed, sympathetically at the case for relaxing the cap on Warwickshire? Will he also look at the application of the formula and, in particular, the area cost factor and the additional educational needs element in it, which have operated powerfully to the detriment of Warwickshire?

Mr. Howard

Again, I can give my hon. Friend the assurance that he seeks. The whole purpose of the process that this statement puts in train is to enable the affected authorities to bring to my attention any factor that they think I may have overlooked or to which they think I may have given insufficient weight. Last year, we made a number of changes from the original proposals in response to representations of that kind. I shall listen carefully to all the representations that are made to me, including representations from Warwickshire in particular.

Mr. John Fraser (Norwood)

Before the Secretary of State smiles like a busy undertaker, may I remind him that in Lambeth it was the Tory party which had a resounding defeat? Although it is the second most deprived borough and has the highest poll tax bills in the country, does he realise that the effect of capping for the sake of about 50p a week will be only to throw many poll tax payers into confusion, because they have received their payment books already, and make it much more difficult to collect the poll tax, thereby creating greater financial problems for the future? It is bound to lead to a cut in services, particularly worryingly in education. Is it not, therefore, better to leave matters as they are, because the long-term costs of this capping will be to increase costs and make it much more difficult to get money in to spend on council services?

Mr. Howard

The hon. Gentleman might also have mentioned that Lambeth receives from central funding £1,628 per adult towards the cost of local services—the sixth highest in the country and £200 per adult more than neighbouring Wandsworth. If Lambeth could manage its affairs efficiently and collected the money it was owed, there would be no need for charge payers to be faced yet again with the highest community charge. I am surprised that the hon. Gentleman dismisses the reduction of £23 in the average community charge in Lambeth, which would be the result of these proposals. Community charge payers in Lambeth will regard it as a significant advantage.

Mr. David Amess (Basildon)

Does my right hon. and learned Friend agree that the sensational local election results in Basildon, with swings of between 20 and 50 per cent. towards the Conservatives, showed that the residents were sick and tired of a rotten, high-spending, inefficient, socialist council and wanted sensible services and a low community charge? Will my right hon. and learned Friend accept my gratitude that that is what my constituents will now get?

Mr. Howard

I am delighted to have this opportunity to congratulate my hon. Friend and the councillors in the area that he represents on their astounding and spectacular victory on 7 May. I have put forward proposals for Basildon's budget for this year. I am confident that in future years, the new council of Basildon will adopt a very different and much more responsible attitude to these matters than its predecessor has done.

Mr. John Austin-Walker (Woolwich)

Is the Secretary of State aware that there is all-party agreement on Greenwich council that the standard spending assessment formula treats Greenwich most unfairly? Will he comment on the situation in relation to the allocation per child on the children's services which gives Greenwich £39 per child and Wandsworth £209 per child? Will he also comment on the reduction that would come to Greenwich poll tax payers if they received grant in the generous way that it is received in Wandsworth? Would he and the Secretary of State for Education be prepared to come to Greenwich to meet parents and other residents and ask them directly whether they feel that Greenwich council spends too much on schools and adult education?

Mr. Howard

Greenwich is receiving £1,433 per adult from central funding in 1992–93, which is a rise of 5.1 per cent. on the previous year's figure. As for the SSA, the hon. Gentleman will have heard my response to my hon. Friend the Member for Eltham (Mr. Bottomley). I am prepared to consider, in the context put forward by my hon. Friend, representations that may be made to me about the SSA for Greenwich.

Mr. Roger Knapman (Stroud)

I congratulate my right hon. and learned Friend on the great care and consideration he has shown before reaching decisions on these complex matters. Is he aware that in Gloucestershire, Conservative councillors and council officers produced a detailed budget showing that they could manage well within the existing record budget, and that only Liberal and Labour councillors there wanted to spend £10 million more? What effect would that have had on those on lower and fixed incomes?

Mr. Howard

I confess that I was not aware of what my hon. Friend just said, though it does not surprise me. It is a characteristic of the difference between Conservative local government and local government controlled by the other parties. I cannot give a figure in answer to the question that my hon. Friend asked, but the proposals that I have put forward today would reduce the average community charge in Gloucestershire by £25. I am sure that that would be welcomed by my hon. Friend's constituents.

Ms. Kate Hoey (Vauxhall)

I and other hon. Members representing Lambeth are disappointed that the Secretary of State has not taken into consideration any of the remarkable improvements that have occurred in the borough's administration and in the delivery of services during the past year. It is indeed sad that no recognition has been given to those improvements. Is the right hon. and learned Gentleman aware that an all-community delegation will be anxious to come and see him to put Lambeth's case? Will he give a commitment now that he will see not just the leader and members of the council but a grouping of various people, including the churches and local police, who wish to see him to put Lambeth's case?

Mr. Howard

The representations that we shall be examining carefully will not in any way be limited to those from local authorities or councillors. If other interested bodies and groups wish to put points to us, we shall look at them with great care, give them full account and take them fully into consideration before reaching our final conclusion.

Mr. Douglas French (Gloucester)

Is my right hon. and learned Friend aware that his announcement this afternoon will be welcomed by my constituents in the city of Gloucester, in so far as it relates to overspending by Gloucestershire county council? In the general election they voted decisively against Labour and Liberal policies, of which the overspending on Gloucestershire county council is a prime example. May I reserve judgment on his decision relating to Gloucester city council, in relation to which there may be some special factors which he should take into consideration?

Mr. Howard

I am grateful to my hon. Friend for what he said about Gloucestershire. I understand that he wishes to reflect on the position in Gloucester. If he can convince me that there are special considerations which fall properly to be taken into account, I shall listen carefully to what he says.

Ms. Marjorie Mowlam (Redcar)

Will the Minister accept that a central problem facing Langbaurgh council over the years has been the way in which the SSA has been worked out, in that it has worked to the detriment of the council, to the point at which we no longer have any reserves left? He has assured the House that, on appeal, he will look at the way in which the SSA is worked out. If that is not the case, will he explain what will be the position? If he willing to look at how the standard spending assessment is worked out for specific councils, will he explain why he is suddenly prepared to do so when all-party delegations have approached his predecessors on the matter for the past six years and been refused?

Mr. Howard

I repeat that I shall take into account all relevant considerations in deciding whether I should modify the proposals that I have made today. I look forward to hearing from the hon. Lady and Langbaurgh council on the matters that they consider relevant. I understand the concern in many areas about aspects of those matters, which is why it is important that we have, as part of our process, a procedure that enables those representations to be made and requires them to be taken fully into account. That is what I shall be doing.

Mr. Geoffrey Clifton-Brown (Cirencester and Tewkesbury)

I am grateful for my right hon. and learned Friend's announcement that Gloucestershire county council's budget will be reduced by the huge figure of £10 million. Does he agree that the charge reduction of £25 will lift a huge, unnecessary burden from my constituents in Cirencester and Tewkesbury, particularly those on fixed and low incomes?

Mr. Howard

I entirely agree with my hon. Friend. One of the functions of central Government is to intervene where necessary to protect charge payers. That is why we have kept a capping power and why I have put forward those proposals today. My hon. Friend's remarks truly speak for his constituents.

Mr. Clive Betts (Sheffield, Attercliffe)

First, I presume that the Secretary of State is aware that the standard spending assessments that form part of his capping criteria are based on 1981 census data. Is he really telling the House that it is the act of a rational Government to determine the services to be provided to people in those 10 authorities on the basis of data collected 11 years ago?

Secondly, bearing in mind that two of the poll tax reductions are £3 and £5 a head, can the Secretary of State assure us that in all cases the savings to those councils and their poll tax payers will be greater than the cost of rebilling?

Mr. Howard

It is the act of a rational Government to make such decisions on the best information available to them. That is what we have done, but if any local authority or other interested party has better or more up-to-date information which they wish to draw to our attention, we shall look at it. That is the purpose of the process that begins with today's statement. Naturally, we have sought to take into account all relevant and up-to-date information leading up to my announcement today. On the hon. Gentleman's second point, the cost of rebilling in the authorities to which he referred will not exceed the reduction in the size of the budget resulting from my proposals. That is one of the factors which we have considered and which has entered our decision-making process. The hon. Gentleman's assertion is not borne out by the facts.

Mr. James Pawsey (Rugby and Kenilworth)

I thank my right hon. and learned Friend for his statement. Will he confirm that Warwickshire is being kept at £293 million, which represents a £6 million shortfall on the budget? Is he aware that if the cap is not lifted, it will have a strong adverse effect on the services offered by Warwickshire county council? Does my right hon. and learned Friend further agree that the real problem in Warwickshire is not a spendthrift local authority, because Warwickshire is careful, but the way in which the SSA operates? Can he assure the House that we can look forward to a reform of the SSA?

Mr. Howard

The proposed cap for Warwickshire is a fraction under £293 million. We keep the standard spending assessment constantly under review. We reviewed it last year and made certain changes to the methodology, from which Warwickshire benefited. We shall continue to keep it under review and I look forward to hearing any representations that my hon. Friend may wish to make on those problems.

Mr. Harry Barnes (Derbyshire, North-East)

If votes were to follow voices, the Government's overall majority would be down to about three. That is obvious from listening to the comments of the Conservative Members from Warwickshire. The capping system will never fit in any circumstances because of the fiddled formula for standard spending assessments. One of the greatest fiddles is the provision for enhanced population, which in some cases is a reduced population. If an area is a seaside resort, if there is a racecourse there, or if there is any other reason why people move there, the funding is increased because of the way that the formula is operated.

In north-east Derbyshire, where people have to move I o Sheffield, Chesterfield or the Markham pit area to find work, the formula used means that the central Government grant is cut. We should stop the fiddle that affects Derbyshire county council, North-East Derbyshire council and other district councils in Derbyshire. I hope that some Conservative Member will speak on behalf of them.

Mr. Howard

There is no question of any fiddling in the standard spending assessment. It is a realistic attempt to reflect the different circumstances of different local authorities for the purpose of assessing Government grant. Labour Members always used to criticise the Government for reducing the proportion of spending on local government services that came from central Government. We have now substantially increased that provision, but the hon. Member for Sheffield, Brightside (Mr. Blunkett) this afternoon criticised us for doing that. Labour Members really need to sort themselves out and introduce an element of consistency into their approach to these matters.

Mrs. Edwina Currie (Derbyshire, South)

Is it not true that not a single Derbyshire council, whether county or district, has taken the risk of being capped this year? They have learnt the lesson of two years ago when the county was capped by the then Secretary of State and the council had its fingers burnt.

What advice would my right hon. and learned Friend give to the teachers of Derbyshire who once again face redundancies in large numbers because of the county council's policy to keep the price of school meals at the same level as it was 11 years ago?

Mr. Howard

My hon. Friend is absolutely right on her first point. The very fact that the number of authorities to be capped under our proposals is as few as 10 shows the extent to which our policies have succeeded. We set out the clear criteria in advance and the vast majority of authorities took careful note and ensured that their budgets complied with them.

On my hon. Friend's second point, I well understand the grievances that many residents of Derbyshire rightly have about the behaviour of Derbyshire county council. Their remedy lies in the ballot box and it will not be very long before they have an opportunity to make their views clearly known in that way.

Mr. Dennis Skinner (Bolsover)

On many occasions since 1981, the people of Derbyshire have had the opportunity to use the ballot box. In 1981, they ousted the Tory group in Matlock. At the following election, the Labour party increased its majority, and at the following election it had another massive majority. At the last election, the two Tory Members of Parliament who are always calling for the sacking of teachers, home helps and everybody in sight who has to work for a living had their majorities cut—

Madam Speaker

Order. The hon. Gentleman is capable of asking questions and I am sure that he is going to do so straight away.

Mr. Skinner

Is the Secretary of State aware that the Conservative hon. Members for Derbyshire, South (Mrs. Currie) and for Amber Valley (Mr. Oppenheim), who are always spouting in here, had their majorities cut by 4,000 and 8,000 votes?

Mr. Howard

For the second time in two days, I must refresh the hon. Gentleman's memory. I seem to recall—and I am sure that he remembers—the confident predictions that were made by Labour Members before the last election that neither of my hon. Friends would be with us after the general election. They are both here, they are both well, and they will both continue to speak for the people of Derbyshire for many, many years to come.

Mr. Philip Oppenheim (Amber Valley)

Is my right hon. and learned Friend aware that the only people whom we want sacked in Derbyshire are the Labour hangers-on, such as the chairman of Derbyshire Labour party and a bunch of ex-Labour councillors who have been given well-paid jobs on the county council by the Labour leader? On the two occasions on which the former Labour leader of the county council stood for election in Amber Valley —which was supposed to be a safe Labour seat—he was trounced, once by a majority of 9,500.

Is my right hon. and learned Friend aware that Derbyshire county council persists in wasting more than £15,000 a year with its policy of pegging school meals at 1981 price levels? That does not even help the children of the poorest families because they get free school meals. Is he further aware that, if capped, the council could make reasonable savings? The people of Derbyshire, with the exception of a few diehards in the Labour party, would welcome capping. Will my right hon. and learned Friend give extra special consideration to capping Derbyshire—that is, if it is not abolished in the meantime?

Mr. Howard

I understand the force that lies behind my hon. Friend's remarks. He and my hon. Friend the Member for Derbyshire, South (Mrs. Currie) are the authentic voices of Derbyshire and they are sitting here today on behalf of the people of Derbyshire. Their voices will be recognised over the next few months and in the county council elections next year, which we await with confident expectation.

Mr. William O'Brien (Normanton)

I hope that the Secretary of State will take note of the sincere appeals made to him by some Conservative Members about the capping announced in his appalling statement. Will he also note that there is no such thing as standard assessment of spending in local government? Each local authority has its own problems, so to say that there is a standard spending assessment for each authority is misleading and wrong. The right hon. and learned Gentleman should accept that standard spending assessments do not work. He should note what has been said by his colleagues this afternoon and cancel his statement.

Mr. Howard

I am not aware that any of my hon. Friends have asked me to cancel my statement; nor am I aware that any of them attacked the concept of capping. I shall take careful note of what they said and, indeed, of what Labour Members said. I shall certainly give careful consideration to all representations made to me on this matter.

In criticising standard spending assessments, the hon. Gentleman should bear it in mind that as long as we accept that it is appropriate for central Government to make a substantial contribution to the costs of local government services—and I understand that that is common ground across the House—there will have to be a system by which that central Government contribution is allocated. We are never likely to arrive at a system that gains universal acclaim and enthusiasm in all quarters. That is impossible because of the nature of the process.

We shall continue to keep SSAs under review. I shall listen carefully to all representations, but I believe that my statement and the proposals that I put before the House will be widely welcomed as a serious contribution to the objectives of keeping general public spending under control and of protecting community charge payers in the areas that I propose to designate.