§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. McLoughlin.]5.52 pm
§ Mr. Tim Rathbone (Lewes)
Not only was it a reasonable hour to have the previous debate, as my right hon. Friend the Leader of the House pointed out, but it is a reasonable hour for this debate.
This is the final substantive debate of the parliamentary year, and it is only correct that a debate that covers a frightfully important subject affecting East Sussex, which can be said to be the font of parliamentary democracy in that Parliament was first set up after the battle of Lewes, should be the one with which to end the parliamentary year. I am speaking on behalf of all my right hon. and hon. Friends from East Sussex and with whom I have discussed the subject of this debate. Some of them may contribute later.
As a final word of introduction, I should like to say what a great pleasure it is that the Under-Secretary of State for the Environment, my hon. Friend the Member for Croydon, Central (Sir P. Beresford), is to respond to the debate. He must know more about local government than almost anyone else in the House. The debate is, of course, on various aspects of local government funding. As we have time on our side for once, I hope to cover a broad spectrum of subjects of which I have given my hon. Friend the Under-Secretary notice.
I deal first with the overall level of rate support grant for East Sussex. On the basis of the Chancellor's Budget statement last year, East Sussex county council is projecting an allowable increase of no more than 0.5 per cent. in 1996–97 and 1997–98. Followed through, that would mean a gap in resources of something like £16 million per annum, which means an 8 per cent. or £32 million reduction over the next two years.
It is open to question whether that projection by the Chancellor, which of course applies to overall Government funding for all Government expenditure, will be applied to the rate support grant in East Sussex or, indeed, anywhere else. Were it to apply, the county council has pointed out that it would lead to substantial reductions in the budgets for which it is responsible.
The county council has not attempted to announce its priorities or to give any guidance at all in the consideration of the budget for next year. It has, however, spread reductions pro rata across the board. In so doing, it has not acted as responsibly as it could have done and has certainly given no leadership in terms of consideration of what the reductions might be. For the interest of the House, I shall cite one or two examples.
The county council has suggested a reduction of £9.5 million in its education budget, a matter with which I shall deal later. It has suggested a reduction of £1.5 million for roads and transportation, a reduction of £300,000 for libraries and the arts and a £750,000 reduction for the fire service—although it would probably not be allowed to make such a cut as it would be contrary to Home Office requirements, which might reassure people living in the county. The council has proposed a cut of £3 million in its social services budget. Incidentally, that is a most peculiar cut, as the council has a £4 million surplus in its social services budget at this very moment.
774 I fear that the council is once again stirring up great concern among many people about what it might have to do were something or other to happen elsewhere.
§ Sir Geoffrey Johnson Smith (Wealden)
My hon. Friend mentioned that the council was stirring up feelings. I can assure him that I have received some 500 letters from parents, many of whom who are shocked and appalled by the conclusions to which they have been driven by that report. Some believe that the county council will be compelled to introduce monumental cuts which will savage the educational system in East Sussex.
§ Mr. Rathbone
My hon. Friend is absolutely right to draw attention to that fact. I shall deal with so-called education cuts in a moment.
The county council claims that its administrative costs are among the lowest in the country and that steps have already been taken to reduce expenses by cutting down on top management posts. I am not in a position to assess the validity of such claims, but, in view of his deep knowledge of local government, perhaps my hon. Friend the Under-Secretary is.
The district auditor has accepted that any reductions in expenditure will be difficult to achieve. He pointed out that net expenditure on services is already well below the county median per head of population and that East Sussex ranks 28th out of the 39 English county areas. He also said that the county is in a sound financial state. In spite of the auditor's report, there are some questionable aspects of policy and expenditure. I shall cite three by way of illustration, although they are in no way exclusive.
In education, for example, £1.2 million of savings have been identified and are being achieved through the improved administration of school meals. I understand that only £500,000 has so far been allowed in this year's budget. That of itself allows considerable budget leeway, which is pretty important, as I shall remind the House when I speak specifically about education. It also raises the question, however, of whether similar administrative savings can be made elsewhere in education and, indeed, in other departments.
In social services, even though the county threatens the closure of homes and day centres, there is an apparent surplus of £4million—unspent—in this year's social services budget. If that is the case, or, indeed, if it is anywhere near the truth, it is near criminal that the county council is stirring up so many worries in people's minds about the cuts in social service expenditure—which it has done.
§ Mrs. Jacqui Lait (Hastings and Rye)
Is my hon. Friend aware that, in each of its 700 beds, social services pays itself £100 a week per person more than it is prepared to pay the private sector'? It could, in fact, save itself another £4 million if it were to pay itself the same rate as it is prepared to pay the independent sector.
§ Mr. Rathbone
My hon. Friend is exactly right. To the best of my knowledge, the cost of keeping somebody in a county council rest home is in the region of £295 a week, whereas the cost to the county council of a person being in an independently run rest home is about £195 per week. If one extrapolates, the figure comes to about £4 million—an extremely large amount of money, particularly in the light of the county's enormous cost-cutting suggestions.
775 Having said all that, I know that there are matters of genuine concern. One is the cost of local government reorganisation. In that, East Sussex is unique in England, since in Brighton and Hove a joint unitary authority is being created out of two boroughs. I do not believe that there is any other instance of that anywhere in the country. That makes the matter very much more complicated than elsewhere, and considerable extra costs in preparing for that reorganisation are already being incurred.
From all accounts, there is a great spirit of co-operation between Brighton, Hove and East Sussex, and all the work together is going well; but, as far as I know, there is no additional Government allowance to cover the added cost to East Sussex, which is of genuine concern to the county.
A second matter of genuine concern is related to the technical question of the area cost adjustment. As the House will know, Ministers are inspecting the application of the area cost adjustment—the way in which local authorities in the south-east of England benefit from additional Government funding to meet the higher cost of providing services in that area. That comes to a substantial amount of money overall: £28 million a year, which is equivalent to about £100 on the average council tax bill.
I understand that, as that process is being reviewed in the coming year, there is a real risk that some of that money, if not all, will be withdrawn from the south-east of England and redistributed to other parts of England, which would leave the county in an extremely difficult budgetary situation unless an extra grant were made available to make up for it.
The third aspect of genuine concern—my concern may not carry all hon. Members—is the effect of capping. In an area where the vast majority of households pay council tax, local government can be held, and be seen to be held, responsible and answerable for its spending plans. With the reduction of the rates support grant as a proportion of the county council's total expenditure, that answerability is of course even further enhanced.
At the moment, for every £1 million that the council decides to spend over the rates support grant, approximately £3.75 is added to band D council tax bills. To put it another way, every additional 1 per cent. of expenditure increases council tax bills by 3.5 per cent. That of itself should act as a good political brake on a council's level of spending. It is far better than imposing a cap, which, quite honestly, allows local government to blame national Government for not being able to do the things that it feels it wants to do, or that it feels people want to have done for them in the local area.
§ Mr. Nigel Waterson (Eastbourne)
Does my hon. Friend agree that it is quite remarkable that, despite all the scaremongering at local level in East Sussex, which he has been explaining with great accuracy, and even though this Adjournment debate has started quite early in the parliamentary day, not a single representative of the Liberal Democrats is in the Chamber?
§ Mr. Rathbone
That is a good point, although one must point out that there are no Liberal Democrat Members of Parliament in East Sussex. Long may that continue! I shall return to that point in another context.
776 It seems that capping has two disadvantages—for an area such as East Sussex at least. It psychologically encourages councils to spend up to that limit, which is exactly what happened when the Liberal Democrats took control of East Sussex county council just three years ago. In the first year after they took over, they decided, contrary to all Conservative advice, to spend right up to their limit, and in the process take advantage of the cumulated balances that the Conservative administration had built up; indeed, they are still taking advantage of those balances.
The other great disadvantage, which runs across the whole country, is that capping tends to be applied equally across all counties, irrespective of expenditure needs. In East Sussex this year that has led to an inability—so the county claims—to spend the extra 3.1 per cent. grant on education which was made because of soaring school rolls. The money—believe it or not—was used to reduce council tax.
That cannot be what was in Ministers' minds when capping of East Sussex expenditure was introduced. I sincerely hope that the ministerial review of capping will conclude that capping for counties such as East Sussex should be removed. Failing that—I hope that that will not fail—I hope that there will be some way in which to ring-fence the funding for education so that it gets used for the purposes to which it is being applied, rather than, as has happened this year, for the reduction of council tax, however welcome that may be.
That leads me to the question of education funding, to which some of my hon. Friends have already referred. It is much in the news and in the minds of people in East Sussex because the county council has set up the Education Committee Strategic Forum which produced a so-called consultation report on so-called education cuts, which has caused desperate worries among parents, teachers and school governors everywhere. Those worries are deeply felt and they have been reflected in conversations, in meetings and in my mailbags and those of all my right hon. and hon. Friends who represent parts of East Sussex.
Terms such as "cash crisis" abound. They are based only on the quite correct commitment made by the Chancellor of the Exchequer to contain overall Government expenditure in this and future years. I say "quite correct" because that is the smack of firm, competent and considerably responsible Government. Will my hon. Friend the Under-Secretary confirm whether there has ever been any similarity between such national expenditure targets and expenditure by local authorities generally, or by local authorities on education specifically? My belief is that there is no parallel between the two. Such parallels would certainly be peculiar in the light of the very specific reassurances by my right hon. and learned Friend the Chancellor of the Exchequer, by my right hon. Friend the Secretary of State for Education and Employment and, indeed, by my right hon. Friend the Prime Minister about the importance of expenditure on education and the priority that should be given to it.
I fear that the truth is that East Sussex county council has been indulging in completely reprehensible political scaremongering rather than responsible contingency planning, as it claims. For that reason, I have asked for the report to be withdrawn and the consultation scaremongering to be brought to an end. I have had no response and I fear that I probably shall not receive one.
777 Council leaders and council officials claim that the consultation is an entirely non-political activity and that the concerns are well founded. That claim is made especially about the founding of what has come to be called the East Sussex schools campaign, which is based on the consultation process. The campaign contains within it a belief and a restatement over and again that East Sussex is being compelled to cut £24 million from the school budget when there is no such compulsion and there cannot be as the cuts do not exist. I am sure that my hon. Friend the Under-Secretary can confirm that.
The East Sussex schools campaign refers to real doubt about future nursery education, when the county council arbitrarily and without any debate refused to consider joining the Government's nursery school voucher scheme, which was designed not only to maintain nursery education but to expand it.
The campaign also refers to the activities of schools and the marvellous job that is done within schools. The campaign has organised a meeting in the House of Commons in 10 days' time under the spurious title of "Excellence At Risk". The meeting has not been discussed with, and sponsorship has not been requested from, any of the East Sussex Members of Parliament, all of whom have a genuine concern to improve educational standards and educational funding in East Sussex. The meeting is under the sponsorship of the hon. Members for Argyll and Bute (Mrs. Michie), for Bath (Mr. Foster) and for North Cornwall (Mr. Tyler), all of whom are Liberal Democrats who are far removed geographically from East Sussex—they could hardly be further removed. Is it not peculiar, therefore, that the claim is still made that the meeting is all about a non-party political consultation process? I fear that that is bunkum.
This well-orchestrated, politically inspired campaign, which is built round scaremongering proposals, is an attempt not only to cause maximum concern, in which respect it has been heart-rendingly successful, but to cover the less than whole-hearted commitment to education excellence of the Liberal Democrat-controlled East Sussex county council.
I call in witness the fact that education expenditure was 6 per cent. lower than the shire county average for the proportion of total expenditure spent on education in 1994, the most recent year for which comparative figures are available. I call in witness a huge balance of £6 million remaining in the education budget at the end of the previous fiscal year which implies less than full or necessary spend on education. I call in witness the complete lack of search for reductions in expenditure elsewhere which would enable the council to spend the considerable extra moneys made available by the Government for this year to cover the cost of rising student numbers—3.1 per cent. in standard spending assessment versus 1.2 per cent. in other areas.
§ Mrs. Lait
Is my hon. Friend aware that in schools in East Sussex the percentage of the teaching budget that is spent on supply teachers is 10 per cent., whereas in grant-maintained schools it is down to about 2 per cent? If the local authority schools could manage to get the number of supply teachers down to the level in grant-maintained schools, would not the schools have sufficient money not only to provide the education that we all wish to be provided but to end the campaign of cuts?
§ Mr. Rathbone
It sounds as if my hon. Friend has put her finger precisely on yet another example of administrative and professional costs which could be reduced to increase educational standards.
As with Government funding for health services, social services and practically everything else, there will never be enough money to do everything that everybody wants to do in education. The Government have to be responsible in proposing levels of public expenditure that reflect national economic interests, especially a continuing low rate of inflation. The county council has to be equally responsible in allocating funding between and within the services that it has to provide for the people living in its area. It is worrying, therefore, and much to be regretted that anyone should play politics with our children's education as the East Sussex education authority has been doing.
The House would agree that nothing is more important than a good education service and proper educational standards. The whole thrust of our Government's education policy has been devoted to achieving that. It should not and must not be placed in jeopardy; we are all committed to that.
§ Sir Peter Hordern (Horsham)
I think that my hon. Friend said that East Sussex county council was talking in terms of having to make a reduction of £24 million. He may be interested to know that West Sussex county council is talking in terms of having to make a cut of £25 million. It is extraordinary that the figures should be so similar; neither is based on anything in the public expenditure White Paper. In addition, West Sussex has enjoyed the highest increase in revenue support grant of any authority in the country.
§ Mr. Rathbone
I always welcome support from across the border, especially from my right hon. Friend the Member for Horsham (Sir P. Hordern). I welcome that support now and I believe that it underlines the absurdity of the awful, gossipy scaremongering in which East Sussex county council has been indulging. I hope that my right hon. Friend and his constituents have not been burdened with the same sort of scaremongering in West Sussex.
I now turn to a longer-term element of funding and planning for East Sussex which is causing considerable concern now—the current review of the East Sussex structure plan. Once again, the county council has produced proposals that cut across all good sense and that would threaten the character of the towns, villages and beautiful countryside of East Sussex. There are proposals for huge numbers of new homes to be built in East Sussex between 2006 and 2011. That seems a long way off, but the proposals are being discussed now and are causing concern now.
There are proposals for 800 new homes on the edge of Polegate, an enormous increase of 25 per cent. to that small town. There are proposals for new settlements—a peculiar new term which has crept into the planning language as if one was part of the wild west of America—somewhere between Polegate and Lewes, and somewhere between Lewes and Wivelsfield. They could amount to 10,000 homes, requiring considerable infrastructure as well as housing. What a horrendous erosion of magnificent countryside that would be. There are proposals to expand Sussex villages, such as Wivelsfield, 7799 Newick, Ringmer and Ditchling, expansion that would put the character of those villages at risk. The developments are close to the south downs, in the beautiful Sussex weald, and are close to areas of outstanding natural beauty which I am sure you know only too well, Mr. Deputy Speaker.
Over the years, I have been in regular contact with Environment Ministers—including my hon. Friend the Under-Secretary—and their predecessors to plead for a more sophisticated reading of housing needs in the south-east generally and in East Sussex in particular. Special regard must be given to the drastic increase in single-occupancy homes which can and should be accommodated in cities and towns. I believe that there are 100,000 unoccupied houses in London, and there are at least 5,000 unoccupied houses in Brighton. I hope that the Government's review of requirements will benefit not only those people who come to live in the area but those people who have been established there for many years.
I hope that my hon. Friend will confirm that the present requirements are not tablets handed down by national Government to the county councils to execute. It is my belief that the requirements have been agreed between the Government and those involved with the south-east regional plan, including representatives from all the councils in the south-east. There is continual liaison between the two as the figures become refined. If that is the case, it is ridiculous for local politicians to blame the Government for the plans, as the local county council is partly and jointly responsible for them.
Thousands of submissions were made to the county council during the recent consultation process seeking drastic and fundamental reconsideration of the structure plan review. I hope that East Sussex county council will heed those requests and that the Under-Secretary will be able to confirm to the House that the council is responsible for those plans and must react to the public consultation process.
I apologise to the House, as I have gone on at somewhat greater length than was my intention, but all the points that I have raised here this afternoon are close to the hearts of the people who live in East Sussex. They have expressed their worries to me and to my colleagues representing the county. I welcome the opportunity to raise those concerns with my hon. Friend the Under-Secretary.
§ Sir Timothy Sainsbury (Hove)
I rise to do two things. First, I congratulate my hon. Friend the Member for Lewes (Mr. Rathbone) on giving the House the opportunity to discuss an important subject, and on putting the facts and figures of the matter so eloquently before the House. Secondly, I want to support as strongly as I can everything that my hon. Friend said. Perhaps I should take exception to my hon. Friend's remarks about the beautiful countryside of east Sussex as I have an entirely urban constituency, but I share his sentiments.
I support what my hon. Friend said about the area cost adjustment. That is very important, and he is entirely justified in saying that it should be maintained. I agree also with what my hon. Friend said about the cost of reorganisation,and about the rather unusual 780 reorganisation in East Sussex and its implications for the staff involved. I also support what he said about capping. He said that he might not find sympathy for his views from my right hon. and hon. Friends on the Front Bench, but he made a valid point about the effect of capping in East Sussex.
Most of all, I support my hon. Friend's attack on the inexcusable scaremongering of the Liberal Democrats—who have been supported by Labour—in the county council. I visited the St. John's day centre in my constituency a couple of weeks ago. Any hon. Member would have been distressed to see the concern which has been caused to the elderly people who use that centre, and the quite unjustified alarm that has been given to them about the future of the centre's funding. My hon. Friend has set out the figures relating to the social services and to the £4 million surplus, and to frighten elderly people who use day centres on those grounds is totally inexcusable.
My hon. Friend rightly said that the worst manifestation of the scaremongering campaign has been seen in the education budget. During the past 15 years, I have witnessed a considerable improvement in the schools in my constituency. In general, we have a high standard and we can be proud of what they achieve and the quality of teaching they provide. It is distressing that head teachers, governors and—most of all—parents in my constituency have been so alarmed by the county council's scaremongering about massive cuts in funding of £24 million, or 10 per cent. The council has also pretended that the cuts will take place in one year, and blames it all on the Government.
The phoneyness and falseness of the campaign has been portrayed in the "East Sussex Education Committee Strategic Forum". The first page of the document is signed by the county education officer, and contains the revealing statement thatIt is possible that up to 10 per cent. reductions in the budget may be necessary over this time".The time referred to is the three years between 1996 and 1999. That puts the scaremongering campaign in its proper perspective.
§ Mr. Waterson
Is my hon. Friend aware that the county treasurer's worst case scenario involves a reduction of only 8 per cent. overall?
§ Sir Timothy Sainsbury
My hon. Friend powerfully reinforces my point about political scaremongering. The 8 per cent. to which the county treasurer refers would again be spread over three years, and would not be introduced in one year.
§ Sir Geoffrey Johnson Smith
I apologise for interrupting my right hon. Friend to repeat a point which has been made, but it needs to be emphasised. The quotation from the county education officer is couched in moderate language. However, the notice issued by the three Liberal Democrat Members to whom my hon. Friend the Member for Lewes (Mr. Rathbone) referred—they have not even done us the courtesy of coming to the debate or informing us that they were sponsoring a meeting—draws attention to a meeting at which it was said that East Sussex would be "compelled" to accept £24 million cuts. I received many letters from constituents who attended meetings organised by governors and headmasters of schools and attended by parents and 781 teachers. They wrote to me to say that there would be no alternative but to knuckle under unless we made representations to the Government on the matter.
§ Sir Timothy Sainsbury
My hon. Friend vividly illustrates the party-political posturing which is causing alarm and concern. Responsible chief officers must stick accurately to the facts, and the county education officer's quote puts matter in perspective. The remarks of my hon. Friend the Member for Lewes about the document were entirely justified. The only proper and honourable course for the Liberal Democrat-controlled county council now is to withdraw the document and to apologise to those whom it has alarmed and scared by its campaign.
§ Mr. Nigel Waterson (Eastbourne)
I am very pleased to have the opportunity to participate in the debate, and I join my right hon. Friend the Member for Hove (Sir T. Sainsbury) in congratulating my hon. Friend the Member for Lewes (Mr. Rathbone) on obtaining it. The debate has been well attended by Conservative Members representing constituencies in East Sussex, and I am pleased to see my hon. and learned Friend the Member for Brighton, Pavilion (Sir D. Spencer) in the Chamber.
I shall develop some of the themes expressed so well by my hon. Friend the Member for Lewes in his remarks. There is a pattern of politically inspired scaremongering by the Liberal Democrats and their Labour coalition partners in East Sussex. We have seen it occur in debates on libraries, social services, the fire service and education. There has been a series of well-timed announcements of considerable drama about cuts which have to be made—it is said—as a result of the wicked Conservative Government. Perhaps the most dramatic example was in the fire service. Within days or almost hours of announcing a new offshore firefighting facility, the council made another announcement that it was threatened by possible cuts. That is precisely the approach adopted by the current administration in East Sussex which is so destabilising. It is worrying for council tax payers, parents, governors and teachers and it must be destabilising for the staff who have to operate the services when they are subject to political ping-pong all the time.
My hon. Friend the Member for Lewes talked about social services. There are threats to close homes and day centres, yet there is on any view a projected substantial underspend this year on care in the community. That strikes me as remarkable because when I raise cases on behalf of my constituents the answer that I am given almost without exception is that there is a lack of resources—again, presumably, the Government's fault.
I have mentioned libraries, but let me deal with education. My hon. Friend the Member for Lewes put a powerful case, as did my right hon. Friend the Member for Hove, on education. In my constituency there is a substantial need and demand for pre-school education. I am sure that the same applies to the constituencies of my hon. Friends who are present this evening. I know that because of the activities of IPNA, the independent nursery operators, with which I have worked closely and from the various play groups that I have visited in recent months, many connected with the Pre-School Learning Alliance.
Contrary to its image in some parts of the world, Eastbourne is a town growing younger at a rapid rate. That means that there are many families with young 782 children. We all know—the evidence is striking—that children who have had the benefit of pre-school education in some form tend to do a lot better when they go into formal schooling. Along with my hon. Friend the Member for Hastings and Rye (Mrs. Lait), who is in her place, I was one of the first to write to my right hon. Friend the Secretary of State for Education when she made her announcement a few months ago about nursery education. I wrote to say how useful and valuable it would be if East Sussex was one of the authorities involved in the pilot scheme so that parents could be some of the first beneficiaries of the vouchers worth, say, £1,100 a year which would be made available for all four-year-olds so that they could have some form of pre-school education.
As my hon. Friend the Member for Lewes has already said, the suggestion that East Sussex should be part of the pilot scheme has been dismissed out of hand, not by the county council or the local education authority, or even by the East Sussex education committee, but by the chairman of that committee, Councillor Norcross. Barely had the suggestion been made than he issued a statement describing the scheme as a political con which he wanted nothing to do with. Not only have elected members of the authority not had the opportunity even to debate the issue but parents and children in my constituency and across East Sussex have been denied the opportunity of pre-school education.
§ Mrs. Lait
I know that my hon. Friend has read closely the draft consultation document. Does he agree that it is appalling, given the circumstances with regard to nursery education that he has outlined and the opportunities that would be available to parents to use the nursery vouchers, that one of the options for cuts suggested by the Liberal Democrats is nursery education?
§ Mr. Waterson
My hon. Friend is right. I shall describe in a moment how I believe that whenever the so-called "cuts" are proposed, they tend to be the ones most likely to upset parents such as the teaching of French and music, special education and nursery schools.
The plain truth is that the East Sussex LEA is sulking because it wanted the Government to give it a big bag of money to run pre-school education the length and breadth of East Sussex. It did not want to see independent nurseries operated, heaven forbid, by the private sector, or even playgroups operated by committed people whether in church halls or more dedicated facilities. They wanted nursery education to be operated as a wholly owned subsidiary of the LEA. That is exactly why it has reacted so precipitately against the Government's trial scheme. When one leaves aside all the political rhetoric that is flying around, what all this means is that a raft of children in my constituency and elsewhere will be denied the opportunity of pre-school education for the one and only time in their lives. That is exactly because of a politically motivated decision by the chairman of the education committee. As I have said, there was no consultation about that decision.
My hon. Friends have referred in some detail to the letters that we have been receiving. As I said when I spoke at the Ratton school awards ceremony in my constituency last Friday, I am not surprised that parents, governors and teachers have written to me in those terms and nor do I blame them. After all, Mr. Deputy Speaker, if someone who seemed to know what he was talking about told you 783 that you were going to be hit on the head by a meteor, you would be worried about being hit on the head by a meteor, but that would not mean to say that it was right.
The disgraceful aspect of this episode is that people who know better because they are professionals or the councillors involved in the education part of the authority's work have allowed a document to go out widely in East Sussex which contains some massive and extremely pessimistic assumptions. Even Members of Parliament do not yet know the allocation for education spending for 1996–97. We will not know, and therefore East Sussex cannot know, what the allocation will be until after the Budget. I am pretty sure that education spending will rise. The only question is by how much.
I am sure that most of my constituents agree that the Government should try to control public spending and borrowing. Even the report recognises thatOpposition political parties do not suggest that a change of Government would lead to a dramatic change of policy.I stress again that we cannot yet know the allocation for the coming year. East Sussex county council has at present a total budget of about £420 million. I agree with my hon. Friend the Member for Lewes that it is difficult to believe that there is no scope for cutting waste and bureaucracy within that figure. We have heard how the LEA has just effected a saving of £1.2 million on school meals alone.
I wish to have assurances from the authors of the document that any increase in spending on education in East Sussex will be passed in full to the schools and not spent on central administration—
§ Mr. Waterson
Or, as my hon. Friend says, on a reduction in the council tax.
The council's reserves are estimated at some £15 million, whereas the figure recommended by the National Audit Office is only £8 million. It seems to me that judicious use of reserves plus cutting out any waste could produce significant additional funding for the chalkface—the schools themselves. It seems to me that some of the conclusions reached in this curious document about possible cuts are surprising and worrying. I suspect that they are designed to be worrying.
It is an abdication of the local education authority's responsibilities to invite people to tick boxes at the end of the report to show which cuts they prefer. Of course, if one's child is doing rather well at his or her music lessons, one will clearly not tick that box.
The truth is that we elect councillors to do the task of allocating significant resources, difficult though it sometimes is. Only councillors and the officers who advise them have the detailed information necessary to make those choices. One of the features of the Liberal Democrats, even when they temporarily win power in a local authority, is that they continue to behave as though they were in opposition. They do not like making decisions. It is in the nature of running any political organisation that decisions have to be made and it is a sad fact that they tend to upset one group or another. How much easier, even when one is nominally in charge, simply to abdicate that responsibility.
784 A considerable amount of money and officer time has been spent on producing the document, for no great purpose except to worry parents, governors and teachers. The report accepts thatthe Education Service in East Sussex is relatively well funded. Pupil/teacher ratios in particular bear favourable comparisons".Along with my colleagues, I will do all I can to continue to press for sufficient funding to maintain those high standards. I hope that when it is proved that these alarmist conclusions are not accurate, as I believe to be the case, the people of East Sussex will receive an apology from the architects of the document and the campaign behind it. People are playing politics with other people's lives and their aspirations for their children—the one thing about which almost everyone gets very passionate.
In conclusion, Mr. Deputy Speaker, you may have seen, as I did recently, that the Liberal Democrats have a new policy for what they call a "virtual Parliament", by which they mean Parliament being organised by video links and the Internet, so that hon. Members would not have to trouble themselves to come to this place, but could operate from their constituencies. That is quite appropriate for the Liberal Democrats because a virtual Parliament would merely confirm that they are virtually never here anyway, and tonight is no exception.
We have heard how the document was produced. It was based on specious assumptions, with strange conclusions, and it has been used as the basis for a campaign directed at parents, teachers and governors and, through them, at myself and fellow Conservative Members, and a campaign to be organised in the House, of which we have had no notice. That gives away the purpose behind the entire operation—to cause political trouble. It is not directed at the welfare of children in East Sussex.
That shows what the campaign is about. I hope that the people of East Sussex will realise how people have been trying to manipulate them and how remarkable it is that, despite the alleged seriousness of the issues, not a single Liberal Democrat is in the Chamber to participate in this debate.
§ The Parliamentary Under-Secretary of State for the Environment (Sir Paul Beresford)
I am particularly grateful to my hon. Friend the Member for Lewes (Mr. Rathbone) for initiating the debate. Looking over my shoulder at one point, I began to wonder whether the East Sussex mafia—I think that almost every Conservative Member representing the county is present—was here as a lynching party. I am relieved that the pressure has landed on East Sussex county council, as it deserved.
This is a good opportunity to discuss some local government measures and local government resources. As hon. Member after hon. Member said, there appears to be a campaign. As my right hon. Friend the Member for Horsham (Sir P. Hordern), who was described as an hon. Friend from across the border, pointed out, that county council is not the only one in the campaign, but it is interesting that the more virulent and unpleasant campaign seems to have come from the Liberal Democrats, with the Labour party not far behind.
Before coming to the House, I always saw such campaigns as "bleeding stumps" campaigns. At the last minute, when it is too late for people to react, the word 785 "cuts" comes out—it is never savings, always cuts. The alarmists use the opportunity to go for the most valuable and treasured service—the one that will hurt the most. They then threaten to cut it off and wave the bleeding stump around, hence the name of the syndrome. I am afraid that East Sussex is not the only authority to do so. Many others are doing the same—I could mention West Sussex, Nottinghamshire and a number of others.
There is a straight campaign, but this time it may have been carried too far. That certainly seems to be the case in East Sussex, as I have never seen so many cross Conservative Members of Parliament utilising the opportunity of a lengthened Adjournment debate. The vehemence was such that I feared that it would last until 10 o'clock.
As my hon. Friends are aware, local government spending for 1996–97 will be announced as part of the Budget statement on 28 November. As a result, they will appreciate that I am not in a position to answer some of the questions on the proposed settlement.
While we are talking about the figures and the fact that the council has utilised last year's and extrapolated from them, let me say that I find it interesting that, when local authorities look for increases they talk of percentages, but when they are talking of cuts they use figures. Of course, figures are more dramatic in the minds of the people whom they are trying to frighten.
I am aware that the total amounts involved in the local government settlement for 1995–96 were not as much as local authorities wished. I do not think that they ever have been. Total standard spending rose by 2.2 per cent., however, which was a fair settlement. I believe, particularly because of my background, that local authorities have sufficient resources to carry out their functions. It is too easy for an authority to pick a wish list, add new demands, add it all up—the taxpayer picks up the bill—and, if it is not arrived at, say that it is the result of cuts.
There ought to be a change. We must recognise the importance to the economy of the way in which local authorities spend their finances. About 25 per cent. of Government expenditure is local government expenditure. It is just as important for local government to squeeze effectiveness out of every drop of other people's money spent as it is for central Government. We need local authorities to look to that. They must realise that they can squeeze full value out of every pound that they spend. They must be more efficient and provide better services. An old local authority motto is, "More services, better services, but for less cost." It can be done.
My hon. Friend the Member for Lewes and others highlighted issues relating to East Sussex and areas of savings. It is a lesson to councillors that, if Members of Parliament without the expertise, the figures and the official advice that they would receive if they were councillors, can find the savings, it ill behoves the local authority not to do the same by utilising the expertise at its disposal.
Each local authority has its own problems and, equally, should sort out its own local solutions. The Government's responsibility is for the overall level of resources available to local government and for the fluidity of the means of resource distribution among authorities.
Every year, we have to set the demands of local authorities in the context of what the country can afford as a whole and that is right. Local government spending 786 accounts for a quarter of all public spending and no Government, including—in the dim and distant past—the last Labour Government, could afford to ignore it. No Government will in the future.
Public spending decisions are made in the context of a medium-term financial strategy to promote sustained economic growth and thus ensure higher living standards. The best way to protect local government services is to ensure that the national economy is strong and inflation under control. To that end, we must continue to seek better use of existing public expenditure and to keep control of public sector bills. Both local and central Government have essential parts to play in bringing about those benefits.
I have no doubt—this has been illustrated tonight—that there is still scope for increased efficiency in East Sussex and in every other local authority despite the claim made by some, or many, that the potential for more effective working has been exhausted. If successful private business can use every opportunity to find a better way of doing things at better value, and bearing in mind the fact that nothing stays the same in business—after all, the provision of public services is a business—such opportunities should be taken by local authorities.
The local authority associations acknowledge that significant efficiency gains are there for the taking. In effect, we need less whingeing and more action. I was interested in the comment of my hon. Friend the Member for Lewes about administration and East Sussex's claim that it is among the best local authorities. Anyone who examined the figures would question that.
For example, consider the number of central full-time administrators per thousand of population: in Essex, it is 12.1; in Hampshire, 12.5; in Kent, 13.1; in Surrey, 11.6; and in West Sussex, 13.2, giving an average of 12.5. West Sussex, as my right hon. Friend the Member for Horsham noted, has the highest figure among that small contingent of councils. However, East Sussex outdoes it with a figure of 14.4. That could mean that some considerable savings are available.
§ Sir Andrew Bowden (Brighton, Kemptown)
I apologise for not being here earlier in the debate.
I suspect that East Sussex county council is trying to put up a smokescreen to conceal its inefficiency, given the excessive number of administrators in relation to the county's population. What makes me angry is that the way in which it has presented information has frightened parents and teachers and misled even governing bodies.
I received a copy of a letter that was sent to the Prime Minister by the chairman of a governing body which said specifically, without qualification, that, as a result of Government action, £26 million would be cut from the education budget in the next financial year. There was no qualification at all. I can only say that the chairman of that governing body—
§ Mr. Deputy Speaker (Sir Geoffrey Lofthouse)
Order. I appreciate that the hon. Gentleman was late and wants to contribute, but his intervention is turning into a speech.
§ Sir Paul Beresford
My hon. Friend is right. He has put down, as a physician would say, the diagnostic pointers to what I call the "bleeding stumps" syndrome. That is exactly what we are talking about.
787 I shall give one or two other examples. Standard spending assessment per head for this financial year is in the region of £570. East Sussex ranks slightly above the middle figure for all the counties. If other counties can provide the same service, or better, for less, perhaps East Sussex should take a hint. On the SSA for education, East Sussex is the second highest out of 38 counties. West Sussex, since my hon. right Friend the Member for Horsham is here, is 11 th. The complaints and the whingeing do not carry the weight that they ought to.
Much has been made of area cost adjustment. This is analysed each year using the data available from the previous year. The data are distributed to the local authority associations and this year went out in August. East Sussex should be aware, unless communications have completely broken down, that the data show a shift of 0.5 per cent. Yes, that is negative, but it is 0.5 per cent. and not quite what the bleeding stumps syndrome diagnosis would suggest.
Education funding has been raised as a matter of special concern, mainly because parents feel vulnerable. Local education authorities have faced some tight decisions in setting their budgets this year, but I do not believe or accept that they need to do anything that would lead to a drop in standards. In fact, with a little imagination, they could improve them, especially when we remember that schools, as well as local authorities, have a variety of means with which to make efficiency gains and to improve standards without incurring extra costs. My hon. Friend the Member for Hastings and Rye (Mrs. Lait) gave an example—and that was from somebody who is not at the chalk face and who does not have the figures available. If they are easily available for her to give to the House, I am quite sure that the local authority could do that, and more.
As has been mentioned, the Prime Minister has said that education will be given priority as the economy delivers further growth. Successive settlements have taken into account factors such as the increase in pupils, and future settlements will continue to do so.
My hon. Friend the Member for Lewes questioned ring fencing. I do not agree with him. The vast majority of government funding for local authority spending on education is provided by way of an un-ring-fenced grant, if hon. Members will excuse the awkward phrase. I believe that that should remain so because local authorities are best placed to decide their spending priorities in the light of local needs and the available resources. The Government cannot dictate such minutiae, and as an ex-local government member, I think that it is vital that local authorities have that opportunity but that they are then held responsible by the public for those decisions rather than shirking them with the sort of campaign that East Sussex is pursuing.
It is important for local democracy that there is a choice available but it is also important for local accountability. Local authorities must be answerable to their electorate, and I hope that in six months, or in a year's time, we may be able to review what has been said by East Sussex and question its decisions and alarmist statements. I hope that parents and governors will also do that and reflect on what has been said and on what has happened and what could have happened, especially if all the local education funding was not allocated to the schools.
788 Mention was made of nurseries and vouchers and the rather dog-in-the-manger attitude taken by East Sussex. I remember, before the days of vouchers, as someone who was involved in a unitary authority, being interested in the opportunity that was offered. That authority, with no positive shift in Government spending, was able to use the availability of nurseries and nursery education in such a way that it was able to offer every three and four-year-old child nursery education free, without nursery vouchers. In addition, it encouraged private sector nurseries and nursery education and a top-and-tailing, or latchkey, system. If that was possible in the difficult parts of central London in which many of us have worked as local authority members, I should have thought that it would be simple for a local authority such as East Sussex to do the same. The opportunity of vouchers is a challenge for local authorities to meet, if they are capable of outdoing the private sector.
Once the total resources available for local government have been decided, they will be distributed according to need. Each year, the standard spending assessment methodology is discussed in detail and at length with representatives of local government, and each year it is updated and improved. It is an open and fair system. The difficulty that I have with it is that it began as a simple system and the refinements seem to make it worse day by day.
One element of the distribution formula that always gives rise to arguments is the area cost adjustment. No one disputes the fact that some adjustment to take account of higher costs in some parts of the country is needed, but those who get it say that they are not getting enough and those who do not, say that those getting it are getting too much. The Government cannot win.
Both my Department and the local authority associations carried out work on the area cost adjustment this year. The Department commissioned research intended to see whether the zones used for the area cost adjustment could be defined more satisfactorily, particularly by reference to travel-to-work areas. The associations carried out further analysis of those higher costs in London and the south-east. They also sought to define alternative ways of determining the area cost adjustment.
Despite that work, we have had to conclude that, so far, we have nothing that is sufficiently well founded to provide a basis for the area cost adjustment which we could be confident represented an improvement. We accept, however, that the present methodology causes considerable dissatisfaction outside the south-east. We need to continue to investigate potential improvements.
The Minister for Local Government, Housing and Urban Regeneration met leaders of the local authority associations on 16 October to discuss concerns about the effects if changes were made to the area cost adjustment. During the meeting, he proposed to the local authority associations that we set up an independent review of the area cost adjustment. We would ask it to seek a basis for the area cost adjustment that is conceptually sound, achieves the widest possible acceptance among local authorities in all parts of the country, and is practical to apply—there is nothing like hoping.
We have suggested to the associations that the review be steered by a group of three, chaired by a leading academic economist. [HON. MEMBERS: "Oh, no!"] I note 789 the cynicism. The other members would be a nominee of the local authority associations and a nominee of the Department. We would expect the review to require research to be commissioned, the cost of which would be met by the Department. We would ask for the review to be completed by June 1996, so that its findings could be taken into account when determining the standard spending assessments for the following year.
My hon. Friend the Member for Lewes mentioned capping. That subject comes up for discussion every year. Hon. Members will understand that capping has been successful in ensuring that all authorities play their part in the restraint of public expenditure, and it has protected council tax payers from high bills. As hon. Members will know from some of the conferences—one in particular—there are two sides to the argument. The Secretary of State and I are well aware of the debate, but the abolition of capping could lead to increases in council taxes and hence to higher public expenditure. Moreover, such increases feed through to Government spending on benefits. Such a policy would therefore conflict with our stated aim to reduce the share of the nation's wealth that is taken by the public sector.
Nevertheless, this year, as every year, we are considering our approach to capping as part of the next local government finance settlement. The Secretary of State will announce his intentions for capping at the same time as his proposals for the 1996–97 settlement. As in previous years, he will be happy to meet authorities to allow them to make representations, once that announcement has been made.
It has been mentioned that East Sussex is spending at its capping limit. It is inherent in the rationale behind capping that, for local authorities budgeting above their SSA, increases in SSA do not necessarily feed through into increases in the cap limit. That is to ensure that, over time, such authorities bring their budgets into closer alignment with their SSAs. As I have said, I am not in a position at this stage to signal any proposals for capping. I am afraid that my hon. Friend will have to wait for the announcement, but he will have expected that.
My hon. Friend also mentioned housing requirements. I understand that the county council's suggestion that continuing housing requirements in the county might be met by completely new settlements has aroused strong feelings—to put it mildly. This option is considered in its draft—I emphasise the word, "draft"—proposals for housing and employment on which it has recently consulted the public as part of the structure plan review. That document makes it clear that no decisions have been taken on the draft proposals, and that the views of the 790 local people, especially, I hope, of local Members of Parliament, are important to the council in deciding where new developments might be accommodated in the country.
I hope that local people will take the opportunity to make their views known to the county council so that those can be taken into account in developing the new draft plan. There will be a further opportunity to make representations in the new year, and an examination in public may be held on selected issues before an independent panel, which would report to the county council and may recommend changes. If the council makes changes, it must advertise them and provide another opportunity for objections and representations to be made. In that way, the development plan system allows for appropriate consideration of development needs and can meet those in a way that is sensitive to other key planning objectives of conserving the countryside and the built heritage.
This has been an interesting debate. I hope that Liberal Democrat and Labour councillors in East Sussex take note of the points that have been made and recognise that they are scaremongering. A final example of that was the prospect of Brighton and Hove unitary authority not gaining finances that would be available to other shadow authorities. That is not so. It will be treated no differently from other shadow authorities. I know from my experience of the delightful disappearance of the Greater London council, followed by that of the Inner London education authority, and of the development of unitary authorities within London, that the opportunities for efficiency savings to produce better services for less for the public in general were massive in unitary authority areas. I hope that, especially in the case of Brighton and Hove, where two authorities are linked and then become a unitary authority, the opportunity for even greater savings are recognised and achieved.
The Liberal Democrats distribute at irregular intervals a leaflet called "Focus". I hope that they recognise that, in any good business, as one sets one's budget at the beginning of the financial year, one focuses on the anticipated shifts in expenditure throughout that financial year through to the next. To leave it to this stage to look for savings might mean that cuts must be imposed. That is the fault of members of the local authority. Looking over my shoulder, I anticipate that Conservative Members of Parliament will drum that message home vehemently and try to spell out to parents that the "bleeding stump" syndrome does not exist if the local authority is efficient.
§ Question put and agreed to.
§ Adjourned accordingly at eight minutes past Seven o'clock.