Local Authority Budgets (Hansard, 28 February 1996)

§ 2. Mrs. Fyfe
To ask the Secretary of State for Scotland if he will meet the leaders of (a) Glasgow and (b) other local authorities to discuss their budgets. [15785]

§ 3. Mr. Watson
To ask the Secretary of State for Scotland when he intends meeting the leader of Glasgow city council to discuss its 1996–97 budget. [15786]

9. Mr. Robert Hughes
To ask the Secretary of State for Scotland what recent representations he has had on the finances of the new unitary local authorities. [15793]

§ The Parliamentary Under-Secretary of State for Scotland (Mr. George Kynoch)
Over the past two days, I have met many hon. Members, including the hon. Member for Glasgow, Springburn (Mr. Martin) with a delegation from Glasgow and a delegation led by the hon. Member for Aberdeen, North (Mr. Hughes). I am always pleased to meet delegations led by hon. Members.

§ Mrs. Fyfe
Will the Minister tell us, following that meeting, whether the people of Glasgow will continue to face cuts of £1.3 million every week? Does he think it acceptable that they face a council tax increase of 36 per cent? If, to judge from the Secretary of State's remarks earlier, he really thinks that the settlement is fair, why are people paying more and getting far less?

§ Mr. Kynoch
The hon. Lady does not—unfortunately—understand the figures for Glasgow. Within its capping limit, Glasgow could increase expenditure by some 4.93 per cent. from the notional budget provided by Strathclyde regional council for the former district. The hon. Lady might like also 871 to contemplate whether she can justify the £500,000 that was spent on the centenary of the Scottish Trades Union Congress. I should have thought that the people of Glasgow would rather that it was spent on services for themselves.

§ Mr. Watson
If the Minister had any sense of contrition, he would not have the nerve to show his face in the House because, although his predecessors told us that the reorganisation of local authorities in Scotland would cost about £30 million, we find that the real figure is more than £400 million. I would not mind that if the Scottish Office would pick up the bill, but it will not—the people of Scotland are being asked to do that.
On the specific question about Glasgow, will the Minister apologise to the hundreds of local authority workers in the city who are likely to lose their jobs and to the thousands of people who are likely to have their services cut, including the 113 members of the ethnic community project at the Dixon centre in my constituency? Why should such people have to suffer and pay for the incompetence and deception of the Minister and the Government?

§ Mr. Kynoch
Does the hon. Gentleman realise that the funding given to Glasgow by central Government is 82 per cent. higher per head of population than the average south of the border? If he devoted more attention to recognising the excess that we give local government in Scotland and addressed the fact that he and his hon. Friends are calling for the ridiculous sum of £395 million on top of that for local government, perhaps he would be able to tell us where he expects us to take the money from. Does he, like the hon. Member for Dundee, East (Mr. McAllion), want us to take it from the health budget?

Mr. Hughes
Will the Minister calm down before he does his health some serious damage? [Interruption.] I know that I should be encouraging him.
Having heard this morning the powerful case put by Councillor Margaret Smith, the convener-elect, Douglas Patterson, the chief executive, and Gordon Edwards, the finance director—all from Aberdeen city council—does the hon. Gentleman now understand the serious difficulties for local authorities? Does he accept that his figures are wrong and that the people of Aberdeen will suffer severely from a cut of £26.5 million? Does he realise that such a cut will affect every citizen and every sector in the city, not least the private sector, which benefits greatly from local authority spending? Will the Minister calm down now, consider the problem seriously and produce a more realistic settlement?

§ Mr. Kynoch
If I am not perfectly calm it is because I am incensed at the proposal by the hon. Member for Dundee, East that we should take money from health, because we believe in making real increases in the health budget.
The hon. Member for Aberdeen, North did indeed bring me a delegation from Aberdeen city this morning. I listened carefully to what they all said, and I commend the city for the moves by which it is clearly trying to bring its budget within the capping limits. The hon. Gentleman should be more honest in recognising, as the chief executive did, the situation that Aberdeen city inherited 872 from Grampian region—savings were not made over the past few years, and reserves were eaten up. That inheritance has been passed to Aberdeen city, and the city must lie in the bed that the former region made for it.

§ Mr. Stewart
Will my hon. Friend pay serious attention to the sensible views of people such as Bailie John Young, who said that Glasgow had been overspending for years? Does he agree with many of my constituents, who are seriously concerned about the fact that the Labour group that runs East Renfrewshire—[HON. MEMBERS: "Hear, hear."] Just wait for it. Does my hon. Friend share our concern about the fact that, under the mismatch agreement, the Labour group has passed over £5.6 million of East Renfrewshire's money to the City of Glasgow?

§ Mr. Kynoch
My hon. Friend is absolutely right. The skewing that occurred in the past is becoming apparent because of the grant-aided expenditure allocation for the new areas. Bailie John Young was in a delegation brought to me by the hon. Member for Springburn this morning, and he agreed with me that some of the excesses of the past had caused Glasgow's present problems. However, I hope that, in the short time still available, the councillors of the new Glasgow city council will recognise the need to look afresh at the way in which they deliver services and ensure that the greatest efficiency is achieved so that they can make the savings that will enable them to set a sensible council tax increase for the people of Glasgow.

§ Mr. Gallie
My hon. Friend will be aware that housing forms a fairly significant part of local authority spending in Glasgow. In addition, central Government supply considerable funds through Scottish Homes for expenditure in Glasgow. Is he aware of the £8 million that Scottish Homes has pledged to spend on ethnic housing in Glasgow? Is that not wrong? Should not such money be spread across the population, irrespective of colour, religion or creed?

§ Mr. Kynoch
I hear what my hon. Friend says. I understand that the decision was taken by Scottish Homes and it is a decision for it to take.

§ Mr. Ernie Ross
From his meeting this morning, the Minister will know that the new Dundee city council, despite making savage cuts to meet the capping level set by him, still faces introducing a council tax increase of 24 to 30 per cent. This morning, he could not tell us what else it could do. Can he tell us this afternoon?

§ Mr. Kynoch
As the hon. Gentleman knows, Conservative councillor Neil Powrie, who was quoted in the newspapers recently, has pointed the finger at the Labour council in Dundee—as did Bailie John Young in Glasgow—by saying that many of the council's problems have been brought about by years of ignoring the need for efficiency savings and delivery improvement.

§ Mr. Wallace
I am sure that the Minister has considered the prospective council tax increases in authorities throughout Scotland. Has he noticed that, despite bitter resentment about cuts, the proposed increases in the islands authorities are between 3 and 5 per cent. compared with an average increase of 873 15 per cent. in Scottish mainland councils? Is it not clear that a large part, if not all, of the difference is attributable to what is increasingly called the Forsyth reorganisation tax?

§ Mr. Kynoch
That is hard on Shetland and Orkney islands councils, to which I am sure the hon. Gentleman is referring. In a tight public expenditure round, those councils have dealt with the problems sensibly.

§ Mr. Wallace
They did not have reorganisation.

§ Mr. Kynoch
The hon. Gentleman keeps shouting that those councils did not have reorganisation. Reorganisation—taking two councils and merging them into one—has brought potential benefits to other councils. It should produce savings, which the hon. Gentleman has seen in the islands councils that he represents. I hope that he will be big enough to commend them for seemingly managing things much more efficiently than many other councils.

§ Mr. Michael J. Martin
I thank the Minister for receiving a delegation today. He referred to the old councils. He must recognise that he and his colleagues set up the new councils and that a reorganised new council should not be burdened with the debts of the old one.
The Minister should be even-handed when he talks about the STUC conference, because Glasgow, I understand, gave £100,000 to the Tory party when it held its conference there.

§ Mr. Kynoch
On that last point, I am reliably informed that the figure is slightly lower, although I have no confirmation of that. Some £40,000 is the figure that has just been whispered in my ear.
On inheritance from old councils, I am not aware that the Government have suddenly introduced local government. They have been adamant that they want to streamline it and to make two tiers become one. In the past, Labour councillors have supposedly been accountable to the electorate. If they have, through total abuse, taken the matter into their own hands, used up reserves and handed a poisoned chalice to their successors, they, and not the Government, should be held accountable to the electorate.

§ Mr. George Robertson
Is the Minister not aware of the genuine outrage and anger that exists all over Scotland at the Government-imposed service cuts or that the 40,000 people who marched through the streets of Edinburgh last Saturday showed that no one in Scotland believes the jiggery-pokery with figures that the Government are indulging in? Is it not a fact that, by reducing by more than £500 million central Government support to local authorities over the next three years, he will be responsible for putting the equivalent of 4p on the standard rate of income tax of all taxpayers in Scotland? Will not everyone in Scotland conclude that, under the Tories, people pay more and get less?

§ Mr. Kynoch
The hon. Gentleman does not accept the fact that, this year, we have put an extra £148 million into local government. Unfortunately, the hon. Gentleman has come clean in the past few days about what he would do 874 with local government. He would lift capping, which means that council tax would go up even further. He would remove the uniform business rate from central Government and put it back with local authorities, thereby increasing costs for businesses, reducing their competitiveness and removing a level playing field. He would increase expenditure in local government. He has called for an extra £395 million for local government, but he has not said where it should come from. If the hon. Gentleman aspires ever to hold office, he should do his sums first and tell us where in the Scottish Office block we should find extra funding for local government on top of the significant increase that it has had.