HC Deb 02 July 1996 vol 280 cc703-4
1. Dr. Lynne Jones

To ask the Secretary of State for the Environment what submissions he has received from the local authority associations concerning councils' capital programmes. [33931]

The Secretary of State for the Environment (Mr. John Gummer)

This and other topics are discussed regularly at my meetings with the local authority associations.

Dr. Jones

Does the Secretary of State accept that local authorities, such as Birmingham, need increased—not reduced—capital investment to provide new homes and to renovate existing, but crumbling, schools, homes and the road infrastructure? Will he ensure that the Deputy Prime Minister's commitment to the Association of Metropolitan Authorities last year is honoured and that the private finance initiative is used to generate additional resources rather than to substitute for public borrowing?

Mr. Gummer

The city of Birmingham has gained a considerable amount of money through the single regeneration budget. Birmingham City Pride, as an organisation, has provided the basis for many of the council's claims, and Birmingham will doubtless make an application under capital challenge. The private finance initiative will give many opportunities for Birmingham to operate satisfactorily. The council needs to make its relationships with the private sector even more effective, and that will give a result of which Birmingham can be proud.

Mr. Harry Greenway

Is my right hon. Friend aware of the way in which so many Labour councils misrepresent capital receipts, capital funding and the standard spending assessment? In Ealing, the Labour council is already pretending that it will get £10 million less than it should have in the coming year, even though it cannot possibly have the slightest idea what its position will be. It also pretends that it did not have an increase last year, when it had a very good increase of £5 million. What can my right hon. Friend do to assert the truth when councils misrepresent the situation so badly?

Mr. Gummer

Ealing is one of the worst councils for such statements. I live in Ealing during the week and it is difficult to find much that Ealing council says that has much to do with the truth.

On the question of paying set-aside receipts, it is interesting that the Labour party has not yet admitted that, to do what it wants to do, it would have to take receipts from some boroughs and give them to other boroughs; otherwise, the two most needy boroughs in London, Hackney and Lambeth, would get no money because they have no receipts to apply and, no doubt, the money would come from other boroughs, such as Enfield and Barnet, which were sensible enough under Conservative control to gain receipts. Sensible boroughs' receipts would be taken away, their council taxes would go up, because they would no longer be able to subsidise them from the interest rates, and the money would go to Lambeth and Hackney—the boroughs that wasted the money in the first place.

Mr. Sutcliffe

Local authority capital programmes, especially social service ones, will be affected by last week's decision by the Court of Appeal on social service charges. What help and assistance will the Secretary of State give local authorities whose budgets will be depleted as a result of that ruling?

Mr. Gummer

No doubt local authorities will have to decide how that ruling affects them and the capital effects it will have. Local authorities spend large sums of capital and the opportunities have been enormously increased by the private finance initiative. The problem is that many local authorities fail to use the private finance initiative, even though it is available. For example, Ipswich has failed to use the PFI to build a crematorium and wants to use money from the taxpayer.