HC Deb 04 June 1997 vol 295 cc519-28

Motion made, and Question proposed, That this House do now adjourn.— [Janet Anderson.]

11.28 pm
Dr. Evan Harris (Oxford, West and Abingdon)

I am grateful for being granted this debate. It seems appropriate that, as I have just witnessed a debate on the modernisation of the House, my first speech following my maiden speech should take place at this hour. However, as a former hospital junior doctor, I am well used to working at such nocturnal times. I hope to ensure in what follows that the House is not the victim, as the national health service sometimes is, of slowness and errors caused by overtired people working under too much pressure.

It may be argued that the difference between then and now is that, during the long nights in hospitals, I had direct influence over people's welfare, their care and their lives. However, I would argue that in our treatment of the revenue support grant, budget and capping of Oxfordshire county council, we in the House also have the lives and welfare of the people of Oxfordshire in our hands. They rely on the services, especially education and social services, provided by Oxfordshire county council for their care and well-being.

I shall not attempt to parade all the arguments that the county council would use to seek to persuade the Government to redetermine the capping level at the budget already fixed by the county council. Those arguments will be put clearly if—and, I believe, when—the county council decides to appeal against the initial designation by the Secretary of State for the Environment, Transport and the Regions. With other hon. Members for the county of Oxfordshire, some of whom are in their places tonight, I will support that appeal at the appropriate moment.

I will not seek to make a party political or partisan speech, because the issue does not divide people along party lines in Oxfordshire, since the above-cap budget has all-party support there. Oxfordshire is not the sort of place where politicians are usually shy about disagreeing with opposing politicians. I think especially of the right hon. Member for Henley (Mr. Heseltine), of the right hon. Member for Oxford, East (Mr. Smith), who is the Minister for Employment and Disability Rights, and, of course, of my predecessor, John Patten. I will seek instead to outline why Oxfordshire has an excellent case for its appeal and why there is no reason, with such cross-party consensus locally and in the House tonight to some degree, why the Government—committed as they are to listening and dispensing with blunt instruments—should not agree, on close examination of the detailed case, that the budget set by the county council is right and proper.

In the spirit of constructive opposition that saw the Liberal Democrats vote for the Queen's Speech, I shall quote from the Labour manifesto, although one of the most appealing aspects of the Gracious Speech was that it contained items to be found only in the Liberal Democrat manifesto. The section in the Labour manifesto headed "Good local government" stated: Local decision-making should be less constrained by central government, and also more accountable to local people. That is the first point that I shall address tonight. The manifesto continued: Although crude and universal council tax capping should go, we will retain reserve powers to control excessive council tax rises. I will address that point second. The manifesto also stated: Labour is committed to a fair distribution of government grant. I will conclude briefly on that point.

On the first point about local democracy and accountability, there is a strong argument, put ably by the Labour party in last year's debate: The Government are acting against the wishes of the people of Oxfordshire"— in redetermining the budget at the capping level— The people want the opportunity to fund their schools and their social services properly, but they know that the Government will manipulate the figures to ensure that they cannot do that. That is not good enough. The speaker, appropriately enough, was the hon. Member for North-West Durham (Ms Armstrong), who is now the Minister of State, Departments of the Environment, Transport and the Regions. The right hon. Member for Oxford, East strongly supported his colleague, and said: As my hon. Friend the Member for North-West Durham (Ms Armstrong) said, except in the most exceptional circumstances, it should be up to local people to make that decision, and councillors should be accountable through the local electoral process. At the time, the right hon. Gentleman was shadow Financial Secretary to the Treasury and charged with showing that his party could be responsible with the public finances, which is a task that I believe he performed well then and which the Labour party seems to have performed well in the election campaign—perhaps too well on occasions for Liberal Democrats. When the right hon. Gentleman was pressed on that subject, later in the debate, he said: we intend to review the system for local government support … to enable local democratic preferences properly to be expressed and reflected in local budgets, so that local people have the say in determining the level of resources for local services, which are there to meet local needs."—[Official Report, 22 May 1996; Vol. 278, c. 359–73.] I could not have put it better myself.

The fly in the ointment last year was that the above-cap budget was not fully supported by the local Conservative group so it could have been argued that, had there been county council elections, the people would have swept to power a pro-capping local Conservative group.

However, that argument was tested this year, and not only did the Conservative group support the budget—indeed, with the Labour group, the Conservatives actually made the above-cap budget—but the council has just been completely re-elected on a huge turnout, and the new council, meeting after that election, unanimously supported that budget.

The Labour party scored well in those elections, and its election platform, as stated in its local manifesto, was: Labour believes in quality public services financed by fair local taxation. We also believe that power should be exercised at the lowest relevant level and that local people should be free to decide through the ballot box on the level of local service and taxes". Liberal Democrats support those sentiments. The manifesto continued: We deplore the years of successive cuts which Tory Governments have imposed on Oxfordshire services. We welcome the reversal of that trend which will follow the election of a Labour Government, as part of a new constitutional settlement which will change the relationship between local communities, their public services and their elected representatives. It is just possible that Oxfordshire county council's Labour group, in its reforming zeal, may be slightly ahead of the Government, but I believe that the redetermination decision will present the Government—a Government who hit the ground running, and may merely have stumbled over designating our budget for capping—with the opportunity to pick themselves up and sprint forward towards the land of local democracy and accountability, and towards that new constitutional settlement.

Those may be grand words—

Ms Julia Drown (South Swindon)

rose—

Dr. Harris

I give way to the hon. Member for South Swindon (Ms Drown), who was an active member of the Labour group on Oxfordshire county council in former years.

Ms Drown

I thank the hon. Member for allowing me to take part in the debate. I wanted to do so, Mr. Deputy Speaker, because my constituency borders on Oxfordshire, and some of my constituents work in, and many are affected by, services in Oxfordshire.

My constituents have raised with me—

Mr. Deputy Speaker (Mr. Michael Lord)

Order. In such debates it is customary not to give way unless there has been some prior agreement. I understood that the hon. Lady was simply making a brief intervention. If she is making a speech, that is rather a different matter. Was there a prior agreement?

Dr. Harris

I was warned that the hon. Member for South Swindon might intervene, and I am happy to give way so that she can briefly make the points that she wishes to make, in an intervention.

Mr. Deputy Speaker

The hon. Lady may complete a brief intervention. Then the debate can continue.

Ms Drown

Thank you, Mr. Deputy Speaker. I have three brief points to make.

First, my constituents, too, are affected by what the hon. Member is describing. Secondly, all parties on Oxfordshire county council agree on the need to point out that the county's budget has been slashed by £52 million over the past six years. That may have produced some efficiencies in the past, but it is now causing great pain.

Thirdly, I shall give an example of the sort of thing that is happening in Oxfordshire. The 400 children on the child protection register are not being properly supervised.

The spending level that the county proposes represents a very modest increase. All parties on the council are asking for that degree of flexibility. I support what the hon. Member for Oxford, West and Abingdon (Dr. Harris) is saying, and urge the Minister to do all that he can to give Oxfordshire the modest flexibility that it requests.

Dr. Harris

I am grateful to the hon. Lady for making those points, which I shall not repeat.

To continue from where I left off, the words that I used may have seemed grand words to describe such a small sum. The difference between the budget that in the view of all groups in Oxfordshire is needed to preserve essential services, and the capped level, amounts to 54p per week on the council tax for a band D property. Indeed, the council tax rise at the capped level—2.4 per cent—will be the lowest rise of all the shire counties.

The £6 million that we are talking about amounts to less than 0.03 per cent. of the public sector borrowing requirement, and a mere 0.008 per cent. of total local authority spending. It is salutary to note that as a percentage of total public spending, the figure amounts to 0.000023 per cent.—approximately one fifth of a millionth of total public spending.

Another point in Labour's manifesto—which swept the Government to power with such a large majority—concerned the need to get rid of crude universal council tax capping and to retain only measures needed to prevent excessive council tax rises. I would agree that Oxfordshire is extreme—it is extreme in that it is the lowest spender per head of all county councils. The hon. Member for Warwick and Leamington (Mr. Plaskitt), who is in the Chamber, is a former leader of the Labour group on Oxfordshire county council. No one could describe him as an extremist.

Labour's manifesto also said that the party was committed to a fair distribution of Government grants. Clearly that complex subject has been mastered only by a few distinguished intellectuals with patience and insight, and I include the Minister in that description. That is why the Liberal Democrat group on Oxfordshire county council has chosen a mathematics don to lead its arguments. That will take a lot of time to review, and I urge the Government to listen in the meantime to the views of the local Labour party and the people of Oxfordshire as expressed at the ballot box.

Oxfordshire has been through a lot. The revenue support grant and capping levels have led to more than £51 million of cuts in the past six years, and the capped budget itself followed a decision to cut funding and services needed in Oxfordshire by £12 million—mainly, I am afraid, from social services. That cut is not the action of an irresponsible or extreme, high-spending council. The council has used all its reserves and balances, as the Government would request. The standard spending assessment takes no account of rurality or of the sparsity of population which, in Oxfordshire, is the worst in the south-east in financial terms—although it is the best for those of us who live there. I stress also that the cap is particularly rigorous in the case of Oxfordshire because it is only 1.3 per cent. above the SSA. It is a fierce cap, as the average for shire counties is 2.4 per cent.

I conclude by quoting the present Minister of State, Departments of the Environment, Transport and the Regions, the hon. Member for North-West Durham, who, in the debate last year, referred to the exasperation at the cap imposed on Oxfordshire following a cap that had been imposed the previous year. She said: Once again, I have found that the words used one year are not followed up in succeeding years".—[Official Report, 22 May 1996; Vol. 278, c. 355.] She added that the then Secretary of State for the Environment had learnt nothing from the previous year. All we are now asking is that Labour Members do not forget what they said—and, I think, believed—last year.

11.42 pm
Mr. Robert Jackson (Wantage)

I congratulate the hon. Member for Oxford, West and Abingdon (Dr. Harris) on winning the ballot for this debate in which he spoke for our county of Oxfordshire, and I thank him for inviting me to take part briefly in it. I am pleased that he recognises the consistent support that I have given to the county's efforts to spend on locally provided services what local people judge to be both prudent and necessary.

In replying to the debate, the Minister will doubtless tell us that Oxfordshire has to prove that it is different. That is what his civil servants will advise him to say, just as it was their advice to his predecessors. This brief debate is not the occasion for that demonstration, which will have to come when he meets representatives of the county and local Members of Parliament in due course.

I want to make two political points. First, I recognise that the Labour party won the general election in part because it responded to people's quite reasonable resentment at what had become an over-centralised system of Treasury control of local government and its services—particularly education. Everywhere in Oxfordshire and throughout the country, Labour candidates campaigned on the basis that centralised local authority expenditure capping would be abolished and replaced by an efficiency audit to ensure that money raised locally was being properly spent.

The Audit Commission studies show that Oxfordshire is undoubtedly one of the more efficient counties, and the message that our constituents want to be allowed to spend more of their money on local services has come over loud and clear in Oxfordshire.

During the general election campaign, the Labour party tapped into a widespread sense of grievance about those matters. I trust that those of my constituents who succumbed to its blandishments will not find that they have voted simply to exchange grievance for disappointment.

I had hoped that the matter might have been settled in favour of the county before the election. To that end, I took part in various conversations and private meetings with Conservative Ministers, before the shutters came down when the election was announced. It was always my clear impression that Ministers at the time were sympathetic to Oxfordshire's case.

The House, the new Government and the Minister might like to know that I am authorised by my right hon. Friend the Member for Skipton and Ripon (Mr. Curry), the former Minister for Local Government, Housing and Urban Regeneration, to say that it was his intention, after hearing Oxfordshire's detailed case, to recommend to his colleagues in the previous Government that Oxfordshire be permitted to levy a council tax at a rate above the capping limit. I hope that in his reply the Minister will be able to speak at least as fairly as that.

11.45 pm
The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Nick Raynsford)

I congratulate the hon. Member for Oxford, West and Abingdon (Dr. Harris) on his good fortune in securing this debate and on articulating in a forthright way the concerns of his local county council and his constituents. I also congratulate my hon. Friend the Member for South Swindon (Ms Drown) on her brief intervention expressing similar concerns. We have heard, too, a short but useful contribution from the hon. Member for Wantage (Mr. Jackson), who spoke in the equivalent debate a year ago, although I note that he voted in favour of the cap on that occasion.

Mr. Robert Jackson

I hope that the hon. Gentleman will recall that that was on the basis that the Government were allowing Oxfordshire to make some supplementary borrowing—not an increase in the cap, but some additional borrowing.

Mr. Raynsford

As the hon. Gentleman has acknowledged, the Government did not adjust the cap, and he voted in favour of that cap. Clearly, he has had a further think in the meantime and is advocating a different course. He has told us that the former Minister, the right hon. Member for Skipton and Ripon (Mr. Curry), said that he would have taken a different view this year. That may be; it is interesting how people can change their point of view after the event, and not least after an election defeat. We as a Government, however, must consider the position that we have inherited, and that is not an easy position.

I want to make some general points about the new relationship between central and local government, to which the Government are committed. The Government have a new agenda for Britain's future, and a vision for local government's place in that future.

We want to reinvigorate local government, in ways that encourage increased democracy, with local people having the chance of more of a say in the affairs of their council. We want local government to have increased autonomy, with more freedom for authorities to take their own decisions; increased accountability, with elected representatives being more visibly accountable for their actions; and increased partnership between central and local government and between local authorities and people, businesses and groups in their area. The hon. Member for Oxford, West and Abingdon alluded to a number of those aspirations and quoted from our election manifesto, to which we are committed.

Within that framework, local authorities have important roles as both commissioners and deliverers of a wide range of local services. Authorities are responsible for assessing service needs for groups and individuals; for balancing priorities; for setting objectives; for procuring delivery and/or providing services directly; and for monitoring quality and standards, reviewing performance and acting on complaints. Those are all important tasks.

We have been busy in the month since the general election. In the Queen's Speech, we announced a major programme of legislation for the first Session, including many Bills affecting local government, on the release of capital receipts, the establishment of a new strategic authority for London and the establishment of regional development agencies throughout England, as well as Bills on education and on crime and disorder and one setting up the welfare-to-work programme.

Only this week we have signed the Council of Europe's charter of local self-government and set out our proposed approach on replacing compulsory competitive tendering with a duty on local authorities to secure best value.

That pace will continue. We shall examine with local government the scope for pilot studies on a range of issues, such as best value, a new approach to regeneration, community planning and partnerships with other agencies, and democratic innovations. We shall also work on the scope of the new duty to promote economic, social and environmental well-being that we intend to place on local authorities, to strengthen their community leadership role and encourage innovation and local partnerships in the delivery of services and development and regeneration projects.

That volume of local government business reflects the importance that we attach to local government. The local government agenda will keep us all very busy over the length of this Parliament and, I hope, beyond it, but we shall also make prompt progress. Our agenda is positive. Our Government want to be judged on our success in improving the quality of life for all people and on the extent to which we have made a difference.

On local government funding, all public expenditure programmes have to be examined rigorously each year, and local government spending, which accounts for a quarter of all public expenditure, is no exception. Decisions on local government spending must take into account not only the pressures on local authorities, but the scope for greater efficiency and effectiveness in local authorities.

We have, of course, inherited this year's local government spending plans, and have given a clear commitment to retain them. Although we are committed to reviewing the local government finance system in future years, for this year at least we must work within the current spending plans.

The hon. Member for Oxford, West and Abingdon mentioned standard spending assessments, as did the hon. Member for Wantage. SSAs are the basis for the distribution of revenue support grant. They are based on measures of spending need that apply to all local authorities, and are discussed with representatives of local government. The SSAs for 1997–98 have been announced. As with total local government spending plans, we have said that they will not be revisited and we do not propose to do so now.

Having said that, we are committed to a fairer distribution of Government grant among authorities, and believe that there is scope for improvement in the arrangements in future years. My colleagues and I will look closely at the SSA system with that aim in mind. We shall listen to local government views on how SSAs might be improved, both for 1998–99 and in the longer term.

If the hon. Member for Oxford, West and Abingdon feels that the SSA system does not treat Oxfordshire fairly, I should be happy to examine any proposals that he has for different methods of calculation or other appropriate changes. However, any system of this nature must be universal and any changes would need to apply to all local authorities equally. In making any changes, we will, of course, want to be sure that they will produce a sounder assessment of needs. I should welcome any specific proposals that he may have.

The local government finance settlement for 1997–98 saw the total standard spending assessment for all local authorities increase by £1.1 billion or 2.5 per cent. on 1996–97. Oxfordshire county council's SSA increased by more than £8.7 million, or 2.7 per cent. That is above the average increase for counties, which was 2.1 per cent., and is well above the overall increase for English authorities of 1.5 per cent.

Two important areas—one was mentioned tonight, and the other featured in a recent publication by Oxfordshire county council—are education and fire services. Oxfordshire's education SSA increased by the shire county average of 3.5 per cent., while the fire SSA went up by 6.4 per cent., compared with an average of only 5.5 per cent. The county also did well with a 4.4 per cent. increase in its highways maintenance SSA—while the shire county average showed a fall—and with a 3.9 per cent. increase in the other services SSA, compared with an average increase of only 2.1 per cent. Those figures do not suggest that Oxfordshire has suffered unfairly in relation to other counties in this year's SSA; quite the contrary, if anything.

Dr. Harris

rose—

Mr. Raynsford

I have only five minutes in which to complete my reply. I hope that the hon. Gentleman will accept that in a time-limited debate, I cannot give way. If he wishes to make observations, I should be happy to accept them in writing. RSG distribution for the 1997–98 settlement is a closed matter, following approval of the local government finance settlement by the House in February, and it will not be reopened. We must look to the future and build a successful partnership, with local government playing its part.

With regard to capping, we gave clear signals that while we proposed to replace in due course the crude capping system that currently operated, that would have to wait for future years. We said that in the meantime we proposed to follow the intentions of the previous Government for 1997–98—a financial year which, as everyone knows, began almost a month before the general election that returned the Labour Government. All authorities, including Oxfordshire county council, knew that when setting their budgets.

Only three out of the 436 authorities in the country set budgets significantly over their provisional capping limits. Our decision to designate those authorities demonstrates that we are taking our commitments on spending seriously. Indeed, we have also made it clear that under our plans for replacing the current capping system in future years, we shall retain reserve powers to deal with exceptional cases where unreasonable budgets are set. The hon. Gentleman also alluded to that. So this year all three authorities will be required to reduce their budgets unless they can convince us that they should not.

Under the capping legislation, capping principles apply to classes of authority, and we can consider an individual authority's circumstances only if it budgets over cap. Oxfordshire was permitted to increase its budget by 2.2 per cent., which was the average permitted increase for shire counties. Certainly on the basis of the information that we have seen so far, there is nothing to suggest that Oxfordshire is in a tougher position than other counties that have budgeted within cap. Our proposed cap would still allow the county to increase its budget by £7.35 million compared with 1996–97. We consider that to be reasonable and achievable.

Decisions on priorities in services is a matter for the authority itself. It is not for me to suggest that the authority should make reductions, or where those reductions might be made if the cap is confirmed. Local authorities would understandably object if we sought to dictate exactly how each pound was spent.

At this stage in the capping process, authorities can accept the caps that we have proposed. When that happens, the cap limit is then set by notice and the authority can immediately set a revised lower budget and recalculate its council tax. Sending out new bills will obviously impose an extra administrative burden, and that expense will have to be met from within the authority's revised budget. However, that is a direct result of the authority's decision to breach the provisional cap, and all authorities are aware of the implications of doing so.

When a county council is required to recalculate its council tax, the burden of rebilling will fall on the district councils in the area. However, those billing authorities can recover the costs from the county. In terms of the effect on services, it will be for the authority itself to decide spending priorities within the resources available to it.

Should Oxfordshire wish to challenge its cap—from what the hon. Member for Oxford, West and Abingdon said, I suspect that we shall receive representations from the authority and hon. Members who have connections with the county—it has 28 days from the date of designation, that is, until 18 June, to propose an alternative amount, together with its reasons for doing so. As well as submitting its written case, the authority will have an opportunity to meet me or one of my colleagues to put its case directly to us. We shall be open to such representations and we shall consider them carefully, as we shall the points that have been made in tonight's debate. We shall then consider all the relevant points before reaching our decision.

Final caps will be set out in—

The motion having been made after Ten o'clock, and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at two minutes to Twelve midnight.