HC Deb 04 November 1997 vol 300 cc104-5
8. Mr. McAllion

What recent discussions he has held with the Convention of Scottish Local Authorities relating to the financing of Scottish local government. [12045]

Mr. Chisholm

My right hon. Friend and I have discussed the financing of Scottish local government with the convention on a number of occasions. The most recent meetings were held on 13 October and 3 November. We next meet the convention on Friday 7 November.

Mr. McAllion

My hon. Friend will know that the funding mismatch imposed on Scottish local government by Tory reorganisation, allied to the middle-class drift away from cities such as Dundee and Glasgow to adjoining areas with lower council taxes, has left city councils trying to provide what is effectively a regional level of service from a greatly reduced council tax base. Therefore, may I congratulate my hon. Friend on facing those hard realities by trying to broker with COSLA a financial settlement that is fair to all of Scotland? Will he take the opportunity to denounce the simplistic, divisive and dishonest spouting of those who claim that spendthrift councils are being bailed out by penny-wise councils?

Mr. Chisholm

I thank my hon. Friend for drawing attention to the position of Dundee council. As I said in a previous answer, there will be losers and gainers from the changes to the social work formula that are in the pipeline and the phasing out of the mismatch. Without those changes, quite apart from other factors, Dundee council tax payers would face an increased band E tax of £85 next year, council tax payers in Aberdeen would face an increase of £75 and those in the Western Isles would face an increase of £200—far more than in Glasgow. We have taken action because we believe that council tax payers must be protected from the extreme changes in council tax that flow from distributional changes. We support that, as do COSLA and the vast majority of council tax payers across Scotland.

Mr. Welsh

The Labour policy of underfunding local services is increasing council taxes and massively cutting services, with more cuts to come, quite apart from the massive increases in water service charges. What sort of financial deal is that for Scottish consumers and tax payers?

Mr. Chisholm

The Government are committed to creating a strong and stable economy. A fundamental way of doing that is to make sure that we put public finances into good order in the early stages of the Government. That is why we said at the election that we would keep within overall public expenditure planning totals during our first two years in office. Even within that, we have managed to find £89 million more for education in Scotland, an extra £26.7 million for capital spending on schools in each of the next four years, and an additional £12.5 million this year and £43.7 million next year for housing. That demonstrates the Government's commitment to local government.

Mr. Connarty

Does my hon. Friend accept that one of the topics that he mentioned, and one that is often mentioned by COSLA, is the financing of housing in Scotland? Does he agree that there are still major problems in respect of the quality of existing housing and the lack of housing for homeless people? Can he provide more figures to show that the Government are treating those difficulties seriously, in contrast to their derisory treatment by the previous Government?

Mr. Chisholm

Unlike the previous Government, we recognise the serious problems of Scottish housing, which were highlighted by the recent house condition survey. We have already taken action on a whole range of fronts to begin to tackle the problem. We announced the awards for the rough sleepers initiative to deal with the visible problem of people sleeping rough on the streets—an extra £16 million was provided for that purpose. We have already put £2 million into the empty homes initiative this year and there will be more next year to deal with the problem of empty homes. We have also earmarked £10 million this year for new housing partnerships and a much larger sum next year to lever in private money to complement the public resources that we are committed to putting into housing. That significant action has been warmly welcomed by the housing lobby across Scotland.

Mr. Fallon

Does the settlement with COSLA for next year make any provision for a minimum wage for council workers, and what is it?

Mr. Chisholm

Pay agreements are a matter for local authorities and their work forces. Local authorities know that we are committed to existing expenditure guidelines, apart from the extra money that I mentioned earlier. As I am sure that the hon. Gentleman knows, our general policy on a minimum wage is that the Low Pay Commission will advise on the rate for that in due course.