§ Motion made, and Question proposed, That this House do now adjourn.—[Jane Kennedy.]
8.17 pm§ Dr. Vincent Cable (Twickenham)I thank the Chair for this opportunity to speak on the Adjournment about the London fire service and an issue that is topical and of immense concern to the people of London, who value the security provided by the service and are worried about the way in which it is being eroded.
The subject is topical for two reasons. First, I think that a request to approve specific cuts in fire service provision in London is sitting on the Minister's desk. It is also topical in a slightly broader sense, in that, within a few days, it will be the 10th anniversary of the King's Cross disaster, which was the last really catastrophic fire in London.
In preparing for this debate, I read some of the Fennell report on that disaster, and it makes striking reading. The great courage and professionalism of the firefighters comes across, as does the importance of precision timing, which is a matter of discipline, training and good management, as well as of equipment, of where the equipment is, and of the number of firefighters available. That ultimately comes down to resources—to money—and that is the subtext of our debate.
I want to speak from a Londonwide standpoint, but I also have a parochial interest. We have not had a catastrophic fire in Twickenham, but in recent memory there were two major events: the loss of a substantial part of our Tudor heritage in the Hampton court fire; and the devastating fire on Eel Pie island—a scenic spot that some hon. Members may know—that took out many industrial buildings and wiped away the livelihoods of many local artisans.
Fortunately, no loss of life was involved, but my constituents are very aware of the risks of fire. That awareness has been heightened by the fact that we have been the subject of severe cuts. In the cuts at the beginning of this year, we lost one of the three appliances in the local stations and another is shortly to be moved; we have effectively lost two thirds of our firefighting capacity. I am not an expert and do not know precisely what that means for response times, but common sense suggests that when cuts take place on a large scale the capacity of the fire service to respond to disasters is correspondingly diminished.
The London fire and civil defence authority has had to recommend the closure of two more fire stations: one in the Barbican—the only one left in the ring of steel of the City—and one at Shooter's hill, while four others have been reduced to part-time status. The problem is that that is neither the beginning nor the end of the process. Earlier in the year, 12 appliances were removed. Downham and Addington are on the long list of other places under threat, and many people are anxious about the future of their stations.
It is not merely a question of the approval of closure of particular stations and appliances; behind that—this is the nub of the debate—is a severe financial crisis. London Members will have received a letter from the chief fire officer, setting out the nature of the authority's financial problems. In the coming financial year it faces a deficit of about £21 million.
468 That deficit has not come out of the blue and is not a one-off event. As the chief fire officer clearly explains, the service has been trying to economise for years. It could not possibly be described as spendthrift or profligate; it has made savings of about £28 million a year; 10 per cent. of the staff have been cut in the past five years; and substantial reserves—£18 million, I believe—have been put towards preventing further closures.
The serious financial problem is marked out from those of other Government services by the extreme rigidity with which the service's finances have to be conducted. That rigidity stems from several elements. The service is a single-purpose local authority and does not have the capacity of local councils or the Government to switch resources from one activity to another. Rigidity is also a result of the capping system that the Government inherited. The capping limit is based on a highly restrictive spending assessment—allowing, I believe, less than 1 per cent. growth a year—that is far below the expenditure needs.
The system has been crippling for the service because its two main items of expenditure are entirely beyond its control and are growing considerably. One, which was determined only a couple of weeks ago, after the closure decisions were announced, is an increase in firefighters' pay of 4.8 per cent. a year—somewhat beyond the retail prices index. I do not begrudge firefighters extra pay, but it should be reflected in the financial provision for the service.
More serious even than pay is the problem of pensions. The service suffers the same problem as the police, some other parts of the public sector, and whole countries such as Italy, in that it is dependent on a pay-as-you-go system of pensions. About 20 per cent. of the service's budget now goes on pensions and the cost is escalating rapidly; I believe that there was 20 per cent. growth in pension provision last year, and about 50 per cent. over the past five years. A little mental arithmetic will show the Minister that far more money is needed than is being made available from central Government.
The problem is getting worse, partly for the good reason that firefighters are living longer. We all welcome that, but it means that their pension entitlements continue for longer. A special problem is looming: about 3,000 firefighters are due to retire in the next few years because of the bunching of recruitment in the 1970s, and each one of them will be entitled to a pension of about £10,000 a year.
All that is taking place at a time when the number of fire personnel is reducing, so we have a ridiculous state of affairs in which more and more retired firefighters have to be funded by fewer and fewer current firefighters, all of whom pay a substantial amount–11 per cent. of their pay, I think—into the scheme. The underlying financial position of the service is dire indeed.
I read the report of the actuaries who were commissioned to consider the problem in detail. Actuaries' reports are, by definition, not terribly exciting reading, but this report is in fact chilling. It describes a series of scenarios, based on different assumptions about pay and retirement rates and shows that, within the next five years, more than a third of the service's budget will have to go towards pension provision. That is simply not sustainable.
469 The problem has been looming for years, so why has not something been done about it? I notice that there is not a single Conservative Member present, but the Tories should be held to account. The matter was referred about four years ago to the former Home Secretary, the right hon. and learned Member for Folkestone and Hythe (Mr. Howard), who set up an inquiry into the pension problem, which was intended to report within six months; to the best of my knowledge, it has never reported.
The issue has been debated in the House: I looked up Hansard for March and May last year, when members of the previous Government made the most extraordinarily convoluted excuses for not dealing with the problem. The present Government have inherited the problem, but they now have the responsibility for doing something about it.
The excuses advanced were extraordinary. My predecessor, Mr. Jessel, who was a Member of Parliament for 27 years, may not have done a great deal that was memorable—I have paid him compliments in the House none the less—but, unfortunately for him, he will always be remembered for his comments on the fire service. Called upon to justify closures in the local service, he tried to explain that, as British households no longer used candles, we did not really need a fire service. Perhaps he did not mean it literally, but that unfortunate remark has gone down as his epitaph.
I am sure that the Minister would expect me to say that the Government should sign a large cheque, and that is indeed part of the answer, but the matter is more complex. We must consider each of the three major stakeholders in the future of the service. The London local authorities are involved, because it is a London problem and London people legitimately have to pay for it; it is a Government responsibility, because many of the key commitments, notably on pay, pensions and standards, are determined by Government; and there is an obligation on the service itself to maintain the highest standards of performance and flexibility. Everyone must make a contribution.
I start with local councils. A proposal is floating around, which I think originated with the chairman of the fire authority, that part of the fire service budget should be—I am not sure about the word—decapped, particularly its pension aspect. Liberal Democrats are strong advocates of the removal of capping as a matter of general principle, and that principle should apply to the fire service. The authority should be free operationally to make decisions and it should be accountable for them. Therefore, we would welcome a relaxation of capping.
But any capping which is so restricted to one item of expenditure does not deal with the problem and does not introduce any real operational flexibility in the system. Moreover, it would have a serious impact on London local authorities. There was a precept rise last year of 20 per cent. To meet the requirement entirely through local authority precepting would mean an increase, I think, of 50 per cent. this year, which would be regarded with considerable reserve by London local authorities. Clearly, they must make a contribution, but that cannot be seen as the major contribution to solving the problem.
That brings me to the second element of the package, which is the Government's contribution. Over the years, the problem has been that the fire service has operated within the national constraint of the spending assessment and the rate support grant growth has been totally inadequate. That now needs to be addressed. I appreciate 470 that the Minister does not control the budget, but I hope that he will at least have a vigorous conversation with his colleague in the Department of the Environment, who does, and explain to him that increased provision must be made for this item.
In terms of the total national budget we are not talking about large sums of money, but the Government have locked themselves into this extremely restrictive approach to public spending, which makes it difficult to switch money between Departments. That flexibility has been shown in respect of health and education, and this is one area where it will have to be found again.
One of the things that has struck me as a new Member looking at some of the emergency services in London is the extraordinary way in which the ambulance service and the Metropolitan police in particular have advanced in their thinking about management; about the way in which they run their internal affairs. Even the greatest friends of the fire service would say that it was probably some way behind them, but that is not the fault of the fire service. Many of those to whom I have talked in management, and the firefighters, have advanced ideas for making the service more flexible, but they are substantially constrained in what they can do by the law.
The principles of the fire service were set down in legislation in 1948, and they have not been changed for the best part of 50 years. It is required to observe procedures which relate to residential conditions and standards of risk which are inappropriate to present conditions; they must be modified.
Interesting ideas for raising money are being circulated by people in the fire service. I am not qualified to evaluate their technical feasibility, but they seem interesting and positive. The fire service is a centre of excellence in training, consultancy and risk, and for such services the commercial sector should be charged. I do not want to go the whole hog and see fire engines blazing through London with Coca-Cola or bra adverts on the side. That is probably not the kind of commercialism that we want to see. But there may be scope for doing much more. However, legislative provision is required for that. That is a way in which the Home Office can help the fire service to rise to the challenge of modernisation for the next century.
The responsibility is multifaceted. It is partly a responsibility that falls on the people of London to show that they are willing to pay a little more for this crucial service; it partly rests on the fire service itself to modernise, but above all, particularly given the locus of the debate, it rests on Government initiative to create the legislative framework for modernisation, and also to sort out this appalling financial mess which, unless something is done quickly, will result in a substantial and damaging reduction in services in the capital.
§ Mr. Jim Fitzpatrick (Poplar and Canning Town)I congratulate the hon. Member for Twickenham (Dr. Cable) on securing time for this important debate. I am grateful to him and to my hon. Friend the Minister for allowing me the opportunity to contribute.
I should say immediately that I was a member of the London fire brigade for some 23 years and an elected official of the Fire Brigades Union. I am now an out-of-trade member of that trade union. 471 I shall be brief, because the hon. Gentleman dealt comprehensively with the issues confronting the London fire service. But I want to focus on the key problems which, as the hon. Gentleman said, are primarily financial. As he said, they include the standard spending assessment, the resources allocated to the London fire brigade, and, in particular, the question of pensions.
With regard to the SSA, the amount of money afforded by Government to the London fire and civil defence authority has, as the hon. Gentleman said, dwindled in recent years. Some awards have been below inflation and some have certainly not met the service's needs, and that at a time when there is a clear rising trend in the number of calls received by the service.
The Fire Services Act 1947 takes no real account of the special services which these days the fire service is called upon to provide. It was drafted in the light of the brigade's ability to respond to fires. These days, a third of calls attended by the fire service are for special services, which range from the King's Cross disaster, to road traffic accidents, rail crashes, chemical incidents and humanitarian services. Under the Fire Services Act, the funding formula takes no account of the brigade's responsibility to carry out those tasks. The increasing pressure on the service has led to a growing belief that they should be taken into account and that the funding formula should be revisited.
The hon. Gentleman also referred to the intensified pressure on the pension scheme. As the hon. Member for Twickenham said, the previous Government were aware of the growing pressure resulting from the structure of the pension scheme. In the debate on the Queen's Speech in 1994, my hon. Friend the Member for Erith and Thamesmead (Mr. Austin) said:
I hope that we might get an assurance from the Government that, when the standard spending assessments are announced in the next couple of weeks, they will give some guarantee on disregards in the SSAs with regard to the rising costs of pensions within the fire and civil defence authorities. Unless that is done, there is a real prospect that we face dramatic cuts in the cover provided by the fire and civil defence authority in the next financial year.—[Official Report, 18 November 1994: Vol. 250, c. 293.]As has been said today, that pressure is intensifying.As the hon. Member for Twickenham said, firefighters contribute 11 per cent. of their salaries towards the pension scheme, but it is a non-funded scheme, which means that payments to retired firefighters come out of the revenue account. In the 1970s, firefighters were required to work 56 hours. In 1974, that was reduced to a 48-hour week and in 1979, to the present 42-hour week. As a result, there were some 2,000 new members of the fire service in London alone; their pensions are coming up for payment. The pressure which has been building up for some years will intensify during the next five years, and the situation will obviously deteriorate.
It is generally accepted that, as well as the increased number of calls to which the service responds, there is an increase in the diversity of calls that they have to attend. No one questions firefighters' professionalism and bravery, nor the public esteem in which the fire service is held. I understand from my dealings with the London fire and civil defence authority that every attempt is being made to address the financial crisis which it faces. Income 472 generation, efficiency measures, cuts over a number of years and private finance initiatives are all being considered as a way of mitigating a difficult situation in which the service finds itself.
Notwithstanding that, a number of London Members are obviously concerned and would jointly request an urgent examination of the funding formula to avoid the immediate crisis. A searching examination should be carried out to find medium and long-term solutions to the problems confronting a service that is regarded as a world leader. Unfortunately, it is in danger of losing that position.
I know that my hon. Friend the Minister has fought and campaigned for the fire service in his local area, as he did when he was the shadow spokesperson. He and his ministerial colleagues are doing all they can to find solutions to these problems. We welcome his contribution, and hope that he will tell us how much progress is being made on this important issue.
§ Mr. Barry Gardiner (Brent, North)I congratulate the hon. Member for Twickenham (Dr. Cable) on securing this debate, and on the measured and responsible way in which he presented the issues.
The hon. Gentleman said that it comes down to resources and money, which is the subtext of the debate. Money may be the subtext, but an injection of cash cannot, in itself, resolve the problem, and that was acknowledged. The crisis in the London fire and civil defence authority is due to the fact that there are more fire service pensioners than firefighters in London. Critically, the pension scheme is not a fully funded scheme, but is run on a pay-as-you-go basis.
As the hon. Gentleman said, the complete absence of Conservative Members from the debate is significant. In the past 18 years, they had the opportunity in government to tackle the issues that were constantly raised about the impending problem in the London fire service, but they did not do so. They did not try to reform the pension scheme to take account of the 1970s bulge, to which my hon. Friend the Member for Poplar and Canning Town (Mr. Fitzpatrick) alluded, which occurred when the fire service expanded its numbers, and thus the number of future pensioners. They did nothing, except to lay off 1,000 firefighters. That is the extent of the reduction in the number of firefighters in London under the Conservative Administration since 1985. It is shameful that the Conservative Benches are entirely empty.
Under the scheme, the authority presently has to make available 20 per cent. of its annual budget to pay its contribution towards current pensions. That shows the incoherence and unpredictability of such a pay-as-you-go scheme. There is no way of taking account of the vagaries of early retirement, perhaps through disability in service, or the increased longevity, thank goodness, of firefighters who have retired from the service. Incidentally, firefighters retire at age 50. Benefits under the scheme accrue rapidly, but firefighters start pension life at a much earlier age than is usual.
My hon. Friend referred to the 1947 Act, under which the early years of the pension scheme benefited by being on a pay-as-you-go basis. The number of pensioners at that time was small, so more of the revenue budget could be used for the needs of the service. In the early days, 473 the problems were not apparent, but they were predictable. The Government must now tackle those problems for the long term.
I echo my hon. Friend's words: he urged the Minister to examine the funding formula and to find a long-term solution to the problem. That can be achieved only by addressing the basis of the contributions to the pension scheme. I look forward the Minister's response to those aspects of the debate.
§ Mr. Andrew Dismore (Hendon)I, too, congratulate the hon. Member for Twickenham (Dr. Cable) on securing this Adjournment debate.
I agree with everything that my hon. Friend the Member for Poplar and Canning Town (Mr. Fitzpatrick) said. I was the legal adviser to the Fire Brigades Union for many years. Not having to do it myself, I appreciate how difficult and demanding is the job of a firefighter. The quality of the service given by the London fire brigade to the people of London and the bravery shown by its firefighters are second to none throughout the world. Firefighters deserve every penny that the pay formula, which has preserved industrial peace in the fire service since 1978, has provided this year.
There is a long-term need to update the 1947 Act. My hon. Friend referred to the problem of special service calls not being reflected in the funding formula for the fire service. Last year, under the previous Government, we lost one of the pumps at Hendon fire station in my constituency. Under the fire risk formula as it then was—there were arguments about how it should be interpreted—we were forced to accept that decision. However, if the special service risks in the area had been taken into account, I do not think that the removal of that pump could have been justified.
The A41, the A1, the M1 and the north circular road all go through my constituency; a major expansion at Brent Cross is about to take place; we have the main railway line up to the west coast; and we had the IRA bomb at Staples Corner several years ago. We could have special service calls to rail crashes, car crashes and bomb incidents, but that is not reflected in the fire service allocation, so we lost our pump at Hendon. Because the 1947 Act is out of date, the neighbouring constituency of Finchley lost its emergency tender. This year is the golden jubilee of that Act, and I hope that the Minister will give us an assurance that it will be examined in the long term.
The pension scheme is generous, but it needs to be. Firefighting is a dangerous job, and we must make the scheme attractive to firefighters. I think that my hon. Friend the Member for Brent, North (Mr. Gardiner) is wrong in saying that firefighters retire at 50: they retire after 30 years' service or at age 55, whichever comes first, and senior officers retire at 60. Having seen firefighters who are approaching that age, I think that no one would begrudge that retirement date. Given the physical demands of the job, few people of that age could cope with the lifting and crawling about in dangerous conditions.
474 I hope that there will be no diminution of the pension scheme, and that long-term solutions will be found to the problems of the fire service in London and nationally.
§ The Parliamentary Under-Secretary of State for the Home Department (Mr. George Howarth)I join my hon. Friends in congratulating the hon. Member for Twickenham (Dr. Cable) on initiating this debate on the London fire service. At the risk of damaging his reputation, I also congratulate him on the measured and thoughtful way in which he presented the subject. He alluded to the fact that his style is in sharp contrast to that of his predecessor. He was perhaps not so amusing as his predecessor, but he was thoughtful nevertheless.
I understand the concerns of hon. Members and their constituents about the quality of fire services, and I am aware of the sensitivities that inevitably surround proposals that change existing arrangements for fire cover.
Given that the performance of the fire service has been raised in the debate, implicitly and, in some cases, explicitly, I feel that I should comment on the service's performance in the country as a whole, and specifically in London. As hon. Members have made clear, we have reason to be proud of the service. The hon. Member for Twickenham mentioned the response to the King's Cross disaster; that is a good example of the service's response to difficult situations and the way in which it gives of its best—often in fraught conditions—earning the deserved pride and support of both the House and the general public.
It is a privilege for me, holding the office that I hold, to work with a service that is so highly regarded by the public: a service which, as has been said, is courageous, which is on the whole well led and which achieves such high standards of performance. Those qualities were recognised in the 1995 report of the Audit Commission's study of the fire service, entitled "In the line of fire".
Several of my hon. Friends—and, indeed, the hon. Member for Twickenham—raised the subject of the 1947 Act. My hon. Friend the Member for Hendon (Mr. Dismore) reminded us that this year marked its golden anniversary. "In the line of fire" raised many issues connected with fire risk assessment and the way in which the London fire service should operate, and there are important lessons to be learnt from it. I shall say more about that shortly, but I think that we should first accept—as several hon. Members have said—that the conditions in which the fire services operate, and the type of work that they have to do, have changed considerably since 1947.
Let me make a simple point which I think illustrates that very well. As I was not born then, I shall take it on trust that, to those who wandered the streets of London or any other major city in 1947, traffic levels alone would demonstrate the stark difference between the risks that existed then and those that exist now. It is necessary only to travel around London at any time during the week to realise how difficult the position now is.
475 Having said that, I must point out that the 1947 Act—initiated under the Labour Government of the day—has, until recently, stood the test of time very well. It has been adapted, the fire services have operated within it and its basic principles were very good. We should not underestimate the Act; but that does not mean that it does not need to be modernised. We all recognise that a much more modern approach is needed to the way in which we assess risk and provide fire services.
Each year, the Audit Commission publishes a report on performance indicators for local authorities. In its latest report, for the year 1995–96—published in March—the commission said that the fire service was
one of the most consistently high-performing services in local government. Most brigades achieved national standards for at least nine out of ten fire calls during all three years from 1993–94 to 1995–96, with the poorest performances significantly improving over this period. These improvements were achieved with increases in spending no higher than the level of inflation.The financial difficulties that all hon. Members have mentioned applied at that time, particularly in London. The increase in standard spending assessment was 1.1 per cent. in 1994–95; 0.8 per cent. in 1995–96; 0.4 per cent. in 1996–97; and zero per cent. in 1997–98. Against a background of real-terms decline in resources, however, the service has continued to improve.The Government are intent on building on the solid foundations that already exist. There will be more emphasis on partnership, and we intend to forge ever-closer links with fire service interests: trade unions, the local authorities concerned—single-purpose or otherwise—and chief fire officers. It is a cornerstone of our attitude to local government that we take a partnership approach, and respect and recognise the legitimate interests that are brought to bear on fire and, indeed, other services.
Let me say a little about the duties of fire authorities. The fire service is, of course, a local authority service. Statutory responsibility for providing fire services rests with the local fire authority—in London, the London fire and civil defence authority. Under the 1947 Act, it is for the fire authority to secure, among other things,
the services for their area of such a fire brigade and such equipment as may he necessary to meet efficiently all normal requirements.The fire authority sets the budget for its brigade, and it is up to it to ensure that that budget is set at such a level that its statutory responsibilities can be properly discharged.Section 19 of the Act provides safeguards to ensure that the statutory responsibilities are met. Subsection (4) requires that a fire authority cannot reduce the number of fire stations, fire appliances and fire-fighting posts without the express consent of my right hon. Friend the Home Secretary. My right hon. Friend will grant his approval only if the following conditions are satisfied. First, the proposals must have been sufficiently widely publicised, in sufficient detail and with adequate time, to enable any interested party to make proper representations. Secondly, those representations must have been considered by the fire authority. Thirdly, Her Majesty's inspectorate of fire services must have advised that the national standards of fire cover will be maintained if the proposals are ever to be implemented.
476 The existing agreed and published criteria make it clear that the Home Secretary will also take into account any representations that are made directly to him. I invite any hon. Member—indeed, anyone with an interest in the subject—to make representations in connection with section 19 applications: my right hon. Friend and I will give them all due consideration.
As the hon. Member for Twickenham said, we have now received a section 19 application from the London fire authority seeking approval for the closure of the fire stations at Shooters Hill and the Barbican, and new arrangements for the provision of fire cover on the River Thames. Until now, there have been no strong representations about the proposals for the Thames, although such representations may emerge; but I have already received written representations from hon. Members about Shooters Hill. I do not think that any representations have yet been received about the Barbican proposals. We shall consider representations and, as part of that process, seek technical advice from Her Majesty's inspectorate of fire services. I assure hon. Members that my right hon. Friend the Home Secretary and I will listen carefully to representations by hon. Members, interested organisations or individuals who wish to comment on the proposals.
I strongly assure the House that, having taken technical advice, we shall not approve any decision that we are advised would place the lives of Londoners at risk. It would be improper for me to give any indication of our likely reaction to the proposals. However, we would not agree to a proposal unless there were overwhelming grounds and we were satisfied that no lives would be put at risk.
On the issue of fire cover, the London section 19 proposals follow recommendations that were made in the authority's review of fire cover, which was published in December 1995, and subsequent follow-up work. All fire authorities regularly review fire risks in their area to ensure that the brigades' deployment of resources is updated in the light of changing circumstances. I think that the hon. Member for Twickenham mentioned Downham. That has been discussed, but I confirm that it forms no part of the section 19 application that is currently before us. As there is no proposal for that fire station at this time, it is not being considered.
Levels of fire cover are determined locally against nationally recommended standards that dictate the initial response to a fire in terms of weight and speed of attack. They rest on four main standards of service according to the risk category of the area, and they assume for each category that a predetermined number of fire-fighting appliances should attend within a certain time. The standards are not just recommended nationally: they are nationally agreed by the Central Fire Brigades Advisory Council, which is constituted under the Fire Services Act 1947 to represent fire service interests in advising the Home Secretary. I have chaired the two most recent meetings of that body and I know that it takes its responsibilities very seriously. The standards were extensively reviewed in 1985 by the advisory councils for England and Wales and for Scotland. The standards have enabled all concerned to know where they stand on the minimum level of service that should be delivered. 477 The Audit Commission recommended in 1995 that there should be another review of the level of fire cover. The hon. Member for Twickenham spoke about that. The commission recognised that no fundamental change should be considered without careful research. I assure the House that we shall carry out such research on any proposals that are received under the process. A review of fire cover standards is being undertaken by a joint committee of the advisory councils for England and Wales and for Scotland. That research is under way, and I look forward to receiving the committee's report in due course.
I shall now deal with fire service budgets because in many ways they are the heart of the concerns that have been expressed by hon. Members. Fire authorities have to set their budgets within the overall framework for local government spending, and that currently includes the criteria that are set for council tax capping. In London, the fire authority's revenue budget for 1997–98 is £267 million—the limit that is permitted under council tax capping policy and some £13 million or 5 per cent. above its standard spending assessment.
The Government are committed to ending crude and universal capping as soon as possible. In July, in collaboration with local government, we announced a review of local government finance which, among other things, will help to put in place the changes that are needed to deliver that commitment. In the meantime, capping will remain in place for 1998–99 and the Secretary of State for the Environment, Transport and the Regions will announce his provisional capping principles later this year. I assure the House that that announcement will be made in good time so that people will know where they stand.
Under current arrangements, it is open to authorities to set budgets that are higher than the provisional capping limit and to apply for redetermination of the cap if they think that they cannot set budgets that would allow them to meet their statutory obligations. There were examples of that happening under the previous Government.
The hon. Member for Twickenham spoke about capital expenditure. Obviously, we are watching that carefully. Eight private finance initiative projects are currently in existence through which the Government are helping local authorities. One such project is in London and it is getting, I think, £70,000 in consultancy support to see how it can benefit from the PFI proposals. Although no immediate relief is available in terms of the overall limits, we are considering carefully and constructively how the PFI can be taken forward and used in that context.
My hon. Friends the Members for Brent, North, for Hendon and for Poplar and Canning Town mentioned the wider question of fire service funding, as did the hon. Member for Twickenham. I do not pretend that the problems of funding public services are easy, or that the funding problems that we inherited can be resolved overnight. The hon. Gentleman graciously accepted that—and I was pleased that, for once, no one suggested that the matter could have been resolved by a penny on income tax. He conceded that we had inherited a very difficult situation from our predecessors.
478 Although, in view of the constraints on its funding, I commend the fire service for maintaining its performance, I am well aware of the financial pressures confronting London and many other fire authorities. Those have been fully represented by myself and my right hon. Friend the Home Secretary, in our discussions with the Department of the Environment, Transport and the Regions, and in representations that have been made to the Treasury on the SSA settlement.
I can say no more now, but it is fair to say that, in the past few weeks, several of my hon. Friends have represented those concerns to me, not in the Chamber but elsewhere. It is also fair to say that the observations that have been made tonight will be given full weight in our deliberations during the next few weeks, and that both Councillor Ritchie and the chief fire officer, Brian Robinson, have had the opportunity to raise those matters with me privately in a meeting, and I am well aware of their concerns.
The Government are committed to sticking to planned overall spending allocations for the first two years of our time in office, but that should not rule out adjustments of priorities within those totals, as hon. Members conceded. I am well aware of the 4.8 per cent. pay settlement that was announced a week ago, and obviously that will form part of our considerations.
We are examining spending throughout government in the comprehensive spending review, to discover what the current priorities are and where they may be shifted. That gives us a further opportunity to consider some of the problems and the fundamental issues and spending priorities in the fire service, looking at standards of fire service cover, fire safety, funding and the structure of the fire service. I hope that we make progress on that.
We are committed to a consultative approach, and I expect that consultation process to start from the end of November. The Home Office has worked closely with the Local Government Association and other fire service interests to assess future fire service spending pressures and to look at the scope for efficiency savings. This year's report of the local authorities' fire service expenditure forecasting group has drawn particular attention to the pressures in respect of pensions, training and fire safety. Each of those issues is being addressed differently.
The hon. Member for Twickenham and my hon. Friend the Member for Brent, North mentioned difficulties with pensions. Hon. Members will be aware that the previous Government commissioned a review of the fire service pension fund. I regularly asked them when they would publish it, and I had begun to believe that it had disappeared into the ether, but lo and behold, to their credit, when we entered office I found that it was advanced and that work was being done on it.
I intend to publish the findings of that review as soon as it is practicable to do so, but I must tell the House that there is no easy solution to the problem. The hon. Member for Twickenham said that he suspects that a cheque book may be needed somewhere along the line. There is no cheque book. Any solution must be a long-term solution: it cannot be implemented overnight. It will be many years before we can get the pension scheme into the type of balance that we would expect. There are many suggestions as to how that can be done and we will have to make a choice at some stage. None of those suggestions, however, lead us to the conclusion that the matter can be resolved speedily. 479 Decisions on the provisional local government settlement for England for 1998–99 will be announced within the month. There has been some wild talk—although not in the House tonight—and it has been reported in the media that difficulties will be experienced in London. I do not believe that at this time it is either necessary or appropriate for anybody, whether in the fire service or among the general public, to panic. As I said earlier, no decisions will be made by my right hon. Friend the Home Secretary or me that will put lives in jeopardy.
The most sensible thing for all concerned is to await next month's announcement. When that announcement is made, I ask that people compare what we have 480 achieved with the achievements of the previous Government, which, as many people have said, is a fairly sorry record.
I can assure hon. Members that fire service funding pressures, including those for London, are noted and are being carefully considered. When the figures are announced next month, I will be happy to be judged on the extent to which my right hon. Friend the Home Secretary and I have noted those pressures and taken them into account. I hope that, when that happens, hon. Members will feel that we have done right by the fire service in England.
§ Question put and agreed to.
§ Adjourned accordingly at ten minutes past Nine o'clock.