HC Deb 29 April 1998 vol 311 cc429-38

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Robert Ainsworth.]

10.13 pm
Mr. Bill Rammell (Harlow)

I am grateful for the opportunity to debate the local government finance settlement for Essex county council, and to highlight the way in which I believe the priorities of that settlement are being distorted by the new Conservative administration on that council.

To put the matter in context, the Conservatives took control of Essex county council on 1 April this year, when Southend and Thurrock, which were previously part of the county council area, became unitary authorities. With the change in political balance, the Conservatives took a one-seat majority on the new county council.

The local government financial settlement for the new incoming Conservative administration was reasonably good. I shall not exaggerate, and pretend that the settlement resolved every problem for the county council in every possible way; issues remained to be addressed. Inevitably, the fact that the Government had agreed to stick to the spending limits of the previous Conservative Government for the first two years in office constrained their actions. Nevertheless, generally it was a reasonably good settlement. In all, £835 million was allocated to local education authorities in addition to that which the previous Government had allocated.

In Essex, there was an increase in the standard spending assessment of 4 per cent.—1 per cent. above the national average—and the education standard spending assessment increased by 5.8 per cent., also ahead of the national average. To place it in context, that increase of 5.8 per cent. was higher than any of the previous four-year increases in SSA. That increase in SSA led to an easing of the cap. People outside the House will understand that Essex was able to increase its expenditure by about 5.6 per cent—not an earth-shattering increase, but well above inflation, and allowing some opportunities for improvement.

Mr. Ivan Henderson (Harwich)

Is my hon. Friend aware that Spring Meadows primary school in my constituency has had its nursery provision deferred, after it had been agreed by Essex county council under the phase 4 county programme, after a governor and a teacher had been appointed, and after parents had already registered their children for the school? Is that not another example of the Tories, when they are in control of education, ruining the expectations of teachers, of parents and of children by playing politics with education?

Mr. Rammell

My hon. Friend is absolutely right. The nursery cut he mentions was one of five throughout Essex that was halted as a result of the new administration's decisions.

The overall settlement also brought some good news: the Government decided not to change the area cost adjustment for this year, reflecting—rightly, in my opinion—the fact that, in Essex, costs for the provision of services are higher than in many other parts of the country, because we are in the south-east of England. I hope that the Government will continue to bear that factor in mind next year, when they reconsider the area cost adjustment.

Overall, it was a reasonably good settlement. Imagine, then, my consternation and that of my constituents when, after 1 April 1998, news of savage cuts began to leak out. It is no exaggeration to say that the cuts that we have seen in Essex, in education and in social services, are probably on a scale that I have not witnessed in one year in any local education authority throughout the country. For hon. Members' benefit, I shall detail some of those cuts.

On education, discretionary grants for dance and drama students have been completely abolished. Funding for the most successful music schools in my constituency—music schools that have given children an opportunity to take part in musical education in a way that previously was not available—has suffered a massive cut of 70 per cent. Adult education grants have been cut by up to 50 per cent. Uniform grants for poorer children have been halved, and support for concessionary fares for pupils over the age of 16 has been slashed, leading to a massive 40 per cent. increase in charges.

If anything, the cuts in social services are worse. Home care charges doubled. Charges for day centre lunches and meals on wheels are increasing by a staggering 92 per cent., targeting the elderly—the most vulnerable people in our communities in Essex.

Sir Teddy Taylor (Rochford and Southend, East)

Southend on Sea, which broke away from Essex and which has Labour and the Liberals in charge, faces exactly the same vicious increases—voted for by Labour and Liberal councillors. Would the hon. Gentleman therefore accept that it is wrong to make this a party political exercise? Southend had a better financial settlement than Essex, but we have had to impose the same savage increases in home care charges. The problem has nothing to do with party: it has to do with local authorities, no matter who is in charge, facing impossible problems these days.

Mr. Rammell

The reason that I believe it is a matter of party politics is that the alternative Labour-Liberal budget proposed for the county council this year did not include the sort of cuts that I am describing. That alternative budget was agreed under the same local government settlement as the one under which the Conservatives in Essex are operating.

I want to explain the human impact entailed by the cuts, and the decision completely to cease discretionary grants for dance and drama students. Under the former Labour-Liberal administration, the county council provided grants of £4,000 a year for the tuition fees of students going to dance and drama colleges. That money levered in funding from the national lottery of a further £4,000 a year. With the complete cessation of discretionary grants, the lottery money, like the grants themselves, has gone.

Thus, whereas dance and drama students throughout Essex were last year eligible for £8,000 from public funds towards their £9,000-a-year tuition fees, this year, under the new administration, they are to receive absolutely nothing.

This will mean that the vast majority of these students will not be able to take up the courses for which they have worked so hard. Talented, dedicated, hard-working young people who have followed the advice given them by older generations—about how to develop their talents and how to get on in life—are having their life chances stripped from them.

I recently met the new Conservative leader of the county council to put pressure on him, and asked him whether he and his political group were aware when they made their decision of the link between discretionary grants and the matching funding from the lottery. He replied that he was not sure. That speaks volumes about their attitude to the cuts—they did not even realise the implications of their decision.

The imposition of the cuts and the distortion of this year's local government settlement for Essex have been disastrous for my constituents and for those of other Members representing Essex. Since this has happened in spite of a reasonably good settlement overall, it is reasonable to ask why. As usual in politics, we need to look at the detail. Although the total budget has risen by a reasonable amount, as I have said, the fire service, the highways and transport service and other services have had increases well above inflation—

Sir Teddy Taylor

Hear, hear.

Mr. Rammell

Politics is about choices, and choices have consequences. In addition to these considerable increases, the reserves have been increased by £3 million. To pay for all this, there is, of course, a price—savage cuts to education and social services.

Mrs. Teresa Gorman (Billericay)

Is it not true that the education committee is spending an additional £11 million on education, but that that redistribution is being spent on reducing class sizes and implementing other Government priorities, not on extra items for schools? The council is clearly mindful of the cuts in dance grants and in other areas which the Government have forced on them, because it is spending up to cap and because it has increased the precept to keep up standards of education. So what the hon. Gentleman says about education in Essex is complete rubbish.

Mr. Rammell

In response to abuse, I shall give some facts. For each of the previous four years under the previous Labour and Liberal administration, the county council spent above the standard spending assessment on education. In their first year in office, the new Tories at county hall are spending £3.5 million below the SSA. That comparison speaks volumes about the priorities and choices that have been made by the new county council.

The lack of priority being given to education raises serious questions about the right and ability of central Government to direct local education authorities as to their spending. The Government have made it clear many times that our No. 1 political priority is education—a priority that the Conservatives in Essex clearly do not share.

Having been a local councillor for 12 years before I arrived in this place, I understand the arguments about local democracy, local autonomy and local decision making. Given the actions that are taking place in Essex and elsewhere, I believe that there is a debate to be had about the relationship between central and local government, and a need to address the question whether central Government have a right to insist that their strategic and national priorities are adhered to by local councils.

There is all the difference in the world between central Government dictating cuts to local government, as happened year after year under the previous Conservative Government, and central Government insisting on minimum standards of provision in education and elsewhere that should be respected by local councils. Given the difference in priority given to education by central Government and many Conservative education authorities such as Essex, that is a fundamental issue.

When I speak of a low priority being given to education, I do not expect hon. Members merely to take my word for it. I invite them to reflect on what George Walden, the former Conservative Member of Parliament who retired at the general election, wrote about Conservative attitudes in his recent book on education. He stated that, because most senior Conservatives do not use the state education system, their personal and political motivation is simply not there. We are seeing that repeated with a vengeance throughout Essex.

Many people say that there are no differences left between the political parties. That is often quoted in the media. Those who take that view should look at what is happening in the county of Essex, where an alternative budget was proposed by the Labour and Liberal administration under the same Government grant regime as the Tories are operating under. That proposal did not include such savage cuts.

Pierre Mendes France said that to govern is to choose. In the way in which the new Conservative administration in Essex has distorted this year's local government settlement, it has chosen. Unfortunately, my constituents and the constituents of other Essex Members are paying the price for those choices.

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

I congratulate my hon. Friend the Member for Harlow (Mr. Rammell) on his success in securing the debate, and in using it as an opportunity to highlight the concerns that he and his constituents have about education provision in his area.

The issue relates to the financial settlement for Essex county council and the subsequent decisions of the council on how it chooses to make use of the resources available to it. The settlement has already been approved by Parliament. All councils have now set their budgets, and every council tax payer will know the level of his council tax bill for this financial year.

The debate allows me to reiterate to hon. Members and to council tax payers in Essex what a good settlement we have been able to provide for the county in the face of the tight spending plans that we inherited. [Interruption.] Conservative Members may laugh. When they hear the figures, they will stop laughing, because they will realise that the Government have given an extremely favourable settlement to Essex. The hon. Member for Rochford and Southend, East (Sir T. Taylor) confirmed that the settlement available to Southend was a good settlement. What the local councillors choose to do with the resources allocated by Government is a very different matter. My hon. Friend has provided some damning evidence about choices affecting education in Essex that have hit particularly hard those people who depend on services. He referred to discretionary awards for dance and drama, and the young people who have developed their skills and talents in the hope of being able to pursue their careers in those fields through further education. Their hopes will be dashed because of the large cut that the county council has made under that budget heading. That is only one of several such examples, and it is clearly distressing.

We are committed to a fair distribution of Government grants to local authorities, and the settlement this year is a start in achieving that goal. It is better in cash terms than many authorities must have expected, based on last year's plans. It is also fairer in its distribution, and it reinforces local accountability by giving local authorities more discretion over local spending decisions. I make no apologies for emphasising the additional help that we have given to local authorities in this settlement. We have provided a 3.8 per cent. increase in provision for local government revenue spending nationally, which is double the previous Government's plans.

The amount made available for local authorities included an additional £835 million nationally for education from the reserve, which has been fully funded by matching grants to authorities. The previous Administration's plans allowed for just a £182 million increase in schools' budgets, which was less than inflation. Our plans provide a 5.7 per cent. increase, which is a substantial increase ahead of inflation, and a real commitment to improving standards.

We have also been able to increase resources for social services nationally next year by some £447 million, which is almost £100 million more than was envisaged by the previous Government. Within that, we have provided an additional £70 million for children's services, which is the first substantial increase for three years; additional funding for adult services, with an extra £21 million on top of the £350 million for the special transitional grant for community care which we will continue in 1998–99; and an additional £73 million for mental health services, which is £6 million more than last year. In addition, we have provided sufficient money for the other priority services of fire and police to enable them to continue their work.

Sir Teddy Taylor

If the situation is so great—and I mean this sincerely—why does the Minister think that, last week, the Labour and Liberal councillors in Southend-on-Sea, which had a better settlement, voted through the most vicious increases in home help charges that I have ever seen? I do not seek to make a political point. Ministers, from whatever party, should realise that local government is facing a nightmare of ever-increasing demands. There is no point trying to score political points and apportion blame.

Mr. Raynsford

I have described the settlement that applies nationally. How it is interpreted locally is a matter for local councils. There is a debate about the correct balance between central and local government, about ensuring that the provision of services meets the standards that the Government expect for citizens in every area of the country, and about the right of local authorities to provide for the people of their area, and to exercise discretion on behalf of their local electorates. That will lead inevitably to differences in performance and in the decisions taken by different areas.

As the hon. Member for Rochford and Southend, East knows, the debate this evening is focused on Essex county council. I apologise to the hon. Gentleman, but I have not come prepared to answer detailed questions about provision in Southend—he will know that the new arrangements exclude Southend from the county of Essex. However, I shall happily write to the hon. Gentleman about that issue if he would like me to explain it further. I hope that he will understand that I am not able to give a detailed response now.

Mr. David Amess (Southend, West)

Will the Minister give way?

Mr. Raynsford

I must ask the hon. Gentleman to calm down, as I am responding to points raised by the hon. Member for Rochford and Southend, East. It is difficult to answer two hon. Members simultaneously. However, I shall give way to the hon. Member for Southend, West (Mr. Amess), as he comes from the same area.

Mr. Amess

Is the Minister not a little surprised that the European Member of Parliament who represents the area we are talking about—Southend and the area represented by the hon. Member for Harlow (Mr. Rammell)—was in Rayleigh high street last week organising petitions against social service charges, but has said nothing about what his Labour colleagues in Southend voted for last week? Does he not find that there is an inconsistency—

Mr. Deputy Speaker (Sir Alan Haselhurst)

Order. I understand the tangential connection between Southend and Essex, but the debate is about Essex, from which Southend is excluded.

Mr. Raynsford

Thank you, Mr. Deputy Speaker. I shall obviously concur with your ruling, and therefore not be drawn into the tempting territory of Southend, however attractive an area it might be, and whatever the peculiarities of its local Conservative representatives at whatever level. I shall focus my comments specifically on Essex.

Hon. Members will be aware that we have made changes to the way in which Government grant is distributed to local authorities. We calculate standard spending assessments for individual authorities following general principles. These are applied to all local authorities, while at the same time taking account of local needs. Essex county council benefited from several of the changes that we made to the SSA formulae for 1998–99, including the introduction of the new needs indices for other social services and the change to the way in which visitors and commuters are taken into account.

I am pleased also to report that the county council also gained as a result of changes we made to the highway SSA, following its representations during consultation on the provisional settlement. I stress that, because the view is often taken that representations by local authorities in the course of settlement have little or no effect on Government policy. As I know the hon. Member for Rochford and Southend, East is aware, representations by Essex county council over the highways settlement did bear fruit.

The county council took over from the Highways Agency responsibility for the A127 between Southend and outer London in March 1997. The council had actively sought this change, which is referred to as de-trunking, because the road thereby ceases to be a trunk road. However, the SSA system failed to take account of the heavy traffic flows on the road when working out the average traffic flows in the county. We took this element into account in the final settlement, and the council's highway SSA was consequently increased by £3 million. We listened carefully to what the local authority had to say when its representatives came to see us, and we acted as we felt was appropriate.

In total, therefore, the SSA for Essex county council has increased to over £836 million, which is an increase of almost £32 million, or 4 per cent. over the past year's figure. I am used to coming to the House for debates on local government settlements to hear Members complaining that their authorities have not received an adequate settlement. I cannot think of anyone from Essex, hearing the figures to which I have referred, who could complain about the settlement for Essex county council. By any judgment, it is a generous settlement—

Mrs. Gorman

Will the Minister give way?

Mr. Raynsford

I defy the hon. Lady to find any fault with it.

Mrs. Gorman

I am not intervening to argue that Essex did not do a bit better than other authorities. However, the money was allocated specifically for education, on which it was spent, despite the remarks of the hon. Member for Harlow (Mr. Rammell). There was an increase of only 0.5 per cent. for all other services, which meant that there had to be a great deal of juggling with the budget, even to maintain the present standard of support for social services. The Government have put Essex county council in this dilemma.

Mr. Raynsford

The hon. Lady is wrong. The figures I have quoted show that the county council received an increase of almost £32 million, which was 4 per cent. above the previous year's figure. Against a lower rate of inflation, that is not a settlement that makes it difficult for an authority to make sensible decisions. Unfortunately, Essex county council has failed to do so.

I know that education is an important issue in the county. The Government were elected with a clear mandate to make education our No. 1 priority, as my hon. Friend the Member for Harlow has emphasised, and we have done that.

Last July, we announced an extra £1 billion in revenue support grant, specifically to boost education. We also set up the new deal for schools, with £1.3 billion of grant for repairing, renewing and improving school buildings, school security and information technology facilities over the lifetime of this Parliament. I accept that that is not a one-year figure, but a figure for the lifetime of the Parliament; it is nevertheless significant money. In the Budget in March this year, my right hon. Friend the Chancellor announced a further £250 million for education. In all, we have therefore already pledged extra investment in education of some £2.5 billion since we came to power.

The priority that the Government have given to education nationally has naturally been reflected in the allocation received by Essex county council. Its education SSA for this year is £497 million, an increase of £27 million over 1997–98, after taking account of reorganisation and the abolition of the wasteful nursery voucher scheme.

On 16 April, my right hon. Friend the Secretary of State for Education and Employment announced that Essex will receive grant totalling more than £2.5 million from the new deal for schools this year. Essex county council's allocation from the standards fund will be more than £8 million this year, supporting our national literacy strategy, the national grid for learning and a wide range of other high priorities for improving education in Essex. All in all, Essex is receiving a substantial boost from the Government in the resources available to it for education.

The Government have played their part by making education their top priority. We believe that all the other partners in education, including local education authorities, should do the same. As hon. Members will know, we made it clear to all local education authorities that we expected the priority that the Government have given to education to be reflected in their education budgets. In July, my right hon. Friend the Chancellor of the Exchequer made it clear that the extra money for education should go to education, and my right hon. Friend the Secretary of State for Education and Employment wrote to the leaders of all local education authorities last December to reinforce the point.

I am glad to say that most LEAs seem to have joined the Government in giving priority to education. That is good news for schools, parents and, most of all, schoolchildren. However, I am afraid that Essex does not seem to consider that education should be at the top of its list of priorities. Despite the fact that its education SSA has been increased by £27 million this year, I understand that Essex plans cuts in education spending of £5.9 million. Neither the Government nor the people of Essex can be happy with that decision. It does not reflect the people's priorities of education, education, education, for which the Government received an overwhelming mandate last May.

Mr. Bob Russell (Colchester)

Not in Essex, they did not.

Mr. Raynsford

I can tell the hon. Gentleman, who has just made an intemperate intervention from a sedentary position, that the Government did receive a considerable endorsement from the people of Essex last May. He should be rather more thoughtful about the results of that election, which swept this Government to power with representation in all parts of the country, including his county. If he cannot remember it, I suggest that he goes to Basildon, which used to be represented by the hon. Member for Southend, West, who thought it was Conservative territory. It is now a further clear example of the Labour party's advances in Essex.

Mr. Russell

Colchester is a Liberal Democrat seat.

Mr. Raynsford

The hon. Gentleman should know better. He clearly has a great deal to learn.

I accept and support the principle that local decisions should be taken locally—

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 seventeen minutes to Eleven o'clock.