HL Deb 14 February 1984 vol 448 cc134-43

3.10 p.m.

The Earl of Swinton

My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Corn m ittee.—(The Earl of Swinton.)

On Question, Motion agreed to.

House in Committee accordingly.

(The LORD ABERDARE in the Chair)

Clause 1 [Education support grants]:

Baroness David moved Amendment No. 1: Page 1, line 9, at end insert—(", which shall be additional to, and shall not affect the total of, Rate Support Grants payable to local authorities under Part VI of the Local Government, Planning and Land Act 1980.")

The noble Baroness said: Noble Lords will see that this amendment is supported by all sides of the Committee. Names from every party are supporting it. This reflects the Second Reading debate when there was anxiety on the subject of whether the money that was to be used for the grant was to be new money or whether it was to be taken from the local authorities' share of the rate support grant. The aim of the amendment is to ensure that new money is used for these grants.

There is one major feature of the Bill to which we want to press objection. This may be called the "additionality" point; that is, the fact that the Bill provides that the money to finance the new education support grant is to be not new money given by the Exchequer to certain authorities but money subtracted from the total of rate support grant, from all local authorities, and distributed to a few. In other words, there is to be a redistribution of money from all authorities under the rate support grant distribution formula in favour of a few authorities fortunate enough to attract the attention of the Secretary of State with new projects. The totality of Peters will be robbed to pay a few favoured Pauls. In short, the objection is not to the introduction of a new specific grant as such—although, admittedly, some local authorities have never particularly liked them—but rather, in Sir Keith Joseph's own words, to the redeployment of money, although only at the margins, at his whim. He should, indeed, be free to back his own judgment with his own money but not with money taken from that destined for the totality of local authorities for the support of their operations as a whole.

Some of the items listed by the Secretary of State on Second Reading in another place as suitable candidates for ESGs show the absurdity of diverting rate support grant money to education support grants. For example, he envisages using education support grants to promote the spread of the good practice of providing a rich and stimulating curriculum and environment in primary schools in both rural and inner-city areas. It is, surely, highly invidious to envisage taking money from all education authorities and giving it to one or two to be used in this way for the spreading of good practice, whether simply in their own areas or generally. What we are aiming at is to exclude expenditure supported by education support grant from the total of relevant expenditure used for the calculation of rate support grant. We want these grants to be treated in the same way as the grant towards mandatory awards.

Local government has had knock after knock. The percentage of the grant paid by central government has been repeatedly decreased. In 1982–83 it was 56.1 per cent. In 1983–84 it was 52.8 per cent. In 1984–85 it was 51.9 per cent. That means that if services are to be kept up more must come from the rates. Then we had the announcement of the TVEI (Technical and Vocational Education Initiative) which meant the MSC and the Department of Employment encroaching on the preserves of the local education authorities. Only the fact that this was funded 100 per cent. from outside made them accept it. We now have this Bill taking.£47 million from the education part of the rate support grant which may mean a little more money for some authorities, although they themselves will have to contribute a proportion, but much less for most.

The rate capping Bill is going through another place and that is another infringement on the powers of local authorities. Even since the Second Reading debate on this Bill in this House there has been the White Paper Training for Jobs which will take £155 million from the local authorities in 1985–86, the year that this Bill also comes into force, and £200 million in 1986–87.

Yesterday I received a letter from the chief education officer of my own county in which he told me what he thought about this latest move. I shall quote just a little from it. He said: The White Paper"— that is, Training for Jobs— has really left us pretty well speechless. There are so many objectionable aspects to it: —no consultation, of course, with the LEAs; —another massive incursion by central Government into local government's province; —a slap in the face for both colleges and employers I should have thought: if the further education colleges' advisory committees have not been able to develop a rapport between colleges and local industry it's hard to think what might; —the thought that our local MSC man, based in Luton, knows as much as the colleges in, for example, Peterborough or Wisbech what local firms want is ludicrous". He goes on: But for me the overwhelming effect has been one of yet another piece of centralization, this time almost breathtakingly cynical in its failure at any pretence of consultation. At C.L.E.A. in the summer we had David Young professing his commitment to 'partnership'; then Sir Keith Joseph saying exactly the same thing the next day"— and at Sheffield more recently— his new permanent secretary, David Hancock, has been preaching the same message during the last few weeks, and now this. So we are not best pleased! Could not the Government think again about this Bill and new money? They can find an extra £7 million, as the noble Earl who is to reply told us two weeks ago, for the assisted places scheme next year, bringing the total cost of that up to £23.5 million. As a gesture of good will and conciliation towards the local authorities, could not the Government provide the £30 million that is their side of the expenditure they want for these new projects?

I repeat, we are not against specific grants with the Secretary of State having a say in innovation and development of the curriculum, but it should be his money and not that of the local education authorities. I beg to move.

Lord Alexander of Potterhill

I rise to oppose this amendment. I was refreshing my memory this morning by reading a little book which was published in 1957 entitled, The Threat to Education. That threat was the introduction of block grant, and there is overwhelming evidence that the threat has been fulfilled over the years. As to the use of new money, may I remind your Lordships of what I said on Second Reading. When I managed to get the agreement of the then Secretary of State to put money into the rate support grant for the in-service training of teachers the money was not spent on the in-service training of teachers. As a result, because this was a matter of importance, the Government had to produce grant additional to that put into the rate support grant to provide for the in-service training of teachers.

What is now proposed is merely the repetition of a very old story. Whether or not all monies in rate support grant are put in that grant for the purposes of education, the local authority must have the right to decide whether or not to bother spending it on education. In my opinion, this amendment, together with the whole concept of block support grant, is virtually the tearing up of the Education Act of 1944.

3.20 p.m.

Baroness Cox

I should like to oppose this amendment because it runs contrary to a central feature of the Bill, which is precisely, as has been admitted, not to increase expenditure on education by making new money available but by redeployment at the margin. I for a number of reasons suggest that it is entirely justifiable not to make new money available. First, I should like to remind your Lordships that in real terms more is being spent now on education than ever before in the history of this country. More is being spent on a per capita basis in education, and other indices of provision such as pupil-teacher ratio are more favourable, if one calls it favourable, as the recent DES statistical bulletin of 1984 has pointed out. So education is faring fairly well from the point of view of resource provision, and although one would always like to see more money being made available for those issues on which one cares very deeply, education is one area where, in terms of demographic trends, demand is going to be diminishing over the coming years.

For example, of the number of pupils entering secondary education, 700,000 came into secondary schools at the beginning of the last school year. That number is going to drop to 500,000 during the 1980s. If one thinks of competition for scarce resources from the gross national product, education in demographic terms is in sharp contrast to, say, health care, where the demographic trends are such that inevitably there is going to be a real increase in demand for resources.

I should like to make one additional point concerning the thinking behind the Bill. As I pointed out at Second Reading, the Government could have behaved differently and presented their case in a different way. For example, they could have set the rate support grant at a very slightly lower level. After all, we are talking about only one-half of 1 per cent. It could have been imperceptible. Then the Government could have announced as a bonus this extra money in the form of education support grants. Presumably that would have been received with wide acclaim and would not have caused the opposition which we are hearing today. But the Government chose to be more honest. They chose to put their thinking in the open for debate, and I think that that principle of honesty is to be commended.

Viscount Ridley

I put my name to this amendment and I should like on behalf of the Association of the County Councils to support everything that the noble Baroness, Lady David, has said. They feel strongly on these matters. I said all that I have to say on Second Reading. I spoke then about the thin end of the wedge, but we have now seen a thicker end of the wedge in the White Paper called Training Pr Jobs, which is what we forecast.

I hope the noble Baroness will not be tempted to lead us into the lobbies against the Government on this occasion. The real reason for that is that an amendment of this kind is almost meaningless. The rate support grant is calculated on quite a different basis every year. Nothing is the same from one year to the next, and I feel that all one can reasonably ask is that the Government, in calculating next year's rate support grant, should take note of the feeling that this Bill is taking away a certain amount of resources—whatever the noble Baroness may have said, that is a fact—from the less enterprising authorities and giving it to perhaps the most enterprising. I do not think this should be done without much more consultation with education authorities than has happened so far. I hope very much that the Government will consider how they can meet the local education authorities and their genuine criticisms and fears under this Bill.

Lord Kilmarnock

I rise to support the noble Baroness. Perhaps I should explain that I added my name to her amendment after I had put down a similar amendment which is included on the Marshalled List at No. 6. I understand from the instruction we have had from the Government that we may debate these two amendments together. I am inclined to prefer the amendment which the noble Baroness and her friends have put down to that put down in the names of my noble friend Lord Beaumont of Whitley and myself, because it is slightly more specific.

I am afraid I must take issue with the noble Baroness, Lady Cox. One understands the point about the demographic trend among the younger generation as opposed to the demographic trend among older people. At the same time, one has to take account of the extreme difficulty some local authorities are having at the moment in maintaining their buildings, in providing books for some of their classes, in keeping up their remedial teaching and in a great number of other activities which they are legally required to carry out under the 1944 Act. I think it is a little too simple to say that there are more and more older people in our society and temporarily we have got a slight dip in the younger generation. Incidentally, I believe that people who have studied these statistics see a demographic surge in primary school attendance somewhere towards the middle of this decade, which is not very far off.

A local authority which is in penalty could be severely penalised should it apply for and receive an education support grant and attempt to find the extra 30 per cent. of the expenditure. It seems to me that this amendment seeks to remove this threat and a similar threat facing authorities on the borders of penalty. It is a modest measure which was supported on Second Reading in another place by Mr. David Madel, a Tory Back-Bencher. It would cost the Government very little and it would introduce a greater element of fairness into the system, allowing LEAs to apply for grants on the merit of their ideas and untrammelled by the very obscure mechanics of local government finance. To see the obscurity of these mechanics, one has only got to look at Section 6 and Schedule 10 of the Local Government (Planning and Land) Act to get some idea of what they are.

At Second Reading my noble friend Lord Beaumont of Whitley and I supported the idea of new money. It is not a great deal of new money, but I think I can speak for him in saying that we are still of that opinion. If he disagrees, he will tell your Lordships so. On those grounds I support the amendment. I also support it because my noble kinsman Lord Ridley has put his name to it. He raised a technical point about whether it was strictly applicable in the form in which it stands, but I do not think that that really affects the principle. Therefore on these Benches we support this amendment, and when we come to Amendment No. 6 I shall not move it.

Lord Stewart of Fulham

I should like to support the amendment moved by my noble friend Lady David. Regarding the comments made by Lord Alexander of Potterhill, it seems to me that the argument as between specific grant and block grant is not in issue here. It has been in issue in other matters. We are all agreed—at least, we on this side are prepared to accept—that there should be the specific grant that the Government propose to make for certain educational purposes, though we could wish the Government were more precise in their own mind as to which particular educational purposes they propose to help. What is in issue is whether that help should be given by the Government, who claim that these purposes are so important, or whether it should be obtained by a general whip-round among the other local authorities. We object to that because, as the noble Lord, Lord Kilmarnock, has pointed out, at present a number of local authorities—whatever the noble Baroness, Lady Cox, may say—are very hard up.

One can be a bit deceived by the demographic argument about education. When the total number of persons in the schools diminishes, it does not immediately and proportionately reduce the cost of running a school. Indeed, in the first instance it can create a considerable number of problems, and that is what many local authorities are facing at the moment. What we object to is that at a time when they are already hard up many local education authorities should be required to pay into the pool for the particular purposes favoured by the Government, when the Government are still not very clear in their minds as to what are the purposes.

We have a number of amendments to be dealt with later suggesting what the purposes might be. Those amendments are necessary because the Government themselves have been so uncertain and at times so vague as to the purposes for which they want the money. What we say is that if the Government really believe that this kind of specific grant is of value they should do two things: they should be a little more specific about the purposes, and they should themselves be prepared to provide the money and not scrape it off the local authorities.

The Earl of Swinton

Perhaps I may first of all answer the last point raised by the noble Lord, Lord Stewart of Fulham. The whole object of the consultations that are taking place and which it is hoped will take place under the Bill—and my right honourable friend has already had three meetings with the local authorities' associations—is to try to reach an agreement on the purposes for which the money should be used under the Bill. There are so many purposes. We shall later come to an amendment which, if approved, would commit all the money straight away. There is no shortage of purposes at all.

In support of my noble friend Lady Cox on the question of the Government's achievement in education generally, I should like to say that the age participation rate of those aged under five has risen from just over 37 per cent. in January 1979 to 40 per cent. in January 1983. Expenditure per pupil in real terms is at record levels, having risen between 1978–79 and 1983–84 by over 10 per cent. in primary schools and by 5 per cent. in secondary schools. The pupil/teacher ratio has improved from 18.9 to one in January 1979 to 18.1 to one in January 1983, and now stands at its best ever level. Despite the fall in overall pupil numbers, those staying on beyond compulsory school age have increased from 280,000 in January 1979 to 346,000 in January 1983—an increase in the age participation rate of nearly three percentage points. I could go on.

However, in answering this particular amendment, perhaps I may start with what might be rather a technical argument. It is one that was mentioned by my noble friend Lord Ridley, who I think spoke perhaps rather half-heartedly in support of the amendment. I am sure that the Committee will be aware that the Exchequer grants paid to local authorities fall into two broad categories—specific and supplementary grants, of which the proposed education support grant would be one, and rate support grants, chiefly the block grant. Each year the Government set a figure for the total of Exchequer grants; the accounts to be paid in specific grants are deducted from that total; and the balance represents the amount available for rate support grants.

The intention of this amendment would be that the total Exchequer grant would be increased to take account of education support grants, so that the sum remaining for rate support grants was unaltered. That implies that the total of Exchequer grant is built up piecemeal, adding a bit here for one grant, and a bit there for another. That is just not the way that the Exchequer grant is determined; nor, I imagine, has it ever been so in the past. The total amount of Exchequer grant is fixed by reference to the Government's plans for total local authority expenditure, and by reference to the Government's judgment of how much of that expenditure should be funded by the taxpayer in the year in question.

That is a matter of fact. It is not a question of, as it were, just collecting all the grants, putting them together, and saying that we are going to give a little more. As my noble friend Lady Cox so rightly said, we could have done that, but it would have been dishonest because it would simply not have been the way in which any other grants are handled.

These matters have not vet been settled for 1985–86—the first year in which education support grants might be paid if the present Bill is enacted. The Government's plans for expenditure by local authorities in 1985–86 will be set out in the public expenditure White Paper which will be published on Thursday. The decison about the proportion of that expenditure to be met by aggregate Exchequer grant for 1985–86 will not be made until next autumn. The Government will take into account a wide range of factors, including the expenditure to be supported by specific grants, before making a decision about the level of grant for 1985–86. In arriving at their plans for expenditure in 1985–86, the Government appreciate the need both for continuing restraint in public expenditure and for the plans for expenditure within different areas within education to be consistent with the Government's educational policies.

Much was made by the noble Baroness, Lady David, about new money, and at one time I think that she even referred to it as Sir Keith Joseph spending his own money. I really must argue most strongly that this is not a question of the Government seeking to take away the local authorities' money: that is just not the case. We are not discussing new money as though we could produce new money. We are not discussing Sir Keith Joseph's own money as though either he was very rich himself and could provide a little from his own pocket, or he had somewhere in his office a little float which he could empty. We are discussing the payment of taxpayers' money, which I think means your Lordships' money and my money as much as anyone else's, voted in another place by the Secretary of State. I should remind the Committee that in the present case we are discussing grant of, at most £30 million to £35 million, compared with total specific grants of about £2,365 million.

I think that it was my noble friend Lady Cox who said that we could of course always do with some more money. I should be delighted to see more money. If we lived in a land flowing with milk and honey, we should all be able to have more money, but I suppose that we should then all have to go round wearing gumboots.

Having said all that, I must repeat the points which I made during the debate on the Second Reading. Education support grants in themselves would not be intended to lead to increased overall levels of expenditure. Their purpose is to provide a limited influence over the redeployment of resources, and consequently I must ask the Committee to reject the amendment.

Baroness David

Some of the points made by the noble Baroness, Lady Cox, and the noble Lord, Lord Alexander of Potterhill, have I think been answered very well by the noble Lords, Lord Kilmarnock and Lord Stewart. So far as the expenditure per pupil is concerned, I believe that this gives an unreal picture, because when there are falling rolls probably as many teachers have to remain, and so the pupil/teacher ratio is not really a fair judgment of the money that is being spent altogether.

The fact is that there is shortage of money in the education system; the HMI reports certainly bear that out. Mention has been made of the complaints from the local authorities about their inability to keep up buildings and to have remedial teachers, and those points, as well as many others, show that they are very short of money.

With regard to the argument as to whether or not the money is being taken from the local authorities, I would point out that Clause 2 quite clearly refers to 0.5 per cent. of the amount determined by the Secretary of State for the year in accordance with the clause. That has been worked out as a specific sum of money; and it will be £47 million this year.

What is absolutely clear is that local authorities are extremely resentful about the Bill, and it is they who have to work the education system. It seems to me excessively foolish that the Government should not be working in partnership, though they said that they are going to do that. The Government are making the local authorities angry and resentful and are making their task much more difficult. We want good will, but we are not getting it from the Bill. So, despite the noble Viscount wishing me not to press the amendment, I fear that I shall have to do so.

3.39 p.m.

On Question, Whether the said amendment (No. 1) shall he agreed to?

Their Lordships divided: Contents, 99; Not-Contents 137.

DIVISION NO. 1
CONTENTS
Airedale, L. Llewelyn-Davies of Hastoe, B
Amherst, E. Lockwood, B.
Ardwick, L. McNair, L.
Attlee, E. Mais, L.
Banks, L. Mayhew, L.
Barnett, L. Milford, L.
Beaumont of Whitley, L. Mishcon, L.
Birk, B. Molloy, L.
Bishopston, L. [Teller.] Morris of Grasmere, L.
Blyton, L. Mulley, L.
Brockway, L. Nicol, B.
Bruce of Donington, L. Oram, L.
Bullock, L. Peart, L.
Burton of Coventry, B. Ponsonby of Shulbrede, L. [Teller.]
Caradon, L.
Cledwyn of Penrhos, L. Prys-Davies, L.
Collison, L. Raglan, L.
Cooper of Stockton Heath, L. Rathcreedan, L.
David, B. Rhodes, L.
Davies of Penrhys, L. Ridley, V.
Dean of Beswick, L. Rochester, L.
Denington, B. Ross of Marnock, L.
Diamond, L. Seear, B.
Donaldson of Kingsbridge, L. Sefton of Garston, L.
Elwyn-Jones, L. Shinwell, L.
Ennals, L. Simon, V.
Ewart-Biggs, B. Soper, L.
Fisher of Rednal, B. Stallard, L.
Gaitskell, B. Stedman, B.
Gladwyn, L. Stewart of Alvechurch, B.
Glenamara, L. Stewart of Fulham, L.
Gormley, L. Stoddart of Swindon, L.
Graham of Edmonton, L. Stone, L.
Grey, E. Strabolgi, L.
Hale, L. Taylor of Blackburn, L.
Hampton, L. Taylor of Gryfe, L.
Hatch of Lusby, L. Taylor of Mansfield, L.
Houghton of Sowerby, L. Tordoff, L.
Hughes, L. Underhill, L.
Hunt, L. Wallace of Coslany, L.
Irving of Dartford, L. Walston, L.
Jacques, L. Whaddon, L.
Jeger, B. White, B.
Jenkins of Putney, L. Wigoder, L.
John-Mackie, L. Wilson of Landside, L.
Kagan, L. Winchilsea and Nottingham, E.
Kearton, L.
Kennet, L. Winstanley, L.
Kilmarnock, L. Winterbottom, L.
Kirkhill, L. Wootton of Abinger, B.
Leatherland, L.
NOT-CONTENTS
Alexander of Potterhill, L. Constantine of Stanmore, L.
Alexander of Tunis, E. Cork and Orrery, E.
Allerton, L. Cottesloe, L.
Alport, L. Cox, B.
Ampthill, L. Crawshaw, L.
Auckland, L. Cullen of Ashbourne, L.
Avon, E. Daventry, V.
Bauer, L. Davidson, V.
Belhaven and Stenton, L. De Freyne, L.
Bellwin, L. De La Warr, E.
Belstead, L. Denham, L. [Teller.]
Bessborough, E. Drumalbyn, L.
Boyd-Carpenter, L. Dundonald, E.
Bruce-Gardyne, L. Effingham, E.
Caccia, L. Ellenborough, L.
Campbell of Croy, L. Elliot of Harwood, B.
Carnegy of Lour, B. Elphinstone, L.
Chelmer, L. Elton, L.
Cholmondeley, M. Enniskillen, E.
Cockfield, L. Erne, E.
Faithfull, B. Merrivale, L.
Fanshawe of Richmond, L. Mersey, V.
Fraser of Kilmorack, L. Milverton, L.
Gainford, L. Molson, L.
Gisborough, L. Morris, L.
Glanusk, L. Mottistone, L.
Glasgow, E. Mowbray and Stourton, L
Glenarthur, L. Murton of Lindisfarne, L.
Glenkinglas, L. Northchurch, B.
Gormanston, V. Norwich, Bp.
Gowrie, E. Nugent of Guildford, L.
Greenway, L. Orr-Ewing, L.
Gridley, L. Pender, L.
Grimthorpe, L. Peyton of Yeovil, L.
Hailsham of Saint Marylebone, L. Porritt, L.
Radnor, E.
Halsbury, E. Rankeillour, L.
Hampden, V. Rodney, L.
Henley, L. Romney, E.
Hives, L. St. Aldwyn, E.
Holderness, L. St. Davids, V.
Home of the Hirsel, L. Saint Oswald, L.
Hornsby-Smith, B. Saltoun, Ly.
Hylton-Foster, B. Sandys, L.
Ilchester, E. Savile, L.
Kaberry of Adel, L. Seebohm, L.
Killearn, L. Sempill, Ly.
Kilmany, L. Sharples, B.
Kimberley, E. Sherfield, L.
Kinloss, Ly. Skelmersdale, L.
Kinnaird, L. Soames, L.
Lane-Fox, B. Somers, L.
Lauderdale, E. Spens, L.
Lawrence, L. Stodart of Leaston, L.
Long, V. [Teller.] Strathcarron, L.
Loudoun, C. Sudeley, L.
Lovat, L. Suffield. L.
Lucas of Chilworth, L. Swinton, E.
Luke, L. Terrington, L.
Lyell, L. Thorneycroft, L.
McAlpine of West Green, L. Tranmire, L.
McFadzean, L. Trumpington, B.
Mansfield, E. Vaux of Harrowden, L.
Mar, C. Vickers, B.
Margadale, L. Vivian, L.
Marley, L. Westbury, L.
Marshall of Leeds, L. Whitelaw, V.
Massereene and Ferrard, V. Wynford, L.
Melville, V. Young, B.

Resolved in the negative, to accordingly.

Baroness Trumpington

House do now resume.

Moved accordingly, an agreed to.

House resumed.