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6.46 pm
Mr. James Wallace (Orkney and Shetland): I was astounded to hear the right hon. Member for Dumfries (Sir H. Monro) say that we are talking about mythical cuts to wish lists. When schools close, real schools are involved; when staff are laid off, real people lose their jobs. The cuts are real, and they will be laid at the door of the Conservative Government.
It may well be that local authorities wish to spend more on repair and maintenance of school buildings. When there is a £500 million backlog of school building repair and maintenance work, it is not unreasonable that they should wish our children to be taught in decent surroundings. That may be a cut to a wish, but it has real effects on the young people who have to study in those buildings.
This debate takes place against a background of cuts in services, proposed increases in council tax and staffing reductions. Although the Minister has been trotting out the same line week after week and it has been clearly shown that his figures are a gloss, he has no new song to sing.
The Minister says that a £148 million increase has been given to local authorities. Of that, £40 million is the cost of reorganisation. When the Secretary of State and the Minister say that they have managed to get £26.5 million more than the equivalent under the Barnett formula that applies to local government in England, it ignores the fact that that sum is £13.5 million less than they say is necessary for local government reorganisation. There has been no local government reorganisation in England and Wales except for two or three councils in England. Some £39.5 million is being transferred from social security to care in the community. They want a£44 million increase for the police, a £13 million increase for fire services and £500,000 for the district courts. If we add all that up, we are left with £11 million for everything else. The Government are supposed to be keen on education. If we assume that education spending represents half the overall budget, they have provided an extra £5 million for the whole of Scotland.
Mrs. Fyfe:
Is it not incredible that, today of all days, the Government should announce an increase of£2.12 million, or 17 per cent., for the assisted places scheme, when council education is deteriorating across Scotland?
Mr. Wallace:
The people of Scotland will note that a substantial sum is being given to a relatively small number of pupils, when the vast majority are suffering from education cuts.
In the highlands and islands, both the chief constable and the chief firemaster believe that even the amount that the Government think should be spent will not provide adequate services. The Government blame local authorities, but the people of Scotland have seen through that. The Government have blamed the outgoing authorities for spending reserves, although those authorities have often been encouraged to do so--and, in any event, that would be an explanation of, rather than a solution to, the problems faced by the new authorities.
The Minister did not deal properly with the point that I raised at Question Time. I salute the islands authorities for managing to control council tax increases. In some cases, they merely kept pace with inflation; the Western Isles increase was only 5 per cent. Many cuts in services or increases in charges have been made, affecting care centres in the islands. Unlike mainland Scotland, however, the islands have not had to contend with reorganisation. That is the cause of a substantial proportion of the council tax increases--£40 million, we hear.
According to the explanatory and financial memorandum to the Local Government etc. (Scotland) Bill, enacted in 1994, the transitional costs were expected to be between £120 million and £196 million, and would be offset by on-going savings of between £22 million and £66 million per annum. I accept that not all the transitional costs will be incurred in the first year, but I think it fair to say that they will be front-loaded in the first year. The savings will come later. Even on the basis of the figures given by the Government at the time they published the Bill, £40 million is wholly inadequate to meet local authorities' costs.
I suspect that, privately, the Secretary of State is furious with his predecessor, who persuaded the Treasury--not that it probably needed much persuasion; no doubt it clapped its hands in glee--that the changes in Scottish local government could be funded from the block grant. That defied history: I do not think that savings have ever been possible in a local government change.
The Secretary of State challenges the Opposition parties to say where savings can be made in the block grant. At the weekend, he said in a speech at Banchory, quoted in the Aberdeen Press and Journal,
They did not want the reorganisation; it was forced on them. Having obliged councils to undergo reorganisation, the Government should do what they did following the debacles of the poll tax and the revaluation of 1985.
Mr. Andrew Welsh (Angus, East):
I have just four minutes in which to speak. I shall do so as briefly as I can, so that others can speak as well. I do not wish to speak briefly, however; there is much to be said.
The debate may be an annual ritual, but this one is different. In the past, there has been much talk of cuts, but these cuts are for real, and will affect local authorities
in the future. Cuts that began in 1976, underDenis Healey, have now run their course, but, as I have said, these cuts are for real, and once they have been implemented there will be no going back on them. The Government's 2.6 per cent. increase for local authorities is really only a 1 per cent. increase; given inflation, it represents a cut. We shall end up with the worst of all possible worlds. The council tax will inevitably rise, as will local charges, and services will be reduced.
Even a financially prudent authority such as Angus could not remain within the Government's cap--even with a standstill budget. The Government propose to take £9 million out of its local economy, which will increase unemployment, reduce services and affect local businesses. The policy on capital receipts and capital from revenue, which has halved the amount that the authority would otherwise receive, will inevitably have that result, which will be mirrored throughout the country.
Central Government now dominate local authorities, which are not allowed to set their own budgets or determine their policies according to local need. Central Government determine their priorities for them. The Secretary of State has told them which core services will be given more resources; within a fixed budget, that means cuts in every other service.
There is no new money for the police, fire services, education or any other service. The Government have financed those services by taking 4.9 per cent. out of every other service budget. That means that every other council service budget will be cut not just by the Secretary of State's 4.39 per cent., but by an additional 3 per cent. for inflation. The real cuts amount to some 7.39 per cent.
The Government's way of running local authorities is to force the departments dealing with social work, libraries, roads, infrastructure and other services to cut 7.39 per cent. from their budgets. All that is deliberate, calculated Conservative Government policy. Central Government have set capping and revenue levels, and determined revenue spending patterns and priorities. They have set capital levels, capital-from-revenue levels and end use of capital-from-sales revenues. Central Government now run local authorities: there is no longer an independent local democratic service. The Government have a cheek to claim that they are giving local authorities more power.
Central Government now rigidly fix the total amount of local authority revenue, and thereby local services. Every unnecessary school closure, every unnecesary rent rise, every unnecessary increased charge--all the inevitable consequences of the order that we are discussing--will stand firmly at the door of the Conservative party. This is not a budget for Scotland's democratic local authorities; it belongs to the Conservative party.
The Conservatives can run now, but they cannot for ever hide from the electorate. They will surely get their come-uppance when the people of Scotland have the chance to judge them.
Mr. Deputy Speaker (Sir Geoffrey Lofthouse):
I call the Under-Secretary of State for Scotland.
Mr. John Maxton (Glasgow, Cathcart):
On a point of order, Mr. Deputy Speaker.
Mr. George Foulkes (Carrick, Cumnock and Doon Valley):
On a point of order, Mr. Deputy Speaker.
Mr. Kynoch:
With the leave of the House, Mr. Deputy Speaker--[Interruption.]
Mr. Deputy Speaker:
Order. Settle down. The Minister does not need the leave of the House--[Hon. Members: "He does."] Order. I have ruled that he does not.
"Councils are undoubtedly feeling the strain of reorganising themselves".
6.58 pm
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