Rate Support Grant

Part of the debate – in the House of Commons am 12:00 am ar 20 Rhagfyr 1973.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Mr Arthur Jones Mr Arthur Jones , Northamptonshire South 12:00, 20 Rhagfyr 1973

I want to take this occasion to recall the contributions made by our late friend and colleague Martin Maddan to our debates on rate support grant orders. He specialised for many years in local government finance. He became an authority on the subject. We always looked forward to the contributions he made on occasions such as this. He brought to our deliberations extensive knowledge and the positive approach which he had to many subjects which came to his notice as a Member of this House. I am sure that I speak for Members on both sides of the House in paying recognition to the great service he gave to the House

I always look forward to these debates on rate support grant orders. I sometimes wonder why I do, but I always find something intensively interesting in the comments made on either side of the Chamber on these occasions, and I look back to the debates we had in the previous year and the year before that. It is interesting to see how the tale unfolds. On previous occasions my right hon. Friend has apologised for the fact that it was the third time he had to have an amending order to a rate support grant proposition. He is getting conditioned to having to do that, but we have not had an apology this year.

I am reminded that in 1968 the then Socialist Government were facing a serious economic situation but declined to make an increase order, and that meant that the local authorities had to bear the increased costs themselves. I make no comparison between the circumstances then and those in which we are today, but the fact I have just recalled shows between the one Government and the other a slight difference of approach.

I very much welcomed my right hon. Friend's reference to the White Paper. He referred to it in Committee on the Local Government Bill. I understand why it has had to be delayed. I know that it will form the basis of useful discussion on a subsequent occasion.

The rising degree of local government expenditure expressed as a proportion of total public expenditure has been of increasing concern to both sides of the House in recent years. That proportion has risen well beyond that of the Government. We have had for some time to consider ways and means by which local government expenditure can be contained. Although I would not express it in such harsh terms as did the hon. Member for Birmingham, Small Heath (Mr. Denis Howell), I think that my right hon. Friend the Chancellor, in that remark yesterday, was unfair to local government as a whole. The remark was not made in the context of the real problem of the extent of local government responsibility and of the degree to which local government expenditure is tied to Government decisions.

As the debate has continued this evening I have looked at the various services represented in the orders we are discussing. There is a series of substantial expenditures outside the responsibility of the Department to which my right hon. Friend the Minister for Local Government belongs. One wonders to what extent Government decisions are coordinated when demands are made on local government and when extensions and improvement of local government services are sought. Looking at the prob- lem in that context, I for one am conscious that local government is at a very grave disadvantage when so many of its decisions are taken by Government Departments, each, understandably, concerned with the extension and improvement of the standards of the services for which it is responsible. One is bound in that context to think of the overall effect on local government expenditure.

There is no doubt that, following the Redcliffe-Maud proposals in the early 1960's, local government in the main has introduced a greater degree of managerial capacity in the co-ordination of departments than there used to be. What it has done is to break down the departmentalism that we used to have extensively in local government and brought it together under a management group of chief officers representing the whole spectrum of services under local government control. In this way we have introduced managerial disciplines. One questions the extent to which this is possible in the central Government, with their tremendous number of Departments.

I much welcomed the centralisation of three earlier Ministries and their joining together within the Department of the Environment. We have seen substantial economies resulting in expenditure for which the Department is responsible in the new circumstances. But when one considers the pressures from other Departments—for example health and education—and the continuing demands for extension of services, although supported sometimes by large grants but generally under the rate support grant arrangements which provide 60 per cent. of the expenditure, one realises that tremendous sums of money are still to be found in the remaining 40 per cent.

In referring to central Government the criticism I direct is in no way a party point, but under successive administrations we have seen expectations created for local government services beyond the capacity of the country to foot the bill. This is the basis of a substantial degree of the problem in present discontents about public expenditure activities, whether by central or by local Government. Although we have the rate support grant of 60 per cent., it is a compounding of local government expenditure when the demands of central Departments are added to the proper expectations and aims of the locally-elected representatives in local government. To a great extent, the matter is open-ended in relation to local government finance.

Speaking of the capital accounts yesterday my right hon. Friend the Chancellor of the Exchequer said: As for capital expenditure, the Government have effective control through the machinery of loan sanctions, and this will be adjusted so as to achieve the required reductions in expenditure."—[OFFICIAL REPORT, 19th December 1973; Vol. 866, c. 1469.] If I thought that it were possible for the Ministers in all of these Departments to take the decisions on loan sanctions, I could see a way of controlling the issue of loan sanctions. I am speaking only from my own limited knowledge. But I feel that so many loan sanctions are passed by the Department itself and do not come from a political decision at all that when it has the proper departmental wish to extend its services, with the decision on loan sanctions coming back to it for adjudication and not to the departmental Ministers, we see that the question is open-ended. This also applies to the extension of services on current expenditure.

I hope that we shall have my right hon. Friend's assurance that the necessary political decisions in containing expenditures will be taken and that it will be found possible to make them effective. If decisions are left to departmental adjudication it will not be possible to contain the capital expenditure, which is so clearly necessary. I do not see this as just a requirement of the emergency situation with which we are faced. I have continually advocated that there should be a containment of local government expenditure.

I know that one is at once asked which services one would contain or curtail. It is a fair question, and one would need to look at each case on its merits. Last year, when I suggested that the library services should be carefully looked at, the hon. Member for Birmingham, Small Heath (Mr. Denis Howell) made some inappropriate interjection. But there are many ways in which the expectations which we have had are unrealisable in the short, medium and long term, and we must give these matters the political attention they require.

It is in that context that I support the increase orders, but I hope that, when we have the promised White Paper, we shall see the Government's determination to bring a proper measure of decision taking into local government services and ensure that their expansion and their extension shall be seen to be properly within the compass of the ability of the country to foot the bill.