To ask the Secretary of State for the Environment whether it his intention to continue to take firm measures next year to protect local taxpayers from overspending by local authorities.

Yes. We intend shortly to announce for 1992–93 provisional capping criteria which will be in a similar format to the criteria adopted for 1991–92.

I thank my hon. Friend for that answer. However, is he aware that when a finance system is changed, it results not simply in the headline-grabbing activities of a few local authorities, but in excessive spending by many local authorities? Therefore, if he wants to ensure that the people of this country receive value for money for their local authority contributions, those controls should apply throughout the country and not just to the extremes.

I entirely agree with my hon. Friend. When the community charge was introduced, many local authorities took the opportunity in the upheaval to increase their spending. I am determined that, when we change the system again, no such opportunity will be provided.

Will the Minister end the rhetoric about local government and begin to address the real problems in our towns and cities which, since the Government came to power, have experienced a reduction in spending to a point at which they are now compelled to sell off the heritage of the people of those cities and towns? When will the Government realise that they are presiding over the downfall of our towns and cities?

The future of Liverpool—if that is what the hon. Gentleman is referring to—is now in rather better hands after some of his friends from the Labour party lost control of Liverpool city council. The prospects for Liverpool have been vastly increased by the City Challenge announced by my right hon. Friend which, I am pleased to say, Liverpool has embraced with enthusiasm.

What protection will my hon. Friend offer to local taxpayers of councils such as Warrington and Halton which award themselves contracts far in excess of private sector tenders?

The measures that we announced yesterday in the Local Government Bill and in the consultation document that we issued at the same time show our determination to extend compulsory competitive tendering and to make sure that there is a more level playing field so that there will be fair play between direct service organisations and outside contractors bidding for local authority work. I hope that that is reassuring to my hon. Friend.

Given that the year-on-year increase in central funding for local authorities next year is only 4·7 per cent., and given that the Chancellor is going to announce nothing this afternoon for the education of children in schools or the care of the elderly, children or the disabled in social services, does the Minister agree with the Secretary of State's comment on Radio 4 on 20 October that there are no cuts in local authority services and will be no cuts next year? Does the Minister agree that the Secretary of State knows perfectly well that there are cuts and will be cuts and therefore is a knave, or is he simply a fool in making such a statement when people's lives are being affected day in and day out by the cuts in education and social services which the Government have inflicted on them?

Despite the hon. Gentleman's colourful language, the figures and the arithmetic are against him. We are increasing total spending next year by 7·2 per cent., and the grant that is being made available by central Government is also increasing by 7·2 per cent. The Government are able to increase funding by more than the rate of inflation, and that is made possible only by the economic policies being pursued by my right hon. Friend the Chancellor.