§ Mr. Ian McCartney (Makerfield)
It gives me great pleasure at this hour, having sat all through the night giving moral support to hon. Members on both sides of the House in a number of interesting debates, to see the end of this marathon sitting ahead. I hope that at the end of the morning's celebrations I shall have been able to shine some chink of light on the matters that I wish to raise with the Under-Secretary.
It is no accident that I raise the issue of Government funding arrangements for fire and civil defence authorities as I am still a member of the Greater Manchester fire and civil defence authority. In the period between abolition and the setting up of the new authority I was a member of the transitional organisation. Since the setting up of the authority I have been the Labour party spokesperson and whip on the authority and as such have been involved in detailed discussions about the running of the authority, both in terms of its policy towards the development of the service and how that service is funded. Interlinked with that, there has been the role of civil defence obligations within the all-purpose authority.
I want to mention three items in the debate. The first item relates to the fire service and the delivery of service by fire fighters. The second item relates to capital allocations and expenditure limitations in the civil defence and the third item relates to the inclusion of fire authorities in the Local Government (No. 2) Bill in respect of the privatisation of certain aspects of the fire service. I do not want to go over all of the ground about the whys and wherefores of abolition.
Much of what I complain about stems from the hurried way in which the Government carried out that operation and failed to take into account the nature of the single purpose bodies they were setting up and the way in which those bodies, not only in the short term but in the long term, have to be funded in a way different from other local government organisations.
The fire and civil defence authorities are all subject to precept limitations under the Local Government Act 1985. This means that the Home Office prescribes the maximum expenditure level—MEL—for each joint authority. The grant entitlement is calculated by reference to grant-related expenditure and other calculators set by the Department of the Environment. The precept raises the difference between those two calculations and the entitlement that flows from the calculations is prescribed as a maximum by the Home Office.
The two target areas have been met by two separate Government Departments. The MELs set by the Home Office, which also provide establishment levels and establishment costs, average about 80 per cent. of the total expenditure. That is important in respect of that high level of investment in manpower when changes take place in expenditure levels and how critical that can be to the service in respect of maximum expenditure levels.
The grant-related expenditure assessment is calculated by the Department of the Environment on a hypothetical assessment of need to spend based on total population, density and fire calls. There is no consistent relationship between those two targets, and the statistics for 1987–88 show unsatisfactory, unexplained discrepancies. For example, the grant-related expenditure assessment as a 914 percentage of maximum expenditure limits for Merseyside is 97 per cent., for West Midlands it is 97 per cent. and it gradually goes down the scale. It is 85 per cent. for London, 84 per cent. for my authority in Greater Manchester, 83 per cent. for Tyne and Wear, 81 per cent. for South Yorkshire, and, at the bottom of the pile, is poor old West Yorkshire. The result of that discrepancy is the loss of block grant for spending at Home Office target levels with consequent increases in precept levels. This year the Merseyside precept is 6.3p in the pound. In West Yorkshire, an authority of a similar size and nature, the precept is 11.59p in the pound. Yet, there is no indication that the standard of fire cover in West Yorkshire is almost twice that on Merseyside. That is the result of the central financing systems. The fire authorities are working to common standards. They are controlled at establishment level by the Home Office and are subject to Her Majesty's inspectors audit. On the face of it there is no justification for the differences and the result is an imposed burden on precept payers in many metropolitan areas.
The absurdity is best demonstrated by the London fire and civil defence authority, which receives no block grant because GREA is so far below maximum expenditure levels. That arises because of totally erroneous assumptions by the Department of the Environment on financial resources available to the authority. I am genuinely hopeful that at the end of this debate the Minister will provide the House with a satisfactory explanation for that wholly unsatisfactory state of affairs.
The effect on Greater Manchester fire and civil defence authority in the past 12 months has been serious. The Home Office set the maximum expenditure limit at £44,232,000. Albeit as a consequence of the Secretary of State for the Environment's indiscretions earlier this year, the redetermination process was suspended and the maximum expenditure limit was eventually converted into the precept level of 9.75p in the pound. However, if the Secretary of State, old Nick as he is commonly known, had got his way, he would have set GREA at £37,241,000. That is £7 million below the Home Office's own assessment of my authority's requirements simply to stand still in the current financial year. If that figure had been imposed on us we would have had drastic cuts in our budget in terms of manpower, ridership factors and in relation to our successful Whelephant operation, which is known throughout the United Kingdom and Europe as the most success attempt to teach children and others in the education process about fire and the prevention of fire. Therefore, an error of judgment by the Secretary of State has prevented us from being paid £7 million less this year than the figure set by the Home Office Minister.
The Association of Metropolitan Authorities has been considering the matter for the past 12 months and on 26 May its sub-committee met to discuss papers prepared by the Home Office and the Department of the Environment addressing the options about the discrepancies on GREA and the Home Office determined expenditure limits for all of the metropolitan fire authorities. The AMA felt that, despite the obvious delay in completing the fire risk areas exercise some one-off proposal should be made to the Home Office for 1988–89 which wouldrecognise the total expenditure resources required by individual authorities in order to meet their statutory functions and support their (Home Office) approved establishment levels;minimise the differences in GREA's and ELs so that the precept levels within the metropolitan areas would be similar 915 and reflect the provision of a (largely) homogeneous service provided to nationally determined standards as monitored by Home Office inspectors.The authority subsequently asked for information from constituent metropolitan fire authorities that would help them in negotiations with the Home Office. That exercise has highlighted major discrepancies between authorities with a commonality of interest. At this hour, I do not wish to tax the House or the Minister with a further list of statistics. Therefore, I recommend to the Minister the AMA report that was approved on 8 July 1987, a copy of which I understand has been sent to his office.
The views of the AMA have all-party support. I do not attempt to use the difficulties between the Home Office and the Department of the Environment for party political purposes. All of us who have worked for fire and civil defence authorities recognise that they are here to stay for a considerable time. Even if the Labour party wins the next general election, fire authorities will remain in place for a considerable time thereafter. Therefore, we are in the real job of trying to come to an accommodation with the Minister about appropriate funding for single purpose authorities. That was basically highlighted by the London fire and civil defence authority on 9 July, when an all-party resolution was approved, stating that the current methodology for GREA is unsuitable for assessing expenditure levels and that more regard must be paid to the standards of fire cover set out by the Home Office, a review of which is presently being undertaken not only by the London FCDA but by most metropolitan fire and civil defence authorities.
Two matters must be considered by the Minister. One is what we shall do in the short term, and the other is what we shall do in the long term. In the long term, we must examine a system that is based on the risk categorisation exercise from which all other factors such as needs and resources ultimately come. I have noted that the Home Secretary's working party discussion paper is examining some of the AMA options in developing GREA for 1988, 1989 and 1990, based on establishment levels, total calls, pensions and fire prevention work, but as yet no firm decisions have been forthcoming from the Department. Such delays have been unhelpful to fire and civil defence authorities who are desperately trying to plan without the obvious abilities of multi-purpose shire counties to support levels of expenditure by virement of GRE between service heads, or using contingencies and balances that are almost always available within larger budget heads such as those commonly available to shire counties.
Fire and civil defence authorities are not in the business of trying to rob Peter to pay Paul. There is no suggestion, nor would I support any proposal, to move funding from the shire brigades to assist metropolitan brigades. We require an interim agreement for 1988–89 on the recognition by all of us that a long-term formula must be agreed for 1988, 1989 and 1990. There must be some political discussion between the Home Office Ministers and those who are responsible for the day-to-day running of fire and civil defence authorities. The AMA has been asking for such a political level meeting since July 1986, and so far, for various reasons, such a meeting has not taken place. Time is now running out to agree a joint package that will meet the needs of the fire service and suit the ratepayer's pocket. At the end of the day, I shall look to the Minister to give an indication to the House when 916 he will meet fire and civil defence authorities via the AMA this summer. If he is not available, I shall ask the Minister of State to do so as soon as possible.
The Government, through their abolition proposals, created the single purpose authorities such as the FCDA's. They must ensure that they are adequately funded. One approach to consider in 1988–89 is that maximum expenditure should be calculated by reference to the original 1987–88 redetermination submissions, updated for inflation and other committed expenditure. I leave that for comment from the Minister.
I now turn to the problems of civil defence, in particular to the funding arrangements for the planned programme of implementation. Despite the original hostility between local authorities and the Government about attitudes to civil defence, there is now a common purpose about the way in which the Government should proceed about using funding arrangements for civil defence in terms of meeting emergency situations in local communities.
At a recent meeting which I attended at the Home Office, to report on what the Greater Manchester fire and civil defence authority was doing to implement the PPI, it became clear from the representatives of the F6 division of the Department that there was no common ground between those officials and the Department of Environment about the way in which 100 per cent. funding grants for emergency centres would be financed via the fire authorities and districts. We have the ludicrous position of the Minister's Department being prepared to provide fire and civil defence authorities and district councils with 100 per cent. funding to update emergency centres, yet the Department of the Environment, on the other hand, penalising authorities by including the calculation in the capital expenditure limits.
The Government cannot seriously expect metropolitan district authorities such as Wigan, which are having their capital expenditure limits squeezed to allow that kind of virement to take place at the expense of social services, housing and education. Because of that difficulty and the disagreement between the two Departments, which has still not been resolved, we have a position where neither ourselves nor the Minister's Department can move forward in any real sense with the refurbishment of emergency centres in metropolitan districts.
On 3 July, F6 wrote to the Greater Manchester fire and civil defence authority about this matter. I quote from the letter, which states:We understand the difficulty authorities face with the capital costs of establishing emergency centres. The Home Office has raised the matter with the Department of the Environment and with the Treasury but the issue has been subsumed into a wider reconsideration of local authority finance. We will not be letting the matter lie but there is nothing further we can say at the moment. As promised, we are currently giving consideration to the question of the running costs of emergency centres.That small paragraph is indicative of the whole attitude towards fire and civil defence authorities in all its guises. The Department of the Environment and the Home Office cannot get their act together, never mind agree with the fire and civil defence authorities.
I turn to privatisation and the incredible decision to include fire services within the scope of the Local Government (No. 2) Bill, I indicate to the Minister that the AMA and others of a responsible view will be looking for 917 an exclusion in the Bill, similar to that contained in the Bill for the police service vehicles. This should also apply to fire service vehicles.
In addition, it is important to place on record the problems associated with the maintenance of fire brigade vehicle workshops, because it is essential that the issue is not simply put aside in the Local Government (No. 2) Bill. We must ensure that fire appliances have 100 per cent. reliability, extending for 24 hours a day, 365 days a year. The public must have confidence in the fire brigade and that confidence can be ensured by having both the vehicles and the equipment on the vehicles fully operational in a first-class condition. I hope that, in all the circumstances, the Minister will state his intention to meet with the AMA as soon as possible to consider all the points raised in the debate this morning.
§ 7.5 am
§ Mr. Clive Soley (Hammersmith)
I wish to begin this very brief intervention by saying what a pleasure it is to see you, Madam Deputy Speaker, in the Chair.
I congratulate my hon. Friend the Member for Makerfield (Mr. McCartney) on his speech. He covered a technical area very competently. He was, perhaps, a little optimistic when he hoped for a chink of light. Even at this time of the morning, that is a bit much. However, when he then said that he hoped for a satisfactory explanation from the Minister, that really was raging optimism.
I served on the abolition Bill, which, as my hon. Friend recognised, is really where all this trouble started. If the Minister were to give my hon. Friend a satisfactory explanation, he would stand at the Dispatch Box and say that that Bill was a total and utter disaster, especially in relation to the fire and civil defence services. Lord Whitelaw's own words showed that the thought it a nonsense to set up a separate authority. The Home Office never wanted it, it never liked it, it thought that it was a contradiction in terms and it recognised that it would lead to major financial problems in the administration of the services. As my hon. Friend said, organisations such as the AMA recognised in advance of the Bill that it would be nothing but bad news for the fire and civil defence services.
The Minister has the opportunity—and I suggest that he takes it—to return to his Department and arrange meetings with the AMA at the level suggested by my hon. Friend, and to begin to talk realistically about the funding of such organisations. My hon. Friend was right to point out the need for a longer-term view of the arrangements for the fire and civil defence services. We do not doubt that we should be looking for proper local authority arrangements again rather than at this mismatch of centralised control, lack of sensible funding related to local needs and so on. My hon. Friend has provided the Minister with an opportunity to recognise past mistakes and to say that he is prepared to begin talks along the lines suggested by my hon. Friend.
I think that the Minister, in his wisdom, recognises that this area went badly wrong under the abolition Bill. Whatever the rights and wrongs of the Government's intentions on the wider aspects of abolition, this area has caused acute problems. If the Minister is not to duck the challenge from my hon. Friend, he should be bold enough—as I am sure he can be at times, as I have seen it in 918 the past—to recognise that there is a major problem to which he needs to respond along the lines suggested by my hon. Friend.
§ 7.7 am
§ The Parliamentary Under-Secretary of State for the Home Department (Mr. Douglas Hogg)
In common with other hon. Members, I welcome you, Madam Deputy Speaker, to the Chair in your new capacity.
I congratulate the hon. Members for Makerfield (Mr. McCartney) and for Hammersmith (Mr. Soley) on raising a matter of considerable importance. Before I deal with the main points raised, with particular reference to the fire authority function, I wish to comment briefly on the civil defence aspect raised by the hon. Member for Makerfield.
The hon. Gentleman made the point that capital controls work in an eccentric way, and I well understand that. He will know that a review is taking place into the capital control—or capital expenditure—system. The points that he raised about civil defence capital grants will be considered in the context of that review.
§ Mr. McCartney
I understand that, but that does not alter the fact that the Department has been pressurising local authorities to put pressure on district authorities—irrespective of the review—to commit some of their capital expenditure to a refurbishment programme. The Minister has admitted that the current review is considering whether any expenditure in an authority at district level reflects on the total capital expenditure. The Minister cannot have it both ways. The Government have had 12 months to resolve the matter, and until they do so there is no chance of authorities finding moneys from the housing, education and social services budgets to meet the planned programme of implementation.
§ Mr. Hogg
I have not conceded anything. I said that the Government are reviewing local authority capital expenditure controls, and that in that context capital allocations for civil defence will be considered. That is a statement of fact, not a concession. I shall not go beyond that and I shall not anticipate the outcome of the review.
I shall deal with the broader questions that the hon. Gentleman raised, which concentrate largely on the mismatch between the GREs and expenditure limits. Before doing so I shall summarise in brief form the controls that exist for the fire and civil defence authorities. There are essentially two controls, those of manpower and finance. I propose to deal with manpower fairly rapidly, as it is not an issue on which the hon. Gentleman concentrated. He will appreciate that my right hon. Friend the Secretary of State for the Home Department exercises a statutory control over the establishment, support services and management arrangements of the seven FCDAs. These controls will operate for the first three years of the existence of the seven FCDAs. That will mean that they come to an end in 1988–89.
The second and much the most important area of control is something that relates to financing. By section 68 of the Local Government Act 1985 the FCDAs were deemed to be subject to the rate limitation controls that were created by the Rates Act 1984. That operates for the first three years of their existence. Effectively, the authorities are treated as being rate-capped, and there is a maximum precept that they are authorised to levy on the constituent districts.
919 The hon. Gentleman will appreciate the fairly complex procedure that has to be followed to determine both expenditure levels and precept levels. I could explain the procedure to the House, though I question the merit of doing so at 12 minutes past seven in the morning, but I shall do so if the hon. Gentleman wishes.
I take up the issue that is worrying the hon. Gentleman, which is the mismatch between GREs and expenditure levels. There is a difference between the GREs and expenditure levels, and there is a difference between the functions of the two. Expenditure levels are set by the Home Secretary, and GREs by the Department of the Environment. They are intended to have different functions and purposes.
Grant-related expenditure is used as a yardstick for use in the distribution of block grant. Its assessments are a means of distributing block grant on an equitable basis. The GRE formula for the fire service was reached after consultations with local authority associations. It is based on common principles that are applicable to all authorities. The GRE of a fire and civil defence authority does not determine what an authority should spend, nor does it determine what it can spend. Grant-related expenditure is a yardstick for all fire authorities. It applies to all fire authorities, and is not confined to the FCDAs. The object of the GREs, imperfect though it may be, is to apply a common yardstick throughout the country for fire authorities.
The expenditure level is a different instrument, with a different purpose. It is part of the process by which the precept limit is set. It takes account of the particular circumstances of each fire and civil defence authority. It is hoped and intended that the expenditure level will ensure that adequate fire protection is provided for the public and fire crews. The expenditure limit determines what an authority can spend, apart from the amount allowed for contingencies that is taken into account when setting the precept limit. It is not possible for the authority to set its budget in excess of the determined expenditure limit.
However, to take a broad view, the function is different. There is a distinction between the GREAs and expenditure levels. They are not intended to achieve the same purpose and there is no particular reason why the two should be in total harmony. I appreciate that there arc problems that necessarily flow from mismatches—the hon. Member for Makerfield has described some of them—and it is for that reason that a review is taking place with regard to fire risk categorisation. That review is intended to bring the GREAs more into line with expenditure levels. It is desirable that GREAs should be more in line with expenditure levels, but there is no compelling reason why that should always be so.
To contrast the expenditure limit against GREA in order to determine the actual level of expenditure is not, in itself, a sensible thing to do. The functions of the two criteria are different. Although I appreciate that there is a need to bring the GREAs more into line with the expenditure levels—a review is being undertaken to that effect—it is not essential that that should happen. The hon. Member for Makerfield will be aware that we have not had a full response to the fire risk categorisation review. Only a minority of the authorities have replied on the question of fire risk categorisation. Therefore, it is not yet possible to say when the review will be complete. I hope 920 that that review will be completed in the foreseeable future. Certainly I should like to see a greater matching between GREAs and expenditure levels.
The hon. Member for Makerfield suggested that a meeting should be convened between the Association of Metropolitan Authorities and Ministers at the Home Office. It is fair to say that the letter addressed to my right hon. Friend the Home Secretary was received in his office on 10 July. I am not in a position to commit my right hon. Friend or indeed my noble Friend the Minister of State, Home Office, who has direct responsibilities for the fire service to such a meeting. I am sure, however, that at an appropriate time Ministers would be extremely pleased to meet the AMA to discuss the problems that the hon. Member for Makerfield outlined.
§ Mr. Soley
Does the Minister accept, perhaps at this time in the morning with a spirit of generosity, that if Lord Whitelaw's advice had been accepted the fire and civil defence authorities would not be in their present difficulties? In those circumstances, will the Minister convey to the Home Secretary, the importance of meeting the AMA as a matter of urgency and recognising that the problems that it faces have been put upon it largely as a result of the Government's legislation on abolition.
§ Mr. Hogg
I shall not make any concession along those lines. The hon. Gentleman is well able to make his own points. He has done so, and those who read Hansard will understand them. The hon. Gentleman must not be the least bit surprised if I say that, much as I should like to agree with him—I spend much of my time agreeing with him—on this issue I shall not make the concession that he wants me to make.
§ Mr. McCartney
The Minister has already given the game away—the Department is already conducting a review. That review is needed because the figures do not add up. The discrepancies have been growing. I find it absolutely amazing, even at this time in the morning, that the Minister can, in the space of 10 minutes, suggest that there is no good reason why there should be any correlation between the two calculations, but then admits that there is a working party endeavouring to bring about that correlation.
§ Mr. Hogg
The hon. Gentleman was either not listening, or he did not understand. The plain fact is that he does not comprehend what is going on.
It is desirable that there should be as much of a match as possible between GREAs and expenditure, as I have said, but, as I have also said, it is not essential, because the functions of the two are different. However, it is desirable, which is why we are having a review to ensure greater consistency between GREAs and expenditure levels. I do not contemplate that they will be the same. That is certainly not an essential requirement, nor is it necessarily an essential part of the review. However, as I have said, greater consistency between the two is desirable and, when more of the authorities have replied, we shall be in a better position to assess whether we will be able to achieve that desirable result.
As I was saying before that pleasing intervention from the hon. Member for Hammersmith, who I gather wants to get away rather urgently so I shall wind up the debate promptly because I never wish to be discourteous to him——
§ Mr. Soley
I cannot stand the idea of the Minister going through all these verbal gymnastics at this time of the day. He will do himself an injury, if he has not done so already. Yes, I am leaving shortly, to tell the police at a local college about how bad the Government are on law and order. However, let us leave that discussion until a little later this morning.
My hon. Friend the Member for Makerfield has a fair point and all that the Minister is struggling with—I understand why and accept that it is not his fault—is the fact that the Government got themselves into a mess between the requirements of the Department of the Environment and those of the Home Office on the abolition Bill. Lord Whitelaw recognised that openly and honestly, and it was frequently referred to during the passage of the abolition Bill. If the Home Office would now say, "Yes, we recognise that that abolition process created acute problems, especially in areas such as fire and civil defence", and would go to meet the bodies to which my hon. Friend referred, especially the AMA, on that basis, the Minister would be impressed by the willingness to co-operate to try to make what has become a mess work much better. The Minister must have an interest in that. Indeed, his verbal gymnastics clearly displayed that he knows that it is a mess. Let us get on and sort it out.
§ Mr. Hogg
The hon. Gentleman said that he was going to talk to the police about how bad the Government's policies on law and order are. I advise him not, in any way, to try to impress the police with the desirability of his party's policies on law and order, because the police would all fall out of their seats laughing. [Interruption.] In fact, the hon. Gentleman knows that and is smiling now. Indeed, he must be embarrassed by the prospect of presenting to the Metropolitan constabulary the policies of the Labour party on law and order because the police would hoot with laughter. However, that is by the way, and we shall let the hon. Gentleman off on that matter.
As for the hon. Gentleman's references to my right hon. and noble Friend Lord Whitelaw, the hon. Gentleman has already made that point and I have already told him as 922 clearly as I can that I shall not make the concession for which he has asked. I am just not going to do it. Although repetition from the hon. Gentleman is humorous, and no doubt enchanting, it will not get him anywhere at all. I was merely trying to conclude my speech to allow the hon. Gentleman to go off to Hendon, which is what he wants to do.
The essential question is whether fire cover in the joint authority areas that we have been discussing is adequate or inadequate. All the other gymnastics that the hon. Gentleman has mentioned, and through which we have been going, are interesting and relevant to that question, but they are not the principal issue. In such cases, the principal issue is always whether the service is adequate or inadequate. Incidentally, I was deeply disappointed not to hear from the hon. Member for Makerfield any analysis of that, because surely it is the major issue. All that stuff about GREAs and expenditure levels is splendid, but it does not go to the main issue, which is simply that the fire cover in the relevant areas is adequate.
§ Mr. McCartney
I do not want to prolong this issue because other hon. Members wish to speak. However we need no lessons from the Minister about adequate fire cover, when the Department of the Environment wants to take £7 million off this year's budget, a budget that was set by the Minister's own Department.
§ Mr. Hogg
The hon. Gentleman improves his case not a bit. The question, as he knows well, is whether the fire cover provided in these areas is adequate. Even in his area of Greater Manchester the proposal for financing represents a 7.5 per cent. increase on 1986–87, which seems to be a significant increase. It is interesting that the hon. Gentleman has not thought for one moment to suggest that the fire cover is inadequate. As I feel sure that the Opposition parties are willing to take every point, whether bad, indifferent or perhaps good, that can be taken against the Government, the fact that they fail to suggest that the fire cover is inadequate makes my point in a singularly compelling way.