Clause 2.—(RATE SUPPORT GRANTS.) (Hansard, 9 November 1966)

§ Dr. Dickson Mabon
I beg to move Amendment No. 1, in page 2, line 10, to leave out 'relevant' and to insert 'reckonable'.
It might be convenient, Mr. Speaker, if, at the same time, we discussed Amendments Nos. 3, 4, 6, 8 and 12 which 1399 are, in substance, concerned with the same point.

§ Mr. Speaker
If there are no objections, so be it.

§ Dr. Mabon
The Bill at present refers to "relevant expenditure" in Clause 2 and "relevant local expenditure" in Schedule 1. These very similar phrases relate to very different things, however; gross expenditure in Clause 2, as against net expenditure after grants have been paid in Schedule 1. It is desirable to differentiate more clearly between these two quite distinct matters. The Amendment is, therefore, a tidying-up operation.

§ Mr. G. Campbell
I am grateful for that explanation because the term "relevant local expenditure" has almost become a technical term which is understood by everyone concerned with local authority finance. I was not sure whether the hon. Gentleman would say that all this had been changed. If I understand his remarks aright, that position remains and the Amendment is designed to make it clear that the similar phrases relate to different things.

§ Dr. Dickson Mabon
I beg to move Amendment No. 2, in line 14, to leave out 'provided by local authorities'.
This is a technical Amendment to ensure that the calculation of rate support grant is done on correct lines. To arrive at the aggregate of rate support grant, the Bill at present provides that there is to be deducted from total Exchequer assistance … that portion which the Secretary of State estimates will be allocated to grants in respect of such services provided by local authorities as the Secretary of State may determine.

§ Dr. Dickson Mabon
I beg to move Amendment No. 5, in line 36, at the end to insert: ', and for the purpose of determining the said amount and portion the Secretary of State may make such adjustments in respect of reckonable expenditure and grants as appear to him to be required to offset the effects on those factors of the constitution or alteration after the passing of this Act of any joint board'. This, too, is a technical Amendment. It is necessary to ensure that the amount of rate support grant is not affected by the creation of a joint committee or board. The example might be given of a joint police committee set up under the proposals announced for the amalgamation of police authorities. So long as the authorities are separate, the gross expenditure of each of them goes into the calculation of the aggregate of Exchequer grants, and the specific police grant is paid as a later transaction. If, however, two or more authorities are combined, the specific police grant is paid to the joint committee, and only the net expenditure of the constituent local authorities goes into the calculation of aggregate Exchequer grant. This would be wrong, and the Amendment therefore allows the Secretary of State to make any necessary adjustment.

§ Mr. G. Campbell
Was this overlooked in Committee, in which case the hon. Gentleman and his Department have now decided to put the matter right, or did it arise out of the hon. Gentleman's discussions and negotiations with the local authority associations on the formulae?

§ Dr. Mabon
The genesis of many of our Amendments—apart from the undertakings which we gave in Committee, to which we will come later—is our desire to deal with matters which we had not resolved or, alternatively, to clear up technical points which have arisen since. This is a point which my Department appreciated and which we desired to correct to make the provision perfectly sound.

§ Dr. Dickson Mabon
I beg to move Amendment No. 7, in line 27, at the end to insert: 'Before making any determination under this subsection the Secretary of State shall consult with such associations of local authorities as appear to him to be concerned'. Following an undertaking given in Committee, this Amendment provides for consultation with the local authorities before the precise details of what expenditure ranks for rate support grant is determined by the Secretary of State. Among the things to be determined are housing subsidies and trading accounts. This might seem straightforward, but there are so many different kinds of payments towards housing and so many kinds of accounts which are partly in the nature of trading and partly in the nature of rating services that the details are best prescribed in the rate support grant Order, after consultation with the local authority associations.
7.30 p.m.
I was pressed to say why the Secretary of State proposed to take power in lines 22–24 to determine that certain payments should not rank for rate support rank. I then explained that this is a precaution because of the great number and variety of local authority services. It might be advantageous to local authorities if certain payments were excluded, because the result might be to increase the percentage rate of grant on the remainder, as hon. Members will appreciate might be and in fact is the case with housing subsidies. In Committee I promised to consider this and I am now meeting my obligation.

§ Mr. G. Campbell
We are glad that the Government have tabled this Amendment, which we regard as an improvement to the Bill. The question of what may or may not be treated as a trading account could be important to local authorities. The Amendment will ensure that there will be consultation with local authorities before the Secretary of State takes these decisions.