ELEMENTS OF RATE SUPPORT GRANTS (Hansard, 23 January 1974)

§ Mr. Graham Page
I beg to move, Amendment No. 24, in page 46, line 8, leave out 'properties' and insert 'hereditaments'.

§ Mr. Deputy Speaker
With this amendment we can take Government Amendments Nos. 25 to 28 inclusive.

§ Mr. Page
This amendment is required because the term "properties" does not include every item which is shown in the valuation list and which contributes to an authority's aggregate rateable value. In particular it does not include notional hereditaments which bodies, such as gas and electricity boards, are treated as occupying in a rating authority's area. The amendment is to ensure that the right phrases are used, and to that extent it is a drafting amendment.

§ Mr. Graham Page
I beg to move Amendment No. 29, in page 46, line 20, leave out from 'which' to second 'the' in line 21 and insert: 'in accordancbph (3) below is determined as the uniform rate in that year for'. It will be convenient if we discuss Amendment No. 30 at the same time.
These amendments deal with the phrase "the uniform rate". Under Part III of Schedule 2 an authority's resources element is determined by multiplying its local deficiency in rateable value by the amount in the pound which is the general rate chargeable in that year throughout the whole of the authority's area. I have tried to explain earlier the way in which, 1754 dealing with the resources element, the taxpayer comes in as a ratepayer for the deficiency in rateable value in any area.
The difficulty is that such a single general rate will not be readily identifiable in cases where, for one reason or another, different rates are levied in different parts of an authority's area. This is where we need to apply a differential rate throughout an area. The General Rate Act 1967 provides that, where the amount, such as a parish precept, is chargeable separately on only part of a rating area, it shall be levied on that part together with, and as an additional item of, the general rate. The number and importance of the amounts levied on parts only of a rating area will be greatly increased as a result of an order which will be laid before the House shortly dealing with differential rating.
We have to have this provision in the Bill to arrive at a uniform rate where the differential rating applies. The scheme for differential rating will phase the elimination of these differentials over a period of five years. During that period it is necessary to have this power to calculate the uniform rate. I regret the technicalities of this. It is really a drafting amendment to get the formulae right.

§ Mr. Graham Page
I beg to move Amendment No. 31, in page 46, line 29, at end insert: '11.—(1) If, after the amount of the resources element payable to a local authority for any year has been determined under paragraph 10 above,—

(a) the rateable values of hereditaments in the authority's area are reduced with effect from a date on or before that which is relevant for determining the aggregate of the effective rateable values of all the hereditaments 1755 in the authority's area for that year under paragraph 9 above, and

(b) the effect of that reduction is to produce a reduction in the aggregate of the effective rateable values of all the hereditaments in the authority's area which is of such a magnitude that, expressed as a percentage of the initially ascertained aggregate figure, it exceeds such percentage as may be specified for the purposes of this paragraph in regulations made by the Secretary of State, and

(c) the authority by notice in writing request the Secretary of State to give a direction under this paragraph,

the Secretary of State shall direct that the amount of the resources element payable to the authority for that year shall be recalculated in accordance with the following provisions of this paragraph and a further payment on account of that element shall be made to the local authority accordingly. (2) Where sub-paragraph (1) above applies—

(a) the rateable value per head of population of the local authority's area for the year concerned shall be recalculated under paragraph 9 above by treating the initially ascertained aggregate figure as reduced by the amount of the excess referred to in subparagraph (1)(b) above ; and

(b) subject to any provision made by virtue of section 4(4A) of this Act, paragraph 10 above shall have effect accordingly for the purpose of determining the amount which, on the basis of that recalculation, would have been payable to the authority for that year.

(3) The further payment referred to in subparagraph (1) above shall be an amount equal to the difference between the amount previously paid to the authority for the year concerned on account of the resources element and the amount determined as mentioned in sub-paragraph (2)(b) above. (4) In this paragraph "the initially ascertained aggregate figure", in relation to any year means the aggregate figure ascertained under paragraph 9(1)(a) above for the purposes of the first determination of the amount of the resources element payable to the authority in that year. (5) The provisions of this paragraph shall have effect notwithstanding that the actual aggregate amount of the resources element for the year concerned may have been specified in an order under section 4(1) of this Act, and if any amount has been so specified it shall be treated as having been increased to such amount as may be necessary to provide for any further payment made to a local authority under this paragraph'. The amount of the resources element payable to an authority is determined in part by the amount of its local deficiency and rateable value. The deficiency is calculated by comparing the authority's aggregate rateable value per head with the national standard. The aggregate rateable value per head is based on the effective 1756 rateable values of the hereditaments in the authority's area. The method of determining effective rateable value is to be specified in regulations.
Normally the effective rateable value of a hereditament will be the value shown for it in the valuation list as at a specified date. However, it often happens that the valuation list value of a property as at a particular date is reduced retrospectively following settlement of an appeal as to the valuation.
Where the hereditament is sizeable and the appeal relates to its value over a period of some years—this may happen with large industrial premises or blocks of flats—the authority may suddenly be faced with a requirement to repay a proportion of the rates paid on the property during those years. The local authority associations have represented to us that it would be only reasonable in those circumstances for the authorities' resources element entitlement for the years in question to be recalculated, taking account retrospectively of the change in the valuations of the property. Those representations were fair and proper and we have endeavoured in the amendment to take them into account and provide for the revaluation and the entitlement to resources element, if such occasion as I have described arises.
It is a long amendment, but it was necessary to cover all the points. We have met the representatives from the local authority associations on this point.