Rate Support Grant (Hansard, 10 December 1975)

§ 1. Mr. Lambie
asked the Secretary of State for Scotland what representations he has received expressing concern about the present method of allocation of the needs element of the rate support grant among district councils; and if he will make a statement.

§ The Secretary of State for Scotland (Mr. William Ross)
Representations have been made that greater needs of some districts compared with others should be taken into account in the distribution formula. There is no easy solution to this problem, but I have undertaken to have it fully examined before the grant settlement next year.

§ Mr. Lambie
Is my right hon. Friend aware that district councils in the Strathclyde Region think that the total amount allocated to them is too small and that the distribution between districts is wrongly based on straight per capita grants instead of on needs? Will my right hon. Friend give an assurance that he will look again at the formula so that the needs element once more becomes what it should be—namely, a part of the rate support grant that is given to areas because of need? Will he take into account the feelings expressed in the report prepared 432 by the Strathclyde District Councils' Association?

§ Mr. Ross
I think that that was the implication of what I said. I realise that there are considerable feelings about this matter. One of the difficulties is that even within districts of virtually the same make-up one gets variations of expenditure. What we have to be able to do in respect of the needs formula is to isolate needs that are national, that are countrywide. The problem has so far defied the working party and the local authority officials concerned—there is no agreement amongst them—but I have made a pledge that we shall deal with it with vigour during the coming year.

§ Mr. Buchanan-Smith
Will the right hon. Gentleman acknowledge that the ratepayers who have been hammered most this year are those who lived in the former county districts but who now find themselves in city districts, where rates have risen by more than 300 per cent.? In discussing the distribution formula, will the right hon. Gentleman take into account the problem of these people, who do not necessarily have all the advantages of the services that are available in the cities and yet have to pay these high rates? The transitional arrangements have not so far fully taken into account the heavy financial burdens that they have to face.

§ Mr. Ross
The hon. Gentleman should appreciate that one of the basic philosophies behind local government reorganisation, for which his Government and not the Labour Government were responsible, was the assimilation of town and country, and that whereas they had previously paid different rates they were in future to be subject to a single rate. The hon. Gentleman should know from his experience the considerable difficulty of finding a formula that meets all the requirements and defines needs and meets them. It is very much easier to do this on a regional basis where one is dealing with services such as education, social work, and so on, and some of these services carry over into districts, too.
Let the hon. Gentleman not suggest that there are easy solutions. He must know that there are not. If he reads properly the case made by my hon. Friend the Member for Central Ayrshire 433 (Mr. Lambie) and the Strathclyde District Council, he will see that they are arguing that within this form of distribution the advantage goes to the landward areas.

§ Mr. Lambie
To the Tory areas.

§ Mrs. Bain
Will the right hon. Gentleman accept that many councils will be delighted to hear that he is finally getting round to considering the needs allowance of the various districts? Will he bear in mind the varying responsibilities of district authorities and the services that they provide? Will he accept that if he does not come up with a formula, the ratepayers of Scotland will find it as outrageous as the fact that they are denied the rate support grant given to England and Wales?

§ Mr. Ross
It is typical of the hon. Lady that she allows her prejudices to take wing and is never disturbed by the facts. She fails to mention that provision was made for that. [Interruption.] We do not see much of the hon. Member for Moray and Nairn (Mrs. Ewing) nowadays. I would be grateful if, on the occasions when she is here, she would listen rather than interrupt. The fact is that this is not an easy problem. As I said in my original reply, there are districts which are virtually the same but in which the expenditures are very different. The expenditure may not be related to needs. It may be related to decisions taken by and in the discretion of the authority concerned, and it would not be right always to support it to the extent of 74 per cent.