HC Deb 13 January 1978 vol 941 cc2118-20

3.54 p.m.

Mr. Arthur Jones (Daventry)

I beg to move That this House, concerned at the statistical techniques used for the calculation of the needs element of the rate support grant, calls upon Her Majesty's Government to set up an inquiry with a view to establishing a more equitable system for the distribution of central Government funds to local authorities. In the time that remains for our proceedings this afternoon I can do little more than to propose the motion. I am sorry that the Minister and I have such limited time to deal with such an important issue, namely, the needs element of the rate support grant procedures. The concern about this matter was clearly reflected by both sides of the House in the debate on the 1977–78 order held on 15th December. The questions were then carefully considered by hon. Members, but I had a wealth of additional information which I hoped I should have had time to present to the House today. As events have determined, I shall not have that opportunity.

There is general recognition that the criteria used for the calculation of the rate support grant are inadequately and regularly changed to meet, as is alleged, changing circumstances and they are accepted or rejected on inadequate material. The latest information confirms the confusion that there is about the calculation and the complicated way in which the factors are put into the computation.

From the report which appears in The Times today, we learn that £16 million of RSG has been lost to the inner London boroughs. Apparently they have received £16 million less than they should have done. The report does not say whether this is in the current year or in 1978?–79. The boroughs lost that amount from that which should have been available to them through the rate support supplementary grant. This was disclosed yesterday by the Secretary of State. I am not sure whether it is an indication of instability in the computer or whether the computer is as confused as is the general view of the needs element of the rate support grant. It is a confusing method of distributing the needs element.

I am sorry that I have not the time to develop my thoughts on this subject. I hope that the Minister will be receptive to my motion that there should be an inquiry, and that he would welcome an early opportunity to discuss the matter in the House.

3.57 p.m.

The Under-Secretary of State for the Environment (Mr. Guy Barnett)

I was looking forward to listening to the hon. Member for Daventry (Mr. Jones), because I know the interest that he has taken in the rate support grant and in local government finance generally. He addressed the House in the debate that we had on the order before Christmas. I am sorry that it is not possible for him to develop his argument, because I was looking forward to hearing what he had to say.

The hon. Member asks for an inquiry. I hope that in the few moments available to me I can assure him that as far as possible the Government are undertaking a wide-ranging inquiry, as they always do, on this difficult subject.

I accept that the regression analysis system, whereby we assess the needs element that should be paid to each local authority, is complex. A limited number of people fully understand the system and I sometimes feel that I can hardly claim to be one of them. It is difficult for the ordinary citizen and many people in local government fully to comprehend the system. However, it is an acceptable system—until we find a better one—because it is objective and seen to be objective.

I refer the hon. Member to what the Secretary of State for the Environment said a few days ago. He said: The Consultative Council on Local Government Finance itself has commissioned a review which includes consideration of methods of needs assessment and the grant machinery. Results will be reported to the Consultative Council in the spring."—[Official Report, 11th January 1978; Vol. 941, c. 1642.] There are no fewer than five subject groups to the grants. The working party which is studying the whole range of problems related to the needs element and the subject groups will be reporting to the consultative council, which is representative of local authorities through their associations. Those various representations will be discussed in detail. The local authorities and we ourselves are constantly looking for refinements and improvements in the system—

It being Four o'clock, the debate stood adjourned.