ADJUSTMENTS OF DISTRIBUTION OF BLOCK GRANT (Hansard, 8 July 1980)

§ Mr. King
I beg to move amendment No. 114, in page 39, line 37, leave out "subsection (2) below" and insert 'the following provisions of this section '.

§ Mr. Deputy Speaker (Mr. Richard Crawshaw)
With this it will be convenient to take Government amendments Nos. 116 and 121.

§ Mr. King
These amendments cover the point to which I have just referred in a previous debate in which the Government, in response to the request from the associations, are tabling amendments to circumscribe the application of multipliers.
The amendment is self-explanatory as to the way in which this will be done. As a matter of general principle, multipliers will be used only to increase grant. They will be used to decrease grant only when there would otherwise be an unreasonable increase in the amount of grant, taking one year with another, that the authority would receive.

§ Mr. Squire
I beg to move amendment No. 117, in page 40, line 4, leave out '(a)'.

§ Mr. Deputy Speaker
With this it will be convenient to take amendment No. 118, in page 40, line 5, leave out from 'authorities' to end of line 20 and insert—

(i) for the purpose of limiting grant changes from one year to the next;

(ii) to take account of less than the actual gross rateable value of an authority or group of authorities in calculating entitlement to block grant;

(iii) to give effect to the equalisation of resources within London.'.

§ Mr. Squire
These are fairly small but very important amendments submitted by the Association of Metropolitan Authorities. They deal with the issue that came up briefly in our last debate, namely, that of multipliers.
The clause speaks of multipliers as the way to adjust local authorities' block grant entitlements. The local authority associations consider that the use of multipliers is one of the factors which make a block grant system very difficult to understand, let alone explain, as one or two 373 hon. Members found in the previous debate. Given, however, that the block grant system is dependent on the use of multipliers, the local authority associations consider that legislation should make quite clear the purposes for which multipliers may be used.
If hon. Members read the clause as it is currently drafted, they may well come to the conclusion that multipliers could be used for almost any or all purposes. My amendment would meet the objective of the local authorities and allow the sorts of adjustments which were found necessary within the rate support grant system to continue.
It would allow three specific adjustments. It would allow for the damping of grant distributions from year to year and for the operation of a safety net, if that were necessary, to protect individual local authorities against the effects of excessive shifts in needs or standard expenditure assessments. This is a very important safety net, as many hon. Members will now from past years' debates on the eects of changes in rate support grant. Local authorities can find themselves left in a very difficult position due to the somewhat arbitrary nature of such shifts.
Secondly, it would enable a London resources clawback—or, indeed, that of any other high rateable value authority—to continue to be set at less than 100 per cent. to offset the extent to which London's resources are overvalued by the present valuation system. I have referred to that in previous debates. I do not think that I need say any more about the present imbalance.
Finally, it would enable the system within London equalisation arrangements to continue. The local authorities and I consider that paragraphs (b) (c) and (d) add unnecessary complications to a Bill which, in all honesty, is already fairly complicated.

§ Mr. King
I hope that my hon. Friend the Member for Hornchurch (Mr. Squire) will accept that the amendment which I moved in advance of his goes a little further than his. We think that it is preferable to his amendment because it meets the principal concerns of the associations. The difficulty about his amendment is that it is rather restricted, and there could be applications in which it 374 might work to the disadvantage of authorities. I hope that on reflection my hon. Friend will agree that the undertaking that we have given to ensure that the multiplier is used as prescribed in the amendments is the best way to proceed, and I hope therefore that he will ask leave to withdraw his amendment.

§ Mr. Squire
I welcome the action taken by the Government in the previous amendments. I am sure of one thing, and one thing alone—that the House would not wish to have a major debate on multipliers at this stage.
I beg to ask leave to withdraw the amendment.