Local Authority Grants (Scotland) (Hansard, 19 January 1981)

§ The Under-Secretary of State for Scotland (Mr. Malcolm Rifkind)
I beg to move, That the Local Authority Grants (Termination) (Scotland) Order 1980, a copy of which was laid before this House on 11 December, be approved. The arrangements for provision of Government grant towards revenue and capital expenditure incurred by local authorities are unavoidably complex. It is highly desirable that they should be kept under review. Improvements, and especially simplification, should be effected at any reasonable opportunity. That is the background to this order which proposes, with the full agreement of the Convention of Scottish Local Authorities, some simplification in the present arrangements. It originates in a review initiated by the previous Administration in 1977.
I should explain that the aggregate amount of support for revenue expenditure by local authorities is determined each year at the time of the rate support grant settlement. The Secretary of State determines an estimate of relevant expenditure to be incurred by authorities in the grant year and applies to that figure the percentage which the Government are prepared to meet. The result represents aggregate grant which is paid in part—some 8 per cent. at present—by way of specific grants, the balance representing rate support grant paid in aid of local 105 authority revenues and not hypothecated to individual services. The more that is paid by way of specific grants the less is available for rate support grant and vice versa. The balance between the two components does not affect the total.
Especially since local authority reorganisation, it has been common ground that specific grants should be restricted so far as reasonably practicable. The corollary is that the proportion of aggregate grant paid through rate support grant should be maximised, so recognising that authorities ought to have wide discretion to determine their own priorities. It was in pursuit of this general principle that the previous Administration recommended in their Green Paper certain criteria to be used in judging the continuing need for specific grants. These criteria were fourfold: first, to give special encouragement to expenditure on particular activities or services where there is a strong national interest; secondly, to compensate local authorities for the cost of activities engaged in at the request of central Government where the authority has little or no discretion over the amount of expenditure incurred; thirdly, to supplement block grant in relation to types of expenditure the need for which arises too unevenly, as between areas or years, to be reflected in the assessment of expenditure needs; and, fourthly, to assist a local authority in the financing of expenditure undertaken for the benefit of a wider area than its own.
A review set in hand in consultation with the convention, following publication of the Green Paper, identified a number of grants which failed to satisfy the criteria. When the Government assumed office, we were entirely content to allow the review to run its course and it has now led to the proposals embodied in the order. We propose, with the agreement of the convention, that three revenue grants and one capital grant should be discontinued effectively from 1 April.
I do not wish to take up hon. Members' time with a comprehensive account of these four grants but their main features may be summarised as follows. Under section 9 of the Local Government (Scotland) Act 1966 grant has been paid on the basis of 50 per cent. of loan charges incurred by authorities in connection with the acquisition of land for use as public open space. Grant payments are running at present at approximately £33,000 per annum. No new claims have been submitted since 1978. I assure the House that grant payable to the individual authorities currently receiving this form of assistance will continue to be paid. That is permissible under article 5 of the order.
Under section 76 of the Health Services and Public Health Act 1968, grant of 50 per cent. has been made available on expenditure incurred by local authorities on the supervision of imported foodstuffs. Only six authorities have submitted annual claims and the total annual payment during that period has not exceeded £39,000. This is a minute sum placed in the context of total expenditure and grant, and discontinuation of the scheme was recommended as long ago as 1974. The order provides a belated opportunity to implement that recommendation.
Under the Education Authorities (Scotland) Grant Regulations 1948, 100 per cent. grant is available towards the costs incurred by authorities in removing war works. The grant served a useful purpose for some considerable time after the ending of hostilities in 1945 but very substantial progress has now been made in clearance of war works and no claims for grant have been received since 1976–77. The grant has clearly served its purpose.
106 Finally, I turn to a capital grant made available under section 97 of the Agriculture Act 1970 towards capital costs incurred by local authorities in provision of flood warning systems. Since the provisions of the Act came into force, three flood warning schemes have been grant aided at the rate of 50 per cent. of actual expenditure—two in 1974–75 and one in the current year. Accordingly, little use has been made of the provision for these grants and the amount involved relative to total capital expenditure by local authorities is small. Looking to the future, I am advised that there is little or no scope for further works of the kind covered by the scheme and no further proposals are in prospect.

§ Mr. David Steel (Roxburgh, Selkirk and Peebles)
Is the current one in Selkirk?

§ Mr. Rifkind
No, the current one is in Haddington.

§ Mr. Steel
There are others to come.

§ Mr. Rifkind
If there are others to come, it will not be possible to finance them by this means if the order is approved. There will still be the opportunity for local authorities to cover such expenditure if they wish.

§ Mr. John Home Robertson (Berwick and East Lothian)
As the scheme is in Haddington—I am sure that the House will be grateful for that information—and as Haddington is in my constituency, will the Under-Secretary of State confirm that grant will be paid on the scheme?

§ Mr. Rifkind
The hon. Gentleman may rest assured that that is one of the schemes that is presently going through. It is covered by the grant and it will not be affected by the order now before the House.
In agreement with the convention, my right hon. Friend proposes to terminate provision for the grant along with the three revenue grants that I have already described.
I shall be glad to answer any further questions that may occur to hon. Members about the provisions of the order. As for the underlying principle, I draw attention especially to the origin of the proposals in the review initiated in 1977 and to the support voiced by the convention for the useful degree of simplification which they entail.
On that basis, I commend the order for approval by the House.

§ Mr. Donald Dewar (Glasgow, Garscadden)
I might be prone to a charge of exaggeration if I were to describe the order as earth-shaking. The Opposition have no objection to it. I am grateful to the Under-Secretary of State for his careful—at times I thought that he was almost over-zealous—explanation of the technicalities.
As I understand it, the idea is that the specific grants should be marginally shortened by the deletion of the four items referred to in the order. Presumably there will be a small compensatory increase in the needs element of the rate support grant. When set against the totality of local government expenditure, the sums involved are microscopic.
There is, first, the clearance of war works from education land. When the Under-Secretary of State made his announcement, he made it sound as if it were a triumph for the present Government. I notice that in 1976–77 someone claimed £1,074 under the order. I agree with the hon. Gentleman that it seems unlikely that there will be 107 any continued need. Any war works still lying around in school playgrounds are more likely to be preserved as ancient monuments of educational value than to be demolished.
I accept that there is little point in keeping the flood warning system going as a specific grant. However, given the present winter, it may seem to some of us that flood warnings are relevant in Scotland.
The other two items involve slightly more substantial sums. Imported foodstuffs payments, which are dealt with under the Health Services and Public Health Act 1968, amount to about £40,000. There has been a substantial number of payments of about £20,000 over the past five years.
I may have misheard the Minister when he referred to section 9 of the Local Government (Scotland) Act 1966. I have the impression that he said that there had been no claims since 1978. That may be the position, but there were payments in 1979–80, for example, of £41,050.
There is no point in delaying the House in nitpicking or worrying over these technical matters. The abolition of these four specific grants will make no large impact on the total rate support grant of £114 million. I am not sure whether the present RSG has been adjusted to take account of the possible disappearance of these grants or whether there will have to be some tiny and probably difficult to detect change in the calculations to take account of the mournful death of these grants as a result of the passing of the order.
As I have said, the order will have no great impact. It stems from the review that was started by a Labour Administration. I understand that COSLA has no objection. There seems to be universal agreement that the funeral should be short. I shall not delay the House. I hope that the order will be given a smooth passage.