LOCAL GOVERNMENT (FINANCIAL PROVISIONS) (SCOTLAND) BILL. (Hansard, 12 February 1946)

§ LORD WESTWOOD

My Lords, I will be a little more brief on this matter. This is a purely Scottish Bill, the purpose of which is to make an interim adjustment in the block grant payable to local authorities in aid of local expenditure. It proposes to increase that grant, of which the annual amount is at present £6,827,000 by £1,375,000 in the present year, £1,512,500 in 1946–47 and £1,650,000 in 1947–48. The increases are equivalent to a rate relief of 7.7d. in the pound during the present year, 8.4d. next year and 9.2d. in 1947–48. The amount of the present block grant, and the method of distributing it, were fixed in 1937; and in ordinary course a revision would have been made in 1942. As it was clear that circumstances would then be abnormal, legislation was passed in 1941 stabilizing the grant at the existing level until such time as Parliament might otherwise determine. If the legislation of 1941 had not been passed a further revision of the block grant would have been due to take place in 1947. It is clear, however, that circumstances are still so exceptional, and the future level of local expenditure so uncertain, that it would be impossible to carry out a normal review, and make a long-term adjustment in the grant and in the method of distributing it, between now and the beginning of the 1947 financial year. On the other hand, the level of local expendi- 388 ture has risen in the last two years, and it would be wrong in these circumstances to leave the grant at its pre-war level. It was accordingly decided to make an interim adjustment in the grant, and after discussion with the local authority associations it was agreed that the adjustment should cover the three financial years 1945–46, 1946–47 and 1947–48.

The total amount of the increase given to local authorities in Scotland is the Goschen equivalent (11/80ths) of the increase being given in England and Wales. This is an exceptional arrangement in calculating the block grant, and is not intended to form a precedent. It was adopted because statistics upon which to make a more exact calculation of the increase required in Scotland, similar to the calculation made for England and Wales, were lacking. Sufficient information is, however, available to enable an assurance to be given that the unusual method adopted to fix the amount of the increase is not unfavourable to Scotland. The Bill sets out in a schedule how the total amount of the new money is to be distributed among the various counties and large burghs. The method of distribution was settled after discussion with the associations of local authorities, and is in accordance with the wishes of the great majority of the authorities. The method of distribution adopted is, of course, not intended as a model to be followed in distributing the grant when it is revised on a long-term basis; and it will be necessary to discuss with the local authority associations before the end of the interim period covered by the Bill what the basis of distributing the grant after the year 1947–48 is to be. The Bill is accordingly submitted as a useful short-term measure, which it is believed deals fairly, and indeed generously, with the present needs of local authorities. It does not, however, in any sense represent the Government's long-term policy in relation to local government finance. This policy will require discussion and settlement when the future responsibilities of the local authorities, and the future level of local expenditure, can be more accurately assessed. I beg to move that the Bill be now read a second time.