HL Deb 26 January 1981 vol 416 cc599-603

5.37 p.m.

The Minister of State, Scottish Office (The Earl of Mansfield) rose to move, That the order laid before the House on 11th December 1980 be approved.

The noble Earl said: My Lords, as your Lordships will be aware, the arrangements for providing Government grant towards revenue and capital expenditure incurred by local authorities are complex. This is unavoidable, and it is highly desirable that the arrangements should be kept under review. Our intention is to secure improvements and in particular to simplify the arrangements when reasonable opportunities arise. That is the background to the order, which proposes some simplification in the present arrangements. It originates in a review, sensibly initiated by the previous Administration in 1977 and summarised in Part IV of their Green Paper Local Government Finance in Scotland (Cmnd. 6811) published in May of that year. The order has the full agreement of the Convention of Scottish Local Authorities, and I should tell your Lordships that it has been considered by the Joint Committee on Statutory Instruments, as recorded in their 5th Report, ordered to be printed by your Lordships on 14th January, and the committee offered no observations on the provisions of the order.

It may help your Lordships if I first outlined how specific grants and rate support grant are linked. 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 for Scotland 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 authority revenues and not earmarked 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 does not affect the total.

Particularly since local authority reorganisation, there has been general agreement that specific grants should be restricted so far as reasonably practicable, and that the proportion of aggregate grant paid through rate support grant should be maximised. That gives authorities wide discretion to determine their own priorities. Too much reliance on specific grant would imply a paternalist attitude by Government, and would be inappropriate in modern circumstances.

In pursuit of that general principle, the previous Administration recommended in their Green Paper certain criteria for use in judging the continuing need for specific grants. Those criteria were: 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 an area wider than its own.

In consultation with the Convention of Scottish Local Authorities, a subsequent review identified a number of grants which failed to meet any of the criteria. When the Government assumed office we were happy to allow the review to continue and it has led to the proposals embodied in the order. With the agreement of the convention, we propose that three revenue grants and one capital grant should be discontinued effectively from 1st April.

The main features of the four grants may be summarised as follows. First, 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 should like to 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, which specifies that its provisions shall not affect the payment of grant in respect of expenditure incurred prior to 1981–82.

Secondly, 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. That 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 by the Local Government Finance Advisory Panel, on which local authority interests were heavily represented. The order provides a belated opportunity to implement that recommendation.

Thirdly, 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 claim for grant has been received since 1976–77; and the grant has clearly served its purpose.

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 1980–81. 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. In agreement with the convention therefore the Secretary of State proposes to terminate provision for this grant, along with the three revenue grants which I have already described.

It is in those circumstances that I commend the order for approval by the House. My Lords, I beg to move.

Moved, That the order laid before the House on 11th December 1980 be approved.—(The Earl of Mansfield.)

5.45 p.m.

Lord Howie of Troon

My Lords, I am a little surprised to be here. My appearance is due to the unavoidable absence of the noble Lord, Lord Ross of Marnock, the most noted and leading Scotsman in the House—at any rate on this side. I am grateful to the noble Earl for his explanation of the order, even though at first sight it appears to be taking money off Scotsmen the day after the anniversary of Burns' birth—but that over-eggs the pudding. This is a minor measure, far from being the most important of the Session, but it is a marginally useful piece of tidying up. If it will do only a small amount of good, at any rate we can agree that it will probably do no harm. The Opposition have no objection to the order. As the noble Earl said, it arises from a review which the last Government set up three or so years ago; and I think he said that the local authorities do not object to the order, either.

Abolishing the four specific grants which the noble Earl mentioned will make little difference to the total rate support grant, which runs at about £114 million. I wonder how much is expected to be saved, considering that some of the grants will continue to be paid under Article 5 of the order, though presumably for a limited period only. There is no doubt that the provision of flood warning schemes will continue in a small way, though as the Minister said, there seems to be little scope for further works of this kind. Presumably if further flood warning works do go ahead, they will be paid for in some other way.

It is good to see, too, that the war seems to be coining to an end and that the claims for clearing war works from educational land have dried up. I remember when I was at school helping to construct an air raid shelter in the playground. That shelter has long since either been filled in or built over, and presumably the work has been paid for. This particular grant has had its day.

As I say, the order will tidy up an area of the grants system. It is to be welcomed, and we hope to see it speedily passed through the House.

Viscount Thurso

My Lords, we, too, raise no objection to the order in general principle. I am personally a little concerned—and most apologetic—that the debate began a little earlier than I expected and so I missed the beginning of the speech of the noble Earl, Lord Mansfield. It was the beginning of the speech to which I would have listened with the greatest of attention, since no doubt it dealt with specific grants payable to local authorities in respect of expenditure incurred in the acquisition of land for use as public open spaces. I am a little worried about the provision of public open space in Scotland. We need in our burghs and towns as much open space as we can get if we are to provide the play areas that our children need. Any diminution of the amount of grant for the acquisition of public open space must make it more difficult to provide the kind of play areas that may well be needed for our children.

If I have mistaken the effect of the order on the ability of local authorities to provide public open spaces, then I apologise to your Lordships for my tardiness and my slow step, and I shall be glad if I learn that I am mistaken. However, if I am not, I hope that the Government will ensure that there are other ways in which adequate public open space can be made available to ensure a sufficient number of play areas and recreation areas within cities and burghs throughout Scotland.

The Earl of Mansfield

My Lords, probably I should congratulate the noble Lord, Lord Howie of Troon, upon his first appearance at the Dispatch Box—

Lord Howie of Troon

It will probably be my last!

The Earl of Mansfield

I congratulate the noble Lord with great sincerity, since he is the only Scottish Labour Peer who has recovered from the celebration of Burns' birthday, which I think is saying something; and I apply similar comments to the noble Viscount, Lord Thurso, who has managed to struggle here, even if not quite on time. If I may say so—and I do not want to be offensive about this—I went into these four little schemes fairly fully in my opening remarks, and I want to emphasise that the amounts of money are simply infinitesimal, not in private terms but in the context of public money. The grants have never recently been popular, particularly so far as open space is concerned. Very few local authorities have availed themselves of the grant, and it is in the order of £1,000 or £2,000 per local authority.

The powers of the local authority to acquire open space are totally unaffected by this little order. Support from the public purse will continue to come through the rate support grant. These specific grants are the way in which central Government can encourage local authorities to do something by providing extra "goodies", if I am not using a slang expression. In this particular instance, the local authorities did not much want to take the offer up, and it is now being discontinued. But this in no way affects either their right or the availability of public money should they wish to provide open spaces.

Very much the same affects the matter of flood warning works. There is absolutely nothing in this order which affects the power of local authorities to provide flood warning arrangements; and, as I have said already, the rate support grant will take care of what I might call the financial aspects.

On Question, Motion agreed to.