§ Mr. Peter Lloyd
asked the Secretary of State for the Environment whether he has completed his consideration of the study carried out by the university of Reading and published by the Chartered Institute of Public Finance and Accountancy under the title, "The Free Two Pence", in October 1983.
§ Mr. McWilliam
asked the Secretary of State for the Environment if he intends to curb the existing powers of local authorities to incur expenditure and make grants under section 137 of the Local Government Act 1972 in the same manner as he has sought to curb such powers of the Greater London council and the metropolitan counties.
§ Mr. Patrick Jenkin
My right hon. Friends the Secretaries of State for Wales and for Scotland and I have examined this study with interest. The study analyses local authorities' exercise of their powers under section 137 of the Local Government Act 1972 and under section 83 of the Local Government (Scotland) Act 1973.
The report provides, for the first time, an overall idea of the use which local authorities make of this discretionary spending power. The main analysis, however, concentrates on spending in 1981–82. The supplementary survey of spending in 1982–83 carried out by the authors appears to show an increasing use of the power.
The report draws attention to a number of controversial uses of the power. Although the authors express the opinion that these are not significant, the Government are very well aware of the mounting public concern about the way in which some authorities are now using the powers.
I am accordingly seeking power, in the Local Government (Interim Provisions) Bill, to control payments under section 137 by the Greater London council and the six English metropolitan counties. My proposals were set out in the statement I made on 26 June 1984 at c. 393–4.
It must be for other authorities, in the first instance, to justify their spending to their local electorates. We shall, however, keep these matters under observation and shall not hesitate to introduce general legislative constraints if we conclude that these are justified.430W
In the meantime, local authorities in England and Wales are already required to keep a separate account of their expenditure under section 137 available for public inspection. A similar requirement has now been included in the Rating and Valuation (Amendment) (Scotland) Act 1984. In the course of consultations on the codes of practice governing local authority reporting and on new accounts and audit regulation my right hon. Friend the Secretary of State for Wales and I shall make proposals for securing that local authorities expenditure under Section 137 of the 1972 Act is adequately disclosed. My right hon. Friend the Secretary of State for Scotland is considering whether similar steps might be taken in relation to expenditure under section 83 of the 1973 Act.