HC Deb 12 July 1984 vol 63 cc619-20W
Mr. Lewis Stevens

asked the Secretary of State for the Environment when the second 1982–83 rate support grant supplementary report will be published.

Mr. Patrick Jenkin

I have laid this report before Parliament today, together with the "Rate Support Grant Supplementary Report 1984–85" and the "Rate Support Grant Supplementary Report (No. 4) 1981–82".

The 1984–85 report demonstrates the consequences for ratepayers in those areas where local authorities have exceeded the targets for spending approved by Parliament last January.

Authorities were informed last December of their spending targets and of the grant holdback if they exceeded these targets. Despite this notice, overspending authorities have chosen to spend up and so forgo the benefits of central Government grant to the tune of £452 million. This is because budgets received from authorities for 1984–85 are set to overrun the plans approved by Parliament by £841 million. £452 million is only 5 per cent. of the total of block grant of £8,631 million; but for the ratepayers in the high-spending areas the consequences are severe. If certain London councils, including the GLC and ILEA, had spent on target there would have been £255 million more grant for Londoners, and total rates in Islington, Camden and Lambeth would have been 48 per cent., 24 per cent. and 36 per cent. lower respectively. Such are the penalties which high-spending authorities have deliberately and knowingly imposed on their ratepayers in 1984–85.

The 1984–85 report also implements three disregards, excluding from the calculation of grant holdback certain expenditure under the urban programme, on civil defence, and on schemes jointly financed with health authorities. The report announces that a fourth disregard agreed for 1984–85, for additional spending on policing the miners' industrial dispute, will be implemented in a subsequent supplementary report when sufficient information is available.

The 1984–85 report adopts an estimate of £216 million for Liverpool city council's expenditure in 1984–85. This estimate was adopted before the council made its rate for 1984–85 yesterday. I shall reconsider that estimate when I receive full details of its budgeted expenditure for 1984–85. Liverpool city council will, of course, receive no more block grant in 1984–85 than it is entitled to.

The 1981–82 fourth supplementary report "closes the books" in the light of audited outturn expenditure information for all local authorities in 1981–82. There is no change to the total of grant and holdback for 1981–82, but there are small changes within the total for all authorities.

The 1982–83 second supplementary report deals with the consequences of the Greater London council's dramatic over-budgeting in that year, which involved that council taking from ratepayers £277 million more than it needed: £177 million of over-budgeting, and £100 million block grant forfeited as a result. The report returns the £100 million forgone grant, necessarily involving grant adjustments to other authorities. Authorities were informed of this prospective change to their grant entitlements last February, so it will come as no surprise. I have frequently made it clear that the whole of that £277 million wrongly taken from the ratepayers by the GLC in 1982–83 should be returned directly to them. This would be equal to a 14p cut in the GLC precept. Instead, the GLC has chosen to keep most of it to spend on a variety of extravagent schemes, including its £6 million advertising campaign. Londoners cannnot any longer afford to pay for the GLC.