§ Lord Northfieldasked Her Majesty's Government:
Whether they have completed their study of rate expenditure by local authorities, particularly in respect of economic development, under Section 137 of the Local Government Act 1972; when they will announce their conclusions; and whether the announcement will enable the matter to be dealt with in the current Bill dealing with local government finance, thus enabling local authorities to plan ahead beyond abolition of the rating system.
The Minister of State, Department of the Environment (The Earl of Caithness)The Government are considering the future basis and88WA scope of local authorities' discretionary spending powers in the light of the recommendations of the Widdicombe Inquiry into the conduct of local authority business. As they proposed, we are looking in particular at the case for specific powers for economic development. We will be issuing our response to the recommendations of the report later this year.
It is not necessary for the future basis of the limit on expenditure under Section 137 to be dealt with specifically in the Local Government Finance Bill. Clause 110 would give a general power to the Secretary of State to change by order, references to rates, rateable values and any other factors connected with rating to some other appropriate reference. It would be possible to use this power to adjust the basis of the limit in Section 137.