HC Deb 12 November 1992 vol 213 cc888-9W
Mr. Jonathan Evans

To ask the Secretary of State for Wales what his proposals are for local government revenue spending in 1993–94.

Mr. David Hunt

I propose to set a level of £2,598 million for total standard spending (TSS) in Wales in 1993–94. This figure comprises an increase of 3.1 per cent. on the TSS for 1992–93, adjusted for functional transfers, and £35.9 million in additional resources for county authorities' new responsibilities for care in the community from 1 April 1993, as announced to the House by my hon. Friend the Under-Secretary of State on 2 October. I propose to set central Government support for TSS through aggregate external finance (AEF) at £2,343 million. This comprises a 1.7 per cent. increase on the comparable level of AEF for 1992–93 and 100 per cent. funding for the £35.9 million community care spending.

I am still considering whether there is need for transitional arrangements to accompany the introduction of the council tax. I will announce my decision in due course. Any transitional arrangements would be funded from within AEF.

The levels of TSS and AEF I propose take account of other changes in local government functions which take effect on 1 April 1993. Responsibility for the majority of further education services will transfer to the Further Education Funding Council and similarly residual higher education services will transfer to the Higher Education Funding Council. The phased transfer of responsibility for school inspection to the office of Her Majesty's chief inspector for Wales also begins in 1993–94. I consider that £126 million is an appropriate level of funding to transfer from local authorities to these bodies in 1993–94. I have adjusted the levels of TSS and AEF accordingly.

I consider my proposals to be realistic in the current economic climate. They give a level of settlement increase above projected inflation.

I recognise that local government in Wales will have to make hard choices about spending priorities if authorities are to stay within my plans. They are not alone in this. The Government have had to take very tough public expenditure decisions for 1993–94. It is essential to economic recovery that we continue to keep inflation and public expenditure down. Local government must play its full part in this and Welsh local authorities will need rigorously to examine their budgetary priorities and pursue efficiency savings.

I shall be announcing provisional standard spending assessments and council tax-capping criteria for 1993–94 in due course to help local authorities with their budgeting.

I intend to consult the Welsh local authority associations on my settlement proposals later this month and I will announce final settlement details to the House early in the new year.

Finally, I propose to raise the non-domestic rate poundage for 1993–94 to 44p from its 1992–93 level of 42.5p. This is an increase of 3.5 per cent. in line with the change in the retail prices index over the 12 months to September 1992. It is consistent with the statutory requirement to limit increases to the rate of inflation.