HC Deb 26 April 1993 vol 223 cc282-3W
Mr. Roger Evans

To ask the Secretary of State for Wales whether he intends to cap any Welsh authorities for 1993–94; and if he will make a statement.

Mr. David Hunt

Local authorities in Wales have now set their budgets and council tax for 1993–94. Almost all have budgeted within or very close to the limits implied by the provisional capping criteria I announced last December.

The provisions of the Local Government Finance Act 1992 require me to determine capping principles for a class of authority prior to announcing a decision to cap any authority of that class.

In the light of careful consideration of their budgets and all other relevant considerations I have now decided my capping principles for district councils.

The principles I have adopted broadly give effect to the provisional criteria I announced to the House last December with one modification. I have included a de minimis proviso to avoid designation in cases where the reduction which could be secured by capping would be less than £1.50 per band D household. Full details of my principles have, this afternoon, been placed in the Library of the House.

On the basis of these principles I have designated Aberconwy borough council for capping. Its 1993–94 budget is £8,734,695 and I have proposed a cap of £8,566,950. The original council tax for a two adult band D dwelling was £69. The reduction implied by the proposed cap is £8.

On the basis of all the information currently available to me, I am satisfied that my proposed cap is reasonable and appropriate in all the circumstances of the authority and that the reduction I propose is achievable this year.

If Aberconwy wishes to accept the amount proposed, it now has 28 days in which to do so. It can also challenge my proposal within 28 days, suggesting an alternative figure together with reasons for it, and in those circumstances it is open to me to set the final cap at a different level from the one I originally proposed. If Aberconwy does not accept my proposed cap, I will seek the approval of the House for a draft order confirming the cap.

Within 21 days of the final cap having been set, Aberconwy must set a new budget requirement reflecting the cap; and this will feed through to the council tax. I expect that by the end of June Aberconwy will have calculated a new budget requirement leading to a reduced level of council tax.

I propose shortly to apply to the High Court for leave to seek a judicial review of the council tax calculations made by Gwent county council for 1993–94. If leave is granted by the court, the judicial review could result in the authority making new budget requirement and council tax calculations. For this reason, I do not consider it appropriate to make a decision on my capping principles for county councils until such time as this matter is resolved. However, on the basis of the budgetary information available to me, I see no reason to pursue the matter of designation in respect of the other county councils in Wales.