Local Government Reorganisation (Hansard, 13 December 1994)

§ Mr. Lang

Following consultation with the Convention of Scottish Local Authorities, I have decided that, with one exception, all the provision for the costs of local government reorganisation which I expect will be incurred in 1995–96 should be allocated to the new shadow councils rather than to the existing authorities. I plan to allocate a total of £36 million to the shadow councils. This sum is entirely additional to the 1995–96 settlement for the existing local authorities which I announced on 29 November. In terms of section 25 of the Local Government etc. (Scotland) Act 1994, the shadow councils may be funded either by grant or by borrowing consent. I am still considering which of these funding methods to use and I shall announce my decision as soon as possible. COSLA is being consulted about the distribution of the £36 million among the shadow councils.

The one exception is provision of £5 million to cover the estimated cost of the elections of the shadow councils in April. That provision is included in the 1995–96 settlement for the existing authorities. A new grant-aided expenditure—GAE—assessment will be created for this amount and the GAE will be distributed among the nine regional councils on a basis agreed with COSLA.

It is clearly important that, in order to achieve as smooth a transition to the new structure as possible, the existing authorities play their full part during 1995–96 in helping the shadow councils to prepare for reorganisation. However, I would not expect the existing authorities to incur additional costs next year as a result of reorganisation. My impression is that the preparation work which is already under way in many authorities is, in the great majority of cases, being carried out by 596W existing staff. I expect that that will also be the case next year. Where the existing authorities do incur costs next year in preparing for reorganisation, I would expect these to be offset by a rundown in their staffing and other activity as 1 April 1996 approaches. In other words, I would expect to see, in general, changes in one cancelling out changes in the other. But if a situation were to arise in which an existing authority had to undertake a major piece of preparation work which, for example, involved the recruitment of extra staff or the commissioning of consultants, I would expect such work to be undertaken only with the agreement of the relevant shadow council or councils and with the costs being met by that council or those councils concerned.

I consider that the provision that I am making for reorganisation costs in 1995–96 and the approach which I have outlined with regard to its distribution will ensure that the process of reorganisation will proceed smoothly and efficiently in the lead up to the transfer to the new councils on 1 April 1996.