HC Deb 26 November 1996 vol 286 cc145-6W
Mr. Jacques Arnold

To ask the Secretary of State for the Environment what plans he has for local government revenue spending in 1997–98; and if he will make a statement. [6306]

Mr. Gummer

Every year, the Government announce the sum of money which local authorities are expected to spend—the total standard spending or TSS. Next year's figure is £45.66 billion, up 2.5 per cent. on last year, after adjusting for changes in function. This means an increase of £1.1 billion, and when the transitional costs of local government reorganisation are taken into account, represents a cash improvement of 2.4 per cent. TSS is planned to be £46.54 billion for 1998–99 and £47.29 billion for 1999–2000.

In allocating this sum between services for 1997–98, I have decided to give the main priority to education. My proposal is therefore that education spending should increase year on year by 3.6 per cent. after adjusting for the introduction of nursery vouchers. Councils must decide how much they actually spend on education, but I am sure that parents, governors and teachers will wish to ensure that education remains the top priority for authorities.

I propose that the level of aggregate external finance distributed to local authorities in 1997–98 should be £35.77 billion. After adjusting for changes in function, this represents an increase of some £530 million or 1.5 per cent. compared with this year's figure.

I also propose that the national non-domestic rate poundage for 1997–98 should rise to 45.8p, reflecting the annual increase in the retail prices index to September.

I propose to set the distributable amount of non-domestic rates at £12.03 billion. I propose that the total of Revenue support grant should be £18.69 billion. Special and specific grants within AEF will amount to £5.05 billion.

I shall announce shortly my proposals for the distribution of Government grants, including my proposals for changes in the standard spending assessment methodology. At the same time, I shall announce my capping intentions.

The Government have played their part by creating stable low inflation. It is essential that local and central Government continue to play their parts in restraining expenditure. My proposals for total standard spending, aggregate external finance and the non-domestic rate poundage represent a fair and balanced approach to funding the demands on local authority services in 1997–98.

This settlement will work for local authorities which look carefully at their spending priorities. If all councils take every opportunity to increase their cost efficiency in the delivery of services, then even in the climate of a tight settlement, the provision for next year will allow them to meet priority needs across the range of their functions.

Mr. Allason

To ask the Secretary of State for the Environment what plans he has to make it a statutory requirement on all local authorities to clearly identify statutory and discretionary expenditure in their annual budget. [6261]

Sir Paul Beresford

None. It would be seen as a considerable burden by local authorities to be required to separate their total expenditure into discretionary and statutory components.