§ Mr. Heathcoat-Amory
To ask the Secretary of State for the Environment, Transport and the Regions when he will determine whether Somerset county council can exceed its expenditure cap for 1997–98. 
§ Mr. Prescott
I am announcing the capping principles for all authorities, including Somerset, today.
The vast majority of authorities have set budgets and council taxes within the limits set by my predecessor; in only three cases (out of 436 authorities) am I proposing cap limits which would require authorities to reduce their budget requirements.
These authorities are Oxfordshire County Council, Somerset County Council and Warwickshire County Council. I have proposed caps for them which I consider, on the basis of all the information available so far, to be reasonable and achievable in all the circumstances of the authorities concerned. If the authorities accept my proposed caps they will be able to issue new lower bills without delay.
The capping principles for 1997–98 are set out in the Limitation of Council Tax and Precepts 1997–98 (4 February 1997) subject to a general proviso that no authority is to be designated if its budget requirement is £50,000 or less above the limit implied by these principles. I have placed copies of this document in the Library of the House. The main points are:
- (i) Inner London boroughs, Metropolitan Districts and Unitary authorities and the Isles of Scilly were able to increase their budget requirements by 1 per cent. or the increase in their education, PSS and fire SSAs whichever is the greater;
- (ii) County Councils, outer London Boroughs and the City of London were able to increase their budget requirements by 2 per cent. or the increase in their education, PSS and fire SSAs, whichever is the greater;
- (iii) Shire districts were able to increase their budgets by 0. 5 per cent.;
- (iv) Fire and Civil Defence Authorities were able to increase their budget requirements by 3.0 per cent.;
- (v) Police Authorities were able to increase their budgets by 3.2 per cent.Authorities budgeting more than 12. 5 per cent. above SSA were subject to a cash freeze.In accordance with sections 54 and 56 of the Local Government Finance Act 1992, I have decided to designate the authorities listed below. The amount given after each authority is the amount which I am proposing should be the maximum amount calculated by each authority as its budget requirement for 1997–98:Oxfordshire County Council: £339.530 millionSomerset County Council: £284.746 millionWarwickshire County Council: £292.335 million155W
This decision demonstrates that we are taking our commitments on spending very seriously. The authorities now have 28 days, starting today, in which to inform us whether or not they accept their proposed cap. If they accept, the caps will be confirmed by notice and the authorities can set revised lower budgets. The budgets we are proposing imply reductions of £6 million for Oxfordshire, £3.339 million for Somerset and £2 million for Warwickshire. Band D council tax bills well be reduced by around £28 (Oxfordshire) £20 (Somerset) and £11 (Warwickshire.) If an authority challenges, it must propose an alternative amount together with its reasons for doing so and will have the opportunity to meet us to explain its case. Once we have considered all the available information we shall propose final caps which will be included in an Order, a draft of which is debated by the House of Commons. If the draft Order is approved, final caps are set by notice and revised budgets and council tax levels must then be set by the authorities concerned.