§ Mr. SteenTo ask the Deputy Prime Minister pursuant to his answer of 14 March 2003,Official Report, column 438W, on local government finance, which local authorities in Devon have suffered a cut in real terms in central Government funding as a result of increased national insurance contributions from 1 April and the proposals and initiatives within the new burdens principle; and whether the increase in national insurance is included in the new burdens principle. [105036]
§ Mr. RaynsfordA new burden is defined as any policy or initiative which increase the cost of providing local authority services. Under the new burdens arrangement Government Departments are responsible for fully funding the costs of their policies which impact on local authorities. The new burdens requirement does not apply to policies which apply the same rules to councils and to private sector bodies (for example a change in the rate of employers' national insurance contributions) except where those policies apply disproportionately to local government. The Government have however guaranteed an increase in grant of at least above the rate of inflation for all local authorities. The increases announced in SR2002 took into account all pressures, including the increase in national insurance contributions, along with the ability of local authorities to make savings. As a result total Government grant to local authorities has increased by £3.8 billion in 2003–04. The Office of the Deputy Prime Minister estimates the change in national insurance contributions will increase local authorities' pay costs on average by 0.7 per cent. or some £250 million.