§ Sir J. Mellorasked the Minister of Health whether he has now any further statement to make on the principles applied and the practice adopted by his Department in dealing with claims for Exchequer assistance by local authorities whose income has suffered through war conditions; and whether, for better guidance, he will, without disclosing their geographical position, indicate the circumstances in which a selected number of typical claimants are receiving assistance?
§ Mr. E. BrownIn accordance with their undertaking, the Government are affording financial assistance to any local authority whose loss of income owing to the war is so great that there is a serious risk of a breakdown of essential local services. Normally 75 per cent. of any assistance given is by way of grant, the remaining 25 percent. being an interest-free advance, the ultimate liability for repayment being left to be settled after the war in the light of the circumstances then prevailing. Before assistance is given to any local authority the Government require to be satisfied that they have made all reasonable efforts to help themselves, including the utilisation of available balances not required for specific liabilities, the arranging of an overdraft at their bankers of a reasonable amount and, in' cases where this is justifiable, an increase in rate poundage.
It is not possible to lay down a precise formula because the circumstances of local authorities differ so widely and it is necessary in each case to discuss the questions fully with representatives of the local authority concerned. The poundage of the rate to be levied is usually the main subject of discussion and the factors taken into consideration are:
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- (1) The estimated loss of productivity of a penny rate as compared with the normal;
- (2). the recent history of the rate poundage; and
- (3). the level of the rates as compared with the rates levied by corresponding authorities.
As to (1) unless the loss of productivity is substantial there is no case for assistance. Generally speaking, the greater the loss of productivity the smaller the increase of rate poundage expected. As to (2), if the current rate represents an appreciable increase over the average of the rates for the two preceding years, the case for further increase is not usually regarded as very strong. As to(3), more substantial increases are expected where
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County Boroughs. (1) Normal 1d. rate product … … £5.680 Loss of productivity (mainly by evacuation) 53 Per cent. Current 1d. rate product … … £2636 Rates 1939 –1940 … … 12s. 5d. (No increase in rates as a condition of assistance). 1940 –1941 … … 13s. 10d. 1941 –1942 … … 13s. 10d. (2) Normal 1d. rate product … … £5,933 Loss of productivity (by evacuation and damage) 38 per cent. Current 1d. rate product … … £3.650 Rates 1939 –1940 … … 21s. 6d. (No increase in rates as a condition of assistance 1940 –1941 … … 21s. 6d. 1941 –1942 … … 21s. 6d. Metropolitan Boroughs. (1) Normal 1d. rate product … … £4,659 Loss of productivity (by evacuation and damage) 11 per cent. Current 1d. rate product … … £4,130 Rates 1939 –1940 … … 13s. 2d. (Increase of 3d. in the rates as a condition of assistance). 1940 –1941 … … 13s. 2d. 1941 –1942 … … 13s. 5d. (2) Normal 1d. rate product … … £3,024 Loss of productivity (by evacuation and damage) 43 per cent: Current 1d. rate product … … £1,724 Rates 1939 –1940 … … 18s. 0d. (No increase in rates as a condition of assistance). 1940 –1941 … … 18s. 6d. 1941 –1942 … … 18s. 6d. Non-County Boroughs. Normal 1d. rate. product … … £1,381 Loss of productivity (mainly by evacuation) 40 per cent. Current 1d. rate product … … £820 Rates 1939 –1940 … … 9s. 6d. (No increase in rates as a condition of assistance) 1940 –1941 … … 9s. 6d. 1941 –1942 … … 9s. 6d. (2) Normal 1d. rate product … … £937 Loss of productivity (by evacuation and damage) 57 per cent. Current 1d. rate product … … £400 Rates 1939 –1940 … … 14s. 0d. (No increase in rates as a condition of assistance) 1940 –1941 … … 15s. 3d. 1941 –1942 … … 15s. 3d. Urban Districts. (1) Normal 1d. rate product … … £239 Loss of productivity (mainly by evacuation) 16 per cent. Current 1d. rate product … … £200 Rates 1939 –1940 … … 12s. 8d. (Increase of 1s 0d. in the rates as a condition of financial assistance). 1940 –1941 … … 12s. 6d. 1941 –1942 … … 13s. 6d. Normal 1d. rate product … … £406 Loss of productivity (mainly by evacuation) 60 per cent. Current 1d. rate product … … £161 Rates 1939 –1940 … … 14s. 4d. (No increase in rates as a condition of assistance). 1940 –1941 … … 14s. 6d. 1941 –1924 … … 14s. 6d. the rate level is low compared with the average, unless there are countervailing considerations. On the other hand, where the rate level is already very high no increases are expected.
Assistance is given by way of monthly advances based on estimates submitted by the local authority of anticipated income and expenditure during each month. Up to the end of May, 54 authorities had received assistance (including seven county boroughs), and in nine cases rates were increased as a condition of assistance. Up to the end of May a total of £6,200,520 had been advanced, of which £1,184,600 was advanced during May. The following particulars relating to certain local authorities who are receiving assistance illustrate the application of the foregoing principles: