HC Deb 06 November 1945 vol 415 cc1216-8W
Mrs. Manning

asked the Minister of Health when he proposes to call upon local authorities who have been financially assisted by the Exchequer during the war to repay the 25 per cent. of the advances made which has by agreement been treated as an interest-free loan; and whether the present arrangements or some modification of them will continue to apply to those authorities whose financial position will be seriously affected for some time to come as a result of the war.

Mr. Bevan

As my hon. Friend is aware, 75 per cent. of the assistance is already treated as an outright grant. The Government have now decided not to require repayment of the remaining 25 per cent. which has hitherto been treated as an interest-free loan. There are two exceptions to this decision, one relates to deficiencies in the revenues of public utility undertakings operated by the local authority; the other concerns expenditure not strictly justified. The Government have also decided to treat the bank overdraft, which some local authorities were required to carry as a condition of Exchequer assistance, on the same footing; this means that in most cases local authorities will be relieved of this liability. The present scheme will not continue after the end of the current financial year, but the Government is aware that if the Exchequer assistance is withdrawn, some of these local authorities would be faced with an unreasonable increase of the rate burden. My right hon. Friend the Secretary of State for Scotland and I will accordingly be prepared to consider applications for a continuance of assistance for a limited period where the circumstances justify it. As under the present scheme, assistance will depend on the need; and this will be measured by the loss of rate revenue as compared with normal, and the rates which would be necessary if no assistance were given.

Assistance given after this year will take the form of lump sum grants; these will be determined after discussion with the individual authorities concerned, and we shall take into acount the loss of productivity of rates and the anticipated expenditure of the authority. In any cases in which further assistance is needed for more than one year, we propose to make a series of two or more annual grants of decreasing amount spread over the period during which the local authority may be expected to achieve financial recovery. We propose to determine the number and amount of these grants at the outset and we shall not then need to impose any conditions as to the poundage of the rate to be levied.