RATE SUPPORT GRANT 1987–88 (Hansard, 3 December 1986)

§ Lord Skelmersdale

My right honourable friend the Secretary of State for the Environment has received a substantial number of representations about the consultation paper which he issued on 3rd October.

As is usual at this time of year, more up-to-date information has also become available for some of the items which are used in the calculation of grant. It 924WA includes information about expenditure in 1986–87, about capital allocations for 1987–88, and about rateable values. It has the effect of redúcing still further the grant entitlements of some of the authorities who were already losing most under the earlier proposals.

My right honourable friend has given full consideration to the representations. The situation is also changed by the new data. He has therefore decided to revise my earlier proposals. He now proposes to give greater protection to those authorities who lose grant, by providing a tighter safety net of 7p at ratepayer level. He also proposes to introduce a new cap on grant gains larger than 12p at ratepayer level. The full details are set out in a further consultation paper issued today.

The aggregate Exchequer grant to local authorities is unchanged from my previous proposals at £12.8 billion, so some authorities will still get less grant than in 1986–87. But the new proposals will particularly benefit those authorities which lost most grant in the previous distribution—notably, Surrey, Hampshire, Hertfordshire, Bedfordshire and Oxfordshire. Most other shire counties, shire districts and outer London boroughs also benefit. The limit on grant gains affects 22 authorities: however, all these authorities are still expected to receive substantially more grant in 1987–88 than in 1986–87.

Copies of the consultation paper have been sent to all local authorities and to the local authority associations: their responses have been requested by 19th December. Copies of the paper have been placed in the Library and in the Printed Paper Office.