§ Sir Geoffrey Finsbergasked the Secretary of State for the Environment how much cash is being distributed to successor authorities by the London and metropolitan residuary bodies; what assessment he has made of the implications this will have for the level of rates in these authorities; and what are the residuary bodies' levies for the 1986–87 and 1987–88 financial years.
§ Mr. ChopeThe financial benefits resulting from the removal of an unnecessary tier of local government are now being realised. This will greatly benefit London borough and metropolitan district councils and their ratepayers.
Within two years of abolition of the Greater London council and the Metropolitan county councils successor 559W boroughs and districts are expected to receive additional cash entitlements totalling £431 million and capital spending power in excess of £754 million.
Ratepayers will benefit directly in three ways. First, the distributed balances of the abolished councils totalling £257 million can be returned to them through lower rates. Secondly, some £174 million in cash receipts received by successor authorities will reduce their need to finance capital expenditure from borrowing or revenue. And thirdly, residuary bodies' levies are significantly lower in 1987–88 than in 1986–87. Indeed in three areas—Tyne and Wear, West Midlands and West Yorkshire —ratepayers will no longer be required to contribute towards the residuary bodies' costs.
Taken together with the Government's estimate of long term annual savings of some £100 million resulting from staff savings it is clear that our decision to remove this unnecessary and wasteful burden of local government bureaucracy was fully justified. In London alone the cash to be distributed by the London Residuary Body in the two years following abolition amounts to around £100 per household.
Subject to audit and certification of the abolished councils' 1985–86 accounts, residuary bodies are in the process of distributing inherited revenue balances after deduction of amounts applied to staff compensation payments resulting from abolition. The timing of distribution is at the discretion of the residuary bodies but they estimate that by 31 March 1988 the following amounts will have been distributed to rating authorities in their areas:
Estimated revenue balances of abolished councils to be distributed to rating authorities by 31 March 1988 £ million London 129.0 Greater Manchester 46.3 Merseyside 15.6 South Yorkshire nil Tyne and Wear 12.6 West Midlands 46.6 West Yorkshire 7.3 In addition my right hon. Friend has made orders under section 77 of the Local Government Act 1985 requiring residuary bodies to distribute capital moneys among the rating authorities in their areas. The residuary bodies estimate that by 31 March 1988 they will have distributed the following amounts of capital spending power inherited from the abolished councils and accruing from their own disposals of capital assets and repayments of principal on loans.
560W
Estimated capital spending power to he distributed to rating authorities by 31 March 1988 (£ million) Inherited from abolished councils Generated by residuary bodies London 368.8 263.3 Greater Manchester 62.3 10.4 Merseyside nil 1.0 South Yorkshire 5.5 2.0 Tyne and Wear 4.6 4.0 West Midlands 4.5 11.1 West Yorkshire 10.6 5.7 The following estimated amounts of capital receipts cash entitlement arising from the same sources will have been distributed to rating authorities by 31 March 1988, after deducting amounts applied by residuary bodies.
Estimated capital receipts cash entitlements to be distributed to rating authorities by 31 March 1988 (£ million) Inherited from abolished councils Generated by residuary bodies London nil 141.4 Greater Manchester nil 6.8 Merseyside nil 0.5 South Yorkshire nil 1.6 Tyne and Wear 2.5 1.5 West Midlands 2.7 11.1 West Yorkshire 1.2 4.2 The levies now announced by each residuary body for the forthcoming financial year, and those for the current year are as follows:
Residuary body levies 1986–87 and 1987–88 (£ million) 1986–87 1987–88 London 48.2 22.0 Greater Manchester 8.4 2.2 Merseyside 7.0 5.3 South Yorkshire 4.0 2.0 Tyne and Wear 2.5 nil West Midlands 2.7 nil West Yorkshire 2.3 nil