Lord Chelwoodasked Her Majesty's Government:
What is the percentage of the rate burden borne in 1988–89 by the Treasury, and to what figure this would be increased if the whole burden of financing (i) education, (ii) the police, (iii) the fire services, and (iv) civil defence were to be met from central funds; by what pecentage this would reduce the local rates; and whether they will give the same information in approximate money terms.
§ The Secretary of State for Trade and Industry (Lord Young of Graffham)If local authorities in Great Britain spend in line with the Government's plans for 1988–89, Exchequer grant will meet £17,401 million out of total relevant expenditure of £36,017 million. That is 48.3 per cent.
If, in addition, the full cost of education was met entirely out of central funds, Exchequer grant would rise by about £16.4 billion to around £33.8 billion; the percentage that grant forms of relevant expenditure would rise from 48.3 per cent. to about 94 per cent.; and there would be a corresponding fall in the proportion met from rates.
For the police, the equivalent figures are an increase in Exchequer grant of about £1.9 billion, and a rise in the percentage to about 54 per cent. For the fire service they are increases of around £850 million, and to 51 per cent.
The cost of civil defence—some £21 million in 1988–89—is already largely met through specific grants from the Exchequer, as indeed is just over half the cost of the police service and a small proportion of education expenditure.
All these estimates assume that local authorities will spend no more than the Government have provided for in the latest Public Expenditure White 959WA Paper, Cmnd. 288, published in January 1988. In practice, local authority expenditure decisions are largely a matter for them and their ratepayers. But substantial increases in Exchequer finance would very likely feed through, at least in part, into higher expenditure by local authorities rather than a full reduction in the rates burden.