HL Deb 19 March 1990 vol 517 cc187-8WA
Viscount Dilhorne

asked Her Majesty's Government:

When they expect to announce their decision on the arrangements for reimbursing local authorities for the costs of the community charge transitional relief scheme.

Lord Hesketh

Local authorities will be reimbursed in full for the estimated £ 180 million which they would forgo in community charge income as a result abating personal community charges for some 7½ million chargepayers over the next three years. Authorities will also be reimbursed for their reasonable costs incurred in preparing for and administering the scheme.

Following a study of these costs by KPMG Peat Marwick McLintock, management consultants, my honourable friend the Minister for Local Government and Inner Cities announced proposals for these costs on 15th February. Following consultation with the local authorities associations, my honourable friend has decided to make the following arrangements.

Authorities' preparation costs for the scheme, largely for computer software, will be reimbursed in full on the basis of the actual expenditure incurred as confirmed by the authority's auditor. We estimate preparation costs to be about £ 7 million in total.

The general administrative costs which authorities will incur as a consequence of the scheme, in particular dealing with enquiries, will be reimbursed by a single flat rate payment of 27p per chargepayer, with an allowance for higher costs in London: In inner London the rate will be 31 p per chargepayer and in outer London 30p per chargepayer. The administrative costs grant will be about £ 9–5 million in total.

Applications by elderly or disabled persons for extra relief will be reimbursed at a rate of £ 3 per application made, which includes both successful and unsuccessful applications. In inner London the rate will be £ 3–60 and in outer London £ 3.45. Where an authority issues a second bill which does not relate to a substitute charge, it will be reimbursed at a rate of 50p per bill for the cost of printing and postage.

The total cost of this package of grant aid is about £ 21 million. My honourable friend believes that it fulfils the Government's commitment to meet in full authorities' reasonable costs incurred in preparing for and administering the community charge transitional relief scheme.