HC Deb 12 November 1992 vol 213 cc851-3W
Mr. Kynoch

To ask the Secretary of State for Scotland if he will announce details of the 1993–94 Scottish local government finance settlement.

Mr. Lang

In considering the settlement for next year I have taken account of the representations made to me by the Convention of Scottish Local Authorities; the additional burdens facing local authorities next year, particularly care in the community; the scope for authorities to make further efficiency savings; and the Government's policy on public sector pay.

I propose that aggregate external finance (AEF) should be set for 1993–94 at a total level of £5,147.3 million. This represents an increase in the 1992–93 provision for AEF of 3.2 per cent. after adjusting for:

  1. (a) the transfer of responsibility for further education colleges to central Government; and
  2. (b) the inclusion within the above total of £60.6 million to finance the full implementation of care in the community from 1 April 1993; and
  3. (c) £3.8 million to meet the cost of grants for rates rebates on premises within enterprise zones and £2.8 million to meet the additional cost of grants for rates rebates on premises for disabled persons. From 1993–94 both of these grants will be treated as specific grants within AEF.

Lord James Douglas-Hamilton

Provisional figures for numbers of warrant sales reported to the Sheriff Courts from 1987 to 1991 are set out by sheriffdom in the table:

I propose that Government supported expenditure (GSE) for 1993–94 should be set at a level of £5,748 million, an increase of 2.75 per cent. on the 1992–93 figure after adjusting for the further education transfer and the inclusion of provision of £60.6 million within GSE for care in the community. I estimate that capital financing will require £725 million next year, leaving a residual amount for grant-aided expenditure (GAE)—excluding the above amount for care in the community—of £5,023 million, an increase of 2.6 per cent. over the adjusted 1992–93 GAE figure.

In determining the above AEF figure, I have assumed that local authorities will contribute £12 million to the next stage of unified business rate policy. Details of the total reduction which I plan to make in Scottish business rates next year are being announced separately.

I have the power to cap a Scottish local authority either where I consider that its planned expenditure is excessive or where there is an excessive increase in its planned expenditure as compared with the previous year. For 1993–94, my intended capping principles are:

  1. 1. Any increase in budget between 1992–93 and 1993–94 of more than 2.25 per cent. will be an excessive increase if the resulting budget is above the local authority's grant-aided expenditure (GAE) assessment for 1993–94;
  2. 2. Any increase in budget between 1992–93 and 1993–94 of more than 1.5 per cent. will be an resulting budget is over 1 per cent. above the local authority's GAE assessment for 1993–94;
  3. 3. Any increase in budget between 1992–93 and 1993–94 of more than 1.0 per cent. will be an excessive increase if the resulting budget is over 5 percent. above the local authority's GAE assessment for 1993–94;
  4. 4. Any increase in budget between 1992–93 and 1993–94 of more than 0.5 per cent. will be an excessive increase if the resulting budget is over 10 percent. above the local authority's GAE assessment for 1993–94; and
  5. 5. Any budget for 1993–94 more than 12.5 per cent. above the local authority's GAE assessment will be excessive.

These principles are necessarily provisional. Before taking my decisions on capping, I will, of course, take into account all appropriate considerations.

This represents a realistic settlement, especially in view of the need to control public expenditure. If local authorities ensure that pay settlements are as near as possible to zero in the coming year and they maximise efficiency savings, there will be scope for real increases in service provision. If authorities do not budget responsibly, I shall not hesitate to use the capping powers available to me.

The settlement should also enable authorities to set council taxes at reasonable levels. I intend to introduce a council tax transitional relief scheme to ensure that households do not face large increases in their bills next year as a result of the change from the community charge to the council tax.