HC Deb 19 December 1994 vol 251 cc972-5W
Mr. Raynsford

To ask the Secretary of State for the Environment if he will list the undertakings given by the Government in their response to the first report from the Environment Select Committee, Session 1993–94, on standard spending assessments, Cm. 2494, indicating in respect of each undertaking what action has been taken and when.

Mr. Robert B. Jones

The undertakings that were given in the Government's response to the Select Committee report and the action that has been taken are as follows:

Subject—Openness (Recommendation 1) Undertaking—The Government will continue to discuss possible changes in SSA methodology with the local authority associations and to provide them with the data underlying any analyses. Action—Between March and September 1994 there were 11 meetings of the SSA sub-group. This sub-group is the forum for discussions between the local authority associations and central Government Departments about possible changes in the formulae for SSAs. A report of the work of this sub-group was received by the Consultative Council on Local Government Finance in October.

Subject—Judgment (Recommendation 4) Undertaking—Later this spring, the Department of the Environment will publish an updated edition of the SSA "Background and Underlying —Methodology" booklet which will explain how Ministers reached decisions on the choice of particular indicators and the research underpinning those decisions. Action—The publication of the methodology handbook has been delayed. I hope it will be possible to publish it in January. Subject-Information for authorities on calculation of SSAs (Recommendation 5) Undertaking—To discuss with the local authority associations the value to individual authorities of providing them with completed calculations. If there is agreement that information in this form would be of use to individual authorities we will consider, with the associations, whether this can be provided. Action—We discussed the issue with local authority associations and completed calculations have been sent to individual local authorities. The authorities have been invited to comment on their usefulness. Subject—Use of regression analysis (Recommendation 6) and Factors which influence local authority spending (Recommendation 19) Undertakings—The Government will be setting in motion some research to consider the scope for alternatives to regression, particularly those involving expenditure data … It is unlikely that this research would be completed in 1994.The Government are looking carefully at the priorities for future work into SSAs in consultation with the local authority associations. This work is likely to include an examination of alternative ways in which the assessment might be made. This work would need to include consideration of any extra information which might be required and the cost and feasibility of collecting it. Action—We have drafted a specification for research which we plan to discuss with the local authority associations on 17 January. The research' would consider alternatives to regression analysis as ways of examining the factors which influence local authority spending. Subject—Change in SSA methodology following reorganisation (Recommendation 7) and Damping effects of changes following reorganisation (Recommendation 10). Undertakings—The Department will be reviewing whether any SSA methodology changes will be necessary as a result of the local government review and will discuss such matters with the local authority associations within the forum of the settlement working group, which is informed by the SSA sub-group and the restructuring finance sub-group. The impact on SSAs of the reorganisation of local authorities and the need for any safety net arrangements will be discussed extensively with the local authority associations during the course of this year within the forum of the settlement working group. Action—We have analysed the likely effects of local government reorganisation and considered whether damping and any methodology changes are necessary. We discussed the effects with the local authority associations in the restructuring finance sub-group. For 1995–96 we considered that no damping and only minimal changes were required, though more substantive changes may need to be considered for 1996–97. Changes for 1996–97 will be considered initially by the SSA sub-group. Subject—Future recalibration of SSAs (Recommendation 9) and future work on SSAs (Recommendation 20) Undertakings—During 1994 the Government intend to discuss with the local authority associations more limited changes in SSAs which now require examination, such as changes in the formula relating to the police which were not examined as part of the 1993 review of SSAs. The SSA sub-group will meet again in 1994 to consider SSA data and methodology issues. Among the Government's priorities for work in 1994 will be the police SSA and the way in which the area cost adjustment tapers outside London. Action—Possible changes to SSA methodology, put forward by Department of the Environment, other Government Departments and local authority associations, were considered by the SSA sub-group and, in respect of police formula, by a working party chaired by the Home Office. The Government's proposals for SSAs in 1995–96, which incorporate proposed changes in methodology, were published on 1 December 1994. The proposed changes include a significant change relating to police and a change to the taper on the area cost adjustment, but are more limited than those arising from the 1993 review. Subject—Stability and the SSA reduction grant (Recommendation 14) Undertakings—The Department of the Environment will be considering with other Government Departments and the local authority associations whether to commission research into ways of updating before 2001 the proxy variables derived from the census. Decisions on whether to pay SSA reduction grant for 1995–96 will be taken, together with other decisions on the local government finance settlement for that year. Action—Discussions have taken place with the Office of Population Censuses and Surveys about work it has started in this area. Their proposals will be discussed with the local authority associations early in 1995. The proposals for local authority finance in 1995–96 include payment of SSA reduction grant in respect of changes resulting from the 1993 review of SSAs, and in respect of changes in the police SSA, and police grant.

Subject—Community Care (Recommendation 15) Undertaking—The distribution—of the special transitional grant—will continue to be discussed with the local authority associations in the normal way and in the light of overall monitoring. Action—The arrangements for distributing the 1995–96 STG for community care were discussed at a meeting between officials of Department of Health and the local authority associations. The associations were also given the opportunity to comment on these matters in writing. In the light of the views expressed, it is the Government's intention to base the distribution of the 1995–96 STG wholly on the SSA for personal social services. The Government remain of the view that it is not possible to monitor the effect of the chosen distribution in isolation from other factors.

Subject—Day visitors (Recommendation 18) Undertaking—A number of issues regarding the day visitor estimates have been raised in discussion with local authority associations and by individual authorities. These issues and other matters concerning potential enhancements to the day visitor estimates will be addressed in the coming year as part of the process of keeping this indicator under review. Action—In 1994, the SSA sub-group considered a paper presented by DOE and Department of National Heritage looking at the strategy for updating the day visitor numbers. It was generally agreed that, pending a more comprehensive review during 1995, when updated information will become available, there should be no change for 1995–96.

Sir Teddy Taylor

To ask the Secretary of State for the Environment if county councils are permitted to exceed standard spending assessment limits by the use of reserves.

Mr. Robert B. Jones

[holding answer 16 December 1994]: Yes. Expenditure funded from reserves or balances lies outside an authority's budget requirement, which is the quantity to which the capping principles apply.

Sir Teddy Taylor

To ask the Secretary of State for the Environment what procedures exist for the review of individual standard spending assessments issued to individual county councils in the event of substantial and unexpected increases in the demand for services; and if he will make a statement.

Mr. Robert B. Jones

[holding answer 16 December 1994]: Standard spending assessments are calculated using a uniform methodology which is applied to all authorities. The methodology is discussed in detail with the local authority associations. Where possible, the data used in the calculation of SSAs are brought up to date each year to reflect the changing conditions in the area of each individual local authority. Where demand for an individual authority's services increases we would normally expect this to be reflected in the data underlyings its SSA, albeit with a time lag.

The proposed SSAs for 1995–96 were announced on 1 December. Authorities have the opportunity to make representations in the period to 6 January. Having considered the representations, the Secretary of State will lay before the House of Commons a local government finance report setting out SSAs for each authority for 1995–96.

Once the report is approved, there can be no more than one amending report. There is a separate scheme, the Bellwin scheme, to deal with major emergencies.

The capping principles recognise that SSAs cannot reflect precisely every local circumstance, by allowing a margin of 12.5 per cent. over an authority's SSA before its budget requirement is regarded as excessive. In addition, local authorities will normally hold balances to meet expenditure unexpected at the time of their budget.