HL Deb 30 November 1994 vol 559 cc45-6WA
Lord Gainford

asked Her Majesty's Government:

What their proposals are for the appropriate level of aggregate local authority spending in 1995–96, and the level of central support for that spending.

Viscount Ullswater

We propose that Total Standard Spending (TSS) for 1995–96 should be £43.51 billion for England. This represents an increase of £930 million (2.2 per cent.) compared with this year's figure, including the amount for transitional community care special grant and provision for local government reorganisation transitional costs. Excluding community care and reorganisation, this still represents a cash increase of 0.8 per cent.

We propose that the level of Aggregate External Finance (AEF) distributed to local authorities in 1995–96 should be £34.67 billion. This represents an increase of £0.43 billion (1.2 per cent.) compared with this year's figure, including community care. Net of community care, this represents a cash decrease of 0.4 per cent.

We also propose that the national non-domestic rate poundage for 1995–96 in England should rise to 43.2 pence, reflecting this year's revaluation and the annual increase in the retail prices index to September. This will ensure that the benefit of the Government's success in tackling inflation will once again be passed on in full to businesses.

We propose to set the distributable amount of non-domestic rates at £11.35 billion and propose that the total of Revenue Support Grant should be £18.32 billion. Special and specific grants within AEF will amount to £5 billion.

My right honourable friend the Secretary of State for the Environment will announce shortly his proposals for the distribution of government grants, including his proposals for changes in the Standard Spending Assessment methodology. At the same time he will announce his capping intentions. He will also set out his proposals for the third year of the scheme of transitional assistance to those households which faced particularly significant increases in their local tax bills following the introduction of the council tax.

It is essential that local and central government continue to play their part in restraining expenditure. Our overriding priority is to reduce the public sector deficit. The proposals for Total Standing Spending, Aggregate External Finance and the non-domestic rate poundage represent a balanced approach to the funding of local authority services in 1995–96. We look to local authorities to take the same responsible attitude in determining their spending priorities and setting their budgets in 1995–96. However, in the context of a tough settlement, we are confident that, with efficient housekeeping and efficient collection of the council tax, these proposals will allow local authorities to maintain their current levels of spending and carry out their functions.