HC Deb 06 February 1996 vol 271 cc104-5W
Mr. Lidington

To ask the Secretary of State for the Environment if he will list(a) the local authorities which will benefit from the area cost adjustment in 1996–97 and (b) the amount by which each such authority will benefit in that year. [13944]

Sir Paul Beresford

A table listing the contribution to SSAs from the area cost adjustment has been placed in the Library.

The contribution of the area cost adjustment is not the same as the amount an authority would gain or lose if there was not an area cost adjustment in the standard spending assessment system. If the area cost adjustment were removed, it would be necessary to revise the analyses on which the SSA formulae are based, and we would wish to consult the local authority associations on what would then be the most appropriate formulae.

Mr. Dobson

To ask the Secretary of State for the Environment (1) what is the planned yield from council tax in England for the financial year from 1995–96 to 1998–99 based on the view of local authority behaviour taken in the "Financial Statement and Budget Report 1996–97" expressed in(a) millions of pounds, (b) in pounds divided by the band D council tax base used for 1995–96 tax setting and (c) in pounds divided by the total number of chargeable dwellings in England in 1995–96; [13972]

(2) what is (a) the Treasury's estimate of the likely increase in the total yield of council tax in England in 1996–97, expressed in pound million and as a percentage based on the view of local authority behaviour taken in the "Financial Statement and Budget Report 1996–97", (b) the detailed worked mathematical calculation that informs that estimate, (c) the Treasury's estimate of the increase in aggregate budgets as adjusted for the purposes of 1996–97 capping, expressed in millions of pounds and as a percentage based on the view of local authority behaviour taken in the "Financial Statement and Budget Report 1996–97" and (d) the planned increase in aggregate Government total external support for local authorities in England in 1996–97, compared to 1995–96 total external support adjusted for 1995–96 community care special transitional grant and further changes in local authority responsibilities, expressed in millions of pounds and as a percentage. [13973]

Mr. Gummer

The Government do not set plans for the yield of council tax, which depends upon decisions made by individual authorities. The figures in chapter 4 of the "Financial Statement and Budget Report", HC 30, which relate to 1996–97 and preceding years only, show an estimate of the contribution of council tax, net of council tax benefit, to the total of general Government revenues.

The costs of council tax benefit fall largely to the Exchequer. In order to reduce the chance that local authorities' budgeting decisions will have an adverse effect on the public finances. Estimates of council tax growth are set on the pessimistic side.

The table shows the calculation of gross council tax yield for England consistent with chapter 4 of HC 30. The calculation takes account of estimates of the council tax base, the assumed average level of council taxes and the average council tax collection rate.

1995–96 1996–97
Estimated council tax base before collection rate adjustment (million band D equivalents) 16.50 16.55
Assumed average band D council tax level, £ 609 656
Percentage estimate of assumed collection rate 97.2 97.4
Estimated yield gross of council tax benefit, £ million 9,780 10,574
Estimated increase in gross yield £ million 794
Per cent. 8.1
Gross yield divided by 1995–96 tax setting tax base, £ 659
Gross yield divided by 1995–96 chargeable dwellings, £ 538

No separate estimate is made of the increase in aggregate budgeted local authority revenue expenditure in England.

Aggregate external finance has been increased by £549 million (1.6 per cent.) above the 1995–96 level, adjusted for community care special grant and other changes in local authority responsibilities.