§ Mr. LlwydTo ask the Secretary of State for the Environment what will be the effect of the change in the estimated level of Government financial support for 1996–97, on(a) local government expenditure and (b) local government taxation. [8891]
§ Sir Paul BeresfordThe overall level of aggregate external finance—that is the total central Government support for English local authorities—will increase by £960 million—2.8 per cent.—in 1996–97. This increase in AEF is to support the Government's view of the appropriate level of revenue spending for local authorities in England—total standard spending, which is £44.9 billion in 1996–97; an increase of 3.3 per cent.
Local authorities are however, subject to capping, free to set their budgets at the level they consider appropriate. The actual level of local authority expenditure will therefore depend on local decisions. If English local authorities increase their spending in line with the 601W increase in TSS, average council taxes in England would increase by between 5 and 6 per cent. in 1996–97. The pessimistic view of local authority behaviour taken in my right hon. and learned Friend the Chancellor of the Exchequer's "Financial Statement and Budget Report", imply that council tax levels will rise by 8 per cent. on average next year.
Local authority funding in Wales is a matter for my right hon. Friend the Secretary of State for Wales.