Local Government Finance (Hansard, 2 February 1998)

§ Mr. Prescott

I am today laying before the House the Local Government Finance Report (England) 1998–99, the Limitation of Council Tax and Precepts (Relevant Notional Amounts) Report (England) 1998–99, and the Special Grant Report (No.31). These reports establish the amounts of revenue support grant (RSG) and non-domestic rates (NDR) to be paid to local authorities in 1998–99, and the basis of their distribution; specify the amounts which are to be used as the basis of comparison for measuring increases in certain local authorities' budgets in 1998–99 for the purposes of capping, and provide for a special Standard Spending Assessment (SSA) reduction grant to be paid to certain authorities for 1998–99. Drafts of these reports were issued for consultation on 2 December 1997. I also announced on that date my provisional guidelines for capping the budgets of local authorities. The Department received written representations from 248 authorities and my Ministerial colleagues at DETR met 95 delegations from local councils.

I have considered the views of local authorities and others who have commented on my initial proposals. However, I have decided to make no changes in the SSA methodology which formed the basis of consultation, nor in the capping guidelines. The SSAs for individual authorities may be slightly different from those at consultation, generally reflecting more accurate data that have become available since then.

This year's local government finance settlement is better, fairer and more flexible than the plans set out by the previous Government. We have been able to achieve this within the tight constraints on public expenditure needed to achieve this Government's economic aims. The Government's intention is that local authorities should be able to respond by giving top priority to education—the Government's and the nation's priority. That is why we have made available £835 million extra for education on top of what was originally planned.

We are also publishing, for the first time, a Plain English guide to the dauntingly complex world of local government finance. This carries the Crystal Mark of the Plain English Campaign. I am keen that hon. Members and members of the public have the clearest possible understanding of how local government finance works.

I shall be sending copies of these reports and the Plain English guide to all authorities, together with tables showing each authority's Standard Spending Assessment and its entitlement to RSG, NDR and special grant, and information on capping guidelines and limits. Copies of the reports, tables, the capping information and the guide have been placed in the Library.