HC Deb 10 November 1999 vol 337 cc617-8W
Mr. Gunnell

To ask the Secretary of State for the Environment, Transport and the Regions what progress has been made on reviewing the local government finance system. [98338]

Ms Armstrong

The July 1998 White Paper "Modern Local Government—In Touch With The People" announced that central Government, in partnership with local government, would investigate ways of distributing revenue support grant that were simpler, more stable, more robust and fairer than the present arrangements.

Alternative approaches to grant distribution are currently being developed by a working group of civil servants and local government officers, which reports to the Central Local Partnership.

The White Paper also announced that work would be commissioned to simplify the system of local government capital finance. PricewaterhouseCoopers (PwC) have now completed their research into two key areas:

  1. (i) prudential indicators for regulating local authorities' capital expenditure; and
  2. (ii) a non-statutory framework for the prudent repayment of local authority debt.

Taken together, the PwC reports propose a move from the present complex system of statutory controls to a new system with a greater emphasis on self-assessment and adherence to professional codes. My Department has not yet had time to fully consider the implications of the reports, but welcomes them as substantial contributions to the review.

Copies of executive summaries of the PwC research are being sent to every local authority in England and placed on the DETR's website and in the House of Commons Library. The full reports will be published shortly. As with the revenue grant distribution review, the proposed reforms will be considered by a joint working group of civil servants and local government officers reporting to the Central Local Partnership.

In order to allow for proper consideration of the options being considered by the RGD Review Group, PwC's work and the linkages between them, we therefore intend to issue the previously announced Green Paper on local government finance in summer, rather than spring 2000.