Revenue Support Grant (Hansard, 29 October 1999)

§ Ms Armstrong

I expect to be able to announce to the House full details of the proposed Revenue Support Grant distribution in late November. However it would be helpful both to hon. Members and local authorities to announce now what I am minded to do in terms of grant distribution, phasing in or changes, and consultation.

This year, I propose to set considerable store by stability in the grant system, to help councils plan ahead. In our July 1998 White Paper, "Modern Local Government—In Touch With The People", we said that we would not expect to make fresh changes to the method of calculation of Standard Spending Assessments (SSAs,) except, for example, where there are changes in the functions of councils, or the financing of particular services. We said that the SSAs of individual councils would change to reflect changes in demand for their services as reflected in the data used to calculate the SSAs.

The totals of SSAs will change this year to reflect the increased funding announced last July in the Comprehensive Spending Review. There will be changes to reflect new functions or financing arrangements. The £150 million from the Service Development Fund which we had put in the Education SSA total to help meet the costs of implementing the pay reforms proposed in the Teachers' Green Paper will now be paid as part of a special Grant for that purpose.

Our present intention is that, subject to consultation, and approval by the House, we shall not make any changes to the method of grant distribution generally. We shall need to make some limited adjustments to SSAs to accommodate the establishment of the Greater London Authority (GLA) and related changes, most notably those arising from the alterations to the boundary of the Metropolitan Police area and the Essex, Hertfordshire and Surrey police areas.

We intend to adopt similar rules for Central Support Protection Grant and the SSA Reduction Grant as for this year. This would mean that no authority would receive less central support in 2000–01 than in 1999–2000, and every education authority would receive at least a 1.5 per cent. increase in central support. In both cases, the comparisons must make allowance for the changes connected with the creation of the GLA. The SSA Reduction Grant would operate in the same way as in 1999–2000 but with comparisons moved on a year as necessary.

I am sure that this early indication of our intentions will be welcomed by most authorities for the extra certainty which it gives them in the early stages of their budget decisions for next year.

Given the degree of stability that we propose this year, I do not intend to invite local authorities to hold meetings with Ministers during consultation on the settlement. I expect authorities to put any points in writing; they will all be considered before I finalise my proposals. I shall meet the local authority associations so that they can put any points directly to me. Individual local authorities of course can channel their comments through the associations.