§ Mr. Clifton-BrownTo ask the Deputy Prime Minister for what reason the proposal in the draft Local Government Bill to merge new domestic rates and rates support grant has been dropped in the published Bill. [84418]
§ Mr. HobanTo ask the Deputy Prime Minister if he will make a statement on the proposed merger of the rate support grant and national non-domestic rates. [85226]
§ Mr. LeslieThe draft Bill proposed the merger of Revenue Support Grant (RSG) and redistributed national non-domestic rates (NNDR) into a single grant stream. The intended purpose was to simplify the grant distribution mechanism by paying the combined total of central government unhypothecated grant support for local authorities and the amount of support raised via business rates using a single basis of distribution. The Government believed that this change would make the grant system more transparent and easier for stakeholders to understand.
A number of local authority responses to the consultation on the draft Bill agreed that the proposed changes would simplify the grant distribution system. However the overwhelming majority of consultation responses argued that the two funding streams should not be merged. The Select Committee also recommend against the proposed merger.
Having considered carefully all the consultation responses and the views of the Select Committee, the Government decided to not to proceed with the merger because it evidently did not achieve the desired objective of improving the clarity of the grant distribution system.