§ Lord Greavesasked Her Majesty's Government:
Why the new needs-based formula grant system for local authorities in England has not been implemented; and why the phasing-in regime has been stopped. [HL5005]
§ Lord RookerThe new grant distribution formulae (the Formula Spending Shares) were implemented for the 2003–04 local government finance settlement. At the same time the Office of the Deputy Prime Minister also increased the extent to which the system takes account of councils' relative ability to raise council tax.
The White Paper Strong Local Leadership—Quality Public Services announced the Office of the Deputy Prime Minister's intention of having minimum grant increases ("floors") within the local government finance settlement. In introducing the new system we confirmed our commitment to this principle. The floors are necessary to ensure that all authorities receive a reasonable increase in grant each year on a like-for-like basis. These must be paid for within the total amount of grant that goes to authorities each year.
I can confirm that we are committed to retaining floors in the grant distribution system. Decisions on the level of floors and how to fund them in 2005–06 have not yet been taken.