32.
asked the Secretary of State for Scotland when it is proposed to make a start for the first phase water supply schemes for Skye and the Outer Islands.
A start has not been made with these schemes because the county council are dissatisfied with the rate of grant recently offered to them. My right hon. Friend hopes to make a revised offer of grant at a very early date.
Will the hon. Member remember that the best season for the building of water supplies is very short? Can he say when it is expected that the negotiations between the county council and the Department for the 85 per cent. grant will be concluded?
I do not know that there will be any 85 per cent. grant. They were recently offered a 40 per cent. grant; they had expected an 85 per cent. grant; and we have had a discussion recently. We hope in the next week or two to be able to offer them a modified grant, but I cannot say what it will be.
Is it the case that part at least of the reason for the reduction of the grant from 85 per cent. to 40 per cent. is that the council indecently rushed to reduce its rates last year and reduced the value of its own contribution?
Was it not true that there was confusion between the county rate and the water rate in the Department?
The 85 per cent. which was expected in the first place was calculated on the basis of the rate burden on the authority before the introduction of the equalisation grant provision. Since the rate of the grant had to be fixed after the operation of the equalisation grant provisions, under which the county council are very generously treated by the Government, it was found that the rate of the grant would properly be fixed at 40 per cent. and the local authority were not willing to accept that.