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Rate Support Grant

Volume 974: debated on Monday 19 November 1979

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asked the Secretary of State for Scotland if he will make a statement about rate support grant in Scotland in 1980–81.

As I have intimated to the Convention of Scottish Local Authorities, I intend that the rate support grant for Scottish local authorities in 1980–81 should be derived from total relevant expenditure of £2,009·9 million, and that the grant percentage should continue to be 68½ per cent. I have determined relevant expenditure at a level 2 per cent. below that for 1979–80 because of the overriding need to curtail public expenditure in the national interest. The aggregate grant I propose is £1,362·8 million, of which rate support grant forms £1,247·9 million.I also intend to make provision for additional grant in respect of increased costs of £5·3 million for 1978–79 and £80 million for 1979–80—with the possibility of a second increase order in 1980 of up to £19 million for 1979–80. I also intend that the cash limit for additional grant for cost increases during 1980–81 should be £194 million. This will be a firm cash limit which will not be subject to review.The main object of the formula for the distribution of grant will be to retain the arrangements made for 1979–80, as the Convention has recommended. Within this general objective, however, I propose to reduce the ratio of resources element to needs element from 1:4 to 1:7 so that authorities striking comparatively high rate poundages will thereby secure less additional resources than under the 1979–80 formula. I shall lay the necessary order for the approval of the House as soon as possible, together with the report required by statute.