asked the Secretary of State for the Environment whether the additional costs of some £7 million which will be incurred by the London borough of Newham by switching its banking facilities away from Barclays bank will affect the level of its Exchequer grants and other payments made by his Department; and whether he will assist in financing these additional costs.

Any net increase in administrative costs counts towards a local authority's total expenditure for block grant purposes. Whether this attracts grant-aid or incurs grant penalties will depend on the authority's overall level of expenditure, and on whether or not it overspends the guidance figure issued by my right hon. Friend the Secretary of State. Whatever the grant effect, any increase in costs increases the amount that an authority has to raise directly from its ratepayers.