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Rate Support Grant

Volume 77: debated on Wednesday 24 April 1985

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asked the Secretary of State for the Environment if he will make a statement about the operation of close-ending under the rate support grant systems.

Rate support grant is based on authorities' expenditure, but the total amount of rate support grant paid out in any year can only be the amount approved by the House of Commons. As a matter of routine, every year my Department notifies each local authority at the end of March of the grant to which it is initially entitled in the forthcoming year, on the basis of authorities' own estimates of expenditure. That process involves making an adjustment, called close-ending, from the figures published the previous December to ensure that the total of payments is in line with the authorised total.

Close-ending is not a new principle. Under the former RSG system, prior to 1981–82, the resources element of grant was close-ended each year to match the grant claimed by authorities to the total grant available. Indeed, the extent of close-ending in 1978–79, the last full year of the last Labour Government, was significantly higher than the 1.5 per cent. being applied in 1985–86. This means that under the former RSG arrangements particular authorities' grant entitlements could and did change to a greater extent than the close-ending recently announced for 1985–86.

Suggestions that either the timing or the substance of this year's announcement were in any way unusual are therefore unfounded and political mischiefmaking.