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Local Government Finance

Volume 264: debated on Friday 20 October 1995

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To ask the Secretary of State for the Environment what recent research his Department has (a) commissioned and (b) evaluated into a comparison of amounts awarded to authorities in the south-east through the area cost adjustment with the actual additional costs for those authorities; and what that comparison showed. [38172]

The group of officials and officers of the local authority associations who discuss possible changes in standard spending assessments reported in September on this subject. Their report showed that there remains a wide divergence of views as to both the nature and the scale of the additional costs faced by authorities in London and the south-east, if they were to provide similar standards of service to those in other parts of the country.My hon. Friend the Minister for Local Government, Housing and Urban Regeneration has therefore proposed to the local authority associations that an independent review of the area cost adjustment should be carried out. We anticipate that research will be commissioned to assist the review in its work. It will be for the review team to consider whether research of the kind to which my hon. Friend refers would be of assistance to it.

To ask the Secretary of State for the Environment if he will list to one decimal place the percentage of total standard spending assessment received by area cost adjustment for the financial years 1990–91 to 1995–96.

The information requested is set out in the table.

YearContribution of area cost adjustment factor £ millionTotal standard spending assessment £ millionArea cost adjustment as percentage of total Percentage
(1995–96 excluding Metropolitan police)(1,556)(4.0)


1. The apparent increase in share in 1995–96 is because the SSA for the Receiver for the Metropolitan police was previously based on his budget, as approved by the Home Secretary. This included those extra costs which, from 1995–96, are reflected in the area cost adjustment. Excluding this effect, the share fell slightly in 1995–96 from 4.1 per cent. to 4.0 per cent.

2. The 1995–96 figures exclude a small element of area cost adjustment which is incorporated within the indicator "Pension Expenditure" in the police SSA.