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Part Ii

Volume 414: debated on Monday 27 October 1980

The text on this page has been created from Hansard archive content, it may contain typographical errors.

Special Provisions Relating To Block Grant

calculation of block grant

4. Paragraph 5 below shall have effect in relation to the calculation of the amount of block grant payable to a relevant authority instead of section 52(6) above.

5.—(1) The amount of block grant payable to a relevant authority is the aggregate of the two amounts specified in sub-paragraphs (2) and (3) below.

(2) The first amount is an amount calculated by deducting from the relevant portion of the Receiver's total expenditure for the year the product arrived at by multiplying the Receiver's grant-related poundage by the gross rateable value of the authority's area, or, if their area is not wholly within the Metropolitan Police District, by the gross rateable value of that part of their area which is within that District.

(3) The second amount is an amount calculated by deducting from the total expenditure to be incurred by a relevant authority during the year—

  • (a)the relevant portion of the Receiver's total expenditure for the year; and
  • (b) the product arrived at by multiplying the authority's grant-related poundage by the gross rateable value of their area.
  • Special meaning of "grant-related poundage"

    6. For the purposes of this Part of this Act, section 52(8) above shall have effect, in relation to a relevant authority, as if in the definition of "granted-related poundage" the references to total expenditure were references to total expenditure after deducting the relevant portion of the Receiver's total expenditure for the year.

    Adjustments of distribution of block grant to relevant authorities

    7. The distribution of block grant to relevant authorities shall be adjusted in accordance with paragraph 8 below instead of section 55 above.

    8.—(1) Subject to the following provisions of this paragraph, the Secretary of State may provide in a Rate Support Grant Report that the amount to be deducted under paragraph 5(2) or (3) above in respect of block grant payable to a relevant authority for a year shall not be the relevant product but that product multiplied by a multiplier determined by the Secretary of State.

    (2) In sub-paragraph (1) above "the relevant product" means the product mentioned in paragraph 5(2) or (3) above, as the case may be.

    (3) Except as provided by sub-paragraph (4) below, the power conferred by sub-paragraph (1) above may only be exercised in relation to either of the relevant products for the purpose of increasing the amount of block grant payable to a relevant authority.

    (4) The power may be exercised for the purpose of decreasing the amount of block grant payable to a relevant authority if the Secretary of State is satisfied that there will be an unreasonable increase, unless he exercises it, in the amount of block grant payable to the authority for a year compared with the amount payable to them for the previous year.

    (5) The power may only be exercised in relation to the product mentioned in paragraph 5(2) above so as to determine one multiplier and to determine it in accordance with principles to be applied to all relevant authorities.

    (6) The power may be exercised in relation to the product mentioned in paragraph 5(3) above so as to determine different multipliers for different relevant authorities.

    (7) The power may only be exercised in relation to that product—

  • (a) for any such purpose as specified in paragraphs (a) to (d) of section 55(4B) above; and
  • (b) in accordance with sub-paragraphs (8) to (11) below.
  • (8) The power may be exercised in accordance with any principles to be applied under section 55(4A)( a)(i) above to all local authorities.

    (9) In relation to relevant authorities who are the councils of non-metropolitan districts the power may be exercised in accordance with any principles to be applied under section 55(4A)( a)(ii) above to all councils of non-metropolitan districts.

    (10) In relation to relevant authorities who are councils of inner London boroughs the power may be exercised in accordance with principles to be applied to all such councils.

    (11) In relation to relevant authorities who are outer London boroughs the power may be exercised in accordance with principles to be applied to all such councils.

    (12) If the Secretary of State exercises the power in relation to either of the products, the principles on which he exercises it shall be specified in the Rate Support Grant Report.

    (13) In its application to block grant payable to a relevant authority for the commencing year sub-paragraph (4) above shall have effect as if there were substituted for the reference to the amount of block grant payable to the authority for the previous year a reference to an amount determined by the Secretary of State.

    Supplementary reports

    9. In the application of section 57 above to the Receiver's grant-aided poundage and the Receiver's grant-related expenditure subsection (5) shall be omitted.

    Adjustment of block grant total

    10. Section 58(3) above shall have effect in relation to relevant authorities as if for the purpose of making a fresh calculation of the entitlement of each relevant authority to block grant it authorised the Secretary of State to substitute the total of the Receiver's expenditure actually defrayed out of the Metropolitan Police Fund for the figure calculated under paragraph 1 above as the part of the Receiver's expenditure which falls to be defrayed out of that Fund").

    The noble Lord said: My Lords, I spoke to this amendment with No. 90A. I beg to move.

    On Question, amendment agreed to.

    Clause 60 [ Adjustment in connection with education etc.]:

    The noble Lord said: My Lords, the present Clause 60 sought to apply the pooling provisions of the Local Government Act 1974 subject only to a simple change in nomenclature. This has since been found to be inadequate, and new Clause 59 was inserted into the Bill at Committee stage to replace Clause 60. Clause 60 should therefore be left out of the Bill. My Lords, I beg to move.

    On Question, amendment agreed to.

    Clause 61 [ Submission of information]:

    moved Amendment No. 95A:

    Page 56, line 10, leave out ("60 above") and insert ("[Special provision for Metropolitan Police District] above and to Schedule [Metropolitan Police District] to this Act").

    The noble Lord said: My Lords, I spoke to this amendment with No. 90A. I beg to move.

    On Question, amendment agreed to.

    Clause 63 [ Changes in rateable values]:

    moved Amendment No. 96:

    Page 57, line 2, leave out ("determined") and insert ("conclusively calculated").

    The noble Lord said: My Lords, this is a technical amendment. The use of the word "determined" in this clause suggests, quite wrongly, that the amount of block grant payable to a local authority for any year will actually be specified in the rate support grant report. The use of the words "conclusively calculated" is consonant with Clause 62(2), which requires the Secretary of State to make a conclusive calculation and notify the result to each local authority. My Lords, I beg to move.

    On Question, amendment agreed to.

    moved Amendment No. 96A:

    After Clause 65, insert the following new clause:

    (" Grants in respect of rate relief for buildings occupied for charitable purpose

    . For the year beginning 1st April 1981 and each subsequent year the Secretary of State shall pay out of money provided by Parliament to any authority giving relief from rates under section 40(1) of the General Rate Act of 1967 (mandatory relief for charities) in that year a grant equal to 100 per cent. of the aggregate amount of relief given.")

    The noble Lord said: My Lords, in moving this amendment I should declare an interest, because it was first proposed to me by the City of Westminster, one of whose ratepayers I am. It concerns a cost to the ratepayers of no less than £4·3 million, and I shall be very directly benefiting if we succeed in getting the amendment accepted. But the principle has since been strongly supported by the Association of District Councils. It has to do with the relief in rates accorded to properties occupied for charitable purposes, and it seems to me that if relief can be given in the case of properties occupied by the disabled, then there is certainly a case in logic for relief to be given in respect of properties occupied by charities.

    There is a mandatory requirement under the General Rate Act 1967 on all rating authorities to afford relief to those charities. My contention is that when relief is so given, those authorities should be fully compensated for the relief that they give in accordance with that Act and in accordance with any other discretion that they exercise on top of it. The national status of charities—it is not a local matter—and the properties that they occupy fall quite arbitrarily. The national charities are concentrated rather heavily in the City of Westminster, and the fact that the City of Westminster has rather more resources than most other local authorities should not, in my view, be a reason barring them from the receipt of this relief, or barring any other local authority that happens to house a considerable number of charities. I beg to move.

    My Lords, I am in absolute sympathy with the new clause, but when one looks closely at this matter it can be seen that the case for a specific grant of this kind is at best a marginal one. Under the resources element of the present rate support grant, almost all rating authorities receive compensation for the relief that they must give. Under our new block grant, even more authorities will receive compensation. There will only be a handful of authorities at most which do not receive grant because they have such large resources of their own. That would appear to give adequate recognition to the authorities' loss of income.

    It is true that this compensation is given within the total of rate support grant, whereas under Clause 65 the new relief to the disabled is to be compensated outside rate support grant. That, however, reflects the innovation of a new form of rate relief to the disabled, only operative from 1st April 1979. In that case a new specific grant serves to give encouragement to local authorities to get the new scheme off to a flying start.

    Charities relief is different. It is long-established and no relief at all was given until 1978. In our view it is entirely reasonable that a form of relief as well established as this should be compensated for by redistribution within the rate support grant total. Finally, I should mention the question of expense. To create a new grant as proposed would cost some £35 million a year.

    My Lords, that is all very well, but the bill is large when it is totted up, and this falls much more unfairly and unevenly on the local authorities than it does on the central Exchequer. I cannot say that this is a particularly convincing argument, but at this hour of the night I shall not press the amendment but will beg leave to withdraw it.

    Amendment, by leave, withdrawn.

    [ Amendment No. 96B not moved.]

    Schedule 11 [ Prescribed expenditure under Part VIII]:

    11.37 p.m.

    moved Amendment No. 96C:

    Page 182, line 9, leave out sub-paragraph (c) and insert—
    ("(c) the improvement or laying out of land other than the reclamation of derelict, neglected or unsightly land;").

    The noble Baroness said: My Lords, Clause 113 of the Bill extends the powers to make grants for the reclamation of land. Unfortunately, the very future of this reclamation programme is under threat because the expenditure upon it will have to be part of the capital allocation for an individual authority. Thus reclamation will have to compete with many other proposals in the same block within that allocation. Local authorities over the years have got a proven record of effective and substantial reclamation of derelict land, and I believe it would be a disaster if this were to change.

    The Government's intentions so far on this point are all the more paradoxical because in the same Bill they also emphasise the importance of identifying and making surplus land available. Much of the land in the metropolitan and in the older urban areas is land which needs to be reclaimed, and such land must take first priority. But national resources are essential over and above the capital spending allocations that will be granted under the powers embodied in this Bill I beg to move.

    My Lords, when expenditure on the reclamation of derelict land was discussed in Committee, I tried to express my own conviction of the immense importance of this kind of work. I also tried to make it clear that the Government have no intention of withdrawing the 100 per cent. grant which is available to support local authorities' efforts to clear land which has fallen into disuse and dereliction. The amendment seeks to make special provision for this kind of expenditure by removing it from the control system altogether. In effect, we would be saying to local authorities—"The total amount that you spend on housing, education, transport, personal social services, libraries, sport and recreation, old people's homes and most of your other functions must not exceed such and such; but on derelict land reclamation, you can spend as much as you like and we shall do nothing to keep that spending within bounds".

    My Lords, I have asked myself whether that exclusion would be to the advantage of anybody. Obviously, it would result in an increase in the amount of derelict land clearance being practised by local auththorities. But think of the other inevitable implications. If the amount of public expenditure on derelict land reclamation goes up, then we must take steps to see that public expenditure on all other local authority services goes down by the same amount. The only way in which we could do that would be to reduce the expenditure allocations to be made for all the other services. That would not only reduce authorities' discretion to decide for themselves on which services to spend the resources that are available to them—it would be grossly unfair on authorities with no derelict land problems, who would find themselves with less resources with which to undertake other services which may be just as beneficial and socially desirable as derelict land clearance. I continue to believe that the disadvantages of accepting this amendment would outweigh the advantages, superficially attractive though the latter may be, and I wonder whether the noble Baroness may therefore feel able not to press this amendment?

    My Lords, my Chief Whip says that the noble Lord's sweet smile is irresistible and therefore I must withdraw.

    Amendment, by leave, withdrawn.

    moved Amendment No. 97:

    Page 182, line 11, at end insert—
    ("(dd) the repair or maintenance—
  • (i) of land (including dwelling-houses and other buildings) held under Part V of the Housing Act 1957; and
  • (ii) dwelling-houses held otherwise than under that Part of that Act,
  • to the extent that the expenditure is defrayed by borrowing;")

    The noble Lord said: My Lords, this amendment brings within the scope of "prescribed expenditure" such repairs to housing as are financed by loans known normally as "capitalised repairs". It thus aligns the Bill with current practice in the housing sector. The capital allocations which my right honourable friends the Secretary of State for the Environment and Wales make at present under the Housing Investment Programme system cover "capitalised repairs", and it is our intention that this established practice, already familiar to local authorities, should continue. I hope that noble Lords will accept that this is a sensible amendment designed both to maintain continuity and to fit in with the new housing subsidy system. I beg to move.

    On Question, amendment agreed to.

    [ Amendment No. 98 not moored.]

    moved Amendment No. 98A:

    Page 182, line 23, at end insert—
    (" Expenditure in connection with the reclamation of derelict land which is to be grant aided by the Secretary of State under the provisions of the Local Government Act 1966, as amended by the Local Employment Act 1972 and this Act, shall not be prescribed expenditures for the purposes of this Part of this Act.")

    The noble Lord said: My Lords, at this late hour I do not think I need any encouragement from your Lordships to be as brief as possible. The reason I have once again to move this amendment, which is couched in the same terms as the amendment I moved in Committee, is that in a very charming letter the noble Lord the Minister admitted that, like me, he had misunderstood the position. This appears at col. 777 of Hansard. I think at that time it was believed by the noble Lord that the whole allocation system would be based upon local authorities making a hid. Those bids for derelict land grants would be considered on their merits and, as such, Merseyside

    having a very considerable derelict land problem, this would be reflected in the eventual allocation.

    I understand that the position as described in the debate at the Committee stage is, in fact, wrong. The bid system will work for four out of the five proposed blocks, but there is an exclusion on the "other services" block, under which derelict land is one of the headings.

    I understand that the department of the noble Lord the Minister have confirmed that the Association of Metropolitan Authorities will be given a total allocation based on the public expenditure White Paper Guidelines for Capital Expenditure on those services falling within the "other services" block. As I understand it, the Association of Metropolitan Authorities would then derive a distribution formula for a distribution between its constituent members; in other words between metropolitan councils.

    Therefore, I think it will be seen that the Association of Metropolitan Authorities with the best will in the world are unlikely to be able to introduce a degree of objectivity in making allocations based on the objective need for derelict land treatment by some of their members, and will inevitably be restricted to a crude population/past spend apportionment which would be grossly unfair (I apologise for the technicality of this) to a metropolitan county council which has a special derelict land problem, as Merseyside does with the considerable dereliction left over from the 19th century and, for historical reasons, not dealt with. I think your Lordships are probably aware that areas such as St. Helens and other inner urban areas of Liverpool have an enormous and probably unique dereliction problem which has been reflected in the 100 per cent. grants made available.

    The fear of the Merseyside County Council is that this advantage they receive because of the peculiar nature of their problem will be lost because allocation in future will be on a crude population basis. I wonder if I could get some kind of assurance from the noble Lord the Minister, who, I understand, to be very sympathetic to the problem I have outlined. I beg to move.

    My Lords, this amendment is very closely related to Amendment No. 96C. I do not think that your Lordships would thank me for repeating at length my reasons for believing that it would not be right to exclude from control expenditure on derelict land clearance. The fact that this expenditure is grant-aided, in some cases up to 100 per cent., is strictly speaking irrelevant, because the main objective of Part VIII of the Bill is to introduce an effective, fair means of keeping local authorities' total capital spending within planned levels, no matter whether the expenditure is financed out of Government grant, local rates, borrowing, leasing or whatever other source of money.

    In my judgment, it is right that under the new system of capital expenditure control, each local authority should be free to spend up to an overall ceiling on whatever services they themselves choose—it is not for central Government to make up local government's mind about what services are more or less deserving of support than others. Of course, I believe in derelict land clearance and I would like to see more of it. But local decisions should be taken locally. I am not prepared to accept the reduction of local democracy which this amendment would entail. I am sure it is not at all what the noble Lord, Lord Evans, intends, knowing him and his involvement in local government as I do. But I think that would be the effect of it, and I hope he will feel able to withdraw it.

    My Lords, at a quarter to twelve at night suppose I am not left with very much choice. Perhaps I have acquired the contagion of the Government, who claim to be in favour of local independence and then produce legislation which is not that way. I suspect that in my concern for the problems of Merseyside I have departed from my principles about equality, but I feel very deeply that areas with special difficulties, such as Merseyside has with dereliction, should have special treatment. But in the circumstance and because of the hour and the fact that I value my life—and I recommend Lord Bellwin, if he values his, not to come to Merseyside—I beg leave to withdraw the amendment.

    Amendment, by leave, withdrawn.

    My Lords, I think we have probably reached the stage where it might be right to adjourn consideration of the Bill.

    I beg to move that further consideration on Report be adjourned.

    Moved accordingly, and, on Question, Motion agreed to.