Percentage and Block Grants

National Expenditure. – in the House of Commons on 1st March 1922.

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There is one matter of general interest which the Geddes Committee dealt with, and which I will only mention in passing. They have taken very particular notice of the system of percentage grants which exists in this country at the present time, and they attribute to that system much of the expenditure which now, unfortunately, has been increasing so largely in this country. They say that when you give a percentage grant there is no inducement, or not so much inducement, to the local authorities to economise, because they say, "We can build this magnificent building for a half of what it is going to cost, because the Government is going to pay the other half," and obviously there is not the same reason for their adopting economies which would be wise in the circumstances, and accordingly it is recommended that we should get rid of this system of percentage grants and turn to a system of block grants. The system of percentage grants was adopted in this country on very high authority. There were great civil servants who recommended it. Moreover, a Committee which sat, I think, before the War thought the system of block grants would be impracticable. We do not propose to leave the matter there. It is obviously a matter which requires consideration and complete investigation, with the evidence of experts upon the whole question, and we propose to set up a Committee at once which will go into the matter and report to the Government.