Levels of Expenditure

Part of New Clause 6 – in the House of Commons at 3:48 pm on 27 March 1984.

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Photo of Mr John Cartwright Mr John Cartwright , Woolwich 3:48, 27 March 1984

Unfortunately, that information turned out to be not entirely accurate. The Audit Commission's information, as related to me, turned out to be not quite as I presented it. That is why I wanted rather more firm information from the London borough of Greenwich than that which I quoted on an earlier occasion.

I support the new clause because it reminds us that the Bill has not appeared out of a vacuum. It comes to us from the same team that produced the Local Government, Planning and Land Act 1980 and the Local Government Finance Act 1982.

The 1980 measure gave us an extraordinary phrase that is referred to in shorthand as GREA — grant-related expenditure assessment. Many of us were suspicious of that form of assessment and disliked the idea that somebody could calculate a reasonable and rational level of spending for local authorities in various areas for a given service.

A phrase constantly used by Ministers in Committee when describing the grant-related expenditure assessment system was "rough justice". It was claimed that it was the only available test of an authority's need to spend. A number of those engaged in local government accepted it on that basis. They accepted it also on the understanding that it would be used as a means of allocating grant, not of controlling expenditure. However, as we often discover when dealing with these issues, the one slid inexorably into the other.

The 1982 Act regularised the complex business of expenditure guidance, as it was euphemistically called, which incorporates the target and penalty system. In this Bill we have the concept of a maximum expenditure limit. It provides a third weapon in the armoury with which Ministers can tax local authorities on their spending. Given their past record, I can understand why the Government feel that they need belt and braces, but to require belt and braces and a stout piece of string seems to be going rather far.

If the clause were accepted, it would serve two useful functions. First, it would go far towards simplifying local authority expenditure. It is a novel idea that it could be made a good deal simpler. Local government officers, councillors and ordinary members of the public would very much welcome that.

Secondly, it would go some way towards introducing an element of natural justice into the way in which local government operates. It seems extremely unfair that a local authority which is spending below its grant-related expenditure level should be penalised under the grant penalty arrangements or the rate-capping system. It seems monstrous that an authority that is spending below its maximum expenditure limit should be penalised under the preceding arrangement.

Opposition Members have constantly urged the Government to accept amendments and new clauses which would smooth the impact of the Bill and make it appear rather more fair and reasonable than it is. Our efforts have been thrown back in our faces. It is a reflection that hope triumphs over experience that we continue to make them. It is very much on that basis that I commend the clause to the House.