Rate Support Grant (Wales)

Part of the debate – in the House of Commons at 12:34 am on 20th January 1986.

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Photo of Mr Keith Raffan Mr Keith Raffan , Delyn 12:34 am, 20th January 1986

May I follow the remarks of my hon. Friend the Member for Clwyd, North-West (Sir A. Meyer). To make my points about the current predicament of Clwyd county council, I must refer to the background to the settlement. At the time of last year's settlement, Clwyd county council was given a provisional expenditure figure for 1986–87 of £161·3 million. In July last year, my right hon. Friend the Secretary of State said in his provisional statement that if Clwyd's spending could be contained to its 1985–86 budget level plus 5 per cent.—or £164·6 million—grant entitlement would be £94·6 million. Then in December last year, in the final statement on the rate support grant, the spending figure was adjusted to £163·7 million, which was a reduction of £900,000, giving rise to a grant of £91·9 million, which was a massive reduction of £2·7 million.

In July, Clwyd understood that it would not be penalised if its spending was contained to its 1985–86 budget level plus 5 per cent., but now its grant has increased by only 1·8 per cent., whereas the average for all the counties of Wales is 5·3 per cent. and Dyfed is receiving 11·2 per cent.

I, too, wish to quote from the letter to the county treasurer, Mr. Ralph Greening, from Mr. Morgan of the Welsh Office. On 14 January he wrote: We have adopted the practice of issuing in July provisional figures for the RSG settlement to assist local authorities. How can provisional figures possibly assist local authorities when they are so way out? No one expects provisional figures to be confirmed exactly, but Clwyd county council is entitled to expect something near to the provisional figure.

To recap, may I say that Clwyd was initially led to expect a lower grant than it was given in the provisional statement in July. It was encouraged to expect a higher grant in that statement, on the basis of which it budgeted, only for the grant to be lowered once again in December. The county council is now in a serious financial crisis, admittedly aggravated by its own inability to control its spending. I repeat my hon. Friend's quote from Mr. Morgan's letter. He said: Because we"— the Welsh Office— also had in 1986–87 the uncertainties caused by the introduction of a new GRP schedule"— that is a grant-related poundage schedule— to replace targets the figures were inevitably more likely to change than usual, and I agree that it is unfortunate that this year Clwyd's figures changed to the extent that they did. It is not just unfortunate, it is disastrous. The GRP schedule has had a devastating effect on Clwyd, with a loss of £2·2 million in grant.

I should be grateful if the Secretary of State would explain to the House, not in the technical jargon beloved of the Treasury, but in layman's language so that I and the House can understand it, the grant-related poundage schedule. If we do not understand it—I admit I do not—how can we explain it to our county councillors, let alone to the ordinary man in the street?