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LOCAL GOVERNMENT FINANCE

Lord Gainford asked Her Majesty's Government:

Viscount Ullswater: We propose that Total Standard Spending (TSS) for 1995–96 should be £43.51 billion for England. This represents an increase of £930 million (2.2 per cent.) compared with this year's figure, including the amount for transitional community care special grant and provision for local government reorganisation transitional costs. Excluding community care and reorganisation, this still represents a cash increase of 0.8 per cent.

We propose that the level of Aggregate External Finance (AEF) distributed to local authorities in 1995–96 should be £34.67 billion. This represents an increase of £0.43 billion (1.2 per cent.) compared with this year's figure, including community care. Net of community care, this represents a cash decrease of 0.4 per cent.

We also propose that the national non-domestic rate poundage for 1995–96 in England should rise to 43.2 pence, reflecting this year's revaluation and the annual increase in the retail prices index to September. This will ensure that the benefit of the Government's success in tackling inflation will once again be passed on in full to businesses.

We propose to set the distributable amount of non-domestic rates at £11.35 billion and propose that the total of Revenue Support Grant should be £18.32 billion. Special and specific grants within AEF will amount to £5 billion.

My right honourable friend the Secretary of State for the Environment will announce shortly his proposals for the distribution of government grants, including his proposals for changes in the Standard Spending Assessment methodology. At the same time he will announce his capping intentions. He will also set out his proposals for the third year of the scheme of transitional assistance to those households which faced particularly significant increases in their local tax bills following the introduction of the council tax.

It is essential that local and central government continue to play their part in restraining expenditure. Our overriding priority is to reduce the public sector deficit. The proposals for Total Standing Spending, Aggregate External Finance and the non-domestic rate poundage represent a balanced approach to the funding of local authority services in 1995–96. We look to local authorities to take the same responsible attitude in determining their spending priorities and setting their budgets in 1995–96. However, in the context of a tough settlement, we are confident that, with efficient housekeeping and efficient collection of the council tax, these proposals will allow local authorities to maintain

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their current levels of spending and carry out their functions.

NON DOMESTIC RATE POUNDAGE

Lord Gainford asked Her Majesty's Government:

    What is their estimate of non-domestic rate poundage for next year and whether they have decided the details of the transitional arrangements to phase in the effects of the 1995 revaluation.

Viscount Ullswater: The 1995 revaluation will not lead to any significant change in overall rateable values in England. We therefore propose to set the poundage for England next year at 43.2 pence, in line with the increase in the RPI in the year to September 1994.

However, the revaluation will result in significant local and sectoral shifts in rateable values. The Department of the Environment's consultation paper, published last month, outlined proposals for transitional arrangements to phase in the effects of these shifts on rate bills. In the light of responses to that paper, and the generous package of support announced by the Chancellor of the Exchequer today in the other place, we now propose that no business will face year on year increases of more than 10 per cent., after allowing for inflation. For property with a new rateable value of less than £10,000 (£15,000 in London), the maximum real increase will be 7½ per cent., while for many small shops combined with living accommodation, the corresponding limit will be 5 per cent.

We estimate that nearly 1 million smaller properties and a quarter of a million larger properties in England will benefit from relief. One-third of beneficiaries will be shops. A further 170,000 properties will see reductions in their bills as a result of the revaluation. We are sure this will be widely welcomed by the business community.

The Exchequer contribution will cover part of the cost of the scheme. The remaining element will be met by limiting real reductions in rates bills, as proposed in the consultation paper. For 1995–96, the limits will be 10 per cent. for small properties and 5 per cent. for large ones.

Other details of the scheme will be as proposed in the consultation paper. Regulations giving effect to these changes will be laid before Parliament shortly.

GOVERNMENT DEPARTMENTS' EMPTY RESIDENTIAL PROPERTY

Lord Gainford asked Her Majesty's Government:

    What are the targets for the reduction of government departments' empty residential property.

Viscount Ullswater: In response to the report of the Task Force on Government Departments' empty houses, the Government undertook to monitor empty residential property owned by departments and to set annual targets. Targets for reduction in 1994–95 are set out in the table following.

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Total Stock at 1 April 1994 Empty at 1 April 1994 Empty as percentage of total stock Target for reduction of number of empty properties held at 1 April 1994(1)
Department of Transport 3,845 887 23 484
Home Office 4,524(2) 498 11 335
Ministry of Defence 68,106 11,006 16 3,550(3)
Department of Health 15,000(4) 1,800(5) 12 700
Scottish Office 1,601(6) 158 10 60
Welsh Office 239 43(7) 18 37

Notes

(1) Includes properties to be sold, leased or reoccupied.

(2) Excludes figures for the provincial police authorities.

(3) Targets relate to stock figures at 1st April 1994. More properties will become empty during the year as others are occupied or disposed of.

(4) Most up-to-date figures available are as at 31st December 1992.

(5) Excludes bed-space in hostels.

(6) NHS figures included in the stock are as at 1st April 1993.

(7) Excludes properties awaiting demolition or conversion to non-residential use.


We will monitor performance and publish achievement against these targets at the end of the financial year.

The Department of the Environment will issue shortly revised guidance for government departments on how to secure better use of their empty residential property. This will reflect the recommendations made by the task force. The Welsh Office will issue similar guidance separately.

WELSH NON DOMESTIC RATE POUNDAGE

Lord Harlech asked Her Majesty's Government:

    What is the estimate of the Welsh non-domestic rate poundage for 1995.

The Lord Advocate (Lord Rodger of Earlsferry): The 1995 revaluation has increased overall rateable values in Wales by around 18 per cent. The Government propose to reduce the Welsh poundage from 44.8 to 39.0 pence reflecting this.

WELSH NON DOMESTIC RATING: TRANSITIONAL ARRANGEMENTS

Lord Harlech asked Her Majesty's Government:

    What are the details of the transitional arrangements for Wales to phrase in the effects of the 1995 revaluation.

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Lord Rodger of Earlsferry: The revaluation will result in significant local and sectoral changes in rateable values and rates bills. Around 76,000 properties will see increases in their bills, and around 26,000 will see reductions. The Welsh Office's consultation paper, published last month, outlined proposals for transitional arrangements to phrase in the effects of these changes. In the light of responses to that paper and the package of support announced by the Chancellor today, the Government propose that no business in Wales will face a year-on-year increase of more than 10 per cent., after allowing for inflation. For property with a new rateable value of less than £10,000, the maximum real increase will be 7.5 per cent. For small composite properties such as shops with living accommodation, the limit will be 5 per cent.

The Government estimate that around 62,000 Welsh properties will benefit from relief. I am sure this will be widely welcomed by the business community.

The Exchequer contribution will cover part of the cost of the scheme. The remainder will be met by limiting real reductions in rates bills, as proposed in the consultation paper. For 1995–96, the limits will be 10 per cent. for properties with a rateable value under £10,000 and 5 per cent. for larger properties.

Other details of the scheme will be as proposed in the consultation paper. Regulations giving effect to the transitional arrangement will be laid before Parliament shortly.

WELSH LOCAL GOVERNMENT FINANCE

Lord Harlech asked Her Majesty's Government:

    What are the proposals for local government revenue spending in Wales for 1995–96.

Lord Rodger of Earlsferry: The Government propose to set total standard spending in Wales for 1995—96 at £2,767 million. This figure includes £124.4 million for care in the community. It represents an increase of £72 million, 2.7 per cent. on the comparable level of funding for 1994–95.

The Government propose to set central government support for TSS through aggregate external finance at £2,450.8 million.

Within AEF, the Government propose to make available £1,711.1 million in revenue support grant, £520 million in distributable non-domestic rates and £219.7 million in specific and supplementary grants.

The Welsh Office have today written to the local authority associations to consult them on the proposals for revenue support grant in 1995–96.

The Government will announce provisional standard spending assessments and provisional capping principles for police authorities in Wales later this week and will announce provisional standard spending assessments and provisional capping principles for county and district councils in mid December. The Government will announce final details of the settlement early in the new year.



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