Explanatory Memorandum from the Department
of the Environment, Transport and the Regions (EST 98A)
PART II—COMMENTARY ON THE SUPPLY ESTIMATES
CLASS VI, VOTE 4: LOCAL
GOVERNMENT AND
REGIONAL POLICY,
ENGLAND
More details can be found in the Annual Report
1998: chapter 11 and Tables A1, A4, A11, A14 and A15.
| Vote total
|
|
| £000 |
|
| Final net provision 1996-97 | 31,633,048
|
| Provision sought 1998-99 | 31,622,066
|
| Change | -10,982 |
| Change (Per cent) | 0 Per cent
|
| |
| Final net provision 1997-98 | 31,487,959
|
| Provision sought 1998-99 | 31,622,066
|
| Change | +134,107 |
| Change (Per cent) | 0 Per cent
|
|
In 1998-99, the provision formerly made on this Vote for
planning and minerals research (£3,767,000 in 1996-97 and
£4,764,000 in 1997-98) has been transferred to Class VI,
Vote 2 (Planning, local transport and vehicle safety). New provision
is being sought in respect of expenditure on the costs of preparing
for the Greater London Authority (in Section B), establishment
and operating costs of Regional Development Agencies and associated
publicity (subject to passage of the Regional Development Agencies
Bill) (new Section D), special grant for revenue support to local
authorities in respect of contracts let under the Private Finance
Initiative (in Section E) and revenue support grant to receiving
authorities in England in respect of supplementary credit approvals
issued under the Capital Receipts Initiative (Section H).
The Vote continues to provide for the disbursement of revenue
support grant, non-domestic rates (including repayments of excess
contributions made by local authorities in previous years), certain
transitional and special grants, and emergency financial assistance
to local authorities in England, and revenue support grant to
specified bodies in England. It also provides for payments in
respect of rating and council tax work by the Valuation Office
Agency, payments to meet the expenses of valuation tribunals,
expenditure on grant-in-aid to the Local Government Commission,
and on local government research and publicity, including contributions
to the Local Government Management Board joint staffing watch.
Individual Sections where the level of provision has changed
significantly are:
| Section A—Valuation services
|
|
| £000 |
|
| Final net provision 1996-97 | 137,659
|
| Provision sought 1998-99 | 129,916
|
| Change | -7,743 |
| Change (Per cent) | -6 Per cent
|
| |
| Final net provision 1997-98 | 139,947
|
| Provision sought 1998-99 | 129,916
|
| Change | -10,031 |
| Change (Per cent) | -7 Per cent
|
|
Annual Report 1998—Chapter 11, paragraphs 11.43-11.48,
Figures 11a and 11k-11l
The reduction of £10 million in provision from 1997-98
to 1998-99 reflects the expected reduction in appeals against
the 1990 and 1995 rating list valuations.
| Section B—Reorganisation of local government
|
|
| £000 |
|
| Final net provision 1996-97 | 2,464
|
| Provision sought 1998-99 | 4,608
|
| Change | +2,144 |
| Change (Per cent) | +87 Per cent
|
| |
| Final net provision 1997-98 | 2,635
|
| Provision sought 1998-99 | 4,608
|
| Change | +1,973 |
| Change (Per cent) | +75 Per cent
|
|
Annual Report—1998 Chapter 11, paragraphs 11.6-11.10;
Figures 11a-b
This Section provides for payments of grant in aid to the
Local Government Commission for England, established in July 1992
under Part II of the Local Government Act 1992. In 1998-99, there
is provision of £2 million for the costs of preparing for
the Greater London Authority.
| Section C—Local government research and surveys
|
|
| £000 |
|
| Final net provision 1996-97 | 847
|
| Provision sought 1998-99 | 2,082
|
| Change | +1,235 |
| Change (Per cent) | +146 Per cent
|
| |
| Final provision 1997-98 | 1,122
|
| Provision sought 1998-99 | 2,082
|
| Change | +960 |
| Change (Per cent) | +86 Per cent
|
|
Annual Report 1998—Chapter 11, paragraphs 11.51-11.53
Section C provides for the local government research programme,
contributions to the Local Government Management Board's joint
staffing watch to provide information on local authority staff
numbers in England and Wales, and (since April 1997) expenditure
on publicity relating to the Department's local government programmes.
The increase in provision between 1996-97 and 1997-98 reflects
the transfer from class VI, Vote 5 (Departmental administration)
of provision for publicity, and the decisions to consult on proposals
for a Greater London Authority and to commission research in support
of the review of local government finance. In 1998-99, a further
increase in provision is sought in respect of publicity on the
GLA referendum and the associated White Paper.
Section D—Regional Development Agencies
Annual Report 1998—Chapter 11, paragraphs 11.54-11.63
Provision of £2,866,000 has been included for 1998-99
in respect of the establishment and operating costs of regional
development agencies (RDAs), subject to passage of the Regional
Developments Agencies Bill which is currently before Parliament.
The RDAs, which will develop regional economic strategies and
create a focus for the work of regional partners, are expected
to be fully operational from 1 April 1999. Preparatory work will
include ensuring that on vesting day each RDA has accommodation
and the necessary staff and support systems in place.
Section E—Revenue support grants
|
| £000 |
|
| Final net provision 1996-97 | 18,246,270
|
| Provision sought 1998-99 | 19,633,147
|
| Change | +1,386,877 |
| Change (Per cent) | +8 Per cent
|
| |
| Final net provision 1997-98 | 18,812,166
|
| Provision sought 1998-99 | 19,633,147
|
| Change | +820,981 |
| Change (Per cent) | +4 Per cent
|
|
Annual Report 1998—Chapter 11, paragraph 11.23; figure
11a
The provision reflects the Government's view of the revenue
aggregate that local authorities need to spend in 1998-99 to deliver
services, known as Total Standard Spending (TSS). The provision
represents Aggregate External Finance (AEF) in respect of that
spending, other than the distributable amount of non-domestic
rates (Section F), and certain special and specific grants which
are provided for on other Votes of this and other Departments.
It includes revenue support grant (RSG) of £19,500,278,000
and certain special and transitional grants. In 1998-89, provision
of £19,800,000 is also sought for special grant to provide
revenue support to local authorities towards the capital element
of contracts for projects undertaken through the Private Finance
Initiative.
| Section F—Non-domestic rates payments
|
|
| £000 |
|
| Final net provision 1996-97 | 12,736,000
|
| Provision sought 1998-99 | 12,524,000
|
| Change | -212,000 |
| Change (Per cent) | -2 Per cent
|
| |
| Final net provision 1997-98 | 12,027,000
|
| Provision sought 1998-99 | 12,524,000
|
| Change | +497,000 |
| Change (Per cent) | +4 Per cent
|
|
Annual Report 1998—Chapter 11, paragraphs 11.36-11.39;
figure 11a
The decrease in the distributable amount in 1997-98 is attributable
primarily to a deficit on the English national non-domestic rates
(NDR) pool being carried forward from 1996-97. The deficit arose
because appeals against rateable values on the 1990 non-domestic
rating list exceeded the amount allowed for in setting the distributable
amounts in previous years. The increase in 1998-99 reflects a
reduced deficit brought forward from 1997-98.
| Section G—Non-domestic rates outturn adjustments
|
|
| £000 |
|
| Final net provision 1996-97 | 500,000
|
| Provision sought 1998-99 | 375,000
|
| Change | -125,000 |
| Change (Per cent) | -25 Per cent
|
| |
| Final net provision 1997-98 | 500,000
|
| Provision sought 1998-99 | 375,000
|
| Change | -125,000 |
| Change (Per cent) | -25 Per cent
|
|
Provision is included to make payments in respect of adjustments,
on outturn, to the amount of billing authorities' provisional
contributions to the non-domestic rating pool for 1997-98 and
earlier years. This expenditure is not included in the control
total. The decrease in provision sought for 1998-99 reflects the
pattern of claims in 1997-98.
Section H—Revenue support grants (capital receipts initiative
element)
Annual Report 1998—Table A1 and A11.
This provision of £5,225,000 is for Revenue Support
Grant payments to local authorities in respect of supplementary
credit approvals issued under the Capital Receipts Initiative.
This expenditure is outside the control total, but is cash limited
within the DETR/CRI non-voted cash limit.
The council tax transitional reduction scheme limited the
increases households faced as a direct result of the changeover
from the community charge to the council tax. No transitional
reductions are being made in respect of council taxes for financial
years beginning on or after 1 April 1996. Provision in 1996-97
was to enable final payments of audited claims in respect of transitional
reduction in 1995-96. Although final provision for 1996-97 was
£3,000,000 this figure does not reflect the virement of £861,000
agreed with Treasury to the Other grants Section. Provision of
£2,000 was needed in 1997-98 to meet a residual audited claim.
All claims have now been paid, and no provision is sought in 1998-99.
| Remnant Section: Other grants and payments
|
|
| £000 |
|
| Final net provision 1996-97 | 3,041
|
| Provision sought 1998-99 | 0
|
| Change | -3,041 |
| Change (Per cent) | -100 Per cent
|
| |
| Final net provision 1997-98 | 323
|
| Provision sought 1998-99 | 0
|
| Change | -323 |
| Change (Per cent) | -100 Per cent
|
|
Three grants were paid under this Section in 1996-97: residual
payments of Community charge grant to compensate local authorities
for income forgone as a result of the £140 general reduction
in community charges for 1991-92 under Community Charges (General
Reduction) Act 1991; emergency financial assistance to local authorities
(the Bellwin scheme), under Section 155 of the Local Government
and Housing Act 1989; and special grant under Section 88B of the
Local Government Finance Act 1988, to those authorities affected
by the terrorist attacks on Docklands and Manchester city centre
in 1996.
Provision for 1996-97 does not reflect the virement of £861,000
agreed with Treasury from council tax transitional reduction grant,
to meet higher than expected residual claims for community charge
grant. Provision was needed in 1997-98 to make a final payment
under a Bellwin scheme established in the previous year, and residual
special grant payments to the authorities affected by terrorism
in 1996-97. A special payment of £6,000 was also made from
this line in 1997-98 in connection with the commutation of a local
government grant scheme in 1984. Any provision required for the
Bellwin scheme during 1998-99 will be sought in a Supplementary
Estimate.
|
