Local Government Finance (England) Special Grant Report (No. 83) (HC No. 88) On Maintenance of Roads Grants 2001-2002

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Dr. Whitehead: The question raises the wider issue of ring-fencing grants to local authorities. Local authorities sometimes make the point that the administration involved in operating ring-fenced grants and the additional money that may be allocated by local authorities to fund a grant is not reflected in the grant and so leads to unbudgeted or unforeseen costs on local authorities when carrying out the requirements of a ring-fenced grant. The Government are sensitive to that and the extent to which ring-fenced grants make up a proportion of the total revenue available to local authorities. The figure, as the hon. Member for East Worthing and Shoreham suggested, is about 10 per cent. The Government intend that that amount of ring-fencing should not become much greater because a regime consisting of ring-fenced grants causes local authorities difficulties in moving money about to service the various grants and the activities which are not subject to grant.

On PSAs, I hope that the Committee will agree that the £50,000 for administration is a step forward and acknowledges that there are administrative costs. The Government want to contribute to the administrative costs arising from the receipt of money following agreement between the Government and local authorities about that form of PSA.

I must emphasise that the Government are not making an imposition, as the hon. Member for Bath suggested. There will be negotiation between central Government and local authorities on what will go into a particular range of PSAs, what targets will be expected, how those targets will come about, what the local authority should agree to do to reach those targets and on what basis the money that will be obtained as a result of agreeing to reach those targets will be spent. It is negotiation, not imposition. That is quite different from some of the arguments that were previously made about elements of ring-fenced grants. It is money that is going to local authorities' treasuries in addition to existing support. We should not be surprised that PSAs have in general received a warm welcome from local authorities of all political persuasions, which have found them useful in helping their targeting and prudence. The ability to negotiate those targets and improvements with central Government has been positive.

Tim Loughton: I am aware that the Minister's time is ebbing away. Perhaps I could activate his promise to write to Committee members with answers to all the outstanding questions that he will be unable to answer in the remaining 60 seconds.

Dr. Whitehead: I shall be happy to do that. I have available to me a lot of information with which to respond to the detailed points that have been made, but if it is the Committee's wish that I respond in writing, I shall be happy to do so. However, I hope that the case made in my opening statement is sufficient to persuade hon. Members that the orders should be agreed to.

Question put and agreed to.


    That the Committee has considered Local Government Finance (England) Special Grant Report (No. 83) (HC No. 88) on maintenance of roads grant 2001-2002.



    That the Committee has considered Local Government Finance (England) Special Grant Report (No. 82) (HC No. 111) on 2001-02 special grants in connection with pilot local public service agreements.-[Dr. Whitehead.]



    That the Committee has considered Local Government Finance (England) Special Grant Report (No. 85) (HC No. 130) on invest-to-save budget round 3 projects.-[Dr. Whitehead.]



That the Committee has considered Local Government Finance (England) Special Grant Report (No. 86) (HC No. 147) on 2002-02 special grant for rate relief in respect of hardship caused by foot and mouth disease.--[Dr. Whitehead.]

        Committee rose at Six o'clock.

The following Members attended the Committee:
Gale, Mr. Roger (Chairman)
Bailey, Mr.
Clarke, Mr. Tony
Clifton-Brown, Mr.
Cox, Tom
Dean, Mrs
Foster, Mr. Don
Gilroy, Linda
Kilfoyle, Mr.
Loughton, Tim
McDonagh Siobhain
Mitchell, Mr. Andrew
Osborne, Mr. George
Pugh, Dr.
Purnell, James
Whitehead, Dr.
Woolas, Mr.

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