§ Mr. Allan Stewart
To ask the Secretary of State for Scotland what action he proposes to take in the light of local authorities' budgets and rates for 1988–89; and if he will make a statement.
§ Mr. Rifkind
Local authorities in Scotland have budgeted to spend £136 million or 3.8 per cent. over guidelines in 1988–89 and have determined rates which will, on average, increase domestic rate bills by 5.2 per cent. I am pleased that the realistic provision and grant which I have made has resulted in many authorities setting their rates at a reasonable level, but I am disappointed that so many authorities have still ignored warnings about overspending.
I am particularly concerned at the problems facing ratepayers in the areas of those authorities which are planning the most substantial expenditure excess. As a result, I have decided to initiate action in terms of section 5 of the Local Government (Scotland) Act 1966 in respect of Lothian regional council, on the grounds that its planned expenditure for 1988–89 is excessive and unreasonable. A letter has today been sent to Lothian region proposing a rate reduction of 5.6p, and inviting it to make representations about the proposed reduction.
I am giving further consideration to whether the planned expenditure of any district council is excessive and unreasonable. I am also reflecting on appropriate grant 384W penalties for overspending authorities in the light of views expressed to me last Friday by the Convention of Scottish Local Authorities. I will make a further announcement on these matters soon.