§ Lord Greaves
asked Her Majesty's Government:
Which local authorities in England have not yet received the full level of revenue support grant that would be due under the new formula allocation system introduced in 2003–04 had ceilings not applied; how much the shortfall is for each such authority last year and this year; and what proportion of their revenue budget such shortfalls equate to; and [HL4664]
What progress has been made this year in implementing the new needs-based formula grant regime for local authorities in England by phasing out the floors and ceilings system; and when they intend to implement the new system in full. [HL4665]
§ Lord Rooker
The White PaperStrong Local Leadership—Quality Public Services announced our intention of having floors and ceilings within the local government finance settlement. The floors are necessary to ensure that all authorities receive a reasonable increase in grant each year on a like-for-like basis. These must be paid for within the total amount of grant that goes to authorities each year. Every authority above the floor level therefore contributes to the cost of the floor.
A table has been placed in the Library of the House showing the difference in formula grant before and after floors and ceilings for 2003–04 and 2004–05 for all authorities, and expresses this difference as a proportion of their revenue expenditure.
The revenue expenditure data have been taken from the revenue expenditure line in the Revenue Accounts Budget Estimates Returns for 2003–04 and 2004–05. Revenue expenditure is defined as the sum of council tax requirement; government grants including police grant, general Greater London Authority (GLA) grant, revenue support grant, special and specific grants inside aggregate external finance (AEF), redistributed non-domestic rates; and the use of reserves and other adjustments.
It should be noted that combined fire authorities became precepting authorities in 2004–05. Before that, they were funded by contributions from the county councils and unitary authorities within their area. On becoming precepting authorities the combined fire authorities received formula grant directly; before this the formula grant for fire services with respect to areas covered by the combined fire authorities was paid to the county councils and unitary councils, i.e. those authorities upon which the combined fire authorities levied.