Part of the debate – in the House of Commons am 12:00 am ar 20 Rhagfyr 1973.
I apologise to the House for coming into the debate at this very late stage, but I have just returned from a committee meeting in Brussels to find the House still discussing the rate support grant. I have a considerable regional interest in the level of rate support grant because the county of Norfolk is affected, not so much by the situation produced by these orders as by the prospect of moving away from the sort of formulae on which the present rate support grant is based.
In view of the overall national situation, my right hon. Friend the Chancellor of the Exchequer last night exhorted local authorities to keep down any addition to their current expenditure. That is a worthy objective, but we must bear in mind the fact that many local authorities, particularly the new Norfolk authority, which is typical, have a heavy on-going commitment. So much has been added as a result of legislation that new resources will have to be found unless some of the undertakings already given are resiled from.
I wish to instance one or two examples. The degree of administration and staff required to supervise fire precautions has particular relevance in Norfolk because of the large number of hotels, boarding houses and similar establishments in coastal areas. It is fair to say that the county feels that it will be extremely difficult to keep down its future expenditure and therefore its rates if there is any substantial diminution in the rate support grant.
As I understand it, the formula is being changed so that the vital factor of sparsity, which hitherto has meant the population per mile of road within the authority, will in future become that of density. In other words, the population will be divided into the acreage of the local authority. That is the main factor as a result of which the new county of Norfolk looks like losing some 3·8 per cent. of its present level of grant, and that means a sum of about £1·25 million.
The difficulty is that the computer does not seem to realise the difference between sparsity and density. It is most easily described by comparing two types of area. Let us say 100,000 inhabitants live in 500 square miles. There is the same density of population, namely 200 to the square mile, whether the area is an evenly-inhabited stretch of arable farmland with many scattered villages and small market towns or a large area of uninhabited moorland with a valley in' the middle of it, at either end of which there is a substantial town, with most of the population gathered in centres. A similar situation can occur within the village structure. A typical East Anglian village often stretches along a mile or two of road with a church at one end and a pub at the other. That has to be compared with a village clustered round a green with the population living much closer together.
One can imagine the difference in costs in terms of connections for sewerage or electricity, for refuse collection and for school transport, and the difference in capital costs where no towns or villages are big enough to justify a new school because the population is so thin that the catchment area has to spread over a number of villages. All this adds greatly to costs.
I reflect that this sparsely populated county is none the less amongst the fastest-growing counties in the country. It has the additional numbers without, on the whole, the advantage of scale. The numbers are scattered. In the event of the overloading of a village school or of a local sewage works, it is always on a small scale and the total county problem requires separate remedies in several places.
The final matter worrying us in Norfolk is that the test seems to be changing. It is no longer one of need, which hitherto has been the ingredient in the rate support grant. The new basis is to be that of previous expenditure. It happens that Norfolk in recent years, in response to Government exhortations to keep down the level of local expenditure, has moved from being one of the counties with rates well above the county average to one of those with rates below the county average. If we now change from a basis of need to one of previous expenditure, the authorities which have co-operated in previous Government policies will be penalised.
Therefore, I must ask my right hon. Friend carefully to reconsider the future formula on which rate support grant is to be based. Certainly, the needs of a county such as Norfolk have increased as a result of expansion and the matters I have mentioned. In particular, will my right hon. Friend distinguish in his formula, and in the Government computer, between density and sparsity? If he will, I think that Norfolk's grant will not be cut to the degree that at present seems likely.