Local Government Act 1974

1 Rate support grants

(1) Subject to the provisions of this Part of this Act, the Secretary of State shall, for the year 1974-75 and each subsequent year, make grants to local authorities in England and Wales in accordance with this section; and any grants made in pursuance of this subsection shall be known as "rate support grants ".

(2) For the purpose of fixing the estimated aggregate amount of the rate support grants for any year, the Secretary of State shall determine the aggregate amount (in this Part of this Act referred to as " the amount available for grants ") which he estimates is to be available for the payment out of money provided by Parliament of grants, other than housing subsidies and grants under section 8 below, to local authorities in respect of their relevant expenditure for that year, and shall deduct therefrom—

(a) the portion of the amount available for grants which he estimates will be allocated to grants in respect of specific services, other than grants under section 8 below; and

(b) the portion of that amount which is prescribed as the aggregate amount of supplementary grants for transport purposes, within the meaning of section 6 below; and

(c) the portion of that amount which is prescribed as the aggregate amount of supplementary grants under section 7 below;

and so much of the amount available for grants as remains after making those deductions shall be the estimated aggregate amount of the rate support grants for that year.

(3) Before determining the amount available for grants and the portions of that amount mentioned in paragraphs (a) to (c) of subsection (2) above, the Secretary of State shall consult with such associations of local authorities as appear to him to be concerned and with any local authority with whom consultation appears to him to be desirable, and shall take into account—

(a) the latest information available to him as to the rate of relevant expenditure;

(b) any probable fluctuation in the demand for services giving rise to relevant expenditure, so far as the fluctuation is attributable to circumstances prevailing in England and Wales as a whole which are not under the control of local authorities;

(c) the need for developing those services and the extent to which, having regard to general economic conditions, it is reasonable to develop those services; and

(d) the current level of prices, costs and remuneration and any future variation in that level which in the opinion of the Secretary of State will result from decisions which appear to him to be final and which will have the effect of increasing or decreasing any particular prices, costs or remuneration.

(4) Subject to subsection (6) below, in this section " relevant expenditure ", in relation to any year, means the expenditure for that year falling to be defrayed out of the rate fund of a local authority—

(a) reduced by the amount of any payments of such descriptions as the Secretary of State may determine which fall to be made for that year into the rate fund; and

(b) exclusive of the items of expenditure specified in subsection (5) below.

(5) The items of expenditure referred to in subsection (4)(b) above are—

(a) sums falling to be paid to another local authority by virtue of a precept or other instrument;

(b) expenditure under section 1(1) (awards for university and comparable courses) or section 2(3) (grants to persons undergoing training as teachers) of the [1962 c. 12.] Education Act 1962; and

(c) so much of the allowances granted in the year in question under a local authority's allowance scheme, within the meaning of Part II of the [1972 c. 47.] Housing Finance Act 1972, as does not exceed the authority's standard amount of rent allowances, within the meaning of that Act, for that year.

(6) The following grants for specific services, namely grants—

(a) to the Receiver for the Metropolitan Police District under section 77 of the [1948 c. 58.] Criminal Justice Act 1948 (towards the cost of probation services) and under section 27 of the [1949 c. 101.] Justices of the Peace Act 1949 (grants for magistrates' courts purposes), and

(b) under section 31 of the [1964 c. 48.] Police Act 1964 (police grants), whether made to a committee of a local authority or not,

shall be treated for the purposes of subsection (2) above as grants made to local authorities; and to the extent that, in any year, any expenditure of the Receiver for the Metropolitan Police District or of a combined police authority is met by any such grants, that expenditure shall be treated for the purposes of this section as relevant expenditure in relation to that year.

(7) In this section—

• " housing subsidies " means such grants to local authorities out of money provided by Parliament for housing as may be determined by the Secretary of State to be housing subsidies for the purposes of this section; and

• " rate fund ", in relation to the Greater London Council, the Common Council of the City of London and the Council of the Isles of Scilly, means the general fund or general rate, as the case may require, and in relation to any other local authority means the county fund or general rate fund.

(8) The provisions of Part I of Schedule 1 to this Act shall have effect with respect to the termination of grants under section 1 of the [1966 c. 42.] Local Government Act 1966 (existing rate support grants).