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PROVISIONAL CAPPING CRITERIA ANNOUNCED

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Environment Secretary John Gummer today announced the provisional capping criteria for 1994-95, along with proposal...
Environment Secretary John Gummer today announced the provisional capping criteria for 1994-95, along with proposals for the calculation of notional amounts for certain councils whose boundaries will change from 1 April 1994.

'They are the base from which I will measure increases in budgets in determining whether those increases are excessive', Mr Gummer said.

In addition, my provisional capping criteria themselves make allowance for the expenditure on Care in the Community which is being met this year by the special transitional grant. This allows a fair year on year comparison.

As in previous years, my provisional capping criteria allow larger increases for authorities with budgets close to their SSAs than for those whose budgets are relatively higher. Where budgets are very substantially above SSA, I intend again to seek budget reductions.

The effect of my intended criteria is that: any increase of more than 1.75% over 1993-94 will be considered an excessive increase if it gives rise to a budget requirement above the authority's SSA;

- any increase of more than 1.25% over 1993-94 will be considered an excessive increase if it gives rise to a budget requirement over 5% above the authority's SSA;

- any increase of more than 0.75% over 1993-94 will be considered an excessive increase if it gives rise to a budget requirement over 10% above the authority's SSA;

'In addition I intend that any budget requirement more than 12.5% above SSA will be considered excessive save that an authority will not be designated if it fulfils certain conditions equivalent to those which have applied in previous years.

'These criteria are necessarily provisional. I cannot make my decisions on capping until authorities have set their budgets for 1994-95. When I come to take those decisions I shall of course take into account all appropriate considerations'.

Mr Gummer told the House: 'in the current economic circumstances, we are as determined as ever that local authorities should play their full part in making reasonable spending plans which their local taxpayers and the country can afford.

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