Grants‐in‐Aid to Public Bodies
| Author | J. W. Grove |
| Published date | 01 December 1952 |
| DOI | http://doi.org/10.1111/j.1467-9299.1952.tb02799.x |
| Date | 01 December 1952 |
Grants-in-Aid
to
Public Bodies
By
J.
W.
GROVE
This survey
of
the problems
of
financial control raised
by
the extension
of
Parliamentary aid to a large number
of
semi-independent bodies
is
by
a Lecturer in Government in the University
of
Manchesrer.
N
recent years there has been a
I
considerable increase in the ex-
penditure of money voted by Par-
liament for independent and semi-
independent public or semi-public
bodies
of
all kinds, e.g. the Arts
Council, the British Council and the
Council of Industrial Design. These
bodies are not directly responsible
to Parliament and their finances are
not subject to the same degree
of
control as are those
of
an ordinary
Government Department. This
article is about the character of this
financial aid and the types of financial
control
in
use.
I
must make it clear at the outset
that the article is not about Local
Authorities, though the term grant-
in-aid is sometimes loosely used to
mean Exchequer grants to them.
It
was in this sense that Sidney Webb
used the term in his book
Grants-
in-Aid
:
A
Criticism
and
a
Proposal,
published in
1911.
“
By a
‘
Grant-
in-Aid,’” he said,
“
the English
administrator understands a sub-
vention payable from the Exchequer
of the United Kingdom to a Local
Governing Authority, in order to
assist that authority in execution
of
some or all of its statutory duties.”
It
is
doubtful whether the statement
was true when it was made, at least
it was misleadingly oversimplified.
It
is
now no longer correct, as a
gIance
at
any recent volume of the
Civil Estimates will demonstrate.
Payments to Local Authorities are
there referred to as “grants,” not
“
grants-in-aid.”l
The term grant-in-aid has a narrow
and special significance in British
Parliamentary and Civil Service
usage. In
1896
the Public Accounts
Committee described some
of
the
characteristics of the grant-in-aid,
but could hardly be said to have
defined it, and Durel12 repeats this
description in his
Parliamentary
Grants.
According to the Public
Accounts Committee of
1896,
the
grant-in-aid is
:-
(i) an exception to the rule that
expenditure within a Parliamentary
Vote must be accounted for
in
detail to Parliament through the
Comptroller and Auditor-General,
and is subject to
his
audit
;
(ii) an exception to the rule that
monies voted by Parliament that
are unspent at the end of the
financial year must be surrendered
to the Exchequer.
The crux of the theoretical distinc-
tion between a “grant
”
and a
“
grant-in-aid
’’
would appear to lie
in the second of these principles.
Normally, a Department will estimate
the amount it will require to pay
out in
“
grants
”
during the coming
year to various bodies included in its
Vote, and if, at the end
of
the
financial year, this estimate is found
to have exceeded the amount actually
paid out, the balance cannot be
claimed by the Department, but
must be surrendered to the Ex-
chequer. Theoretically, the grant
‘It is
to
awld
this
confusion th$t D.
N.
Chester
in his
Central
and
el
Government
uses the term Exchequer grant which he defines (at p.
124)
as a contribution
authorised by Parliament and made by a central Department
to
a
Local
Authority in
aid
of
a service
or
services which
are
provided by, and the statutory responsibility
of,
a
Local
Authorim.”
‘A.
J.
V.
Ddrell,
Principles and Practice
of
the
System
of
Control over Parliamentary
299
Grants,
p.
200.
PUBLIC
ADMINISTRATION
in-aid difFers from the “grant
’’
in
that, as Durell has saida: “When
money is voted as a grant-in-aid
Parliament
.
.
.
dispenses
with
the
condition
.
.
.
that any amount
issued to the grantee, but not finally
expended
within
the financial year,
shall be surrendered.
,
. .
In
such
cases,
therefore, what is not spent
in
one year
is
available for the
service in the subsequent year
or
years.
. .
.”
Durell continues
:
“
Granwin-aid should
.
.
.
be con-
sidered
as
exceptions to the rule
in
our
financial system.” They are:
“
a
free
gift
and a final payment, not
subject to the
normal
rule
of
surrender
of
any balance unexpended within
the year.” How far such criteria
actually apply to modern grants-in-
aid
it
is
part
of
the purpose
of
this
article to point out. My reason for
stressing the “theory
”
of these
principles
is
that in practice they are
liable to considerable modification.
The fact that they do not nec-
essarily distinguish between a “grant”
and a
“
grant-in-aid
’’
may be readily
seen
by reference to the Broadcasting
Vote. Here, as will be seen, the
B.B.C.
Home and Television Services
are financed by what is described as
a
“
grant ”-not a
“
grant-in-aid
”-
yet this “grant
’’
is an exception
to the rule that expenditure
within
a Parliamentary Vote must be
accounted for
in
detail to Parliament
through the Comptroller and Auditor-
General, and is subject to
his
audit
(the accounts of the
B.B.C.
are
commercially audited), and
it
is an
exception to the rule that monies
voted by Parliament that are unspent
at the end of the year must be
surrendered to the Exchequer (the
B.B.C.
does not return any unspent
part of its “grant” to the
Ex-
chequer).
On
the Public Accounts
Committee’s
“
definition,” the
B.B.C.
“
grant
”
should be called a
“
grant-
in-aid,” yet
it
is not
so
called.
I
shall not attempt any further
definition, however, but make it
clear that
I
shall be
talking
about
“
grants-in-aid
”
as that term
is
used
officially
in
the Civil Estimates.
The
Public
Bodies
Concerned
A
Treasury Memorandum‘ sub-
mitted to the Public Accounts
Committee during the
1950/51
Session
lists
more than 150 separate
grants-in-aid amounting to over El42
million for the year 1951152, or
rather less than
5
per cent. of the
gross total6
of
all
estimated Govern-
ment expenditure for that year.
This
total includes some very large
grants-in-aid (e.g.
L23
million
to
the
University Grants Committee) and
also some very
small
ones (the
smallest was
El50
to the Solicitors
Discipline (Scotland) Committee).
These grants-in-aid are made
by
Parliament
:-
(u)
to various
“
Funds
’’
(e.g.
the Road
Fund,
the Development
Fund, the Agricultural Marketing
Fund, the Forestry Fund) under
the control of Government De-
partments or semi-independent
bodies, the Funds being created to
“take the subject matter out
of
politics,”
as
Sir
Ivor
Jennings has
put it.6 Some of these
Funds
are
fed, not only by the grant-in-aid,
but by appropriations in aid,
for example, the Forestry Fund
and the Agricultural Marketing
Fund. The Forestry Commission
(which administers the Forestry
Fund) obtains a large part of its
revenue from sales of timber.
The Agricultural Marketing
Fund
*Dwell,
op.
cit.,
p.
200/1.
Ye.
before deduction of appropriations-in-aid.
4Appendix
4
to
4th
Rep. P.A.C.,
1950/51
(H.C.
241-1).
‘Jennings,
“
Parliament,”
p.
336.
300
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