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Cash Limits

Volume 976: debated on Friday 21 December 1979

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asked the Minister of Transport what was the price rise implied in setting the cash limit in June for roads and so on in England; what the presently expected price rise for the items in this budget will be; how far the difference in the actual and assumed price rises has been accommodated by curtailing (a) construction, (b) maintenance and (c) other expenditure within the cash block; which specific schemes have been delayed; and in what other way motorway and trunk road plans have been changed for 1979–80 and subsequent years in order to stay within the cash limit ceiling.

The cash limit set last year by the previous Administration for roads, etc. in 1979–80 allowed for rises of 10·8 per cent. on road construction costs and 6·4 per cent. on maintenance costs. It was subsequently reduced by £9 million to reflect the measures announced in the June Budget. Final figures for price rises during 1979–80 will not be available until the end of the financial year, but the estimates underlying Cmnd. 7746 are 14·7 per cent. on construction and 10 per cent. on maintenance.It is not possible to isolate the effect of the restriction imposed by the cash limit from other factors affecting expenditure on motorway and trunk road construction, or to identify the extent to which individual schemes have been affected by it. The programme has been managed so as to allow expenditure on maintenance to continue in real terms slightly above the level originally provided.

asked the Minister of Transport how the cash limit of £450,542,000 for roads and so on, in England for 1979–80 compares with the expenditure plans for English motorway and trunk road construction and maintenance set out in Cmnd. 7439, as subsequently amended by the Budget measures of June, showing how the current expectation for the English motorway and trunk road budget for (a) construction and (b) maintenance converted from 1979 survey prices to expected outturn prices has reached its cash limit ceiling.

It is not possible to disaggregate the cash limit in the manner suggested. The figure published in Cmnd. 7604 was consistent with the volume provision in Cmnd. 7439, as adjusted by the previous Administration and the June Budget. It was also consistent with the volume of expenditure underlying Cmnd. 7746 at the inflation rates then assumed.

Expenditure on motorway and trunk road construction and maintenance was then expected to be £291 million and £94 million respectively at 1979 survey prices, equivalent to approximately £334 million and £103 million at outturn prices. It is too early to say what the actual outturn will be as the cash expenditure will be affected by a number of factors, including the future rate of inflation, and adjustments to keep within the overall cash ceiling do not affect all parts of the programme equally.

asked the Minister of Transport what considerations led him to fix the cash limits for the English motorway construction programme for 1979–80 at its present level, having regard to the fact that the January 1979 expenditure White Paper, Cmnd. 7439, had already reduced the motorway and trunk road programme by £35 million to reflect the lower level of commitments.

I refer the hon. Member to my right hon. and learned Friend the Chancellor of the Exchequer's speech to the House on 22 May 1979, which set out the Government's policy on cash limits.