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Audit Commission (Report)

Volume 78: debated on Wednesday 8 May 1985

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14.

asked the Secretary of State for the Environment if he will make a statement on the Audit Commission's report on captial spending.

I welcome the report. The commission has drawn attention to flaws in the present system which the Government had already identified and which led us to review the system in consultation with local government. The report will make a useful contribution to this work.

Does the report not substantiate and amplify in the most authoritative and independent way the criticisms by the Select Committee on the Treasury and Civil Service in each of the last four years, of the Government's persistent mismanagement of public capital expenditure? Does the Secretary of State not realise the urgency of this matter, when skilled people are idle, plant is underused and people are suffering from the inadequacies of the built environment?

I recognise the urgency to which the hon. Gentleman refers. I have had a series of meetings with local authority associations and officials and I hope to write shortly to the associations or to have a meeting at member level to discuss the options that the investigations have shown up. We shall then have to reach decisions as soon as possible.

Is it not clear that the present system does not work? As my hon. Friend the Minister for Housing and Construction announced that this would be reviewed when he introduced the capital receipts reduction orders in the House, will my right hon. Friend assure us that a new system will be in place by the next financial year?

Nobody knows better than my hon. Friend the great complexity of trying to reconcile the two objectives that have been shared by all Governments: first, the Treasury's reasonable measure of control over total public expenditure, including local authority capital expenditure and secondly, giving local authorities time horizons and certainty and flexibility so that they can plan their programmes sensibly. These are complex matters, but I hope that we shall reach decisions soon.