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Local Authority Expenditure

Volume 82: debated on Monday 8 July 1985

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asked the Secretary of State for Wales if he will estimate local government expenditure in Wales for 1985–86; what restrictions, if any, he intends to impose on capital expenditure by local authorities; if he will review the percentage of capital receipts which can be spent by local authorities; and if he will make a statement.

Local authorities have budgeted to spend £1,323 million on current account in 1985–86, about 1 per cent. more than the level of provision underlying the rate support grant settlement for the year. Allowing for the normal degree of shortfall on budgeted capital spending, and the tendency for budgets to understate the final level of receipts, the latest statistical returns suggests that local authority net capital spending in Wales in 1985–86 will be of the order of £265 million, about 5 per cent. more than the Government's control total.In the light of this forecast I have no plans to restrict the level of capital spending during the course of the year, or to revise the proportion of receipts which authorities can use to enhance the spending power of their capital allocations. The situation will be closely monitored. If in the event there is an overrun on the cash limit it would be met from the reserve of £5 billion, and would not therefore add to the planned total of public expenditure.