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Local Government Finance

Volume 488: debated on Friday 27 February 2009

To ask the Chancellor of the Exchequer if he will bring forward financial measures to assist local authorities in delivering their capital programmes in circumstances where anticipated finance from capital receipts is reduced owing to falls in property and asset values. (259600)

Local authorities are responsible for determining their own capital spending plans and associated financing. The introduction of the prudential borrowing regime and the ending of ‘set aside’ of capital receipts from 1 April 2004 has given local authorities greater flexibility and discretion to manage the financing of these plans. This, alongside bringing forward to 2009-10 capital investment from the Department for Children, Schools and Families (DCSF), in respect of the fiscal stimulus, will ensure that local authorities are well placed to maintain capital expenditure plans during the economic downturn.

To ask the Chancellor of the Exchequer if he will discuss with (a) the Secretary of State for Communities and Local Government and (b) local government representatives measures to relax (i) capital financing and (ii) tendering rules for local government expenditure as measures to support the economy; and if he will make a statement. (259604)

HM Treasury meets regularly with the Department for Communities and Local Government and representatives from local government to discuss a range of issues, including the impact of the economic downturn on localities.