§ Lord McCARTHYasked Her Majesty's Government:
How far the cash limits for 1980–81, which were based upon estimates for future movements in the RPI, will produce a reduction in the real value of their expenditure allocations for this period unless these are revised to take account of the higher rate of inflation which can now be expected.
§ Lord COCKFIELDCash limits have been set for 1980–81 relating to the support given to local authorities through the rate support grants. These limits allow for an increase in costs of 13 per cent. compared with 1979–80 together with an allowance for the extra cost of comparability awards. If a local authority's costs increase faster than this, there can be no guarantee that its spending plans in volume terms will be fulfilled. Cash limits have also been set for the external financing needs of the nationalised industries. These needs depend in part on how input costs rise relatively to the prices for their products.
§ Lord McCARTHYasked Her Majesty's Government:
Whether it is their intention to revise the 1980–81 cash limits to allow for increases in the projected rate of inflation since the time of their determination: and if not why not.
§ Lord COCKFIELDThe cash limits for the local authorities and the nationalised industries were announced in November. The presumption is that these limits will not be revised. It will be for the local authorities and the nationalised industries to manage within the cash limits provided.