HC Deb 09 December 1985 vol 88 cc608-9
5. Mr. Gareth Wardell

asked the Secretary of State for Wales when he last met the Welsh Association of District Councils to discuss capital funding.

Mr. Nicholas Edwards

I met representatives of the Welsh districts at a meeting of the Welsh consultative council on local government finance on 25 November. Last Tuesday I announced my decision to increase total capital allocations for local authorities in Wales by £60 million in 1986–87. Housing allocations have increased by £32 million. I hope shortly to announce my decisions on the allocation of these resources to other services and to individual local authorities.

Mr. Wardell

Will the Secretary of State confirm that the increase of £32 million in housing capital allocations will be reflected in a similar increase in gross spending provision in the coming year based on a realistic capital receipts forecast?

Mr. Edwards

I shall announce the gross figures in due course in the normal way, but I have deliberately increased the allocations this year, partly because we expect slightly lower receipts from house sales, and partly because local authorities have tended to underspend their housing allocations. They spend about 85 per cent. To get the maximum possible spent on housing, we have taken account of that factor in making our decision on allocations. The local authorities regard the allocations figure as very important, because that is the figure on which they can confidently plan their capital spending programmes. However, the actual figures will be very much affected by the receipts as well.

Mr. Raffan

Will my right hon. Friend confirm that since 1978–79 capital expenditure in Wales has increased in real terms? Will he remind the Labour party that the last Labour Government reduced capital expenditure as a proportion of total local government expenditure in Wales from 42 to 17.7 per cent.?

Mr. Edwards

It is important to remember that, following the disastrous economic policies of the Labour Government and their calling in the International Monetary Fund, they slashed capital spending not only in local authority areas but on health. As a result of our being able to persuade local authorities in Wales to control their current spending, we have been able to allocate substantial additional resources for capital spending in Wales.