HC Deb 20 December 1995 vol 268 cc1522-4
8. Mr. Kirkwood

To ask the Secretary of State for Scotland when he expects to be able to authorise new capital spending under section 94 consents for local authorities for the financial year 1996–97; and if he will make a statement. [5202]

Mr. Kynoch

In February or March 1996.

Mr. Kirkwood

Will not the announcement on capital expenditure in November, which restricts the amount which local authorities can spend through capital receipts on capital expenditure in 1996–97. and the current constraints on the amount of capital that can be funded from revenue, mean that £160 million or £170 million less capital expenditure will be devoted to capital projects next year in Scotland? Is it not passing strange that, after 16 years in office, £100 billion from North sea oil and gas and £60 billion from privatisations, the Government are putting constraints on capital expenditure, which means that less will be spent on roads, bridges, schools and industrial development north of the border next year?

Mr. Kynoch

The hon. Gentleman refers to the capital allowances. He must accept that, at present, capital expenditure by local authorities in Scotland is running significantly higher than elsewhere—it is 77 per cent. higher overall than in England. It is therefore only right and proper that we should try to cut the borrowing costs which divert funds from front-line services. That is why the constraints have been put in place.

When the hon. Gentleman came to see me with the right hon. Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel), we talked about specific projects in his constituency. We also spoke about the opportunity to use the private finance initiative. I hope very much that local authorities will fully explore that possibility, because they could bring forward projects sooner than would be possible if the authorities used purely public funds. They may well find that they get those projects significantly cheaper by using private expertise.

Mr. Stewart

Will my hon. Friend say something about Government policy towards smallish local authorities which may have major capital projects to finance? I have no doubt that my hon. Friend has the Eaglesham bypass particularly in mind. I am grateful to the Minister of State for meeting a delegation on that recently. Can my hon. Friend say how those projects fit into the allocation process?

Mr. Kynoch

My hon. Friend will be aware of the challenge funding arrangement, which will be maintained. Some road and transport spending may be settled by those means, and I am sure that that arrangement will be considered for the particular bypass that my hon. Friend mentioned.

Mr. Michael J. Martin

The Minister may know that his colleague, the hon. Member for Aberdeen, South (Mr. Robertson), visited my constituency recently to look at multi-storey flats. He will no doubt agree that it is important that more and more of such flats, which are not the worst place in the world to live, should have concierge systems. The local authority has tried its utmost to offer to as many multi-storey flats as possible the security of concierge systems. Will the Government release funds to allow local authorities to install such systems, which offer safety particularly to the elderly living in such flats?

Mr. Kynoch

I congratulate the hon. Gentleman's local authority on the work that it has done on security. He will be aware that my right hon. Friend the Secretary of State has already announced increased funding for closed circuit television, and that local authorities have greater flexibility on how they spend their capital allocations.

Mr. McAllion

Does the Minister not understand that, by forcing councils to use 25 per cent. of their capital receipts next year and 50 per cent. of them in the following year to repay outstanding capital debts, he is effectively cutting public investment in Scottish housing over those two years by at least £300 million, as well as depriving the already depressed construction industry in Scotland of £300 million-worth of business? How in God's name can that make any sense when there are still tens of thousands of Scots homeless and on the streets, and when the Government's own national housing conditions survey revealed that Scottish housing is riddled with damp and condensation and is in disrepair, which is an utter national disgrace? Why does not the Government give the people of Scotland and Britain the only Christmas present they want from the Government —a general election in the new year? That will give people the opportunity to cast the Government into the political oblivion that they justly deserve.

Mr. Kynoch

I look forward to whenever the general election campaign begins, because I shall be able to ensure that the people of Scotland are aware of the reckless spending that the Labour party would introduce in the country. The Opposition must accept the fact that, since 1987, local authority housing debt has risen by almost £1 billion to £3.938 billion—an increase of nearly 20 per cent. If the hon. Gentleman were to encourage stock transfers, he would get receipts. He must accept that the cost of borrowing is significant and that it is diverting taxpayers' money into funding debt rather than it being used to deliver services.