§ Mr. Kenneth Clarke
Planned expenditure on construction was reduced by the previous Government at the start of the year 1979 to £315 million which was reduced by a further £8 million in the June 1979 budget. The cash limit for the roads block as a whole was set by the previous Government at £459.5 million, but this was based on forecasts of inflation which proved wholly unrealistic. This was reduced in June 1979 to £450.5 million still using 245W the previous Administration's inflation assumptions. When inflation and the cash limit began to affect the volume of work, the block was managed so as broadly to maintain the level of maintenance at the expense of new construction. This is one of several factors affecting expenditure on construction although it is not possible to isolate the exact effect of any one factor. The provisional outturn is £455 million, about 1 per cent. over the cash limit. The previous Government's full plans could not have been achieved in practice without a massive overspend of their own cash limit or a neglect of vital maintenance work.