HC Deb 06 November 1986 vol 103 cc499-503W
Mr. Heddle

asked the Secretary of State for the Environment if he plans any changes in his public expenditure programme.

Mr. Ridley

My right hon. Friend the Chancellor of the Exchequer has announced the Government's public expenditure plans for the next three years. The table below gives details of the major changes in my Department's programmes. Increased receipts have enabled me to provide for carefully targeted increases in gross investment on some vital programmes at relatively small net cost.

Housing

For housing, there is a substantial increase in the gross provision for capital expenditure in 1987–88. This will now be £451 million (14 per cent.) higher than previously planned, at £3,661 million. That figure is £225 million more than the estimated outturn for 1986–87. An increase on this scale has been made possible by the success of the right to buy. Over the next three years receipts are now expected to yield some £950 million more than previously forecast.

The gross provision for local authority capital expenditure in 1987–88 will be £2,922 million an increase of £231 million over the estimated outturn for 1986–37. In using their increased resources, I look to local authorities to give first priority to the renovation and maintenance of their housing stock.

In determining the total for housing allocations to local authorities I shall take account of their growing spending power from receipts. I shall honour the assurances given by my predecessors that initial housing allocations to individual authorities for 1987–88 would be not less than 80 per cent. of their initial allocations for 1985–86.

In addition I shall be able to make significant increases to the amounts allocated to local authorities to revitalise rundown estates under schemes developed in conjunction with my Department's urban housing renewal unit. I shall also be able to increase the gross provision for the Housing corporation, particularly to support housing association schemes financed primarily by the private sector. We shall make further announcements about these shortly.

Housing investment by new towns is now increasingly confined to the servicing of sites for development by the private sector, and gross provision in 1987–88 will be more than covered by the forecast capital receipts from sales of housing and land for housing.

Provision for current expenditure in the housing programme has been increased by £131 million for 1987–88. This mainly reflects increased provision for rate fund contributions by local authorities to their housing revenue accounts, which forms part of the rate support grant settlement, and revised estimates of the cost of housing subsidy. The extra provision will also allow scope for significant new initiatives on agency services for home improvement and on housing management training.

Overall, the net housing programme for 1987–88, covering both capital and current expenditure, will increase by £361 million to £3,204 million.

For 1988–89 and 1989–90, the continuing success of the right to buy will enable further substantial increases on previously planned gross provision for capital investment. Private sector housing investment will also continue to increase. Current provision for the two years is increased for the same reasons as the increase in 1987–88. The overall net housing programme total for 1988–89 is now £3,016 million, an increase of £129 million on previous plans, and for 1989–90 is £3,091 million.

Other Environmental Services (OES)

In the other environmental services programme, provision for gross expenditure on local authority local environmental services capital in 1987–88 has been increased by £50 million to £609 million. £380 million of this is expected to be offset by capital receipts. The increase in provision will enable me to make appropriate capital allocations to local authorities, honouring the assurances given by my predecessors, while allowing authorities to use the steadily growing spending power available to them from capital receipts.

I attach high priority to tackling inner city problems. Provision for the urban group programmes is increased by £40 million a year. For 1987–88, £15 million of this will go to establish the four new urban development corporations in Greater Manchester, Teesside, Tyne and Wear and the Black Country; and there is £25 million extra to enable LDDC to build on its success in regenerating London's docklands, which has generated nearly £1.5 billion in private sector investment commitments, and to embark on a new local road network. At the same time the resources for the other programmes in the group — the urban programme itself and derelict land reclamation — will continue at the planned level in 1987–88 and will then be kept at that level in 1988–89 and 1989–90. Resources for the introduction of urban regeneration grant will be provided within the urban programme.

I am also increasing the resources for our environmental and heritage programmes — specifically, the protection of natural habitats through the Wildlife and Countryside Act, the programmes for improving access to the countryside and providing conservation advice to farmers, landowners and voluntary groups, the provision of workshops and employment in rural areas, and repair grants for historic buildings, including churches.

The various additions to provision outlined above are partly met by increases in the capital receipts, totalling some £100 million over the three years, which we now expect from the disposal of property and development land in new towns. New investment in the new towns is fully maintained at the previously planned level. Private sector developers are taking on a larger proportion of it: the public sector resources thereby released have been retained and reallocated within the OES programme.

The English water authorities' external financing limit for 1987–88 has been increased by £14 million, to sustain the increased level of capital investment achieved in 1986–87 while keeping the cost in water charges to a reasonable level. The British Waterways Board EFL remains as planned at £45 million for 1987–88.

PSA

An additional £40 million a year is provided for the

£ million cash
Totals may not sum due to rounding
1986–87 1987–88 1988–89 1989–90
Estimated outturn Cmnd. 9702, adjusted Revised plan Cmnd. 9702, adjusted Revised plan Plan
DOE housing
Capital:
Gross 3,436 3,210 3,661 3,108 3,462 3,507
Receipts -1,850 -1,481 -1,702 -1,335 -1,701 -1,706
Net 1,586 1,729 1,959 1,773 1,761 1,801
Current 1,261 1,114 1,245 1,114 1,255 1,290
DOE housing programme total 2,848 2,843 3,204 2,887 3,016 3,091
DOE other environmental services
Local environmental service current1 2,534 2,414 2,613 2,414 2,695 2,763
Other local authority current 181 180 187 180 193 198
Local environmental services capital:
Gross 923 559 609 567 567 582
Receipts -398 -380 -380 -390 -390 -400
Net 526 179 229 177 177 182
Urban programme, DOE component 222 232 232 237 231 230

Property Services Agency for major new works, unavoidable increases in rents, and maintenance and estate rationalisation.

Overall Local Authority Expenditure in England—All Services

As regards overall local authority current expenditure, I proposed on 22 July that provision for local authority relevant current expenditure in 1987–88 be increased by £2.92 billion to £25.2 billion, and that aggregate Exchequer grant be increased by over £1 billion to £12.84 billion. I have consulted local government about my proposals for the 1987–88 rate support grant settlement and will take decisions shortly.

Additional provision of £460 million and grant of £183 million will be available in 1987–88 for a teachers' pay settlement which meets the requirements set out in the statement of 30 October by my right hon. Friend the Secretary of State for Education and Science.

For 1988–89 and 1989–90, provision for local authority current spending shows annual increases of 4 per cent. and 21/2 per cent. respectively, allowing for the phasing-in of additional provision for teachers' pay.

As regards capital expenditure, the growth in accumulated receipts on all the services covered by the main cash limit continues to present serious problems of control. In recent years, some allowance has been made for the spending power from receipts in determining the total available for allocations, but in the event the allowance has proved inadequate and we have had repeated overspending. My colleagues and I find that unacceptable. This year, a more realistic allowance has been made for receipts which has constrained the amount available for allocations. But this will be more than offset by the growth in spending power from receipts. Overall, we have increased gross provision on the main cash limit by £660 million across the five service blocks (housing, education, transport, personal social services and other services). The revised plans allow for spending against the cash limit of almost £5 billion, an increase of £600 million on provision for 1986–87.

1986–87 1987–88 1988–89 1989–90
Estimated outturn Cmnd. 9702, adjusted Revised plan Cmnd. 9702, adjusted Revised plan Plan
(Total urban programme, including other departments' components) (321) (324) (324) (330) (324) (324)
Derelict land 84 81 81 84 81 81
Urban Development Corporations:
London Docklands DC and Merseyside DC 90 86 111 89 138 147
New UDCs — — 15
Royal parks, historic buildings, heritage 107 112 114 115 115 118
DOE administration: Environmental research 114 142 152 146 154 159
Environmental and Countryside Bodies
(Development Commission, Nature Conservancy Council, Countryside Commission, Sports Council, other bodies) 120 124 132 127 135 136
Water research, other water services, Civil Defence 6 8 8 8 9 11
New Towns:
Gross investment 84 74 74 76 361 50
Receipts -146 -110 -150 -101 -131 -134
Net2 -62 -35 -75 -25 -70 -83
Nationalised Industries external finance4 120 34 48 33 35 -13
OE other programme total 4,071 3,557 3,847 3,585 3,894 3,928
PSA: office and general accommodation5 -90 -130 -90 -130 -90 -90
Total Local Authority current expenditure covering all departments' services:
Local Authority relevant current 24,300 22,291 25,211 — — —
Rate fund contributions to Housing Revenue Accounts 460 330 437 — — —
Additional provision for teachers' pay 255 — 460 — —
Local Authority public current 625,015 22,621 626,108 22,621 627,149 27,8656
Notes:
1 Excluding Urban Programme Current expenditure (£50 million a year).
2 Negative baseline because disposal receipts now exceed the gross investment needs of the new towns programme.
3 Reduced figure reflects the fact that an increased proportion of development expenditure in the new towns is being carried out by the private sector, reducing the public sector resource requirement.
4 Regional Water Authorities, England, excluding MAFF drainage grants; British Waterways Board.
5 Negative baseline because Departments' market-rent payments to PSA for accommodation exceeds PSA's costs of provision, because of properties held on Crown freehold or at low historic rent.
6 Subject to final decisions on RSG settlement, and teachers' pay.

Mr. Key

asked the Secretary of State for the Environment whether he proposes to make any changes to the cash limit for class X, vote 4, Department of the Environment — other environmental services: Royal Palaces and Ancient Monuments etc.

Mr. Waldegrave

Subject to parliamentary approval of the necessary Supplementary Estimate, the cash limit for class X, vote 4 will be increased by £1.1 million from £81,901,000 to £83,001,000. The increase will be charged to the Reserve, so it will not add to the planning total of public expenditure. The increase is the minimum necessary to cover a shortfall in receipts, due to a drop in the number of overseas visitors to the royal palaces and so on, and emergency expenditure of £100,000 following the Hampton Court palace tire.