§ Mr. Heathcoat-AmoryTo ask the Secretary of State for the Environment what estimate he has made of outturn in the current year on the DOE-LA1 cash limit; and if he will make a statement.
§ Mr. RidleyThe DOE-LA1 cash limit covers capital expenditure and receipts by local authorities in England on education, housing, transport, personal social services, and other services. On the basis of local authorities' third quarter expenditure returns, the cash limit is forecast to be underspent by about £750 million in 1987–88, similar to the forecast based on first and second quarter returns. The underspend is caused by capital receipts being substantially higher than forecast before the year.
Under the relevant end year flexibility arrangements, the DOE-LA1 cash limit for 1988–89 will be increased in due course by £141.7 million — five per cent. of the 1987–88 cash limit, provided that fourth quarter returns confirm an underspend of at least that size.
I and my colleagues responsible for services within the DOE-LA1 cash limit will therefore be making additional capital allocations for 1988–89. We propose to issue £100 million of these shortly, and a further £41.7 million when local authorities' budget returns for 1988–89 are available, provided these returns do not lead to a forecast overspend against the revised cash limit.
The sum available for my Department's services from the £100 million is £58.1 million. I propose to hold back a £5 million reserve to cover any claims for storm damage expenditure in 1988–89 on DOE services. I will be making allocations of £25 million to local authorities towards capital expenditure necessary to prepare for collection of the community charge, and my hon. Friend the Minister for Housing and Planning will be including details of £28.1 million extra capital allocations in an announcement he is making about housing matters today.