HC Deb 11 November 1997 vol 300 cc476-7W
Mr. Watts

To ask the Secretary of State for the Environment, Transport and the Regions if it is his policy(a) to return to a needs-based capital approvals allocation system and (b) that any increased capital allocation will be made to local authorities via basic credit approvals. [14196]

Mr. Raynsford

The Government are carrying out a Comprehensive Spending Review, a root and branch review of public spending in all Government Departments. Conclusions will emerge in new spending plans and in new policies reflecting the Government's priorities next year. In parallel with this, we have set up a review to look at the future arrangements for local authority finance, in close collaboration with local government and representative organisations. This will include consideration of capital allocation systems and options for local authority support for capital expenditure. We will be consulting widely from late Autumn on particular aspects of the system and plan to issue a White Paper in the Spring on our policies for local government in England, including finance, best value and democratic renewal.

In 1998–99 we have agreed that the HIP allocations will be based on 50 per cent. on need, whereas previously it had been intended that 100 per cent. of the allocation would be subject to ministerial discretion. We have also agreed that the allocation of Supplementary Credit Approvals under our Capital Receipts Initiative should be made on the basis of 66 per cent. reflecting need.