§ Mr. Wigleyasked the Secretary of State for Wales (1) if a local authority exceeds its capital standard expenditure for any one year by virtue of raising loans on the money markets, whether a corresponding financial reduction will be required in the authority's other services in subsequent years to meet the repayment charges arising out of that loan;
(2)whether any loan raised by local authorities from the money markets towards capital expenditure projects will affect the block grant of such local authorities in either the year in which the loan is secured or in any subsequent year;
(3)whether any funding of capital projects raised by local authorities directly from the money markets, without recourse to borrowing from the Government, will be considered as part of the total allowable standard expenditure of local authorities or whether such a sum, either in total or in its annual capital repayments, can be considered as additional to the standard expenditure laid down by the Government.
§ Mr. Wyn RobertsThe amount of capital expenditure which a local authority may incur in any year is controlled under the provisions of the Local Government, Planning and Land Act 1980. The way in which the expenditure is financed is not relevant for the purposes of the control. Any excess on the permitted level will be deducted from an authority's allocation for the following year. Loan charges incurred in connection with capital expenditure are a component of local authorities' rate fund revenue expenditure and consequently attract block grant, but do not feature in the control of local authority capital expenditure.