§ Mr. Favellasked the Secretary of State for the Environment whether he will give details of his public expenditure programme for 1984–85.
§ Mr. Patrick JenkinMy right hon. Friend, the Chancellor of the Exchequer has announced the main changes to the Government's public expenditure plans for 1984–85 and later years. The main changes affecting DOE programmes arise from the fact that local authorities in England have not held their current expenditure down to previous White Paper figures. Collectively their budgets for relevant current expenditure this year, 1983–84, indicate an overspend of £858 million. We have accordingly had to increase the provision for their current spending in 1984–85 by some £500 million above the level we had previously planned for that year. Even at that level the targets are very tough, and I have consulted local government on proposals for the other main elements of a rate support grant settlement designed to strengthen the pressures to meet these targets.
The failure to curb current spending has inevitably meant that with great reluctance we have had to look for economies on the capital side to stay within the Government's overall public expenditure objectives. However, although the figures for local authority capital spending in England have been reduced from those in last year's White Paper—Cmnd. 8789—the gross amount actually available for capital spending in 1984–85 will still be close to this year's expected outturn. This has been made possible largely because of the continuing success of the Government's right to buy legislation, which means that the forecast inflow of housing capital receipts in 1984–85, mostly to local authorities, will be about £300 million higher than previously estimated.
In order to help local authorities to make the best use of their capital allocations and to plan their spending more efficiently, the Government propose to introduce a system of year-end flexibility on the national cash limits relating to local authority capital expenditure. This will mean that 524W where a cash limit is underspent in one year it will be possible to carry a proportion of the resources forward to the following year. For 1983–84 the maximum carry forward will be 2 per cent. of the net provision in 1983–84. This carry forward provision introduces a new principle into the management of local authority capital spending and the Government hope to be able to increase the figure of 2 per cent. in later years in the light of experience gained and the circumstance then prevailing. For 1984–85 this new carry forward provision enables us to increase the total available for allocation for all local authority services in England, by some £60 million, which can if necessary be added to the cash limits for 1984–85.
I propose to introduce two other changes which would assist local authorities to make better use of capital resources. First, I shall be maintaining at 50 per cent. the prescribed proportion of non-housing capital receipts, that is the proportion available to authorities to supplement allocations at their own discretion, but I propose to consult the local authority associations through the Housing Consultative Council about changing the prescribed proportion for most housing receipts from 50 per cent. to 40 per cent.
As this year, I shall use the remaining proportion of the forecast national level of receipts to enhance basic allocations and the change on housing would provide increased scope for directing resources towards the areas of housing need. I would be prepared to consider making extra resources available in certain cases to authorities whose programmes relied on full use of receipts and have been adversely affected by the changes in proportion over the past two years: my Department will be discussing details with the local authority associations.
I also propose to extend the arrangements introduced this year to give authorities assurances about the level of their allocations for later years. Subject to similar conditions to those which applied last year authorites may plan on the assumption that their allocation for housing and the other services block for 1985–86 and 1986–87 will be at least 80 per cent. and 70 per cent. respectively or the 1984–85 figures, of which they will be notified shortly.
The table at the end of this answer shows how I am proposing to distribute the overall provision for DOE programmes together with the additional accounts to be carried forward for allocations to local authority capital programmes.
For housing, subject to the outcome of consultations with the local authority associations, the gross capital provision for 1984–85 together with the carry forward will be a little over this year's provision in cash terms. Because housing starts in the private sector are running 20 per cent. higher than in 1982, the overall level of housing activity should be well sustained by the public sector programme I am announcing. On home improvements, I see no reason why spending on grants should not match the 1982–83 outturn, which was by far the highest level then achieved and double the amount spent in 1981–82.
For next year I shall be bringing the urban programme, derelict land reclamation and the urban development corporations within a single block for the first time. A single cash limit will be set for the capital elements of this, giving me greater freedom to switch resources from one service to another within the course of a year in order to put them to best use, subject to parliamentary approval of the necessary Vote provision. Including the reinvestment or urban development corporation receipts and the benefit
525Wof end-year flexibility, total expenditure permitted in the new urban block in 1984–85 will be £424 million, which represents a small increase on the provision for 1983–84. Total expenditure for the urban programme alone, including contributions from other Departments, will be £348 million—the same figure as last year. The external finance limit for the English water authorities will be set
Totals may not add due to rounding £ million cash 1983–84 1984–85 Cmnd. 8789 Provision Forecast Outturn* Notional allocation of provision in Cmnd. 8789 Revised Totals together with 2 per cent, carry forward Total local authority relevant current expenditure in England (covering all Departments' services) 19,692 20,550 19,791 20,345 DOE—Housing (Local authorities, housing corporations and New Towns) Capital: Gross expenditure 3,245 3,460 3,420 ‡3,274 Receipts -1,402 -1,863 -1,300 -1,596 Net capital expenditure 1,843 1,597 2,120 ‡1,678 Current expenditure† 949 1,034 870 847 Programme total: Net capital plus current expenditure 2,792 2,631 2,990 †2,525 DOE Other Environmental Services Local Environmental Services, Capital: Gross expenditure 624 596 636 ║621 Receipts -424 -358 -425 -425 Net expenditure 200 238 210 ob/196 Local Environmental Services current expenditure¶ 2,202 2,441 2,250 2,259 Urban and derelict land block 405 406 450 ●424 Royal Parks, ancient monuments etc. 76 70 80 88 Central and miscellaneous services, environmental research■ 113 116 120 120 Environmental bodies development commission 80 79 83 89 English water authorities external finance limit* 341 320 331 266 Water research, other water services 14 12 13 13 British Waterways Board—grant-in-aid 40 40 44 42 PSA (Office and general accommodation)# -141 -141 -120 -91 *Based on budgets and first quarter 1983–84 figures, where available. †Subsidies and rate fund contributions. ‡Including carry-forward allowance of £29 million. ║Including carry-forward allowance of £7 million. ¶Including costs of rate collection and of the births, marriages and deaths registration service. •Including carry-forward allowance of £5 million, and £7 million receipts available for reinvestment. ▀Excluding Ordnance Survey. *Including DOE and MAFF components. #Negative provision reflects the fact that Department's repayments to PSA for office accommodation at market rental values exceeds PSA's actual