HC Deb 03 November 1987 vol 121 cc655-61W
Mr. Heddle

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

Mr. Ridley

My right hon. Friend, the Chancellor of the Exchequer has today announced the Government's public expenditure plans for the next three years. The following tables give details of the major changes in my Department's programmes. Because of increased receipts I have been able to provide for significant increases in gross expenditure, particularly for housing, the inner cities and the environment without increasing net expenditure.

Housing

There is a substantial increase in gross provision for housing capital expenditure in 1988–89. At £3,827 million, this is £384 million (11 per cent.) higher than previously planned and £159 million higher than the estimated outturn for 1987–88. In 1989–90 there will be an increase of £284 million on previous plans. Increases on this scale have been made possible by the continuing success of the right to buy, and by disposals of new towns land for housing. Capital receipts are now expected to yield more than £2 billion in each of the next three years.

Within the total available for capial investment I have allocated resources in accordance with the priorities outlined in the White Paper "Housing: the Government's proposals" (Cm. 214). Gross provision for the Housing Corporation will increase by nearly £50 million in 1988–89, and by 1990–91 will be £145 million higher than expected outturn in 1987–88. I hope that these extra public resources will increasingly be augmented by private finance under mixed funding arrangements.

While housing associations will have an increasing share of the provision of new social housing for rent, I have made substantial additional provision for local authorities to enable them to spend more on renovation of their existing stock. Gross provision fot local authority capital spending in 1988–89 will be £3,048 million, an increase of £313 million on previous plans and of £128 million on estimated outturn for 1987–88.

As local authority spending power from receipts continues to increase, the borrowing consent represented by capital allocations declines in importance. Nevertheless, basic housing investment programme and homes insulation scheme allocations will remain at a high level in 1988–89: at £1,150 million they will stand at around 90 per cent. of this year's.

Additional allocations will again be made to local authorities to revitalise rundown estates under the Department's estate action programme. The resources available will nearly double, to £140 million.

Additionally, over the three survey years I am making available a total of £125 million for housing action trusts so that they can renovate some of the worst estates of rundown local authority housing, and pass it on to new forms of ownership and management.

Housing investment by new towns is increasingly confined to the servicing of sites for development by the private sector. Gross provision in each of the next three years has been increased to support this activity, and is more than financed by increased proceeds from disposals.

Because of the continuing high level of receipts it will be possible to achieve the higher levels of gross provision for capital investment I have outlined without any increase in the overall net housing programme totals already planned. The figures are given in the following table. Compared with expected outturn in 1987–88 the overall planned level of net expenditure in 1988–89 shows an increase of £498 million (20 per cent.).

Other environmental services

I continue to give very high priority to the inner cities. The urban development corporations have proven their worth in bringing effective help to the areas of greatest need, drawing on the resources and expertise of the private sector, and I am increasing planned resources by £65 million in 1988–89, and £68 million in 1989–90. Total resources for UDCs will now be more than £200 million in each of the next three years. This will enable us to maintain the momentum of the corporations in London and Merseyside, to secure the successful launch of the four new UDCs established this year (in Trafford Park, Teesside, Tyne and Wear and the Black country) and to press ahead with further initiatives.

Despite the increased emphasis on UDCs I am still continuing to provide substantial resources, nearly £300 million a year, for the other parts of my urban group: the urban programme (including urban development grant and urban regeneration grant) and derelict land grant.

I am also increasing resources for the countryside, environment, recreation and heritage. The Development Commission, Nature Conservancy Council, Countryside Commission and Sports Council will receive increased financial support. In addition the National Heritage Memorial Fund will receive an additional £20 million capital injection in 1987–88.

Provision for gross capital expenditure in 1988–89 on local environmental services has been increased by £60 million to £627 million.

The increases in gross expenditure in the other environmental services programme in 1988–89 have been more than offset by substantial increases in forecast receipts to local authorities and the new towns. This reflects in particular the success of the new town bodies' programme of disposals as the private sector takes an increasingly prominent role in the future of the towns.

Water

I am reducing slightly the borrowing limit for the water authorities by £9 million in 1988–89. Water authorities continue to reduce real operating costs and this, taken with increased profitability, will enable them to finance large increases in investment proposed in their 1987 corporate plans. Capital expenditure has already grown in real terms by 40 per cent. since 1980–81 and is currently running at about £1 billion. Further major growth is now assured in programmes to improve water and sewage treatment and to renew underground assets.

Department of the Environment—Housing
1987–88 1988–89 1989–90 1990–91
Estimated outturn Previous plan Revised plan Previous plan Revised plan Plan
Capital
Gross Expenditure
Central Government
Housing Corporation 705 686 735 682 775 850
Other Central Government 3 5 4 5 5 5
Local Authorities 2,920 2,735 3,048 2,779 2,908 2,808
Public Corporations
Housing Action Trusts 0 0 5 0 50 70
New Towns 41 18 35 18 30 30
Total Gross Expenditure 3,668 3,444 3,827 3,484 3,768 3,763
Receipts
Central Government
Housing Corporation -71 -70 -80 -71 -80 -90
Other Central Government -3 -2 -2 -2 -2 -2

The British Waterways Board external financing limit is to increase by £1.6 million in each year.

Property Services Agency

PSA's civil accommodation programme in net terms is planned to decrease by £22 million in 1988–89 and by £59 million in 1989–90. But because disposal and Properly Repayment Services receipts are expected to increase substantially, expenditure is planned to increase by £63 million and £78 million respectively in the next two years. After meeting increases on rents to be paid to landlords and other unavoidable expenditure, the agency should be able to allocate sufficient funds to the maintenance of the civil estate in 1988–89 to prevent further build up of the backlog of work. In the following year the Agency should be able to make inroads into this backlog.

Overall Local Authority Expenditure, England

I proposed on 23 July that provision for local authority relevant current expenditure for 1988–89 should be increased by £838 million to £27,538 million and that aggregate Exchequer grant should be £13,775 million, an increase of £750 million compared to 1987–88. I am consulting local government about my proposals for the 1988–89 rate support grant settlement.

As regards local authority capital expenditure overall, gross provision for the main local authority cash limit DOE-LA1 in 1988–89 has been increased by £500 million. Because of authorities' continuing success in increasing their capital receipts, this has not required an increase in net provision. The revised plans allow for gross spending on the five services covered by the cash limit (housing, education, transport, personal social services and other services) of nearly £5.2 billion.

The very high level of receipts being generated by authorities in 1987–88, which is leading to an underspend against the net cash limit, will add to the growth in accumulated receipts and hence will lead to a further increase in the spending power from receipts next year. Despite this, the increase that has been agreed for gross provision means that the allocations available for the services across the cash limit in 1988–89 should be broadly equal to allocations issued for the present year.

1987–88 1988–89 1989–90 1990–91
Estimated outturn Previous plan Revised plan Previous plan Revised plan Plan
Local Authorities -2,315 -1,581 -1,876 -1,581 -1,915 -1,923
Public Corporations
New Towns -112 -29 -110 -29 -80 -70
Total Receipts -2,501 -1,682 -2,068 -1,683 -2,077 -2,084
Net Capital
Central Government
Housing Corporation 634 616 655 611 695 760
Other Central Government 0 3 2 3 3 3
Local Authorities 605 1,154 1,172 1,198 993 885
Public Corporations
Housing Action Trusts 0 0 5 0 50 70
New Towns -72 -11 -75 -11 -50 -40
Total Net Capital 1,167 1,762 1,759 1,801 1,691 1,679
Total Current 1,353 1,271 1,259 1,306 1,312 1,364
Total DOE housing 2,520 3,032 3,018 3,107 3,003 3,043

DOE other environmental services
£ million (sums may not total due to rounding)
1987–88 1988–89 1989–90 1990–91
Forecast Outturn Previous Plan Revised Plan Previous Plan Revised Plan Plan
1. Urban Group
(1) Urban Programme1 227 231 221 230 221 222
(2) Urban Development Corporations of which: 133 138 203 147 215 223
(a) LDDC/MDC 111 108 108 147 215 223
(b) New UDCs 22 30 95
(3) Derelict land reclamation 81 81 76 81 76 76
2. New Towns
Gross2 87 61 81 50 65 60
Receipts -335 -131 -311 -134 -175 -150
Net -248 -70 -230 -83 -109 -90
3. Countryside, Recreation and Environment
(1) Development Commission and support for industry 28 27 32 27 33 32
(2) Countryside, Recreation, and Environment Bodies 105 105 110 106 112 114
(3) Environmental Research 26 30 31 32 32 33
4. Heritage
(1) Royal palaces, royal parks and Royal Armouries 41 41 44 42 46 45
(2) Historic buildings, ancient monuments and national heritage3 93 73 74 75 75 77
5. Water
(1) British Waterways Board EFL 45 45 47 46 48 49
(2) Regional Water Authorities EFLs 3 -11 -20 -58 -74 -94
(3) Civil Defence 2 3 3 4 4 4
(4) Other Water Services 2 2 1 2 1 1
6. Departmental Administration 113 116 128 119 123 122

1987–88 1988–89 1989–90 1990–91
Forecast Outturn Previous Plan Revised Plan Previous Plan Revised Plan Plan
7. Local Environmental Services
(1) Capital
Gross 890 567 627 581 627 627
Receipts -550 -390 -542 -399 -542 -542
Net 340 177 85 182 85 85
(2) Current4 2,841 2,694 2,800 2,762 2,898 2,984
8. Other local authority current
(1) Local authority rate collection 176 177 185 182 191 197
(2) Records and registration of births, deaths and marriages 17 17 25 18 26 27
Programme total 4,025 3,876 3,815 3,914 4,004 4,107
1 Includes capital and current expenditure, DOE element only. Total UP provision (all departments) for 1988–89 is £314 million.
2 Includes £4 million for Letchworth Garden City Corporation in 1987–88.
3 Includes £20 million additional funding for NHMF in 1987–88.
4 Excludes Urban Programme current expenditure.

PSA Civil Accommodation
1987–88 1988–89 1989–90 1990–91
Forecast outturn Previous plan Revised plan Previous plan Revised plan plan
Expenditure1 500 476 539 486 564 598
Receipts2 -575 -575 -660 -587 -724 -758
Net -75 -99 -121 -101 -160 -160
1 Capital expenditure, maintenance, rents and administration.
2 PRS and disposal receipts.