§ Mr. Nicholas BrownTo ask the Secretary of State for the Environment what is his policy towards centre funding of local authorities which have financial difficulties due to(a) the collapse of BCCI and (b) late rating appeals and (c) interest rate swaps; and if he will make a statement.
§ Mr. Portillo[pursuant to his reply, 17 December 1991, c. 108]: My right hon. Friend intends to issue directions permitting local authorities which have incurred losses in BCCI and the Chancery and Edington banks to treat those losses as capital expenditure, where these are substantial in relation to an authority's revenue budget and reserves. He does not propose to approve any of the applications he has received for supplementary credit approvals—SCAs—related to such losses.
However, my right hon. Friend is now minded, out of resources which are available as a result of certain SCAs not being taken up to the anticipated extent, to issue SCAs to provide some assistance to those authorities most affected in 1991–92 by late rating adjustments of which they could not have been aware with certainty when setting their 1991–92 budgets. He has today invited authorities to provide him with information about their late rating adjustments, after receipt of which he intends to decide the level of assistance which in all the circumstances would be appropriate.