§ Mr. StewartTo ask the Secretary of State for Scotland what plans he has to further regulate the use of capital receipts by Scottish local authorities; and if he will make a statement. [6634]
§ Mr. Michael ForsythLast year, I introduced measures to control the indebtedness of Scottish local authorities through limits on their ability to utilise capital receipts by requiring them to set aside 25 per cent. of those receipts for the redemption of debts.
I have decided that, from 1 April 1997, Scottish local authorities will set aside 50 per cent. of receipts raised from the sale of land and other property held on the general fund and, in the case of housing, 75 per cent. of receipts raised from the sale of housing stock. Scottish Homes will also be required to apply receipts to debt repayment from next year.
So far as the general fund is concerned, these decisions confirm the intention I announced on 28 November 1995. The exceptions to these set-aside rules will remain as in the current year, including an exemption from debt redemption rules when assets are transferred by an authority as part of a private finance initiative project.