This item was published during the term of a previous administration that ended in April 2007
Calum MacDonald announces capital allocations of £328 million for local authorities
Mr Calum MacDonald MP, Minister for Local Government at The Scottish Office, today announced capital allocations for local authorities in 1998-99 totalling £328 million. These allocations allow councils to incur expenditure, mostly through borrowing, to meet capital expenses on their non-housing programmes. This covers spending on roads and transport, education, social work, general services, flood prevention and coast protection and non-council owned housing projects.
Local authorities are reimbursed by the Government for much of their borrowing costs through loan charges support paid in subsequent financial years.
Mr MacDonald said:
"I am pleased to announce these capital allocations amounting to £328 million. The major part of these allocations is for general expenditure across all local authority non-housing capital programmes. The level of these general allocations reflects the Government's commitment to stay within existing spending plans. However, we announced on July 2, as part of the Budget, that we would make additional resources available to councils for spending on improvements to school buildings in this and the next four years. The allocations therefore include an extra £26.7 million specifically for spending on education which will be made available to councils after they have submitted details of the work they plan to carry out on schools.
"The increase in the planned overall provision for non-housing capital spending reflects the high priority we attach to education. In addition, all authorities will receive a formula allocation that is, on average, 4.3 per cent higher than the provisional allocations for 1998 99 notified to them last year. This reflects the fact that more resources are available for general distribution given that we have decided, following consultation with COSLA, not to proceed with any new challenge fund competitions in 1998-99.
"I recognise that this is still a tight settlement for authorities. The fact that resources are constrained makes it even more important that authorities commit to and comply with our new policy of Best Value: sixteen councils have already demonstrated their ability to do this and the remaining councils are, I know, making considerable efforts to achieve the necessary standards.
"Councils can of course supplement their capital allocations by using capital from current revenue (CFCR), securing private sector contributions, by securing EU funding, and by raising capital receipts. They can also take advantage of the opportunities offered by the Private Finance Initiative to undertake major capital projects in partnership with the private sector."
1. Local authorities require the consent of the Secretary of State under section 94 of the Local Government (Scotland) Act 1973 before they incur a liability to meet capital expenses. The permissions to spend announced today will in general allow councils to incur new liabilities on any or all of six capital programmes - roads and transport, education, general services, social work, flood prevention and coast protection and housing outwith the housing revenue account.
2. The allocations have primarily been determined by a formula which covers all non-housing programmes. Councils have complete flexibility within their formula allocations to determine their own priorities for spending across the non-housing programmes. Some authorities' allocations include amounts for specific capital projects, mainly those approved for funding by the previous administration under challenge funding arrangements. All authorities' allocations include a share of the additional resources being made available for improvements to school buildings. Authorities have been asked to submit details of the use they plan to make of these resources to The Scottish Office by 31 December. Subject to confirmation that they will utilise the available resources fully for the intended purpose, authorities will receive these extra capital allocations. Shetland Islands Council will only receive an allocation for improvements to school buildings. The remainder of their capital spending programme is financed from their own resources.
3. Capital allocations for the housing revenue account and for police and fire authorities will be the subject of separate announcements.