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CAPITAL SPENDING BOOST FOR COUNCILS - MCCONNELL

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The minister for finance Jack McConnell today announced significant provisional allocations to local authorities fo...
The minister for finance Jack McConnell today announced significant provisional allocations to local authorities for 2000-01 totalling

£396 million for councils' non-housing capital expenditure.

Mr McConnell said: 'We are allowing councils to increase capital spending on general local services and making next year's announcement earlier than ever before. We are working with councils to help them invest in high quality services, and today's announcement demonstrates our commitment to better schools, public transport and care and repair projects for the elderly.'

'These allocations are up on last year and to help councils plan early, I am notifying them of their main allocations now.'

Councils play an essential part in people's lives and government finances are helping to deliver benefits to communities in every part

of Scotland.'

'We have an active partnership with local government and continue to back this up with substantial financial resources including

additional finance through the public transport fund and the new deal for schools.'

'I am particularly pleased to see that some councils such as Borders, Falkirk and Fife have benefited from the arrangements. The Strathclyde passenger transport authority increase further demonstrates our commitment to transport.'

'We announced the abolition of debt redemption last year and councils can spend all their non-housing receipts on essential services. I encourage councils to continue to dispose of surplus assets and use the extra income to benefit local communities.

BACKGROUND

1. As part of the comprehensive spending review, ministers formed a view on local authority non-housing capital spending needs in total and agreed to abolish the debt redemption requirement. This encourages councils to dispose of surplus assets and allows an overall increase in the gross resources available to councils. We have an agreement with COSLA that the bulk of non-housing capital allocations should be issued at a gross level, ie incorporating the forecast receipts provided by individual authorities.

2. This is because each local authority's forecast of receipts is taken into account in the distribution formula. Therefore those with

more receipts receive less central government net support and those with fewer receipts receive more central government support.

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