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Hard pressed local authorities in South Yorkshire will be given£20m in extra credit approvals in 1997-98 to help t...
Hard pressed local authorities in South Yorkshire will be given£20m in extra credit approvals in 1997-98 to help them meet their debt responsibilities resulting from the unprofitable South Yorkshire Supertram Project, local government minister David Curry announced today.

In reply to a written parliamentary question, Mr Curry said:

'The government is well aware of the exceptional problems facing the South Yorkshire districts and the South Yorkshire Passenger Transport Authority as a result of the loss-making Supertram project.

'We have looked very carefully at this problem and discussed it with representatives of the South Yorkshire districts. We have decided to issue a further£20m in credit approvals for 1997-98. We are also prepared to issue capitalisation directions if these would help authorities to meet the costs of Supertram in 1997- 98.

'If the districts set budgets above their provisional cap, I will look carefully at all their circumstances before determining a final cap which is reasonable and achievable.'

The South Yorkshire Supertram was built and is owned by the South Yorkshire Passenger Transport Executive. Central government funded most of the construction costs, on the basis that the system would be sold to the private sector. The PTE is in the process of selling the system.

The proceeds of sale may not be enough to cover the debts and liabilities arising from its construction and operation. A large proportion of these liabilities will fall due in the financial year 1997-98.

Liabilities which are not covered by sale proceeds will be passed on to the four South Yorkshire districts (Barnsley, Doncaster, Rotherham and Sheffield) through the annual levy set by the Passenger Transport Authority.

The four districts are concerned about the effect of an increased levy on council taxes and spending on other local authority services.

In this exceptional case, the government has decided to make additional resources available to the districts to help reduce the effect of the increased levy in 1997-98.

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