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Rural Scotland and the environment are among the main beneficiaries of an extra£19m of funding announced by financ...
Rural Scotland and the environment are among the main beneficiaries of an extra£19m of funding announced by finance minister Jack McConnell.

The additional resources have been allocated from a£72m central reserve 'pooled' from efficiencies generated across the executive over the past year.

The minister also confirmed that local authority budgets for Scotland would for the first time be keeping 100% of end-year balances this year - amounting to some£21m.

Mr McConnell said: 'Sound financial management of the extra resources coming to Scotland is the foundation on which the delivery of better services is based. This is even more important when those resources are increasing this year to all-time record levels as a result of the prudent management of the UK economy.

'As part of that prudent approach, we have been able to create a central reserve of£72m generated from 'end year flexibility' and efficiencies across the executive.

'This reserve will support specific projects. The allocation of these resources has been agreed by the Cabinet.

'I can announce ... that the next priority areas for funding from the central reserve will be those departments which have not already received substantial in-year investment as a result of the recent UK Budget.

'In particular the executive's rural affairs department will receive£5.4m and the environment department will receive an additional£5.5m. The Crown Office and Historic Scotland will benefit by a further£0.2m and£2.5m respectively. Ministerial colleagues will make announcements on detailed allocations of this money in the coming weeks.

'Already my colleague Wendy Alexander has announced details of her initiatives to support rough sleepers and the voluntary sector supported by£9m from the reserve. And Henry McLeish has announced a£10m capital investment in further education. Both of these amounts have been drawn from the EYF central reserve.

'I will be holding the balance of the reserve, some£35m, for contingencies or exceptional pressures which arise during the course of the financial year.

'I am also able to announce today that I have secured agreement with cabinet colleagues that - for the first time - the local authority budget in Scotland will be able to retain 100% of end-year balances. This year that will amount to some£21m.

'This is the strength of the new financial principles we have constructed for devolved government in Scotland. A strong focus on supporting strategic priorities matched with the flexibility to meet immediate or exceptional needs.

'End year flexibility - or EYF - represents a substantial additional contribution to the programme of investment now underway in renewing public services in Scotland. It is not about recycling or reannouncing money. Far from it. EYF is about helping the executive's budget to go an 'extra yard further' for Scotland.'


1. Jack McConnell announced yesterday by PQ that a total of£435m will be retained by the Scottish executive under end year flexibility rules. The central reserve of£67.5m is part of that total. The remaining resources have been allocated across the executive.

2. The minister announced the allocations from EYF in a PQ.

3. EYF is the money which remains unspent from departmental budgets at the end of the financial year. Under proposals introduced in 1997 departments are now allowed, with the agreement of Treasury, to draw extra resources up to that level in the following financial year.

Under the previous rules there was an incentive for departments to spend up to their annual limit by making - often fairly low priority - purchases near the end of the financial year. The funding announced today is in respect of underspends in 1999-2000 financial year.

4. EYF is the result of prudent financial management and small underspends within departments. Some of this stems for example from slippage in capital programmes.

Once the amount of EYF has been agreed with Treasury the money is allocated between the departments of the Scottish executive. In most cases 75% of the underspend is allocated automatically. The remainder is held in a central pool to be allocated as pressures develop during the year.

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