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Cuts in capital allocations for councils in Scotland announced before the Christmas break will have a devastating i...
Cuts in capital allocations for councils in Scotland announced before the Christmas break will have a devastating impact on local economies, according to the Convention of Scottish Local Authorities.

Local government minister George Kynoch said he was making£296.5 million of capital allocations available in 1997-98 for roads, transport, education, social work and general services.

But COSLA said funding was being cut by£70m compared with the current year.

The convention also pointed out that another source of funding was being squeezed by the Scottish Office's intention to force councils to increase the amount of capital receipts they have to use to reduce their debts.

It said the plan to restrict the amount of receipts they can use on capital spending from 50% to 25%, represented an estimated cut in expenditure of£30m.

'This is another nail in the coffin of building programmes, road building and maintenance - it is all money being lost to the Scottish economy and in particular the construction industry,' said COSLA president Keith Geddes.

The Scottish Office said an extra£30m would be injected into capital projects in 1997-98 under the capital challenge programme where councils will bid for funding.

Tighter restrictions on the use of capital receipts from the sale of houses are also being introduced with the amount councils have to set aside to redeem debt increased from 25% to 75%.

Figures produced by COSLA show that this will result in a cut in investment in housing of£170m in 1997-98. 'That means 30,000 homes in Scotland will not get improvements councils have promised next year,' said Mr Geddes.

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