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Mr. McCrindle : To ask the Secretary of State for the Environment if he will make a statement on the consequences for local authorities of financing new capital expenditure direct from revenue after the introduction of the community charge ; and if he will make a statement.
Mr. Gummer [holding answer 15 May 1989] : Under the proposed new capital finance system contained in the Local Government and Housing Bill, local authorities will be free to finance additional capital expenditure direct from a revenue account. This freedom will extend the accountability of the community charge to capital as well as revenue expenditure. I am discussing with the local authority associations how allowance for the direct financing of capital expenditure should be included in the total revenue needs assessment used to determine local authorities' needs grant.