Chamber and committees

The current local authority boundaries were established in 1996. Local authorities need a period of stability to address the modernisation agenda and to allow them to concentrate on the efficient and effective delivery of services.

The Chancellor announced in July 1998 that, other than in exceptional circumstances, in future all underspends on Departmental Expenditure Limits (DEL) would be reclaimable under End Year Flexibility. I attach two tables setting out total unspent balances, retained balances and net underspend prior to the change in July 1998; and a further table setting out the same information after the change. Since the Chancellor's change, the net underspend in the main comprises Annually Managed Expenditure (AME). That is expenditure which is managed annually because it cannot reasonably be subject to firm multi-year limits. Expenditure in AME is generally less predictable and controllable than expenditure in DEL.

Table 1: Unspent balance, retained balance, net underspend pre-change

	1993-94	1994-95	1995-96	1996-97
Unspent balance	151	188	259	245
Retained Balance	98	19	46	121
Net Underspend	132	142	161	124

Table 2: Unspent balance, retained balance, net underspend post change

	1997-98	1998-99
Unspent balance	161	310
Retained Balance	122	283
Net Underspend	39	27

In 1998-99 the Scottish Arts Council (SAC) allocated £111,077 (equivalent to £0.43 per head of adult population) of Voted Funds to organisations based in North Lanarkshire out of its total grant from the Scottish Office of £27,184,000 (equivalent to £6.62 per head of adult population in Scotland)). In addition organisations based in North Lanarkshire received £148,646 (equivalent to £0.57 per head of adult population) of total Scottish Arts Council Lottery funding in Scotland in 1998-99 of £22,844,985 (equivalent to £5.56 per head of adult population in Scotland).

In both cases a number of other organisations supported by SAC will have been active in North Lanarkshire in that period, although not based there. Fuller details of SAC funding of the different art forms are to be found in the SAC Annual Report and Accounts for 1998-99, which have been laid before Parliament.

The table below sets out capital expenditure in the public sector in cash and real terms (at 1999-2000 prices). Any analysis of capital investment in the public sector should also include capital investment levered in through Public/Private Partnerships and the Private Finance Initiative. In 1994-95 capital investment through PFI was £11 million and the Scottish Executive expects this to be £472 million in 1999-2000.

	1994-95	1995-96	1996-97	1997-98	1998-99	1999-2000	2000-01
	Outturn	Outturn	Outturn	Outturn	Outturn	Outturn	Estimated Outturn
Cash	1,896	1,725	1,614	1,429	1,482	1,494	1,832
Real Terms	2,186	1,932	1,751	1,508	1,520	1,494	1,792

	2001-02	2002-03	2003-04
	Provisional Plan	Provisional Plan	Provisional Plan
Cash	2,241	2,341	2,516
Real Terms	2,138	2,179	2,285

The Scottish Executive is in regular contact with the United Kingdom Government on a wide range of issues, including those concerning charitable status.

Comparability percentages apply at the departmental level, changes in comparabilities reflect changes in coverage and similarity of Whitehall department's expenditure. Annex C of the revised Statement of Funding Policy published on 18 July 2000 provides details of the comparabilities. Prior to devolution this information was not published by the Treasury.

I refer you to PQ S1W-5433 which provides details of the additional resources allocated to the Scottish budget from the UK Reserve since 1 July 1999. In addition the Scottish Budget will increase by £288.3 million in 2000-01 as a result of Scotland's share of the Chancellor's pre-budget announcements. This funding will be met from the UK Reserve.

The rules governing access by the devolved administrations to the UK Reserve are set out in the Statement of Funding Policy. A revised version of this was published by HM Treasury on 18 July 2000. A copy of the publication can be found on the HM Treasury Internet site at www.hm-treasury.gov.uk/pdf/2000/sfp4.pdf.

Information is not held in a way which would allow Barnett changes to be disaggregated from other changes, such as transfers to and from Scotland's Budget. The total net effect of these changes, however, can be tracked through comparisons of the revised plans figures published in the Executive's Annual Expenditure Report Investing in You and its predecessor, the Departmental Report Serving Scotland's Needs which was published annually over a number of years.

Under the formula Scotland receives a population share of changes in comparable UK programmes. When the formula was first used for Scotland in the 1978 public expenditure survey the population share was fixed at 10/85ths, or 11.76%. It was revised to reflect changes in population to 10.66% in 1992, 10.45% in 1996, and currently stands at 10.34% for 1999. In addition there is a comparability factor for each programme. They are set out in Annex C of the Statement of Funding Policy which is available on HM Treasury's website at www.hm-treasury.gov.uk/news.html.

The table below sets out capital expenditure in the public sector for financial year 1999-2000, broken down by category of expenditure and source of funding:

Category of Expenditure	Amount (£ million)	Source of Funding
Purchase/Sale of Buildings	-15.6	Central Government
Formation of Tangible Asset	220.4	Central Government
Change in Levels of Stock	6.5	Central Government
Capital Grants to Private Sector and non-profit making bodies	171.0	Central Government
Capital Grants to Public Corporations (including Nationalised Industries)	382.7	Central Government
Net Lending to Private sector	0.1	Central Government
Net Lending to Public Corporations	232.9	Central Government
Bank and National Loans Funds Deposits by Public Corporations (including Nationalised Industries)	-19.6	Central Government
Capital Grants to Local Authorities	12.6	Central Government
Capital Grants from European Communities to Local Authorities	26.0	Transfer from Central Government
Credit Approvals to Local Authorities	476.9	Transfer from Central Government
Total	1,493.8

In addition to these amounts the Scottish Executive expects capital investment levered in through Public/Private Partnerships and the Private Finance Initiative to have been £472 million in 1999-2000.

Lanarkshire Acute Hospitals NHS Trust, which has commissioned the new Wishaw General Hospital, advises me that construction work is progressing on schedule. The Trust expects the hospital to be completed in May 2001 as planned.