Simon Hughes
Main Page: Simon Hughes (Liberal Democrat - Bermondsey and Old Southwark)(13 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Speaker
Order. We are talking about redundancy costs, so we must get on with it.
Simon Hughes (Bermondsey and Old Southwark) (LD)
I gather that in the comprehensive spending review the Government allocated £200 million for the capitalisation cost of redundancy payments. I also gather that local authority chief executives and treasurers suggest that the costs might be between £1.5 billion and £3 billion. If they are correct and the Government estimate is much lower than the actual sums involved, what are the Government going to do about it?
Robert Neill
Capitalisation, which enables local authorities to treat revenue expenditure as capital and borrow for it is an exception to the accounting rules, so there has always been a need for some control, and capitalisation for a number of streams has never run at 100%. It is also worth bearing in mind that local authorities have been aware for some time that reductions in expenditure were inevitable—they were planned by the previous Government. A shrewd authority will therefore have planned to deal with the problem in advance.