Vol. 558 No. 3
36 Mr. Sherlock asked the Minister for the Environment and Local Government the reason for the reduction of 22% in his Department's allocation for 2003 for subsidies for local authorities towards loan charges in respect of the provision of capital services; and if he will make a statement on the matter. [23863/02]
Prior to 1 January 1988, the normal method of financing capital projects in local authorities involved a system of loan and subsidy financing in the context of the local loans fund. The changeover to direct capital grants from this Department eliminated this system of payments and provided a simpler funding mechanism for Exchequer financed capital projects with effect from this date.
As part of these changes, local loans fund loans entered into by local authorities before 1 January 1998 were written off. A relatively small number of subsidisable non-Exchequer loans remained extant, and it is the subsidy payments in respect of these loans which are defrayed from Subhead G.3 of my Department's vote. As no further subsidisable loans were approved subsequent to 31 December 1997, the requirement for subsidy payments has been declining steadily as the remaining loans are paid off.
