you will no doubt take the matter back for collective Ministerial discussion. Secondly, you will need to pay regard to the impact on local authority opinion of a faster rate of intake, given that the Treasury will be firmly against providing extra resources to assist the resettlement of refugees into the community.

5. On that understanding I agree that you should take Supplementary Estimate provision sufficient to cover a realistic estimate of expendi- ture on the numbers you can accommodate, both physically and within the overall H02 cash limit. If, with your Finance Department's agreement you can make provision within that limit for more than £3.5 million at current prices, we should be content. But we should want to be able to identify the savings elsewhere on HO2 which are to be used to finance. the extra expenditure. We shall also expect your Ministers to announce an increase in the cash limit, consistent with the Chief Secretary's decision, before Supplementary Estimates are published. (The same would apply to any Scottish Office provision.)

6. I am sending copies of this letter to the recipients of your letter as well as to Denis Peach.

DE. MURRAY

J...

(Miss J M Forsyth)

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