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Circular
SIR,
DOWNING STREET,
12th November, 1945.
I have the honour to address you on the subject of the Colonial Develop- ment and Welfare Act, 1945, which provides for increased financial assistance towards the continuation and expansion of the policy of Colonial development. A copy of the Act is enclosed for convenience of reference. (Enclosure 1.)*
2. As you are aware, this Act increases the amount of money that may be provided by Parliament for schemes of Colonial development and welfare to £120,000,000, and extends the period of such assistance to 31st March, 1956. It substitutes for the former fixed maximum sum of £5,000,000 in any financial year for development and welfare, and £500,000 for research, this new total sum, which can be drawn upon at any time within the ten-year period, subject only to a maximum to be issued in any one year of £17,500,000. It further provides that the maximum assistance towards Colonial research shall not, in the aggregate, exceed £1,000,000 in any financial year. general provisions of the Colonial Development and Welfare Act, 1940, other- wise than as just indicated, remain in force.
The
3. This increase in the total sum to be provided and the lengthening of the period of such assistance by a further five years mark an important turning point in the development of Colonial productive resources and the improvement of human well-being. It comes at a time when a gradual easing of the war-time shortages of materials, equipment and skilled technical and scientific personnel may be hoped for. There are great possibilities
in the years that lie ahead for raising the standards of health, education, social welfare, and general well-being of Colonial peoples if these expanded services are based upon improved economic efficiency and increased produc- tion. The primary requisite still is an improvement of the economic position in the Colonial Dependencies, the utilisation of their natural resources to the greatest extent possible and the widening of opportunity for human enterprise and endeavour. As a contribution towards improvements in Colonial development and welfare, the present Act provides a substantial sum of money, but it is not intended that this sum should be taken as indicating the total Colonial need for development expenditure in the next ten years. The total cost of development that can be embarked upon may be expected to be considerably greater than £120,000,000, according to the extent to which Colonial Governments can supplement the contemplated grants whether from public funds or with the assistance of private trade and enterprise. The new Act will, I am confident, enable Colonial Governments to draw up plans of development over the ten-year period, and to achieve steady and sustained progress towards the great goal of raising the standards of living and well- being of their people.
4. You will naturally wish to know the approximate amount of assistance, out of the total sum provided under the new Act, that will be available to the territory under your administration. I have, therefore, prepared a scheme
for the division of the £120,000,000. A copy of this table is attached to this despatch. (Enclosure 2.)
5. The first group of allocations covers those services to the Colonial Empire which can best be provided for centrally and which are of immense value, directly or indirectly, to development generally. The total set aside for these centrally provided schemes is £23,500,000, which includes a margin for unforeseen contingencies. A list of the more important of such schemes
* Not reproduced.
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is contained in Section I of the enclosed Statement of Allocations (Enclosure 2). The most important, financially, is research. Under the new Act provision is made for expenditure on research up to a limit of £1,000,000 per annum, but as that scale of expenditure is not expected to be reached for some years, owing to the shortage of first-class research staff, the total over the decade is put at £8,500,000. In this total will be included the cost of the Colonial Geological Survey of which you have already been advised. Other surveys are also provided for under Central Schemes other than Research. The "savings of £1,500,000 thus anticipated on research are therefore available for non- research purposes and will, if necessary, be so used. Although included for convenience in this central budget, it is by no means intended that all research schemes will be under direct central control. In appropriate cases research grants will be made to individual Colonial Governments, but they will be debited to this general allocation for research
"
6. I have thought it unwise to allocate the whole of the remaining balance to individual territories at once, since it is obviously impossible today to forecast the relative balance of the needs of all territories over the next decade. I have, therefore, set aside a sum of £11,000,000 as a general reserve, which will be available for supplementary allocations, as necessity arises, either for schemes submitted by the Colonial territories themselves or for central schemes.
7. There remains thus a total of £85,500,000 for allocation to individual territories or regional groups of territories. The allocation to each Colonial Government of a sum that represents a fair proportion of the total amount available has been a difficult task. I am satisfied, however, that the allocations which I have made are fair and reasonable. No single criterion was adopted for judging the requirements of one Colonial territory as against another. All factors which were known to be relevant were taken into account, including the size and population of the territory, its known economic resources and possibilities, the present state of development, the development schemes known to exist or to be under contemplation, and the financial resources likely to be available locally.
8. It will be understood that the allocation to each territory does not consti- tute an authority to spend, but lays down a sum within which it is proposed that individual schemes should be authorised, provided that schemes which are in themselves suitable for assistance and fall within an approved general plan are put forward. Subject to the qualification that Colonies possessing responsible government are by the terms of the Act excluded from its pro- visions, and that the position might therefore be modified within the period covered by the Act, it makes possible the planning of the development pro- grammes of each Territory for the next ten years, on the basis of the funds estimated to be available. The money available will be the allocation under the Act, shown in the attached table, together with the Dependency's own estimated resources for development purposes, i.e., from surplus balances, future revenue surpluses or the proceeds of public loans. The poorer Depen- dencies have, of course, less prospect than the richer of drawing upon local resources in some cases no such prospects can be counted on at all— but allowance has been made for these variations in determining the allocations under the Act. The main purpose of development planning should be to ensure that all the resources available are used to the best advantage, that the whole field of possible development and welfare is surveyed, and that the sums to be devoted to each project are determined, so that the programmes form a well-balanced whole.
9. The determination of the broad programmes of development requires close co-operation between Colonial Governments and His Majesty's Govern-
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