VOLUME 8
16.9
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DEVELOPMENT AID PROCUREMENT POLICY
The policy and the rules to be observed by the Governments of DTs in receipt of development aid of any kind are set out in Tying of Aid, ODA Office Procedure Vol III B-9, and current DOT circulars (see Annex 20). In all discussions of aid, these rules must be observed by all Whitehall Departments concerned and, when necessary, brought to the attention of DT Governments. Applications for specific waivers of the procurement rules should be referred to the Department of Trade, and questions of procurement policy to the ODA.
16.10 LOANS
Full instructions are in ODA Office Procedure (Vol III B---8 and III C-1). Proposals for loans instead of grants are sometimes made by the Governments of DTs. These are considered in the same way as for grants by the Departments concerned. ODA can propose loan finance.
16.11
BUDGETARY AID: FINANCIAL CONTROL
If a DT is in receipt of budgetary aid, ie a grant-in-aid of general administration on an annually recurrent basis, or if a DT appears to be likely to incur such a degree of deficit as to make such aid from HMG necessary, the finances of that Territory will come under HMG's control. If the Territory is not yet in receipt of a grant-in-aid, the object of the control is that its finances should be so managed as to lead to the recovery of a credit balance, and to remove or minimise the necessity for a grant. Budgetary aid should, wherever possible, be progressively reduced and eventually eliminated. The essential requirement of grant-in-aid is that it shall be provided only on proof of need. The amount of grant must, therefore, be limited to what is necessary to maintain a reasonable minimum level of service. The finances of the DT should be administered so that a balanced budget is achieved in the shortest possible time and the necessity for a grant and for financial control ends. To achieve this some increase in budgetary aid, in the short term, may be necessary to generate additional sources of revenue.
16.12
BUDGETARY AID: ADMINISTRATION
Separate agreements have been made with the various DTs about the administering of grants-in-aid. An example is given in Annex 17.
16.13
BUDGETARY AID: SURPLUSES
Surpluses arising on cither the current or capital budgets are not normally subject to recovery by HMG. They are, however, taken into account in fixing the grant for a subsequent year. This allows the General Revenue Balance to be included with the estimate of local revenue in determining the grant-in-aid to be made available to meet an approved deficit. Since the amount of the surplus cannot normally be established with certainty until some time after the end of
September 1980
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