CAB129-78 — Page 23

al mens bremst Printed for the Cabinet. October 1955

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The circulation of this paper has been strictly limited, it is issued

for the personal use of

TOP SECRET

C.P. (55) 156

18th October, 1955

CABINET

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Copy No.47

CAPITAL EXPENDITURE: MESSAGE TO LOCAL AUTHORITIES

NOTE BY THE CHANCELLOR OF THE EXCHEQUER

I circulate, for the information of my colleagues, the final text of the message on capital expenditure to local authorities which I circulated to the Cabinet as Annex A to C.P. (55) 132, as revised after discussion with the Ministers concerned.

The message will be signed, for authorities in England and Wales, by the Minister of Housing and Local Government and myself; and for authorities in Scotland, by the Secretary of State for Scotland and myself. The aim is for the message to arrive at each local authority's office on the day following the statements which we are to make to Parliament on its reassembly.

R. A. B.

Treasury Chambers, S.W. 1,

17th October, 1955.

MESSAGE TO LOCAL AUTHORITIES ON CAPITAL EXPENDITURE

1. This message is to explain the action that the Government ask all local authorities to take as part of the series of measures announced by the Chancellor of the Exchequer to reduce the demands upon the nation's resources. [England and Wales only. A further communication explaining the Government's housing subsidy proposals will be issued shortly by the Minister of Housing and Local Government.]

2. We are writing to you, and to all other local authorities, on behalf of the Government to ask you to undertake an immediate review of your capital expenditure for the period from now to 31st March [Scotland, 15th May] 1957. We also ask you to review your current expenditure in order to secure economies wherever possible, and to refrain, save in cases of exceptional need, from undertaking new services which will involve additional expenditure either from Government grants or from the rates.

3. The reason for this request is that in recent months it has become clear that the productive resources of the nation are carrying too heavy a load. The consequence of this is seen in the upward movement of costs and prices at home, as well as in the pressure on sterling abroad

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