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4. The Government's policy is designed to bring the total demand within the capacity of the nation's productive resources. It has always been recognised, from the Full Employment White Paper of 1944 (Cmd. 6527) onwards, that the maintenance of full employment involves a continuing process of adjustment, particularly in the capital expenditure plans of public authorities, in order to keep the economic affairs of the country on an even keel.

5. The aims of your review should be to ensure first, that your authority's total capital expenditure(1) in the year 1956-57 does not exceed that of 1954-55, and secondly, that no new works, even those already authorised, are undertaken unless your authority are satisfied that those works are urgently necessary to meet the needs of the area.

6. Some authorities, it is hoped, will be able to reduce their capital expenditure(2) below the level of 1954-55. We appreciate, however, that some authorities have special problems which may prevent them from fully carrying out the first of the aims of the review. This may apply particularly to those authorities with rapidly expanding populations and to those whose capital projects are concentrated on one service in which they are already committed to expansion.

7. Questions of the priority to be given to different projects should normally be decided in the light of local circumstances in your area. Where it is appropriate, for example in the execution of the road programme which involves co-operation between authorities, the Department concerned will be ready to give guidance on the relative urgency of projects in its field.

8. We appreciate that to give effect to the request in this message may result in the postponement of improvements which local authorities would like to make in the standards of their services. But the essential condition for all future progress is to ensure the nation's internal and external economic stability. Failure to take the necessary action for this purpose would involve later a much more serious setback to employment and the standard of living.

(1) For county district councils in England and Wales and for all Scottish authorities except County Councils, add here a parenthesis "(excluding for this purpose expenditure on housing) ".

(2) For the authorities covered by note (1) of paragraph 5, add “ as here defined'

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THIS DOCUMENT IS THE PROPERTY OF HER BRITANNIC MAJESTY'S GOVERNMENT