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BBC Radio Scotland's Brian Taylor
"The money is not for day-to-day spending"
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Political Editor Brian Taylor reports
"Councils' borrowing limit has risen"
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Friday, 19 November, 1999, 16:03 GMT
Ministers loosen purse strings
Money will be made available for school projects

The Scottish Executive has loosened its financial grip on local authorities, allowing them to spend more on renovating schools and improving public transport.

But the move includes new pressure on councils to sell off surplus assets.

Next year councils will be allowed to spend 396m on renovating schools, roads and other projects.

Making the announcement, Finance Minister Jack McConnell said it should help councils invest in "high quality services".

"Year on year there's an 11% increase for next year - that's more than a tenth more for local authorities in Scotland to spend on local services," Mr McConnell said.

He highlighted extra spending on transport in Strathclyde and in the Borders, Falkirk and Fife.

BBC Scotland's political editor Brian Taylor says councils are pleased with the increase but point out that the rise simply allows them to borrow more and does not increase the "hard cash" they are given by the Scottish Executive.

It is also being underlined that the funding is for capital spending only and cannot be used to pay for day-to-day expenditure such as pay rises.

Norman Murray, president of the Convention of Scottish Local Authorities, said: "We have a real concern that for the ninth year in a row there's no element for wage increases.

Norman Murray: "No fat left"
"We estimate that could possibly be as much as 100m next year.

"We don't know where that money is coming from given the fact that there is no fat left in local authority services."

Our correspondent also says several councils question the level of central control over their finances.

Included in the total is a presumption that councils will raise money by selling off assets which are no longer needed.

That was previously specified by the chancellor in his comprehensive spending review.

Mr McConnell's announcement does not cover housing which is treated separately.

Ministers have signalled their eagerness to transfer housing stock to local associations.

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