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Capital cut

The Labour government has scaled down government capital spending projections for the next two years according to figures released after this weeks Budget.

These show that capital spending for 1997-98 is estimated at 18.5bn compared with an original estimate of 20.5bn set out in the Conservatives last Budget in November 1996.

And forecasts for 1998-99 show capital spending of 20.9bn compared with the 1996 estimate of 21.5bn.

Treasury figures also show that the Private Finance Initiative is still under performing. Payments to PFI consortia are only expected to reach 1.5bn in 1997-98 compared with an originally expected 2.5bn. The next financial year is expected to see government PFI spending increase to 3bn, compared to the 3.7bn originally forecast.

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