HC Deb 19 May 1980 vol 985 cc86-7

'.—(1) Where, under section 5 of the 1975 Act, transitional town development subsidy is payable to a sending authority for years later than the year 1979–80 the Secretary of State may, with the agreement of the sending authority and of the receiving authority, determine—

  1. (a) to commute further payments of transitional development subsidy into a single payment of an amount detemined by him or calculated in a manner determined by him; and
  2. (b) to commute the corresponding payments by the sending authority to the receiving authority under subsection (6) of that section into a single payment of an amount four times that payable under paragraph (a) above.
(2) In making a determination under this section the Secretary of State shall make such allowance (if any) as appears to him appropriate for circumstances in which, if there were no commutation, his power under section 5 of the 1975 Act to reduce or discontinue the sending authority's transitional town development subsidy might be exercised.'.—[Mr. Geoffrey Finsberg.]

Brought up, and read the First time.

The Under-Secretary of State for the Environment (Mr. Geoffrey Finsberg)

I beg to move, That the new clause be read a Second time.

The purpose of the new clause is to enable the Secretary of State, with the agreement of the authorities concerned, to commute further payment of transitional town development subsidy, payable to sending authorities, and the associated rate fund contribution, payable by sending authorities, into lump sums.

The 1972 Housing Finance Act required sending authorities under town development agreements to contribute from their rates to the rate fund of the receiving authority to compensate for the extra burden. The Exchequer paid a rate fund subsidy of 25 per cent. to the sending authority. The contributions for the subsidy were to continue for the periods specified in the town development agreements, which were mainly for 10 years, but one or two stretched to 12 years.

The 1975 Housing Rents and Subsidies Act provided that in the case of newly provided dwellings an exporting town subsidy would be paid direct to the receiving authority. Most of these agreements will expire before 1985 and a few will expire in 1987. The principal contributors and recipients are within the Greater London Council. The GLC has suggested the power to commute into a lump sum payment, and it believes that the receiving authorities agree in principle. Certainly, that is the information that has been given to us. This seems a sensible proposition. I stress that it can operate only by mutual consent. We propose that enabling powers will be taken to streamline the system for ease of administration and ease of accounting procedures. I believe that it is in the best interests of sound, sensible local government co-operation.

Question put and agreed to.

Clause read a Second time and added to the Bill.

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