§ 19. Mr. Bill Rammell (Harlow)If he will make a statement about the move to resource accounting for housing revenue accounts and his plans to mitigate its effects on councils in negative subsidy. [116161]
§ The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions(Mr. Chris Mullin)Our view has always been that transitional measures would be justified for councils in negative subsidy. We propose to introduce such measures from April next year, to coincide with the introduction of the major repairs allowance. We shall consult on the detail of the measures in due course.
§ Mr. RammellThe Minister will be aware of the dramatic impact of this change on a number of local authorities, particularly new town authorities. Without mitigation, the change would involve a dramatic slashing of council services or a huge and unsustainable increase in the council tax. Will the Minister look carefully at the issue and, in particular, at the use of housing capital receipts for non-housing capital purposes which took place during the 1980s and which is the major cause of this problem in my local authority?
§ Mr. MullinI have possibly taken my hon. Friend by surprise by saying that we are proposing to introduce transitional measures from April next year. We are aware of the problem—I met a delegation of leaders of councils that are affected, and am due to meet my hon. Friend in due course. I look forward to discussing the details with him then.