Local Authorities: Funds (Hansard, 20 January 1986)

§ Lord Dean of Beswick
I beg leave to ask the Question standing in my name on the Order Paper.

§ The Minister of State, Department of the Environment (Lord Elton)
None, my Lords. These funds are held by the local authorities themselves.

§ Lord Dean of Beswick
My Lords, I accept the Answer of the noble Lord the Minister as factual—that these funds are held by the local authorities themselves—but is it not true that the Government have severely restricted access to those funds by halving the amount accessible from 40 per cent. to 20 per cent. some time ago? Can he now give us the amount of this money that is being held in reserve by the local authorities? Bearing in mind that the Government's own report on housing shows a need for £19 billion expenditure in order to deal with some of the problems which confront local authorities and other housing authorities these days, will the Minister consider pressing the Chancellor of the Exchequer further to release those sums at absorbable amounts so that the local authorities can grapple with the situation that now confronts them?

§ Lord Elton
My Lords, I think I have grasped the main theme of the noble Lord's various questions. The fact is that the sums held by local authorities are very large indeed and we are now consulting with them as to how best to get an accurate picture of their size.

§ Lord Dean of Beswick
My Lords, surely the Minister must know the figure, bearing in mind that the last time it was quoted it was £6 billion plus? During the last Financial Statement there were reports from very reliable quarters that those sums had increased quite considerably in excess of £6 billion—so much that the Chancellor of the Exchequer was considering reducing the 20 per cent. to 15 per cent. So will the Minister tell us how much money is involved and stop hiding behind some rather vague answers to some very pointed questions?

§ Lord Elton
My Lords, I am hiding behind nothing except possibly a misconception in the mind of the noble Lord. We are not talking about money as such but about spending power, which is what I tried to make clear in my original Answer.

§ Lord Dean of Beswick
They are the same, my Lords.

§ Lord Elton
No, my Lords; money and spending power are not the same. Spending power is what one gets by borrowing money and by having permission to spend; money is cash. To take an example which is fresh in the noble Lord's mind, if a local authority sells a council house it may get cash or it may get a mortgage undertaking, and the two are very different. The spending amounts in question are roughly of the order of £6 billion in England, but I thought that he would want something more accurate, and I shall not be in a position to give him that until we have had the survey to which I have referred.

§ Lord Grimond
My Lords, when the Government are discussing the matter with the local authorities will they bear very much in mind a point that has already been raised by the noble Lord, Lord Dean; that is, the urgent need for more housing? As some of the funds arose from the sale of housing, will they do all they can to see that the maximum amount is put back into new housing?

§ Lord Elton
My Lords, we are very much aware of the housing needs of this country and we will bear the noble Lord's remarks in mind.

§ Lord Jacques
My Lords, will the noble Lord bear in mind that in a period of high unemployment mobility of labour is exceptionally important; that that can best be fostered by rented property; and that the local authorities are best able to provide that as long as they are given the necessary finance?

§ Lord Elton
My Lords, I do not wish to widen the terms of the debate other than to say that we recognise the need for mobility of labour in this country; and the noble Lord will recognise the fact that there are a large number of properties vacant at present.

§ The Earl of Lauderdale
My Lords, does my noble friend agree that it is restrictions on renting that are causing a great shortage of accommodation in many parts of the country and impeding the mobility of labour?

§ Lord Elton
My Lords, I am obliged to my noble friend for his comment, but I think that it goes a little wide of the Question on the Order Paper.

§ Lord Molloy
My Lords, can the noble Lord explain the statement that he made a moment ago about actual cash and borrowing? He gave the example of a council tenant being allowed to purchase his house. Let us assume that he goes to a building society, as the overwhelming majority have to do, to raise a mortgage. Is nothing at all sent to the local authority?

§ Lord Elton
No, my Lords. In my perhaps rather telescoped example I was thinking of the local authority itself providing a mortgage.

§ Baroness Fisher of Rednal
My Lords, does the noble Lord agree that the Government are breaking faith? When they cajoled local authorities to sell houses it was implicit in the discussions and in the debates in this House that selling the houses would release the capital for them to build other houses that were urgently needed. The Government are breaking faith if they do not now let them use the money for that purpose.

§ Lord Elton
My Lords, it is a fact that not all the money can be used in the first year, but only the prescribed amount. But the prescribed amount is available again for the remaining amount in the subsequent years.

§ Lord Dean of Beswick
My Lords, I regret that in answering my questions the Minister has appeared to be more evasive than is his usual standard when he comes to the Dispatch Box. If he is not prepared to give the answer now, I may be able to appraise him of the figures during the debate that is due to take place in a short time on the report of the Duke of Edinburgh's commission on housing.

§ Lord Elton
My Lords, it is my duty to answer the questions, but I cannot see what the noble Lord's question was.