HC Deb 21 January 1981 vol 997 cc195-6W
Mr. Frank Allaun

asked the Secretary of State for the Environment if he will elaborate paragraph 3.1.4 of the Appendix to the departmental publication "Grant Related Expenditure: How the Expenditure Needs of Local Authorities are assessed in the new Block Grant", in particular by stating the assumptions he has made about the new capital expenditure, management and maintenance expenditure, rent income and income from other sources in estimating notional deficits on housing revenue accounts for 1981–82, and the relationship of these assumptions to his determinations of local contributions differential and housing costs differential under the Housing Act 1980.

Mr. King

The individual notional HRA deficits of housing authorities in 1980–81 calculated by the method described in paragraph 3.1.3 are revalued to a 1981–2 price base by the application of average national assumptions. These are:

  1. (a) Aggregate capital expenditure will be in line with the provision in "The Government's Expenditure Plans 1980–81 to 1983–4" (Cmnd. 7841).
  2. (b) An average pool rate of interest of 11¾ per cent. applies.
  3. (c) No growth in the volume of management and maintenance expenditure is assumed but costs are taken to increase in line with cash limit provision.
  4. (d) Income from rents will increase by £2.95 per dwelling per week. There will be further increases on account of noon-reckonable expenditure, equivalent to an average 30p per dwelling per week, distributed between authorities in proportion to their notified rate fund contributions in 1980–81.
  5. (e) Income from interest receipts in respect of sales will increase in line with projected total sales of 120,000 units. The increase in income is allocated to authorities in proportion to the size of their existing housing stock.

The subsidy determinations so far made under the Housing Act 1980 relate to reckonable income for the years 1980–81 and 1981–82 and thereby provide the basis for each authority to calculate their local contribution differential for the year of account 1981–82. The determination for 1981–82 sets an increase in local contribution of £2.95 per dwelling per week, as in (d) above. My right hon. Friend assumes that this amount and on average an additional 30p. per dwelling per week on account of non-reckonable expenditure, also as in (d) above, will be met from rents. A copy of the determinations made on 19 December 1980, as circulated to English local authorities on 23 December 1980, has been placed in the Library of each House.