HOUSING: CAPITAL AND EXPENDITURE (Hansard, 25 November 1982)

§ The Parliamentary Under-Secretary of State, Department of the Environment (Lord Bellwin):

Following discussions with the local authority associations in the Housing Consultative Council, my right honourable friend the Secretary of State for the 1055WA Environment is now able to announce the outstanding decisions on housing capital and current expenditure in 1983–84.

Taking capital expenditure first, my right honourable friend is glad to say that gross housing capital provision in 1983–84 will be increased to £3,244 million, which is £137 million above the 1982–83 provision he announced on 21st December 1981 and some £340 million above the expected level of expenditure this year. Housing capital receipts are forecast at £1,402 million, so the net provision is £1,842 million. The gross provision of £3,244 million will be divided as follows:

Home loans scheme	£5 million
New Towns	£61 million
Housing Corporation	£690 million
Local authorities	£2,488 million

The new towns allocation again reflects the fact that the publicity rented programme in the new towns has virtually ended. The remaining investment is concentrated on providing sites for private development, on shared ownership, and on repair and improvement of dwellings prior to transfer to local authorities.

The gross provision for the Housing Corporation comprises an allocation of £630 million plus an estimated £60 million of capital receipts. This will maintain the Housing Corporation's enhanced level of investment achieved this year, where the outturn (excluding debt refinancing) is expected to be about one third higher in cash terms than in 1981–82. A substantial expansion of housing association activity has therefore been taking place.

The gross provision of £2,488 million for local authorities permits an increase of some 15 per cent. over the current forecast of outturn in 1982–83.

As in the two previous years, the housing investment programme allocations to local authorities take account of the fact that local authorities are free to increase their expenditure over and above their allocations on account of a prescribed proportion of their capital receipts. My right honourable friend estimates that in 1983–84 they will be able to undertake at least an additional £684 million of expenditure in this way. £3.2 million must also be allowed for the administrative costs of the homes 1056WA insulation scheme. Allowing for rounding, the amount to be distributed as HIP allocations is therefore £1,801 million. Of this, some £32 million has been set aside for the homes insulation scheme, though authorities are free to transfer a greater sum to home insulation from elsewhere within their single capital block if they wish. This sum will accommodate authorities' homes insulation scheme bids in full.

My right honourable friend announced on 15th November in another place that he would be taking additional steps to assist local authorities to meet the higher level of demand for home improvement grants, following the extension of the higher grants rates until 31st March 1984. Each authority is being notified of a figure for expenditure on improvement grants next year. In most cases the figure represents an amount 10 per cent. above the figure for expenditure on improvement grants which the authority included in its HIP bid. If an authority's actual expenditure on improvement grants in 1983–84 exceeds the indicative figure, an additional allocation will be made available retrospectively if the authority's total HIP allocation would otherwise have been exceeded.

My right honourable friend has discussed the method of distributing the HIP allocations for 1983–84 with the local authority associations. My right honourable friend is today informing local authorities of their individual allocations.

Copies of the letter to authorities and of the schedule of allocations have been placed in the Library and the Printed Paper Office.

Turning to Housing current expenditure my right honourable friend has carefully considered the views of the local authority associations on the consultation papers issued on 8th November on reckonable income for 1983–84 and on reckonable expenditure on management and maintenance for 1983–84. My right honourable friend has decided that he should give effect to his subsidy proposal by determining an increase in the local contribution of £0.85 per dwelling per week for 1983–84. It remains a matter for individual authorities to decide how to finance such a contribution from local sources. On management and maintenance my right honourable friend proposes to increase the expenditure counting towards the subsidy calculation to 7 per cent. above the level assumed for 1982–83.