§ Dr. Cunninghamasked the Secretary of State for the Environment if he will make a statement on the rules he has imposed constraining the use by local authorities of their capital receipts, new and cumulative, in each year from 1981–82 to 1985–86, most recent arrangements.
§ Mr. Patrick JenkinThe Local Government, Planning and Land Act 1980 provides for the rate of use by local authorities of capital receipts to be regulated by prescribing what proportion of different classes of receipt may be used to enhance an authority's capital spending permission in any year.
From the coming into force of part VIII of the Act on 1 April 1981, proportions were prescribed for local authorities in England as follows:
- —for receipts from the sale of dwellinghouses normally let or available for letting, other than those disposed of on shared ownership terms, 50 per cent.;
- — for receipts from the repayment of advances for the acquisition or improvement of a dwellinghouse, 50 per cent.; and
- —for receipts from the repayment of grants and advances to housing associations, 1 per cent.
From 1 April 1982 the proportion of 50 per cent. Was revoked in respect of receipts from the sale of dwellinghouses normally let or available for letting where the dwellinghouse was not held under part V of the Housing Act 1957 or was disposed of under a homesteading agreement.
From 1 April 1983 a proportion of 50 per cent. was prescribed in respect of receipts from the sale of land (including buildings and structures on land) not held under the Housing Acts and of vehicles, vessels, plant, machinery and apparatus; anf from the repayment of grants and advances not made under the Housing Acts.
From 1 April 1984 the proportion of 50 per cent. in respect of receipts from most sales of dwellinghouses and from repayments of advances for the acquisition or improvement of a dwellinghouse was changed to 40 per cent.
From 1 April 1985 that proportion of 40 per cent. becomes 20 per cent. less; the proportion of 50 per cent. 5W for most non-housing receipts introduced in 1983 becomes 30 per cent.; and a proportion of 30 per cent. is introduced in respect of receipts from the sale of undeveloped housing land and of dwellinghouses normally let or available for letting disposed of on shared ownership terms or under a homesteading agreement.
Authorities will continue to be able to use receipts arising from low-cost home ownership schemes such as building under licence, build for sale and purchase for resale, in full to cover the immediate cost incurred under such schemes. The position remains that no prescribed proportion applies to such receipts. Accordingly, authorities have been and remain free to use such receipts in their entirety in any year to enhance their spending permission.
Where there are prescribed proportions, they apply to receipts accruing in the year in question and to those accumulated in earlier years.
While the rules properly constrain the amounts which authorities may spend, they do not prevent them from applying the cash from capital receipts at any rate they choose for any other purpose to which capital monies may properly be applied, for instance, the repayment of debt, internal lending, or other such purposes.