Mr. Robert G. HughesTo ask the Secretary of State for the Environment if he has decided what deemed rent increase and what increase in reckonable expenditure on management and maintenance should be used in calculating the entitlement of local authorities to having subsidies for 1988–89.
§ Mr. WaldegraveOur proposals for these increases were issued as consultation papers last September. The local authority associations have sent us their comments in writing and in discussion with my officials. We have considered these comments very carefully.
My right hon. Friend has decided, jointly with the Secretary of State for Wales, that, in view of the need to encourage local authorities in improving the condition of their housing, the increases in reckonable expenditure and income for the purposes of calculating entitlement to housing subsidy for 1988–89 should be in excess of the general level of rises in costs and prices. Therefore, the allowance for management and maintenance will go up by 9.2 per cent., provided an authority's actual expenditure reaches the enhanced level. Similarly the increase in the deemed local contribution will be £1.60 per week. It is for local authorities themselves to decide actual rents according to their own circumstances. Taken together, the increases represent a balance between central and local contributions towards extra renovation costs.