HC Deb 20 December 1989 vol 164 cc325-7W
Dr. Twinn

To ask the Secretary of State for the Environment whether he will give details of the Housing Corporation's approved development programme for 1990–91.

Mr. Howard

My right hon. Friend announced on 15 November that provision for the Housing Corporation's gross capital expenditure will double over the next three years, rising from £818 million this year to £1,736 million in 1992–93, demonstrating the Government's commitment to the housing association movement as the main providers of new subsidised homes. The Housing Corporation will also receive £73 million over the next two years under our special homelessness initiative. Altogether, gross provision in 1990–91 at £1,220.5 million will be nearly 50 per cent. higher than this year's level of expenditure.

The programme that we have now approved for 1990–91 with provisional plans for the following two years should enable the Housing Corporation to approve nearly 43,000 new homes for rent and low-cost home ownership in 1992–93. Over 38,500 homes should be completed with Housing Corporation funds in 1992–93, well over twice last year's total.

These very significant increases in housing associations' output will be archieved partly through greater use of private investment to supplement public subsidy. During the next three years we expect over 13,000 more homes to be provided than would have been possible without the use of private finance. We shall set the Housing Corporation and the housing association movement a cash target for the amount of private finance to be drawn in by schemes approved by the corporation in 1990–91. This will be based on our expectation that 75 per cent. of new schemes can be approved on a mixed funded basis, combining grant with private loans. In the light of this new target, there will be no need for a national average grant rate for mixed funded schemes of the kind that the corporation operated this year. Grant rates for schemes individually will be similar to those currently in force; the corporation will announce details nearer the start of the new financial year.

The distribution of the corporation's programme is guided by the housing needs indicator (HNI), which has been reviewed this year. I have accepted the technical recommendations of the review group, whose report I am placing in the Library. I have decided, however, to phase in the distributional pattern implied by the new HNI over two years so as to ensure that all regions see an increase in funds next year and can approve more units. I have also given a degree of protection to all regions affected by the move to the revised HNI. I have decided to increase the allocations of the 57 local authority areas with urban programme status by a total of £100 million in recognition of the special needs of inner-city areas. The funds allocated to the corporation's regions will be cost-compensated so that planned unit output is not distorted by varying costs of provision in different parts of the country.

This is an exciting and challenging time for the Housing Corporation and the housing association movement. The plans that I have set out for the corporation's programme over the next three years should enable resources to be targeted on the areas that need it most and in particular to allow the corporation to help meet the needs of the homeless. I have confidence that housing associations, through the Housing Corporation, will make the maximum impact on housing needs with the massive levels of public subsidy we are now entrusting to them.

The breakdown of the approved development programme for 1990–91 and provisional plans for the following two years is as follows:

£ million
1990–91 ADP 1991–92 Plans 1992–93 Plans
Housing for rent1 1,040.5 1,341 1,499
Miscellaneous works (including major repairs) 68.0 88 63
Mini-HAG 5.0 7 8
Tenants Incentive Scheme 33.0 33 34
Low cost home ownership2 68.0 88 126
Other Expenditure3 6.0 6 6
Total gross expenditure 1,220.5 1,563 1,736
Receipts -115.0 -117 -120
Total net expenditure 1,105.5 1,446 1,616
1 Includes public expenditure on mixed funded for rent schemes and 100 per cent. publicly funded rented schemes.
2 Includes shared ownership, leasehold for the elderly and rehabilitation for sale.
3 Includes right to buy mortgages, self build, and tenants participation grants.

Details of expenditure from additional homelessness funds (included in main totals)
£ million
1990–91 1991–92 1992–93
Major repairs 10 30
Acquisitions for rent 13
Tenants Incentive scheme 13

Regional shares of the revised Housing Needs Indicator (including distribution of extra funds for inner city areas but before cost compensation) and the planned regional distribution of the programme are as follows:
Revised HNI Unit distribution 1990–91 Unit distribution 1991–92
London and Home Counties North East 10.8 10.5 10.7
London and Home Counties North West 11.5 9.7 11.4
London and Home Counties South 15.1 13.3 15.0
West 13.8 10.6 13.7
East Midlands 9.5 9.2 9.4
West Midlands 10.4 12.5 10.3
North East 13.9 15.6 13.9
North West 11.5 12.2 11.4
Merseyside 3.5 6.4 4.2
England 100.0 100.0 100.0