HC Deb 26 June 1989 vol 155 cc347-8W
Mr. Patnick

To ask the Secretary of State for the Environment what arrangements he proposes for the financial management by local authorities of their arrears of rents and other income; and if he will make a statement.

Mr. Gummer

The Local Government and Housing Bill provides that from 1 April 1990 local authorities will be able to cover their arrears of rents and other income by borrowing for six months after the end of the year in which the arrears arose. Having carefully considered the representations of the local authority associations, my right hon. Friends the Secretary of State and the Secretary of State for Wales now propose to extend this period to 12 months, but thereafter authorities must make provision in their budgets for any arrears remaining outstanding. We also propose that housing rent arrears will fall within the ring-fenced housing revenue account, and hence if not collected within the 12-month period will have to be paid for by the other tenants.

For the transition we propose that housing rent arrears outstanding at 31 March 1990 should be dealt with outside the ring-fenced HRA and hence if uncollected will be a charge on community chargepayers. We recognise that if these arrangements were immediately applied in full to

Local authority empty dwellings at April 1988
Number of dwellings empty for:
Six months or less More than six months All empty dwellings A year or less More than a year All empty dwellings
Greater Manchester metropolitan council1 8,716 3,547 12,263 10,471 1,792 12,263
Westminster 332 561 893 535 358 893
Suffolk Coastal 70 12 82 81 1 82
Isles of Scilly 1 0 1 1 0 1
1 Comprises the 10 metropolitan districts of Bolton, Bury, Manchester, Oldham, Rochdale, Salford, Stockport, Thameside, Trafford and Wigan.

those few authorities which have irresponsibly allowed their arrears to escalate to very high levels, this could put very great burdens on their chargepayers. Accordingly, we are also proposing that an authority with high outstanding arrears at 31 March 1990 may apply to my right hon. Friends to enable them to spread over three to five years any budgetary provision for writing off these arrears.

We intend to bring forward in another place appropriate amendments to the Local Government and Housing Bill to give effect to these proposals.

It is each authority's responsibility to collect efficiently the sums due to it. We believe that our proposals, including the transitional arrangements, are fair to housing tenants and chargepayers, and will mean that in future authorities in both England and Wales have greater incentives for efficient collection of their income.