§ Mr. Gwilym Jones
To ask the Secretary of State for Wales when he will consult representatives of local government and relevant professional bodies on his proposals for housing revenue account subsidy in 1991–92; and what proposals he will be making.
§ Mr. Grist
The Welsh Office is today consulting local authorities, the Council of Welsh Districts and other interested bodies on proposals for determining each authority's entitlement to subsidy for 1991–92. The proposals include some important technical changes to the rules for calculating subsidy entitlement. Comments on the bulk of the proposals are invited within six weeks. I shall be placing a copy of the consultation papers in the Library together with a list of the guidelines and allowances for each authority.
For rent guidelines, we propose an average rent increase of just 2 per cent. above the allowance for inflation. This means an average increase per week of £1.87 ranging from £1.41 to £2.50 over the guideline rent which applied this year. This will continue the process introduced last year or encouraging authorities towards charging sensible levels of rents which better reflect the value of property in different parts of the country while remaining within the reach of ordinary tenants.
For management and maintenance allowances, we propose to introduce a system of targeted allowances which will better reflect the condition of each authority's stock. This will be of particular benefit to a number of authorities while no authority will have an allowance lower in cash terms than for the current year. Across Wales overall, the average increase in allowances will maintain them at this year's level in real terms.
The rent guidelines and management and maintenance allowances are no more than the assumptions the Government will make in calculating each authority's entitlement to subsidy. It is for each council to set its own 292W rents and to decide how much to spend on managing and maintaining its stock within its obligations under the Local Government and Housing Act 1989.
Changes are also proposed which affect authorities' subsidy entitlement in respect of properties held on leasehold terms. The aggregate cost of leases acquired after midnight tonight will have to be met within annual limits. Authorities can continue to use short-term leasing in appropriate circumstances subject to the plans being agreed with the Department. This is in addition to a change proposed by my right hon. Friend the Secretary of State for Social Security which was announced earlier this week and deals with an anomaly in the present subsidy rules.