Housing Expenditure (Hansard, 11 November 1991)

§ Sir George Young

Public expenditure on housing will be nearly £7.8 billion next year, an increase of 4.9 per cent. on previous plans, and will rise further to £8.2 billion by 1994–95. This rising programme will increasingly focus on tackling run-down council estates and providing for families in housing need. Our plans include:

—£350 million extra over three years to provide nearly £1,200 million in total for the enhanced estate action initiative which I announced in July, and more for housing action trusts in the two later years, to continue our policy of focusing resources on the most run-down council estates;

—the Housing Corporation's capital programme of new social housing to go on rising as planned to £1.7 billion next year and over £2 billion thereafter, to provide 120,000 homes over three years mainly for the benefit of homeless families and others in housing need;

	1991–92	1992–93	1993–94	1994–95
	Forecast outturn	Previous plan	Revised plan	Previous plan	Revised plan	plan
Housing Corporation (net capital)¹	1,636.7	1,706.5	1,706.5	1,918.8	1,918.8	1,966.7
Local authority capital²	19,61.1	1,845.9	1,962.7	1,813.5	1,952.5	2,002.4
Housing Action Trusts	10.3	67.3	40.1	69.0	86.8	88.2
Housing Revenue Account Subsidy	3,751.1	3,531.8	3,755.7	3,537.8	3,695.3	3,861.7
Other Expenditure	266.6	263.3	310.2	255.8	305.4	292.0
Total housing	7,625.8	7,414.9	7,775.2	7,594.9	7,958.8	8,211.0
¹Housing Corporation forecast gross capital expenditure: 1991–92 £1,731 million; 1992–93 £1,770 million; 1993–94 £2,004 million; 1994–95 £2,052 million.
²Includes Estate Action: 1991–92 £266 million; 1992–93 £365 million; 1993–94 £407 million; 1994–95 £423 million.

My Department is also today consulting local authorities about my proposals for the management and maintenance allowances and rent guidelines to be used in calculating authorities' entitlements to housing revenue account subsidy next year, and I have placed the consultation papers in the Library with a list of proposed allowances and guidelines for each authority. I plan to introduce important new measures to help raise standards of management and maintenance in council housing. First, I propose an average increase of 6½ per cent. in management and maintenance allowances, allowing a real improvement in service to tenants. Second, I propose further moves towards targeting allowances according to the type of housing that each authority owns and the differing management problems they face, thereby directing £93 million more to the authorities with the greatest needs. On rents, I propose increases in guidelines averaging £2.44 a week—to give a new average guideline of £27.33—and ranging from £1.20 to £4.50 a week, thus continuing our policy of encouraging authorities to charge rents that better reflect the relative value of housing provided while remaining on average well below market levels. Responsibility for setting actual rents remains with individual local authorities. Housing benefit will normally meet the whole of any rent increase for the two thirds of tenants receiving it.

Backed by this substantial public expenditure provision, and by recent initiatives to drive up standards and secure better value for money, our housing policies will continue to focus—though constructive partnerships between all the agencies involved in providing housing

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—£30 million next year for a continuation of the successful programme of new rural housing financed through local authorities;

—£25 million over three years for bringing flats over shops back into use;

—£70 million over three years for a new grant to help authorities meet the costs of replacing privately leased accommodation for homeless families;

—over £1.5 billion each year in grants and borrowing approvals for local authorities' mainstream housing capital programmes of renovating their own estates, supporting housing associations, and helping low-income private owners to renovate their houses;

—£3.75 billion in 1992–93 for subsidies to council housing, including rent rebates for low-income tenants.

Lower construction costs—down nearly 10 per cent. since this time last year—and lower land prices are helping us to get more output from current levels of public expenditure. The table gives further details of the breakdown between main spending areas. I shall announce further details of specific programmes, and of capital allocations to individual authorities and of the Housing Corporation's development programme, over the coming weeks.

—on encouraging owner-occupation for those who can afford it, on helping homeless families, and on widening choice and improving service for tenants especially on the most run-down council estates.