§ Mr. Patrick Thompson
To ask the Secretary of State for the Environment if he will make a statement about the payment of loan charge contributions to local authorities in England and Wales in respect of defective housing expenditure.
§ Sir George Young
It has recently come to light that the statutory basis for making defective housing loan charge contributions to local authorities, originally contained in section 569 of the Housing Act 1985, was inadvertently repealed when making provision for the commutation of loan charge contributions through section 157 of the Local Government and Housing Act 1989. We have always made it clear to local authorities that they should expect to receive these payments until commutation took place. Local authorities' total audited final claims in respect of 1991–92 are likely to amount to almost £21 million.
To ensure that local authorities do not incur financial loss, it has been agreed with the Treasury that although payments in respect of 1991–92 claims cannot be made 575W under the 1989 legislation, local authorities will be recompensed the full amounts that would have been due to them by means of ex-gratia payments.
We shall be seeking legislation at the earliest possible opportunity in order to restore the original statutory position, and allow the commutation of defective housing payments including sums by way of loan charges to go ahead as quickly as possible.