§ Mr. Frank FieldTo ask the Secretary of State for the Environment from what date, for the purposes of calculating receipts taken into account, local authorities are assumed to have had the use of 100 per cent. of capital receipts; when they actually had the use of 100 per cent. of capital receipts; what steps he will take to ensure that local authorities realising large capital receipts between those dates are not penalised by these rules; and if he will make a statement.
§ Mr. Robin SquireIn issuing basic credit approvals-BCAs-to local authorities to support their capital expenditure in 1993–94, account was taken of a proportion of the usable capital receipts estimated to be available to them during that year. In this way, more of the available support could be directed to authorities with few receipts.
The BCAs for 1993–94 were issued on 22 December 1992, at which time neither we nor authorities knew how much each authority would have available in 1993–94 as usable receipts. Thus we could only make estimates.
For 1992–93, we based such estimates for each authority on the usable receipts brought forward from the 133W previous year, and those which the authority forecast it would obtain during the year. But we felt that it would not be fair to estimate usable receipts for 1993–94 on a similar basis, unless we made some additional allowance for the changes in the usable proportions of receipts which were announced by my right hon. Friend the Chancellor of the Exchequer in the autumn statement and which apply during the period from 13 November 1992 to 31 December 1993. With a few exceptions, the effect of these changes was to increase the usable proportion of capital receipts from council house sales from 25 to 100 per cent., and to increase the usable proportion of such receipts from other kinds of disposals from 50 to 100 per cent. Thus authorities' usable capital receipts in 1992–93 and 1993–94 will be increased as a result of the change hut, for any given level of disposals, the increase will he greater for housing receipts.
We therefore asked authorities to estimate how much their usable receipts would have been in 1992–93 if the changes made in the autumn statement had applied throughout that year. These figures enabled us to make some allowance for the temporary change in the rules in our estimates of usable receipts in 1993–94 which we took into account in determining basic credit approvals.
We recognise that differences are bound to arise between the usable receipts actually available to authorities and those used in the calculation of the basic credit approvals. It would be possible to make an adjustment for such differences when calculating the receipts taken into account in future years. The local authority associations will be consulted on the alternatives which might be considered.