§ Mr. Austin-WalkerTo ask the Secretary of State for the Environment what is the cost compensation factor used in determining resource allocation for London in(a) the generalised needs index, (b) the single regeneration budget and (c) capital challenge; and what plans he has to amend the allocation. [8852]
§ Sir Paul Beresford(a) The generalised needs index, which is used in the distribution of housing annual capital guidelines for local authorities in England, uses regional cost compensation factors to reflect the different costs of capital works in different parts of the country. There were separate factors for the new provision and renovation parts of the index.
Relative cost compensation factors are calculated for each region and the factors are scaled so that the factors for the lowest regions equal 100. The cost compensation factors for London used in the GNI for 1996–97 were 155 (new provision) and 137 (renovation); the figures for other regions range between 100 to 130 and 100 to 114 respectively. The methodology underlying the cost compensation factors, which are updated annually, was reviewed in detail in 1995.
(b) Cost compensation factors are not used in determining the indicative regional allocations for the single regeneration budget challenge fund. Individual bids for resources are based on forecast actual costs, and so should take account of any regional variations in prices.
(c) The apportionment amongst regions of the sums available under the capital challenge pilot scheme is based on each region's share of the national total of local authorities' annual capital guidelines, supplementary credit approvals and capital grants for all services. It takes no account of a cost compensation factor except in so far as it is included in the housing ACG as discussed above.