Local Authority Housing (Hansard, 30 March 2001)

§ Mr. Raynsford

I am today placing in the Library of the House the text of guidance on arm's length management of local authority housing and on the availability of the additional resources made available in832W the spending review. This will very shortly be made available on the Department's website, and printed copies will be available in due course.

I am grateful to those who responded to the consultation paper; I am placing a summary of responses in the Library of the House. We have made a number of changes to the proposals set out there in the light of comments.

Many authorities asked for a pre-allocation of resources so that they could proceed to plan and to consult their tenants in the knowledge that, if they meet all the requirements, a known amount of additional resources will be available. We will be setting up such a system, and will be making the resources available over two years so that authorities will have longer to spend the resources they have been allocated. The guidance suggests that authorities wishing to seek resources for 2002–03 should aim to let the Department have an early indication of their intention to seek a place on the list by July 2001 and full supporting information by the end of September.

Many authorities have expressed concern that the requirement to obtain a 3^* (excellent) rating from the Housing Inspectorate is very demanding. We are, however, quite clear that additional resources should be linked to the highest standards of service. But we recognise that those authorities that develop the first arm's length proposals will face a particularly challenging task, and are prepared, for 2002–03, to make a part payment to those authorities that demonstrate that services are well on the way to achieving a 3^* rating. In such cases a 2^* (good) rating together with an assessment of likely to improve or will improve will attract 50 per cent. of the full amount subject to an agreed plan to achieve 3^* standard. The full amount will be payable once the 3^* standard is reached.

We have made a number of other changes to the proposals in the consultation paper to reflect concerns expressed in responses and to give further detail on some points. In particular, the guidance makes clear that there will be some flexibility in the limit of 12,000 dwellings for an individual company; that tenant representatives on company boards should be elected; and that there should be clearly defined responsibilities between a local authority and a company in relation to the authority's strategic functions.

I believe that arm's length management is an exciting new opportunity for authorities and tenants. I am encouraged by the enthusiasm with which the idea has been received, and I hope that many authorities will give it serious consideration. The Department will be working closely to establish template documentation with those who are looking to be the leaders in this field.