§ Mr. Clifton-BrownTo ask the Deputy Prime Minister, pursuant to the answer of 7 May 2002,Official Report, column 22W, on local authority capital receipts, concerning his intention to pool housing capital receipts from debt-free authorities (a) what proportion of the receipts will be pooled, (b) on what basis and to which other local authorities the money will be redistributed, (c) on what date this arrangement will be implemented; (d) how this arrangement will encourage existing debt-free authorities to remain so and others to become debt-free, (e) whether the new arrangements will apply to clawbacks from previous large scale voluntary transfers of council housing and (f) how these proposals will help those local authorities who have difficulties in providing additional affordable housing due to the high price of buildings. [76525]
§ Mr. McNultyOur consultation paper "The Way Forward for Housing Capital Finance", issued in August, sought views on the detailed mechanism of the capital receipts pooling regime. The consultation period ended last Friday and we will make a further announcement when we have considered the responses. As the then Under-Secretary, my hon. Friend the member for Northampton, North (Ms Keeble) said in her reply on 7 May 2002,Official Report, Hansard (col. 21–22W) these changes will be introduced alongside the wider changes to the local authority capital finance system which required primary legislation; the timing of this is still to be decided.
The proposal is about sharing out funding for investment fairly among local housing authorities. The current arrangements for redistributing the spending power of capital receipts do not apply to all authorities. Debt-free authorities are exempt—they retain all their capital receipts, and so finance substantially more investment from receipts than other authorities, regardless of their relative need to spend.
There is no good reason for this anomaly. Pooling will ensure that capital resources are better targeted, so that all housing authorities have the access they need to fund new affordable housing and bring their stock up to decent standard. Without this, either investment in housing by the most needy authorities would need to fall, or substantial increases in taxes would be necessary to make good the money that debt-free authorities retain.