§ Mr. Durantasked the Secretary of State for the Environment whether he is now able to announce his decisions on housing subsidy and public sector housing investment for 1982–83.
§ Mr. HeseltineFollowing discussions with the local authority associations in the Housing Consultative Council, I am now able to announce a number of decisions on housing public expenditure in 1982–83. I am glad to say that, despite the reduction in overall housing expenditure in 1982–83, envisaged in last year's public expenditure White Paper, it will be possible to hold capital expenditure next year at approximately the same level as this year—as foreshadowed in the statement by my right hon. and learned Friend the Chancellor of the Exchequer on 2 December.
This has been made possible largely by the growing volume of sales of local authority dwellings and land which we expect to see continue throughout next year as a result of the Government's policies on low-cost home ownership, particularly the right to buy, and from the encouragement given to authorities to dispose of surplus land.
But my decisions on the level of housing current expenditure also have a bearing on the amount I have been able to make available for capital.
I discussed with the Housing Consultative Council on 17 December the level of local housing income and of management and maintainence expenditure to be taken into account for subsidy and rate support grant. I have considered carefully the views which its members put to 327W me, and I have also noted the points raised when the House debated rents on 16 December. I have decided that I should give effect to my subsidy proposal by determining an increase in the local contribution of £2.50 per dwelling per week for 1982–83. It is for individual authorities to decide how to finance such a contribution from local sources. On average, however. I expect that authorities will choose to meet their increase in local contribution from rental income so that next year average rents would rise by £2.50 per dwelling per week.
on management and maintenance, I propose to increase the expenditure counting towards the subsidy calculation to 7 per cent. above the level assumed for 1981–82.
After allowing for other items of revenue expenditure, I have been able to provide £1,983 million net for capital expenditure. Housing capital receipts are forecast at £1,124 million. Gross provision will therefore be £3.107 million. This sum will be divided as follows:
£ million Home loan and other net lending 8 New towns 73 Housing corporation 556 Local authorities 2,470 The new towns allocation reflects the fact that the publicly rented programme in the new towns has virtually finished with remaining investment concentrated on opening up new sites for private development, on shared ownership, and on repair and improvement of dwellings prior to transfer to local authorities. The gross provision for the Housing Corporation at £556 million is being maintained in real terms for the second year running, and comprises an allocation of £530 million plus an estimated £26 million of capital receipts.
The gross provision of £2,470 million for local authorities will permit an increase of some 3 per cent. over their 1981–82 level of activity. Within that figure, some £30 million has been set aside for the homes insulation scheme, though authorities are free to transfer a greater sum to home insulation from elsewhere within their single capital block if they wish.
The amount of the housing investment programme allocations to local authorities has, however, to take account of the fact that, under the system of capital expenditure control, local authorities can undertake expenditure over and above their allocations on account of their capital receipts, or a prescribed proportion of these. I estimate that in 1982–83 they will be able to undertake at least an additional £593 million of expenditure in this way. £3 million must also be allowed for the administrative costs of the homes insulation scheme. Allowing for rounding, the amount distributed as HIP allocations will therefore be £1,875 million.
I also wish to make it clear that local authorities can plan their capital expenditure for 1982–83 on the firm assumption that, at the national level, housing capital receipts will reach the figure forecast by the Government.
Provided that authorities' aggregate level of gross spending does not appear to be exceeding the level planned nationally, no question will arise of authorities' allocations being reduced in the event of their housing capital receipts in 1982–83 falling short of the Government's forecast.
I have discussed the method of distributing HIPs with the local authority associations and I will be informing local authorities of their individual allocations for 1982–83 328W on Tuesday, 22 December. Copies of the letter to authorities and of the schedule of allocation will be placed in the Library.