§ Mr. Durantasked the Secretary of State for the Environment whether he is now able to announce his decisions on public sector housing investment and housing subsidy for 1983–84.
§ Mr. HeseltineFollowing discussions with the local authority associations in the Housing Consultative Council, I am now able to announce the outstanding decisions on housing capital and current expenditure in 1983–84.
Taking capital expenditure first, I am glad to say that gross housing capital provision in 1983–84 will be increased to £3,244 million, which is £137 million above the 1982–83 provision I announced on 21 December 1981 and some £340 million above the expected level of expenditure this year. Housing capital receipts are forecast at £1,402 million, so the net provision is £1,842 million. The gross provision of £3,244 million will be divided as follows:
558Wfinancial year and is intended to achieve a further reduction of some 10 per cent. in 19838–4. From 1 April next manpower budgeting will be complemented by a new system of divisional cost budgeting backed by a computerised management information system, and by specific management accounting systems for, initially, the main executive activities of my Department which employ the vast majority of the staff. In addition, I have currently in hand a review of the Department's objectives, functions and costs.
Besides these, my Department has available to it a considerable range of in-house management services expertise including staff inspection, organisation and methods, operational research and audit all of which have full and continuing programmes of work. These are apart from the attention paid selectively to different aspects of my Department's work through Rayner scrutinies, policy reviews and studies, and Civil Service-wide examinations of various activities.
All these contribute to the effectiveness and efficiency of my Department. Though it would be disproportionately expensive to give details of all the work done; the following examples of significant studies carried out in recent years are provided for illustration:
£ million Home loans scheme 5 New towns 61 Housing corporation 690 Local authorities 2,488 The new towns allocation again reflects the fact that the publicly rented programme in the new towns has virtually ended. The remaining investment is concentrated on providing 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 compromises an allocation of £630 million plus an estimated £60 million of capital receipts. This will maintain the Housing Corporation's enhanced level of investment achieved this year, where the outturn—excluding debt refinancing—is expected to be about one third higher in cash terms than in 1981–82. A substantial expansion of housing association activity has therefore been taking place.
The gross provision of £2,488 million for local authorities permits an increase of some 15 per cent. over the current forecast of outturn in 1982–83.
As in the two previous years, the housing investment programme allocations to local authorities take account of the fact that local authorities are free to increase their 559W expenditure over and above their allocations on account of a prescribed proportion of their capital receipts. I estimate that in 1983–84 they will be able to undertake at least an additional £684 million of expenditure in this way. £3.2 million must also be allowed for the administrative costs of the homes insulation scheme. Allowing for rounding, the amount to be distributed as HIP allocations is therefore £1,801 million. Of this, some £32 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. This sum will accommodate authorities' homes insulation scheme bids in full.
I announced on 15 November that I would be taking additional steps to assist local authorities to meet the higher level of demand for home improvement grants, following the extension of the higher grants rates until 31 March 1984. Each authority is being notified of a figure for expenditure on improvement grants next year. In most cases the figure represents an amount 10 per cent. above the figure for expenditure on improvement grants which the authority included in its HIP bid. If an authority's actual expenditure on improvement grants in 1983–84 exceeds the indicative figure, an additional allocation will be made available retrospectively if the authority's total HIP allocation would otherwise have been exceeded.
I have discussed the method of distributing the HIP allocations for 1983–84 with the local authority associations. I am today informing local authorities of their individual allocations.
Copies of the letter to authorities and of the schedule of allocations have been placed in the Library and the vote office.
Turning to housing current expenditure, I have carefully considered the views of the local authority associations on the consultation papers issued on 8 November on reckonable income for 1983–84 and on reckonable expenditure on management and maintenance for 1983–84. I have decided that I should give effect to my subsidy proposal by determining an increase in the local contribution of £0.85 per dwelling per week, for 1983–84. It remains a matter for individual authorities to decide how to finance such a contribution from local sources. On management and maintenance, I propose to increase the expenditure counting towards the subsidy calculation to 7 per cent. above the level assumed for 1982–83.