§ Mr. Ron Daviesasked the Secretary of State for the Environment if the excess costs of reinstatement grants and re-purchasing by local authorities for the purposes of the Housing Defects Bill will count in their annual spending targets; and if the Government will make allowances for this in determining future targets.
§ Sir George YoungReinstatement grants and the total cost of re-purchasing defective houses will count as local authority capital expenditure. The net cost to local authorities, after Exchequer contributions, of financing such expenditure will be treated, for rate support grant and expenditure target purposes, in the same way as the costs of financing the rest of their capital expenditure. Before each rate support grant settlement, and before he issues expenditure targets for a year, my right hon. Friend takes into account, inter alia, the latest information as to the rate of relevant expenditure.
§ Mr. Ron Daviesasked the Secretary of State for the Environment if the costs envisaged in the financial 402W memorandum to the Housing Defects Bill take account of changes in value added tax on construction materials announced in the current year's Budget.
§ Sir George YoungThe estimate in the financial and explanatory memorandum to the Bill did not take into account the proposal that, as from 1 June, expenditure on structural alterations, as well as on works of repair and maintenance, should attract value added tax. It assumed however that a substantial proportion of works of reinstatement under the Bill would be of a kind which already attracts VAT.
§ Mr. Ron Daviesasked the Secretary of State for the Environment what financial provision the Government intend to make for occupiers of council dwellings classed as defective for the purposes of the Housing Defects Bill who have not yet exercised the right to buy; what role the local authorities are to be asked to play in this; and what assistance the Government will offer the latter in their efforts to deal with the remaining defective housing stock.
§ Sir George YoungPresent arrangements are adequate to enable local authorities to deal with defective dwellings in their own stock. Subject to their obligations under section 32 and 33 of the Housing Act 1961, it is for local authorities to decide how and when to take action. My right hon. Friend has said that the need for expenditure for this purpose will be taken into account in determining housing investment programme allocations, and the possibility of including in the general needs index an indicator to reflect the need for expenditure on defective dwellings is under discussion with the local authority associations. Where local resources are inadequate to finance expenditure on housing, authorities receive general housing subsidy, and 75 per cent. of the loan charges on expenditure on redevelopment and capitalised repairs is taken into account in determining entitlement to subsidy.