§ Mrs. Roeasked the Secretary of State for the Environment if he has decided what deemed rent increase, and what increase in reckonable expenditure on management and maintenance, should be used in calculating the entitlement of local authorities to housing subsidy in 1987–88.
§ Mr. John PattenWe have considered carefully the views of the local authority associations on the consultation papers about calculation of entitlement to housing subsidy for 1987–88 which were sent to them in October.
My right hon. Friend has decided, jointly with the Secretary of State for Wales, that the increase in the local contribution for 1987–88 should be 65p per dwelling per week. The purpose of this figure is to determine entitlement to housing subsidy on a common basis. It is for local authorities to decide how large a rent increase they need to apply in order to meet their requirements for expenditure. It has been decided to increase the notional allowance for management and maintenance by 3¾ per cent. over the level assumed for 1986–87. As I announced on 17 February in reply to my hon. Friend the Member for Hertfordshire, West (Mr. Jones), the calculation of subsidy entitlement will be based on an authority's actual relevant expenditure on management and maintenance in 1987–88, rather than the notional amount referred to above, if the authority's actual relevant expenditure is lower than the notional amount.