§ Mr. Home RobertsonTo ask the Secretary of State for Scotland if he will make a statement on the provision he proposes to make in respect of the financial consequences for local housing authorities of transfers of housing stock to housing associations or co-operatives on the basis of valuations which are less than the outstanding debt attached to the property concerned.
§ Lord James Douglas-HamiltonLocal authority borrowing for the purpose of capital investment in housing stock is not secured against the individual properties114W subject to, or resulting from, that investment. Debt redemption arising from transfers of housing stock would reduce the overall outstanding capital debt on the housing revenue account of the authority concerned. A reduction in overall outstanding capital debt would lead to a reduction in loans charges falling on the housing revenue account. Where such reductions in loans charges were insufficient to cover the assumed net loss in income arising from reduced rental income and reduced management and maintenance expenditure, the authority would receive increased housing support grant. In the case of those authorities which do not at present qualify for housing support grant, the effect might be to bring such authorities back into qualification.