Departmental Expenditure (Hansard, 30 January 1989)

§ Mr. Ridley

The White Paper explains in more detail my Department's plans for expenditure for 1989–90 to 1991–92, announced in summary at the time of the Autumn Statement, and gives comprehensive information about what we have achieved through our programmes in past years, and about our targets for the future.

Housing

The Autumn Statement announced gross provision for housing capital expenditure in 1989–90 £441 million (12 per cent.) higher than previously planned. This increase has been made possible by the considerable success of the Government's right-to-buy policy. Receipts from the sale of local authority housing and land are on course to reach over £3,000 million, their highest level ever, with right-to-buy sales up by nearly 40 per cent. on last year, to an estimated 150,000.

This year's White Paper continues the trend established in previous years of offering more detailed information about the Government's housing programme. Particular emphasis has been placed on setting future targets for individual components of the programme, an emphasis which will be continued next year when the effects of new legislation have been absorbed. Information on the outputs already achieved has also been further developed, and should assist the reader in assessing public sector performance in the housing field.

Housing associations

Within the overall increase in housing expenditure, a major feature of the Government's plans is the increasing role of the Housing Corporation in supporting the provision of new rented accommodation by housing associations. Approvals for rented accommodation are set to rise from the current level of 16,000 to over 24,000 in 1991–92. The resources available through the Housing Corporation are being increased by £75 million in 1989–90, with further increases planned in subsequent years to reach over £1.3 billion in 1991–92 (80 per cent. up on the original provision for this year). This increased investment will be further augmented by injections of private capital. Details of the corporation's approved development programme were given by my noble Friend the Minister for Housing on 14 December. The increased resources being made available over the next three years together with the expanding use of private finance will allow many more homes to be provided for those in need.

Local authority programmes

The local authority programme is focused on renovation of their stock. In 1988–89 some 160,000 local authority dwellings will undergo improvement compared with 150,000 in 1987–88. The 1986 English house condition survey, published recently, confirms the successful use of housing investment programme resources to the extent that 92 per cent. of the local authority-owned housing stock is in good repair. Planned expenditure by local authorities on their own housing capital programmes in 1989–90 will be £353 million (13 per cent.) higher than provided for in previous plans. After taking account of the substantially increased spending power available to local authorities from higher levels of receipts, HIP allocations 25W for 1989–90 have been set at £920 million. Individual local authority allocations were announced by my noble Friend the Minister for Housing on 8 December 1988. Local authorities continue to spend an increasing proportion of their resources on the renovation of their housing stock, in line with Government policy.

Estate Action

Estate Action's budget has been increased by 36 per cent. to £190 million in 1989–90. This programme continues to promote renovation and improved management, encouraging innovative solutions to the problems of physically run-down and difficult-to-let estates. Over 100,000 dwellings are now benefiting from Estate Action treatment.

Housing action trusts

Last year, the Government announced a proposal to establish a number of housing action trusts as a pilot programme to tackle the worst areas of local authority housing. Following the identification of six potential HAT areas, consultants were appointed to report on their feasibility. The Government are now considering the consultants' reports. Net provision for HATs in 1989–90 is £68 million.

Other environmental services

Inner cities

My Department's inner cities programmes remain a very high priority. The key to successful inner cities regeneration is partnership between the public and private sector. Both the urban development corporations and the city grant programme are having considerable success in attracting private sector investment in their areas.

Urban development corporations

There are now 10 urban development corporations in England, Bristol being the latest to be set up this year. Public expenditure provision for UDCs is over £250 million in each of the next three years. Total resources available to UDCs will be even higher as increased receipts from the disposal of completed properties and sites are reinvested in the programmes. Priorities for 1989–90 have been set for the first and second generation UDCs. For example, in 1989 a start is planned on the Limehouse link road, the eastern extension of the London docklands light railway and on the development of Newcastle business park at Elswick. New measures will also be undertaken in other UDCs to further progress in housing, commercial and industrial development.

City grant

Since 1982, some £200 million of city grant and its predecessors have generated more than £800 million of private sector investment in the inner cities creating over 34,000 jobs and some 9,000 homes. To build on the momentum already achieved. City grant resources will increase by £23 million in 1989–90 and £28 million in 1990–91.

Urban programme, and derelict land grant

Despite the increased emphasis on UDCs and city grant, planned expenditure by DOE on the urban programme and derelict land grant amounts to well over £200 million a year. In 1988–89 local authorities' inner area programmes supported by government grant, are forecast to create or preserve about 37,000 jobs and support about 55,000 training places. Since 1982 over 7,000 hectares of derelict land has been reclaimed with the aid of derelict land grant. The programme will continue to concentrate on the regeneration of urban industrial land thus also 26W relieving development pressure on open land. Some 2,700 hectares of urban land are planned to be recovered for productive use in the next three years.

New towns

The new towns programme in England is now moving into its final stages. The three remaining corporations are making good progress with the development of their towns and target dates for their wind up have been set. The disposal of commercial and industrial properties is continuing successfully and capital receipts now exceed gross capital expenditure by a substantial margin. Compared with last year's White Paper (Cm. 288) some increase has been provided in the resources available for capital investment in 1989–90 and over the plan period to facilitate wind-up and the increased disposals programme.

Countryside, recreation and environment

The Government is providing substantial resources for countryside agencies to further the process of creating a healthy rural economy, an attractive environment and to conserve wild life. The support for the Rural Development Commission will enable it to continue to help in the provision of a suitable range of viable job opportunities and services to meet the needs of rural communities. Additional resources have been provided for the Countryside Commission to continue its tree planting programme over the next three years. There are also extra resources to help start up in April 1989 the new Norfolk and Suffolk Broads Authority. The support for the Nature Conservancy Council will help protect valuable peatland habitats in Caithness and Sutherland, and enable NCC to conclude further 465 new management agreements with farmers and land owners to protect sites of special scientific interest. Continued support for the groundwork initiative will help extend the community based environment improvement schemes to other priority regions. Support for the Tidy Britain Group experimental clean-up projects has been more than doubled. The modest increase for the Sports Council will enable it to increase the range and quality of opportunities to participate in sports and physical recreations at all levels and to seek ways of attracting private sector investment into sports.

Environmental research

My Department's environmental research programme will be increased by £2.5 million in 1989–90 and 1990–91. The additional provision will support in particular research into the North sea marine environment, waste disposal, climatic change and water metering trials.

Heritage

Planned expenditure on the heritage will be increased by £8 million in 1989–90, and £11 million in 1990–91 mainly for continued restoration of Hampton Court following the fire; the first phase of Albert memorial restoration; additional provision for Historic Buildings and Monuments Commission grants programme, and to provide for the cost of maintenance of the growing number of churches vested under the redundant churches scheme.

Local environmental services (current and capital)

An additional £110 million has been included in local authority current expenditure provision for 1989–90 for the costs of preparing for the implementation of the community charge; this will be supported by a specific grant of £55 million with the remaining expenditure supported by block grant in the usual way. Provision for capital expenditure by local authorities for 1989–90 has been increased by £192 million to £819 million This includes a further provision of £135 million in addition to 27W £110 million mentioned above to enable local authorities to prepare for the community charge. Capital receipts generated by local authorities on LES are buoyant, and forecast receipts for 1989–90 have been revised upward by £203 million to £745 million.

British Waterway Board

The BWB's external financing limit is increased to £48.3 million. The four-year action plan which the board has drawn up in line with its first and second responses to the Monopolies and Mergers Commission report on engineering operations will change BWB to a regionally managed, business-orientated organisation, seeking greater private sector investment.

Water authorities

As announced in the Autumn Statement, before the privatisation of their water supply and sewerage functions, the water authorities' responsibilities for the water environment will be taken over by the National Rivers Authority. £40 million has been allocated to the NRA in 1989–90 and £71 million in 1990–91. It is anticipated that increased receipts from direct charges will reduce the NRA's need for the Department's support to £65 million in 1991–92. The nine English regional water authorities will continue to require external finance in 1989–90 and provision of £10 million has been made, but their requirement will depend on the timing and cost to them of the establishment of the National Rivers Authority and of the privatisation itself. Investment by the regional water authorities has increased in constant price terms by over 50 per cent. since 1980–81 and is currently running at £1.1 billion. Further growth is assured to meet higher environmental and drinking water quality standards required by United Kingdom and EC legislation. The Water Bill will establish an independent director general of water services to protect the interests of consumers by ensuring proper standards of service and controlling prices. Provision has been made for the running costs of the water services offices of £2 million in 1989–90 and £4 million each for the following two years.

Property services agency

The PSA's civil accommodation programme is planned to increase by a net £8 million in 1989–90 and £9 million in 1990–91 compared with previous plans. Extra spending of £65 million and £109 million will be offset by increases in capital receipts from disposals, in rents and in payments by other Departments through the property repayment services system. The agency's provision reflects the need to meet unavoidable rent increases as well as to maintain its new building programme and the increased level of maintenance activity agreed last year. It has also been given additional funds to prepare for the change to fully commercial operation in 1993. On PSA's separate parliamentary works programme additional funds have been provided for restoring the Victoria Tower, and for various minor improvements to the Palace of Westminster.