§ Mr. McCrindleTo ask the Secretary of State for the Environment (1) what effect ring fencing of the housing revenue account will have on the ability of councils(a) to set rents in their areas and (b) to control future rent rises; and if he will make a statement;
(2) if he proposes to reduce housing subsidy to an authority which does not increase rents in line with Government policy; and if he will make a statement;
(3) if he expects local authorities in deficit on the housing revenue account to increase rents twice in the year of account; and if he will make a statement.
§ Mr. TrippierIn the new regime, my right hon. Friend will set an annual guideline rent increase for each local48W authority. Housing revenue account subsidy will be paid on the assumption, among other things, that the authority increases rent in accordance with the guideline. Subsidy for the year will not be reduced if the authority raises rents by a different amount. Local authorities will be free to set their own rents so long as they do not budget to make a deficit on their housing revenue account for any year. If, despite this, it appears during the year that a deficit is likely to arise on the account, the authority will be required to take all such steps as are reasonably practicable to avoid that outcome. In such a case it will be for the authority to decide whether a rent increase is necessary.