§ Mr. Gwilym JonesTo ask the Secretary of State for Wales when he will consult representatives of local government and relevant professional and other bodies on his determination under part VI of the Local Government and Housing Bill of housing revenue account subsidy for 1990–91; and what proposals he will be making.
§ Mr. Peter WalkerMy Department is today sending local housing authorities in Wales, the Council of Welsh Districts and other interested bodies, consultation papers on the proposed new housing revenue account subsidy. The papers contain my detailed proposals for a method of calculating the new subsidy for which the Local Government and Housing Bill makes provision. They also include details of the guideline rents, and of the allowances for expenditure on management and maintenance which we propose to take into account in calculating each authority's entitlement to subsidy in 1990–91.
Comments are invited within six weeks. I am putting a copy of the consultation papers in the Library together with a list of the guidelines proposed for each authority. For the rent guideline, taking into account prevailing rent levels in Wales, I propose to assume next year an average rent increase of two per cent. above the allowance for inflation.
I also propose to use the provisions in part VI of the Bill to allow the aggregate notional rental income for Wales to be apportioned between housing authorities by reference to variations in the aggregate values of local authority dwellings. This leads to different guideline rents for different authorities. A set of rules to limit changes ensures 645W that no guideline rent would represent an increase of more than £4.50 a week over the average rent in any authority this year and permits, at the lower end of the scale, guideline increases which are restricted to the allowance for inflation over an authority's existing rent level.
The proposals represent a balanced approach to the establishment of sensible levels of rents in different parts of the Principality.
For the management and maintenance expenditure guideline. I propose to assume a 3 per cent. growth per dwelling above the allowance for inflation next year for each housing authority in Wales.
The guidelines both for rent and for management and maintenance spending are no more than the assumptions my Department will make in calculating subsidy. Each council will have to decide for itself what level of rents it sets and how much it spends on managing and maintaining its stock.