Housing Investment Programmes (Hansard, 13 December 1990)

§ Sir George Young

Each housing authority is today being informed of its housing investment programme—HIP—allocation for 1991–92. Copies of the letters to local authorities and of the schedule of HIP allocations have been placed in the Libraries of both Houses.

The local authority associations have been consulted about the distribution of housing capital allocations, including the construction of the generalised needs index —GNI—which has been further updated for 1991–92 following the comprehensive review last year. In particular, we have this year introduced a new indicator into the GNI to measure authorities' use of temporary accommodation. This helps to ensure that those authorities that face the most severe homelessness problems and that have had to meet them by using temporary accommodation receive additional resources to reflect their needs.

Local authority credit approvals and specified capital grant total £1,972 million in 1991–92. There are also £7 million of other capital grants. The Local Government and Housing Act 1989 allows my right hon. Friend to take account of local authorities' capital receipts when making allocations, and the housing element of the receipts taken into account in this way is £276 million. Housing capital allocations for 1991–92 will therefore total £2,255 million.

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After considering the views of the local authority associations, my right hon. Friend has concluded that the distribution of resources should be made on the following basis: (i) £387 million to be allocated separately as supplementary credit approvals as follows: (a) £115 million for the second year of the special homelessness initiative; local authorities in London and the south-east will shortly be invited to submit bids, particularly to bring empty homes back into use and for cash incentive schemes; (b) £185 million of the total of £290 million available for the Estate Action programme, for new and some continuation schemes. In 1990–91, the HIP allocation of the 57 urban programme authorities included additional resources in the form of inner city special allocations. For 1991–92, my right hon. Friend has decided that these resources can be used more effectively if allocated as part of an enlarged Estate Action programme; (c) £50 million for the new rural housing programme; (d) £10 million for energy efficiency demonstration projects in the local authority stock; (e) £25 million to provide against demand for mandatory grants in excess of authorities' available resources; (f) £2 million to cover repairs to defective ex new town stock; (ii) In addition to the £185 million of supplementary credit approvals for Estate Action, a further £105 million of annual capital guidelines—ACGs—for Estate Action continuation schemes is being allocated to authorities on the basis of agreed levels of commitment, as part of their main HIP allocations.; (iii) The remaining £1,756 million of the main HIP allocations, made up of the £1,343 million of housing ACGs and £413 million of resources for specified capital grant, has been distributed in two stages. First, the distribution to DOE regions has been made in proportion to the sum of the GNI scores of the local authorities in each region. Second, each region's total has been allocated to individual local authorities one half in proportion to each authority's GNI score, and one half following recommendations by the Department's regional housing controllers to reflect local needs and circumstances.

Under the new capital finance system, the Government issue forward indications of all-service annual capital guidelines for the second and third years of the public expenditure survey period. The indications for 1992–93 and 1993–94 will be issued as early as possible in the new year. However, to assist authorities in planning their housing investment programmes more than one year ahead, my right hon. Friend has decided to promulgate provisional figures for the housing element of the overall calculation with authorities' HIP allocations. The amounts for 1992–93 and 1993–94 are included in each authority's allocation letter.