§ Mr. SpearingTo ask the Secretary of State for the Environment if he will give the place, manner or mode in which he has placed restrictions on the expenditure of local authorities on new municipal housing from funds accrued by them from sales of residential premises, together with the statutory basis of such restriction, and the approximate total sums of such funds now available for such building; and if he will make a statement on the policy of Her Majesty's Government concerning the future use of these funds.
§ Mr. Robin SquireUnder part IV of the Local Government and Housing Act 1989, local authorities may use 25 per cent. of their capital receipts from the sale of council houses, and 50 per cent. of most other receipts, to finance new capital expenditure on any service. They are required to set aside the balance as provision to meet credit liabilities. The total of the amounts set aside under the present capital finance system, including receipts from council house sales, was about £5.5 billion at 31 March 1991. If authorities were allowed to spend a larger proportion of their capital receipts, their net indebtedness would rise and the total of spending by the public sector and the public sector borrowing requirement would be increased. The present system has also enabled a greater proportion of capital receipts to be recycled in the form of new credit approvals to those authorities where needs are greatest. We therefore have no plans to change these arrangements.