§ Mrs. Angela KnightTo ask the Secretary of State for the Environment when he intends to make an announcement about the distribution of housing resources for 1994–95.
§ Sir George YoungI am today announcing a number of decisions about the provision of resources for housing in 1994–95.
Local housing authorities will today receive their housing investment programme—HIP—allocations for 1994–95. They total some £1.5 billion. Within that, £1,038 million are general purpose allocations, or housing "annual 1097W capital guidelines". As last year, these have been calculated 40 per cent. on the basis of a statistical assessment of local housing needs, and 60 per cent. on a discretionary basis related to published criteria. The primary criterion has been the efficiency and effectiveness of local authorities in making use of capital resources to meet housing needs.
This year, for the first time, in addition to their bids for resources, local authorities have also been required to submit a separate housing strategy statement. Our aim is that these strategy statements should become important documents in their own right, setting out a planned framework for housing programmes looking at least three years ahead. They should present an all-embracing picture of the housing needs and resources of each area, covering not only the plans of the local authority, but also the contribution to be made by the private sector.
In general, the picture emerging from the bids and strategy statements this year is one of continuing improvements in performance by local authorities, both in the management of their own stock and in their enabling role. Housing strategies are now better researched and the analysis of local problems and opportunities is conducted on a sounder basis. Local authorities are acting in a more corporate manner, drawing on all the available sources of funding and using their enabling powers to meet needs in fields such as community care. Further efforts have also been made to involve private housing interests, tenants and residents in the development of housing strategies. Authorities are also making increased use of the private sector to assist them in meeting the needs of those accepted as homeless. My announcement of both the housing investment programme and approved development programme resources today also demonstrates how the housing programmes of local authorities and housing associations are being brought closer together.
Under the competitive HIP process, we have again been able to direct resources to a greater degree to local authorities who are best able to make use of them. I am glad to be able to publish today the names of the authorities that were judged the best performers in each region under the HIP process. All other authorities will have the assessment of their performance conveyed to them by the Department's regional offices. I am encouraged by the progress which many authorities have made this year, and hope that all authorities will continue to work for further improvements during 1994–95.
A further £288 million has been allocated for private sector renewal and housing defects in the form of "specified capital grant", to assist councils with their expenditure in these areas. As with the annual capital guideline allocations, 40 per cent. of these resources has been distributed on a statistical assessment of local needs, and 60 per cent. on a discretionary basis.
I am depositing tables in the Library of the House showing each authority's annual capital guideline and specified capital allocations. I am also depositing a list of the names of the authorities in each region who have been assessed as the best performers.
From 1 April 1994, estate action will be part of the single regeneration budget. Within the budget, £306 million will be available in 1994–95 for estate action schemes already under way. A further £67 million will be available for new schemes which will be approved under current estate action guidelines. Local authorities are today being notified of the outcome of their bids for resources for 1098W new schemes next year, as well as of the resources being provided for continuing schemes. I am placing a list of the new schemes in the Library together with tables showing the latest position on the distribution of resources between authorities for continuation schemes.
Turning to the housing revenue account subsidy determination for 1994–95, I can today announce the main results of our consultation exercise.
I intend to confirm the proprosals to increase management and maintenance allowances by 4 per cent. overall and to continue to distribute the increase through a system of targets reflecting authorities' relative need to spend.
For rent guidelines, I am confirming the proposal for an average increase of 7.5 per cent. This will result in an average increase in guideline rents of £2.20 per week over those which apply this year, with a range of between £1.50 and £2.90 for individual councils, bringing the national average guideline rent to £31.60. Responsibility for setting actual rents remains with individual local authorities. Housing benefit will normally meet the whole of any rent increase for tenants receiving it.
The Housing Corporation's approved development programme for 1994–95 represents its fourth largest budget since housing association grant—HAG—was introduced in 1974. Overall, gross capital expenditure will amount to over £1.5 billion in 1994–95. Some £600 million is available for new schemes to start next year, of which £400 million will be for new homes for sale or rent.
The Housing Corporation is confident that this programme will enable housing associations to provide some 58,000 new homes in 1994–95, bringing the total over the three years from 1992–93 to 1994–95 to 178,000. This more than fully meets our manifesto commitment to provide 153,000 homes over this period, and compares extremely well with the 70,300 new homes provided over the preceding three years, 1989–90 to 1991–92.
The Housing Corporation estimates that, because of reductions in procurement and borrowing costs and increases in efficiency, coupled with the growing proportion of the programme targeted at tenants incentive scheme grants and other cost-effective home ownership initiatives, it should still achieve the estimate it made a year ago of at least 154,000 completions over the three years 1993–94 to 1995–96.
The Housing Corporation has discussed priorities with local authorities before reaching decisions on new allocations to housing associations active in each area. These have been targeted on the basis of a statistical assessment of needs, an assessment of the enabling performance of the authority itself, and the value for money of bids. In this context, anticipated local authority contributions of discounted land or local authority HAG have increased by 15 per cent. over 1993–94. This, together with increased competition for resources and the reduction in grant rates, has led to an average HAG cost per unit which is 13 per cent. lower within the rented programme than the equivalent figure for 1993–94.
A key aim of the 1994–95 approved development programme is to make the most productive use of the existing housing stock: funding for the tenants incentive scheme has been increased and do-it-yourself shared ownership will continue to be targeted principally at local authority and housing association tenants, thus freeing up more existing tenancies for new lettings; the mini-HAG programme for short-life housing has been increased to its 1099W highest ever level; within the mixed and publicly funded rented programme, 19 per cent. of 1994–95 allocations are for rehabilitation which represents an increase on the last few years; and the major repairs and miscellaneous works programme has been allocated £75 million, which represents the second highest figure ever.