§ Mr. CarringtonTo ask the Secretary of State for the Environment when he proposes to issue the draft housing revenue account subsidy and item 8 determinations for 1996–97. [1896]
§ Mr. CurryLocal authorities have today been sent the draft housing revenue account subsidy and item 8 determinations for 1996–97 together with a consultation paper on proposed arrangements to discourage them from increasing their rents by more than the Government's guideline increase for next year. Authorities have been invited to let my Department have their views by 15 December 1995.
97WI am pleased to be able to say that we are proposing to freeze the average guideline rent for 1996–97, in real terms, at £34.70 a week. The increases on this year for individual authorities would range between 67p and £1.17 a week. This is good news for council tenants.
The assessment of each authority's proposed guideline rent would, for the first time, explicitly include allowance for average earnings of manual workers. Authorities' guideline rents would be based equally on local capital values and earnings. This would improve the targeting of subsidy and would ensure that the pattern of rents charged by authorities nationally better represented the income pattern of tenants. It would help us ensure that local authority rents remained affordable for those on low incomes.
We are proposing a change in the subsidy rules to encourage authorities to keep their rent increases within the guideline. Rent rebate subsidy would be limited and the limit would be linked to the guideline rent increase. Authorities which stay within this limit would be unaffected.
To provide authorities with greater certainty about their subsidy entitlement and to reduce the administrative burden both for authorities and for the Department, the proposed subsidy determination has been streamlined and the calculation of subsidy considerably simplified.
Total provision for management and maintenance costs will be £3.4 billion. The provision is slightly higher than this year per dwelling. We propose to update the distribution formula to include data from the English house condition survey and to include an allowance for social factors. About 10 per cent. of the maintenance component would be indexed to measures of social deprivation. These changes are designed to improve the allocation of subsidy so that it goes where it is needed most.
In common with the remainder of the public sector, we want to see housing departments of local town halls constantly seeking greater efficiency. Up to now, spending has continued to rise while the number of council houses has fallen, with the cost being picked up by tenants and general taxpayers. Our proposals will encourage authorities to keep their rent increases down to the Government's guideline levels and will provide a spur for them to use opportunities, such as compulsory competitive tendering, to improve efficiency, bring costs down and provide tenants with better services.