§ Mr. CoxTo ask the Secretary of State for the Environment, Transport and the Regions what plans he has to encourage the building of properties within the Greater London Authority area for low cost rent. [18587]
§ Mr. RaynsfordThe Government recognise that the building of properties for low cost rent within London raises particular issues because of the scarcity of land for new social housing developments and the high cost of acquisition in what is a global property market. The Revised Strategic Planning Guidance for London Planning Authorities (RPG3) and the proposed revisions to circular 13/96 which details how the delivery of affordable housing may be assisted through negotiations with developers, both send out a clear message that the Government wish to ensure greater allocation of land for low cost rent properties in the capital than has been provided in recent years.
The main mechanism for the delivery of affordable housing is through the Housing Corporation of Local Authority Social Housing Grants. In 1997/98. some £161 million representing 65 per cent. of the Housing Corporation's London Region programme, is being directed to new build housing for rent.
Our early action to release capital receipts from council; house sales has injected an additional £53 Million into London's housing in 1997–98. Allocations for 1998–99 will be announced shortly. A significant proportion of this will be used by the London Authorities in enabling the provision of new or rehabilitated social housing partnership with registered social landlords.
§ Dr. IddonTo ask the Secretary of State for the Environment, Transport and the Regions if he will estimate the gross cost to public funds of a reduction in housing association rents of(a) 10 per cent., (b) nine per cent., (c) eight per cent., (d) seven per cent., (e) six per cent., (f) five per cent., (g) four per cent., (h) three per cent., (i) two per cent. and (j) one per cent.; and what would be the cost net of savings in (i) housing benefits and (ii) public expenditure linked to the RPI. [18595]
§ Mr. RaynsfordThere are no powers under which the Government could impose a general reduction in housing association rents. The calculations below are on the hypothetical assumption that the cuts in rent could be achieved and that housing associations would be fully compensated for their loss of revenue. The estimated gross cost and the cost net of savings in Housing Benefit are as shown. The figures represent the annual costs calculated on the basis of average housing association rents in 1996–97. The Department does not have a model for calculating the RPI-related savings in public expenditure arising from reductions in housing association rents.
284W
Reduction in rents percent Cost of compensating HA revenue loss £ million per annum Net cost after savings in Housing Benefit £ million per annum 10 298 86 9 269 77 8 239 68 7 209 60 6 179 51
Reduction in rents percent Cost of compensating HA revenue loss £ million per annum Net cost after savings in Housing Benefit £ million per annum 5 149 42 4 119 34 3 90 25 2 60 17 1 30 9
§ Dr. IddonTo ask the Secretary of State for the Environment, Transport and the Regions if he will estimate the gross cost to public funds of a reduction in local authority rents of(a) 20 per cent., (b) 19 per cent.,(c) 18 per cent., (d) 17 per cent., (e) 16 per cent., (f) 15 per cent., (g) 14 per cent., (h) 13 per cent., (i) 12 per cent. and (j) 11 per cent.: and what would be the cost net of savings in (i) housing benefits and (ii) public expenditure linked to the RPI. [18596]
§ Mr. RaynsfordA reduction in Guideline Rent in 1998–99 for Housing Revenue Account local authorities in England wouldhave the following estimated effects:
Present value (discounting to 1996–97) of effects from 1998–99 to 2027/28 1996–97 prices discounting to 1996–97 Guideline Rent reduction in 1998–99 (percent) Loss of gross rental income (£ million) Saving in rent rebates. (£ million) Saving in public expenditure linked to the RPI. (£ million) Net public expenditure cost. (£ million) 11 6,402 4,816 1,476 110 12 6,984 5,244 1,610 130 13 7,565 5,675 1,744 146 14 8,147 6,104 1,878 165 15 8,729 6,527 2,012 190 16 9,311 6,954 2,146 211 17 9,893 7,379 2,280 234 18 10,475 7,799 2,415 261 19 11,057 8,222 2,549 286 20 11,639 8,643 2,683 313 Figures in the table have been rounded to the nearest £1 million. The calculations are derived from LAMOD, the Department's model for estimating the public expenditure effects of a change in Guideline Rent policy for local authorities. The results from LAMOD are sensitive to assumptions which are kept under continuous review.