§ Mr. Nigel JonesTo ask the Secretary of State for the Environment, Transport and the Regions (1) what restrictions apply to the use by a local authority of capital receipts obtained from the large-scale voluntary transfer of its housing stock to housing companies; and if he will make a statement; [9093]
(2) what percentage of the total capital receipts from the large-scale voluntary transfer of its housing stock to housing companies is available to a local authority; and if he will make a statement. [9121]
§ Mr. RaynsfordTwenty-five per cent. of any capital receipt from a large-scale voluntary transfer is available immediately to spend on housing. If a local authority becomes debt free, at a later date, the remainder of the receipt then also becomes available to it to spend as it wishes. Currently this is subject to one restriction: that it may not be used to support local authority social housing grant. This is being reviewed.
§ Mr. JonesTo ask the Secretary of State for the Environment, Transport and the Regions in what circumstances a local authority is permitted to use moneys in its housing capital account to reduce its council tax; and if he will make a statement. [9122]
§ Mr. RaynsfordCapital resources can be used only to fund spending for capital purposes. However, the Secretary of State has powers, under section 40(6) of the Local Government and Housing Act 1989 to issue a direction to capitalise revenue expenditure. Where revenue expenditure is capitalised, there can be a saving to the local authority's revenue account which may enable it to reduce its council tax, or—for spending within the housing revenue account—reduce its council house rents.
Under the capital receipts initiative the Government will issue supplementary credit approvals to enable authorities to invest additional sums in housing. Where authorities incur additional spending under this initiative, they will receive revenue support in the normal way. There should be no effect on the level of council rents or council taxes.