§ Mr. WebbTo ask the Secretary of State for the Environment, Transport and the Regions, pursuant to his answer of 27 October 1997,Official Report, column 726, on rented housing, what would be the gross cost to the public sector if all local authority rents were to be cut by (a) 20 per cent., (b) 30 per cent., (c) 40 per cent., and (d) 50 per cent.; and in each case what would be the cost net of savings in housing benefits. [37197]
§ Mr. RaynsfordA reduction in Guideline Rent in 1998–99 for Housing Revenue Account local authorities in England would have 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 £ million Guideline Rent reduction in 1998–99 Loss of gross rental income Saving in rent rebates Saving in public expenditure linked to the RPI Net public expenditure cost 20% 11,639 8,643 2,722 274 30% 17,459 12,785 4,083 590 40% 23,278 16,816 5,444 1,018 50% 29,098 20,726 6,805 1,567 Note:
Figures in the table have been rounded to the nearest £l 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. The housing stock is assumed to fall by about 114,000 dwellings each year, until 2007–08, as a result of Right to Buy sales, transfers, voluntary sales, new build completions and demolitions. This assumed annual decline in stock is in line with the present rate of change. The model assumes that the level of stock is constant after 2007–08 with no further decline.
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