§ Mr. WebbTo ask the Secretary of State for Scotland, pursuant to the 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 in Scotland were to be cut by 10 per cent; and what would be the cost net of savings in housing benefits. [37199]
§ Mr. Macdonald[holding answer 6 April 1998]: Scottish local authorities determine their rents according to local needs and circumstances. In England, guideline rents are set by the Department of the Environment, Transport and the Regions and, in certain circumstances, rental income is used to offset the cost of rent rebates. Because of these and other differences in the systems of local authority housing finance, it is not possible to give estimates for Scotland which are directly comparable with those for England given on 27 October 1997, Official Report, column 726.
A 10 per cent. reduction in Scottish local authorities estimated rented income for 1997–98 would, however, have resulted in an estimated reduction in housing benefit in that year of around £79 million. And local authorities' housing expenditure in the same year would have been reduced by £107 million. As a result, authorities would have had this amount less to invest in repairs and maintenance and for other housing related expenditure. That, in turn, could have led to an increase in Housing Support Grant and pressure also to increase Housing Revenue Account allocations, although it is not possible to be precise about the size of such increases. The net effect on overall public expenditure cannot therefore be reliably estimated.