§ Dr. Lynne JonesTo ask the Secretary of State for the Environment, Transport and the Regions what the total amount is(a) of early redemption penalties and (b) overhanging debt paid from central Government funds to enable the transfer of council housing to registered social landlords; and if he will list the advantages of early redemption of debt. [134731]
§ Mr. MullinUnder the arrangements for dealing with overhanging debt announced to the House by my hon. Friend the Minister for Housing and Planning on 16 December 1999,Official Report, column 250W, local authorities are responsible for meeting the cost of early redemption penalties either from the capital receipt arising from the transfer of housing stock or from within their existing resources. Since the arrangements came into force we have made one-off payments to Burnley Borough Council and Coventry City Council to assist 298W them to repay outstanding principal of their Public Works Loan Board (PWLB) loans. The sum total of both payments was £132.696 million.
The advantages of early debt redemption are twofold. First, a mechanism to deal with overhanging debt makes housing transfer a realistic option for a wider range of authorities where investment is most needed. I understand that the total capital investment over the next 30 years in the housing stock transferred by Coventry City Council and Burnley Borough Council is estimated to be over £1 billion. Second, a one-off payment to assist an authority to repay outstanding PWLB loans is simpler—for both local and central government—than the alternative of leaving an authority's Housing Revenue Account open, despite the transfer of stock, and for the Exchequer to subsidise the overhanging debt for many years.