Housing Capital Resources (Hansard, 16 November 2001)

§ Ms Keeble

Decisions have now been taken about the needs indices to be used in the allocation of housing capital resources for 2002–03. I am arranging for details of the indices to be placed in the Library of the House.

The Department issued a consultation paper in July seeking views on the development of the indices, including some specific proposals for changes to the indices for 2002–03. Some 80 responses were received. A list of the respondents is available in the Library of the House and individual responses can be viewed in the Department's Library.

The responses reflect the difficulty of striking the right balance over the differing housing needs around the country. Responses from London argued that the revised indices would not give sufficient weight to the need to provide additional affordable housing in areas of high demand; those from northern regions raised concerns that the proposed changes do not adequately reflect the problems of area renewal and housing market failure.

The Indices of Deprivation 2000 (ID2000) were adopted last year as the basis for the future allocation of resources to deprived areas. The consultation paper set out a proposal for moving to base the targeting of housing capital resources on the most deprived areas as identified in ID2000. We have decided to proceed with this change. ID2000 is a more up to date, broader based measure and is a clear improvement on the largely, 1991 Census-based Index of Local Conditions on which the targeting is currently based. Work is either planned or being undertaken to address the acknowledged weaknesses in the housing element of ID2000 and the absence of a crime measure.

Most LAs are unaffected by moving to use ID2000 but a small number of authorities face sizeable shifts in index shares. We will, as indicated in the consultation paper, apply transitional arrangements to phase the impact of this change in over three years.

We have also decided to proceed with the three other proposed changes—the introduction of a low demand indicator into the LA index; the increase in the share of the LA index accounted for by the LA stock indicator; and the revised basis for the index used to allocate Disabled Facilities Grant resources. The transitional arrangements will also apply to these changes.

The housing capital resources for LAs for 2002–03 will be allocated through the Single Capital Pot (SCP). The performance-related component (5 per cent.) within this is much less than has applied to housing allocations in earlier years (50 per cent.). The consultation paper indicated that we did not consider it right for the better performing authorities to face the whole impact of this in one year. The consultation paper proposed that the transitional arrangements should be applied in a way which also covered the reduction in the size of the performance element. We have decided to address this in a different way by allocating a part, one third, of the formulaic housing element of the SCP on the basis of performance assessments. This has the advantage of much greater transparency and it also reflects the latest 912W performance assessments rather than being fixed on the 2000 assessments as would have been the case under the initial proposal.