§ Mr. FlookTo ask the Secretary of State for Work and Pensions when district councils will be informed of the element of the rate support grant for handling Housing Benefit. [142792]
§ Mr. PondResponsibility for payment of the Housing Benefit subsidy element, previously distributed by the Office of the Deputy Prime Minister, The National Assembly for Wales and the Scottish Executive through the Revenue Support Grant, has been transferred to the Department for Work and Pensions. This element represented the 5.5 per cent. residual subsidy paid to authorities for Rent Allowance, Council Tax Benefit and non Housing Revenue Account Rent Rebates, which supplemented the 95 per cent. direct subsidy we already pay.
Our agreement that all funding relating to Rent Allowance, Rent Rebate and Council Tax Benefit would transfer to the Department for Work and Pensions from April 2004 provided the opportunity to review all subsidy rates and rules, in order to produce a more transparent and simplified system.
From April 2004 we will pay all subsidy as a direct grant, payable at 100 per cent. for correct claims. Authorities will not therefore receive any indirect subsidy through the Revenue Support Grant relating to Housing Benefit. Although the overall levels of funding have not changed, we recognise that individual authorities may gain or lose under the new regime; a transitional protection scheme has been put in place, which ensures that no authority will lose more than 1 per cent. in the first year over that which they would have received had the rates not changed.
A subsidy circular (S9/2003) was issued to all authorities on Monday 1 December to explain the funding changes in greater detail. A copy has been placed in the Library.