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Local Authorities (Expenditure)

Volume 76: debated on Wednesday 3 April 1985

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4.

asked the Secretary of State for the Environment what representations he has received in response to the reduction in the prescribed proportion of capital receipts which local authorities may spend.

My right hon. Friend and I have received a number of representations from right hon. and hon. Members and from local authorities. In response to those representations, my right hon. Friend has announced that local authorities may continue to use in full capital receipts from low-cost home ownership schemes instead of only 30 per cent. as proposed originally. He has also agreed to consider applications from local authorities which may not be able to meet their obligations under the Housing Defects Act 1984.

Does the Minister agree that it is sheer economic madness and incompetence of the highest order that, when we have a crisis in local government with education, social services and housing, local authorities are unable to spend their own money, thereby saving by doing repairs this year rather than in future when the bill for such repairs will be greater?

The hon. Gentleman will recall that the House has debated this matter fully on two occasions. The first was 27 February, when the hon. Member for Birmingham, Perry Barr (Mr. Rooker) was given responsibility for deploying the Opposition's case. The Government had a modest majority of 108. When, a fortnight later, on 13 March, responsibility for deploying the Opposition's case was transferred to the hon. Member for Copeland (Dr. Cunningham), the Government had a majority of 121.

I hope that the hon. Member for Copeland will speak for the Opposition more frequently.

What urgency is my hon. Friend according to the departmental review that he announced in the latter debate? Has he instructed his officials that a new system should be in place by this time next year?

I have told the House, as I have told my hon. Friend, that the present system of control by central Government of local authority capital expenditure is the reverse of perfect. Because we recognise that truth, and because this Government are striving towards perfection, we are giving more urgency to the review to which my hon. Friend referred.

The House is seeing more and more that the Minister does not want seriously to answer important questions put to him by both sides of the House. May I put to the Minister one question relating to the concession made by the Secretary of State in our last debate in respect of the Housing Defects Act? How many applications have been made by local authorities under that concession and, more importantly, how much money does the Secretary of State have available to make a reality of that concession?

No applications have yet been received from local authorities in response to the announcement by my right hon. Friend in the debate last month. On 27 March the Department sent a circular to local authorities, a copy of which, if it is not already in the Library, will be placed there by me. The resources to be made available will depend upon the strength of the case that local authorities are able to make. In the debate my right hon. Friend made it clear that he would consider sympathetically applications by local authorities.

Since mobility of labour is one of the key factors in reducing unemployment, and since one consequence of the reduction in the proportion of capital expenditure that local authorities can incur will be to restrict the rate at which public sector housing is built, does my hon. Friend agree that the impelementation of this policy makes it even more urgent that we should take steps to abolish the Rent Acts so that the private housing market can be reactivated?

I hope that it will be possible before too long to make a statement about the Government's policy in this matter.