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Housing Revenue Accounts Subsidy

Volume 164: debated on Thursday 21 December 1989

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To ask the Secretary of State for Wales when he will announce his initial housing revenue account subsidy determinations for 1990–91.

The housing revenue account subsidy determinations for 1990–91 have been made today. Every local housing authority in Wales has been sent a copy of the determinations together with provisional figures on which its subsidy entitlement will he based. The figures for each individual authority are subject to change in the light of new information supplied by the authority itself. Copies of the determinations and of the provisional figures for all authorities are being placed in the Library and the Vote Office.The new housing revenue account subsidy was introduced by the Local Government and Housing Act 1989. It replaces the existing main housing subsidy, the rent rebate element in housing benefit subsidy and the element in rate support grant related to authorities' own housing costs.Each authority's subsidy will he determined in accordance with the formulae prescribed in the determinations. For 1990–91, the formula assumes that there will be a national increase of 2 per cent. in gross rent income together with an allowance of 5 per cent. for inflation. However, unlike previous years, the determinations provide for different guideline rent increases in different authorities instead of a uniform increase for all authorities receiving subsidy. The rent guidelines for 1990–91 are set by reference to the value of each authority's housing stock.For 1990–91, the subsidy formula provides for a 3 per cent. real terms increase in the provision for management and maintenance expenditure. The allowance will be related to authorities' past expenditure.The subsidy formula also takes into account the full cost of loan charges and of rent rebates, subject to safeguards to prevent double subsidy and to provide an incentive for the efficient operation of the rent rebate scheme.