Local authorities retaining both the ownership and the management of their housing stock have to deliver their decent homes programme using the resources available through the housing revenue account and supported capital expenditure.
Additional investment needed to make all social housing decent is provided by
Setting up a high-performance arm’s length management organisation (ALMO) which can then access additional supported capital expenditure;
Entering into a private finance initiative (PFI) contract; or
Transferring stock to registered social landlords.
Local authority landlords
Supported capital expenditure is allocated to local authorities via the regional assemblies and paid via the housing revenue account (HRA). The London Mayor determines the allocations of supported capital expenditure for the London boroughs. The following table shows the allocation of supported capital expenditure to London boroughs for 2008-09. The revenue support for the interest payments on this borrowing has been built into the subsidy determination for 2008-09.
Name of local authority 2008-09 (Thousand) Barnet 2,208 Islington 9,112 Kensington and Chelsea 5,100 City of London 40 Croydon 3,256 Ealing 5,900 Enfield 4,797 Greenwich 6,742 Hackney 17,700 Hammersmith and Fulham 6,072 Haringey 6,233 Harrow 2,725 Havering 2,114 Kingston upon Thames 1,439 Lambeth 8,757 Lewisham 2,697 Merton 2,090 Newham 16,410 Sutton 1,244 Southwark 12,526 Tower Hamlets 15,500 Waltham Forest 6,680 Camden 10,643 Total 149,985
ALMOs
The Minister for Housing determines the allocations of the supported capital expenditure to ALMOs which is paid as revenue support for the interest payments on this borrowing and this has been built into the HRA subsidy determination for 2008-09. The London boroughs which are receiving supported capital expenditure for ALMO programmes to deliver decent homes are listed in the following table:
Authority 2007-08 2008-09 2009-10 2010-11 Barnet 18,931,000 15,198,000 10,608,000 1— Ealing 41,000,000 28,000,000 37,000,000 17,773,000 Hammersmith and Fulham 47,122,000 50,892,000 43,906,000 1— Haringey 6,990,000 23,000,000 30,000,000 1— Hillingdon 11,300,000 — — — Newham 46,113,000 65,113,000 49,113,000 53,113,000 Islington 33,761,000 36,300,000 38,360,000 1— Waltham Forest 22,000,000 22,349,750 16,349,750 16,349,750 1 To be confirmed
The London boroughs of Enfield, Hackney, Havering, Lambeth, Lewisham, Sutton and Tower Hamlets have yet to agree their funding with the Department but we expect to do so by 31 March 2008.
Housing PFI Programme—decent homes schemes
The London boroughs which are receiving funding for PFI schemes to deliver decent homes are listed in the following table:
London borough PFI scheme PFI credits (£ million) Signature date (operational date) Full year subsidy (£) Contract length (years) Camden Chalcots Estate 65.00 May 2006 6,824,382 15 Islington Islington 1 74.69 March 2003 6,140,376 30 Islington Islington 2 165.00 September 2006 16,327,104 16 Lewisham Brockley 115.91 June 2007 10,353,146 20 Newham Canning Town 31.89 June 2005 2,391,331 30
Schemes on the Housing PFI Programme are allocated PFI credits which act as a promise of government funding and indicate the level of capital investment which will attract government support. Support for Decent Homes Housing PFI schemes is paid to local authorities via the housing revenue account subsidy system on a fixed annual basis over the life of the PFI contract. Subsidy is payable when schemes are operational. It is calculated on the overall capital cost of a scheme and does not reflect capital expenditure in individual years.
In addition, the Department has made a commitment to release subsidy for two further Decent Homes Housing PFI schemes in London, which are currently in procurement, provided they meet all relevant terms and conditions. These schemes are:
London borough of Lambeth—Myatts Field North—contract signature expected April 2009; and
London borough of Newham—Forest Gate—contract signature expected March 2008.
The levels of PFI credits and subsidy are not confirmed until schemes reach contract signature.
Transfer to registered social landlords (RSLs)
Gap funding arrangements with RSLs enable local authorities to transfer their housing stock when the level of private finance required to deliver investment for decent homes improvements cannot be supported by the rental income from the homes. The numbers of arrangements in place in London are:
London borough Number of transfer schemes Total gap funding value (£ million) Grant expected to be paid in 2007-08 (£ million) Islington 1 32.340 10 Tower Hamlets 9 39.864 11 Lewisham 1 42.2 0
All gap funding payment arrangements are the subject of annual grant letters issued to each RSL.