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Housing: Debt

Volume 472: debated on Monday 25 February 2008

To ask the Secretary of State for Communities and Local Government what estimate she has made of the historic housing debt remaining at the latest available date; what rate of interest was charged on that date; how much has been written off for (a) stock transfer and (b) large-scale voluntary transfers since 2000; and what the cost is of treating the remaining debt in the same fashion as that in transfers. (186840)

No distinction is drawn between ‘historic debt’ entered into to build councils’ housing stock and ‘new debt’ entered into to pay for decent homes. The total assumed housing debt in 2007-08 is £17.3 billion. The interest on debt is governed by each council’s Consolidated Rate of Interest (CRI). The CRI is different for each authority and depends upon the number, value and period of the various loans that authorities have negotiated individually. The average CRI for 2007-08 is 6.17 per cent.

If a local authority’s attributable housing debt is not cleared either in part or in entirety by receipts from a registered social landlord (RSL) through large-scale voluntary transfer arrangements, the debt that remains is transferred from the local-authority sector to central Government through a payment made to the Public Works Loan Board. Overhanging debt payments to the Public Works Loans Board under these debt transfer arrangements since 2000 are shown in the following table.

£ million

2000-01

276

2001-02

0

2002-03

548

2003-04

91

2004-05

591

2005-06

386

2006-07

544

Total

2,436

A payment of £17.3 billion would be required to be made to the PWLB to transfer the remaining housing debt to the Exchequer.