Hugh Bayley – 2014 Parliamentary Question to the Department for Communities and Local Government

The below Parliamentary question was asked by Hugh Bayley on 2014-06-27.

To ask the Secretary of State for Communities and Local Government, how much funding his Department allocated to City of York Council for (a) local authority supported capital expenditure in housing stock and (b) major repairs allowance in each year since 2009-10.

Brandon Lewis

The information requested is as follows:

The local authority received £1 million in Supported Capital Expenditure (Revenue) in both 2009-10 and 2010-11.

Following our reform and decentralisation of the Housing Revenue Account in April 2012, the system has fundamentally changed and no longer operates in that manner outlined in the Hon Member’s question. Councils now manage their housing stock without annual payments to or from central government. They now keep their rental income and use it to fund their housing stock (called ‘self-financing’).

In 2012, the move to self-financing included a one-off settlement payment to, or from, each council, giving each a level of debt it can support, based on a valuation of its council housing stock. Where the valuation was lower than the amount of housing debt supported through the Housing Revenue Account subsidy system, the government paid off the difference. Where the valuation was higher than the debt supported by the Housing Revenue Account subsidy, the council paid the difference to the government.

These payments were based on a valuation of each council’s stock, using a 30-year discounted cash flow model of income and expenditure. The costs in the model assumed that councils will need to spend on average 15 per cent more on managing, maintaining and repairing their stock than was assumed under the subsidy system. The self-financing settlement took into account an assessment of local authorities’ needs, including major repairs.

These reforms have given councils the resources, incentives and flexibility they need to manage their own housing stock for the long term and to improve quality and efficiency, and they have also provided a clearer relationship between the rent a landlord collects and the services they provide.