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Written question asked by Austin Mitchell (Labour) on Tuesday, 13 November 2007, in the House of Commons. It was due for an answer on Thursday, 15 November 2007. It was answered by Iain Wright (Labour) on Tuesday, 11 December 2007 on behalf of the Department for Communities and Local Government.

Council Housing: Debts

Question
To ask the Secretary of State for Communities and Local Government what the housing debt was of each local authority in each year since 1997; how much principal debt was paid off in each year by each authority and how this was resourced or otherwise financed, categorised by (a) right to buy receipts, (b) transfer receipts, (c) other capital receipts, (d) Treasury debt write off and (e) support for overhanging debt; what the cost was of servicing the debt, including the interest rate; and what were the means whereby this was funded.
Answer

I have arranged for a table showing: the level of housing debt, the amount each authority with debt set-aside for the repayment of that housing debt, the cost of servicing the debt (the 'Item 8 debit' in the Housing Revenue Account) and the interest rate that the housing debt attracted (the 'Consolidated rate of Interest' or CRI) for each financial year from 1997-98 to 2005-06 (the last year for which audited data is available) to be deposited in the Library.Until 1 April 2004, local authorities were required to 'set-aside' a proportion of their capital receipts for the repayment of housing debt, although whether or not the amount set-aside was actually used to repay housing debt was a treasury management decision for the authority. It was assumed for the purposes of HRA subsidy that housing debt was repaid. The absence of set-aside data in the table after 2003-04 reflects the introduction of the housing capital receipts 'pooling' regime replacing set-aside and there being no requirement to collect 'set-aside' data from that year. Set-aside data used in the HRA subsidy calculation was audited and so collected in the year following the year it was actually set-aside. It was considered that building set-aside into the HRA subsidy model for 2004-05 was not appropriate as the pooling of capital receipts would also be operating for this year.The data available to Communities and Local Government does not allow the break-down of set-aside into its constitute parts, which will include right to buy sales, transfer receipts and receipts from other disposals such as the sale of housing land.Treasury does not 'write off' housing debt. Any overhanging housing debt arising from a housing stock transfer is cleared by a payment from Communities and Local Government. These payments are made from an Annually Managed Expenditure Budget held by the Department. Under this arrangement debt moves from one part of the public sector to another, and in consequence there is no net increase in the public sector borrowing requirement. The Exchequer meets future interest payments generated by such transactions.The following table shows the value of transfer receipts and the value of overhanging debt payments by year for England since 1997.

£ million
Transfer receipts Overhanging debt payments
1997-98 259.67 0
1998-99 483.94 0
1999-2000 658.67 21.00
2000-01 830.20 255.20
2001-02 377.73 0
2002-03 545.87 548.20
2003-04 140.83 91.00
2004-05 200.40 591.48
2005-06 128.53 385.87
2006-07 91.98 533.49
Current financial year to date 156.86 252.00

Secondary information

Type
Written question
Reference
165562; 469 c538-9W;469 c540-1W
Session
2007-08
Related items
Deposited Paper DEP2007-0310
Tuesday, 11 December 2007
Deposited papers
House of Commons
Deposited Paper DEP2007-0130
Thursday, 22 November 2007
Deposited papers
House of Lords
Subjects
Council housing Finance
Link
View this Written question on www.publications.parliament.uk