Oral question asked in the House of Commons, by David Curry (Conservative). It was answered on Tuesday, 18 November 2008 on behalf of the Department for Communities and Local Government.

Local Authority Housing Revenue Account

Question: Is the Minister aware that social housing depends hugely on the health of the private sector? A huge part of social housing is a by-product of housing that is in the marketplace. Given the recession that we are entering, is he aware that the Housing Corporation is permitted to finance only up to 40 per cent. of social housing developments, and that the rest must come from sale-for-market properties or from borrowing? Given the dependence of social housing on the private sector, would it not be intelligent to raise the 40 per cent. limit so that the Housing Corporation could make a proportionately bigger contribution to social housing? Would that not be a good recommendation for the Treasury's pre-Budget statement?

Answer: I thank the right hon. Gentleman for his question. He is a former housing Minister, and I know that he is well versed in these arguments. His point is well made, and my response to his question is twofold. First, we are aware of the need for a vibrant construction industry. The £1 billion package that my right hon. Friend the Secretary of State announced in September is part of a package to help the construction industry prepare for the upturn and manage the current difficulties. The right hon. Gentleman mentioned the grant regime. The Housing Corporation—as of 1 December, the Homes and Communities Agency—is looking at that issue, and Sir Bob Kerslake, the chief executive designate, is keen to have increased flexibility to ensure that delivery can happen on the ground so that we can help the industry to provide more houses, particularly social and affordable housing.

Secondary information