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Office of the Deputy Prime Minister

Answer

Sir Nicholas Winterton: To ask the Deputy Prime Minister (1) which local authorities in England are operating on a debt-free status; [148705] (2) what steps his Department is taking to protect the debt-free status of local authorities; [148706] (3) how much funding derived from capital receipts has been transferred by his Department in each of the last five years from debt-free local authorities to Metropolitan local authorities; [148707] (4) if he will end the transfer of funding derived from capital receipts from debt-free local authorities to Metropolitan local authorities. [148708] Mr. Raynsford: The following list shows the 134 local authorities that had debt-free status as of 30 September 2003: It was formerly our practice to take into account local authorities' capital receipts when issuing the credit approvals which allow them to borrow. That ended in April 2003. No estimates are available of the resources thereby redistributed from debt-free authorities to metropolitan authorities. The redistribution of resources remains a fundamental principle of the housing finance system. It is currently achieved by the requirement for authorities to set aside for debt redemption part of their housing capital receipts. Debt-free authorities are exempt and have thus enjoyed an advantage unavailable to others, but that anomaly will be corrected from 1 April this year, when set-aside is replaced by pooling, under which all authorities must pay part of their housing capital receipts to the Government. Transitional measures will protect debt-free authorities from the full impact of this new redistribution mechanism for three years. Thereafter they will be treated on the same basis as authorities with debt. The Office of the Deputy Prime Minister consider that the recently introduced the new prudential framework for local authority borrowing and authorities who need to borrow and can afford to do so should not be deterred by artificial incentives to remain free of debt. Local authorities who have reported that they have `debt free status' as at 30 September 2003 Ashford Avlesbury Vale Babergh Barking & Dagenham Basingstoke & Deane Bath & North East Somerset Bedford Bracknell Forest Breckland Bridgnorth Broadland Bromley Bromsgrove Broxbourne Cambridge Chelmsford Cherwell Chichester Chiltern Christchurch City of London Congleton Corby Cotswold Crawley Dacorum Dartford Daventry East Cambridgeshire East Devon East Dorset East Hampshire East Lindsey East Northamptonshire Eastleigh Eden Elmbridge Epping Forest Epsom & Ewell Erewash Exeter Forest Heath Fylde Guildford Hambleton Harlow Hart Havant Hertsmere Horsham Huntingdonshire Kennet Lichfield Macclesfield Maldon Malvern Hills Mendip Mid Bedfordshire Mid Sussex Mole Valley Newcastle-under-Lyme North Devon North Dorset North Wiltshire Penwith Redditch Reigate & Banstead Rother Runnymede Rushcliffe Rushmoor Ryedale Salisbury Sevenoaks Shrewsbury & Atcham South Bucks South Cambridgeshire South Hams South Lakeland South Northamptonshire South Oxfordshire South Shropshire South Somerset South Staffordshire Spelthorne St. Albans St. Edmundsbury Staffordshire Moorlands Stevenage Stratford-on-Avon Suffolk Coastal Surrey Heath Swale Tandridge Tewkesbury Three Rivers Tonbridge & Malling Tunbridge Wells Tynedale Uttlesford Vale Royal Vale of White Horse Watford Waverley Wellingborough Welwyn Hatfield West Berkshire UA West Devon West Dorset West Lindsey West Oxfordshire West Wiltshire Winchester Windsor & Maidenhead Woking Worthing Wychavon Wycombe Wyre Wyre Forest Dorset police authority Kent police authority Suffolk police authority Sussex police authority Wiltshire police authority Dartmoor national park authority Exmoor national park authority Lake District national park North York Moors national park authority Northumberland national park authority Peak national park authority The Broads Authority Yorkshire Dales national park authority North London waste authority An authority is `debt-free' only if: (a) at 31 March 2003, the authority's credit ceiling was nil or a negative amount and (b) at 30 September 2003, the authority had no money outstanding by way of external borrowing other than short-term borrowing or hard to redeem debt, as defined in Regulation 154 of the local authorities (Capital Finance) Regulations 1997.

Secondary information

Type

Written question

Reference

416 c1200-3W; 148705;148706;148707;148708

Session

2003-04

Subjects

Debts Housing Finance Local government Local government finance

Link

View this Written question on www.publications.parliament.uk