Clause 40 - Loans by Public Works loan commissioners
Local Government Bill
10:15 am
Mr Desmond Swayne (New Forest West, Conservative)
The Government are seeking not only to encourage stock transfer but to encourage housing authorities to maintain their housing stock. What concerns me, particularly in relation to the lack of transparency referred to by my hon. Friend, are the perverse incentives that may arise from those payments and to which the Select Committee drew our attention.
I already know of the difficulty caused by the failure to maintain the standard of the stock. My local authority is currently prevented from spending its resources in the acquisition of additional affordable housing, which is desperately needed, by the requirement imposed by the Minister that it use those resources to maintain the existing stock. It is quite right that the existing stock should remain at a high standard. My authority is a beacon authority that has maintained its stock very well for many years.
The policy, entirely appropriate as it may be to an authority that has not maintained its stock properly so that much of it has become uninhabitable, affects us disproportionately hard and prevents us from meeting local need. The Select Committee drew attention to what it regards as a perverse incentive in the arrangements for the maintenance of stock. I cite paragraph 31 of the Select Committee report, and the evidence given by the Chartered Institute of Public Finance and Accountancy:
''The 'playing field' is not level and taxpayers' money is being used in a discriminatory fashion. There is also a measure of 'perverse incentive' in the proposal as it benefits authorities that have not
maintained their housing stock in the past to a standard where the market value exceeds the historic debt.''
I ask the Minister to provide some reassurance as to why the criticisms levelled by CIPFA in its evidence to the Select Committee hold no force.