Deputy Prime Minister written question – answered on 30th March 2006.

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Photo of Austin Mitchell Austin Mitchell Labour, Great Grimsby

To ask the Deputy Prime Minister what plans he has to introduce an investment allowance for council housing as proposed by his Department in 2002.

Photo of Yvette Cooper Yvette Cooper Minister of State (Office of the Deputy Prime Minister) (Housing and Planning)

The Investment Allowance was one of a number of options for radical change consulted on in the Office's August 2002 consultation paper The Way Forward for Housing Capital Finance". The aim of the paper was to solicit views on simplifying and enhancing the capital financing regime.

Only 20 per cent. of local authorities expressed an interest in the allowance and then primarily as an avenue for securing additional funding rather than as a mechanism for delivering existing levels of funding.

Capital financing is provided through a range of different routes, including the Major Repairs Allowance, the Regional Housing Pot and Capital Receipts Initiative. The proposals for an Investment Allowance were included for discussion at that time simply to stimulate consideration of whether the delivery of existing resources could be simplified.

The Government decided, because of the low and qualified level of support to respond by introducing on 1 April 2004, new housing capital finance arrangements, the Prudential Borrowing regime, which allows local authorities to determine for themselves what they can afford to borrow above borrowing supported by central Government, supported from their own resources.

This has provided greater flexibility for local authority borrowing.

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