15 December 2000
Allocations for 2001/02 made under the Housing Investment Programme (HIP), announced on December 7, were significantly lower than last year because much of the money has been switched to a new Major Repairs Allowance (MRA).
MRA allocations, which were to be announced after Public Finance went to press, are distributed on a different basis to HIP allocations.
But the government insisted that most authorities should be better off under the dual system during what is a transitional year.
HIP allocations are due to disappear in 2002/03, once most local authority capital resources are allocated under a single pot, but the new MRA will remain in place.
According to the Department of the Environment, Transport and the Regions, councils that have not transferred most or all of their housing to a registered social landlord will receive a combined HIP/MRA allocation for 2001/02 which will be at least 10% more than their 2000/01 HIP allocation.
Total HIP allocations for 2001/2 are worth £988m, compared with £2,090m last year.
With MRA allocations totalling £1.6bn, housing minister Nick Raynsford told the House of Commons that total capital spending on housing in 2001/02 would be in the region of £2.6bn an increase of about 25%.
Paul Lautman, head of housing at the Local Government Association, welcomed the creation of the MRA as symbolising the government's determination to help authorities clear the £19bn backlog in council house repairs by 2010.
But he doubted whether councils would be able to reduce that backlog to £13bn by 2004, as ministers had suggested. `This target assumes a very large stock transfer programme,' Lautman said.
PFdec2000
