07 February 2003
Under transitional arrangements announced by local government minister Nick Raynsford, 34 councils that have paid off their debts will receive a guaranteed share of money from the new pool for three years.
But the amount received will fall from 75% of receipts raised by each council in the first year to 50% in the second, and 25% in the third. Each authority must also promise to spend the money on new affordable housing.
The transitional scheme, announced on January 30 during the committee stage of the Local Government Bill, will soften the blow for debt-free councils. They were angry that they may lose all their receipts once pooling is introduced in April 2004.
Louise Goodfellow, finance research officer at Waverley Council and a spokeswoman for the Capital Receipts Group, said it was 'better than nothing', but added: 'They are asking us to agree to a pooling arrangement but we don't know who is going to benefit.' The Office of the Deputy Prime Minister has been criticised by the Local Government Association for failing to provide enough detail about how pooling will work.
PFfeb2003
