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EXTRA CASH BOOST FOR COUNCIL HOUSING

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Local authorities in England are to get further cash increases to...
Local authorities in England are to get further cash increases to

improve the management and maintenance of council homes.

At national level councils will receive 6 per cent real increases in

both management and maintenance allowances for 2004-05 and 2005-06.

Together with changes to take account of rent restructuring, this is

equivalent to an average cash increase of£268 per dwelling by the

second year.

This is also on top of a 3.4 per cent real increase nationally in

management allowances and a 1 per cent real increase in maintenance

allowances in 2003-04, announced on 14 November. In total, allowances

will rise by the equivalent of over£325 per dwelling during the

Spending Review period.

Housing minister Jeff Rooker said not all authorities will get the

same amount, but the government's three-year commitment would enable

authorities to plan ahead on a sensible basis.

'These significant increases in resources will allow councils to do

even more to tackle urgent repairs, while improving services to

tenants, and as well the successive increases will boost local

authority efforts to tackle anti-social behaviour.

'We will be reviewing the allocation of management and maintenance

allowances to ensure this new money is shared out as fairly as

possible between authorities, while avoiding unnecessary complexity.'

He said the review would cover, among other issues, the impact that

stock type, sparsity, social factors, and regional cost variations

have on different authorities' need to spend on managing and

maintaining their housing stock.

ODPM will consult councils next year on proposals for allocating

resources for 2004- 05 in the light of the review's findings.

Notes

1. The increases in management and maintenance allowances for

2004-2005 and 2005-2006 are reflected in the Pre Budget Report of 27

November 2002.

2. Management and maintenance (M&M) allowances determine the amount

to be provided to local authorities for spending on managing and

maintaining council housing. The allowances form part of the

calculation of Housing Revenue Account (HRA) subsidy. HRA subsidy

takes account of an authority's relative rent income, together with

expenditure on M&M, the Major Repairs Allowance (MRA), rent rebates

and debt charges. Subsidy is payable where calculation shows a

deficit between the assumed income and expenditure.

3. The ODPM published draft 'Housing

Revenue Account Subsidy and Item 8 Determinations for 2003-2004' for

consultation on 14 November 2002 (available here). These documents contained details

of the proposed management and maintenance allowance increases for

2003-2004.

4. The proposed increases in management and maintenance allowances

over the Spending Review period will amount to a further£127 per

dwelling in 2004-2005, and£141 more per dwelling in 2005-2006. The

increases take account of the impact of rent restructuring on

subsidy.

5. These are national average figures. The amounts for individual

authorities will depend on their circumstances. This is because

management and maintenance allowances are calculated for individual

authorities on the basis of the characteristics of the housing owned

by them, together with other factors which influence costs.

6. The office has recently commissioned the Building Research

Establishment to review the method of allocating M&M allowances. The

research will review the impact of stock sparsity, social factors,

regional cost variations, and other relevant findings and their

impact on unit management and maintenance costs. Any proposals for

change from 2004-2005 will be subject to consultation.

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