The housing grant distribution system creates differences in the treatment of otherwise similar authorities, according to a new discussion paper. The government has paired authorities as having similar needs and as performing to a similar standard - but their Housing Annual Capital Guideline (ACG) are different. For example, Westminster fares better than Brent - even though both have similar needs and are assessed as being 'above average' performers. Similarly, Tower Hamlets fares better than Lewisham; Camden better than Islington; Sutton better than Richmond-upon-Thames; and Thurrock better than Kingston-upon-Thames.
The discussion paper highlights a number of the issues raised by the operation of one of the existing plan-based allocation systems - the system used to distribute the ACG - which would need to be addressed if the government were to introduce a plan-based revenue grant distribution system.
This is the second of the discussion papers, written by Rita Hale, and published by Rita Hale & Associates Ltd and CIPFA which focus on the issues raised by the local government finance review. The paper:
- identifies the effect of the Government Offices' judgement on the distribution of Housing ACG to each of the 354 housing authorities in England
- highlights some of the anomalies in the Housing ACG distribution for both years
- identifies some of the issues raised by the analysis of the Housing ACG distribution arrangements which would need to be addressed if the government were to introduce a plan-based revenue grant distribution system
A number of questions about the fairness of plan-based distribution systems are raised, which would need to be addressed if the government were to introduce a plan-based revenue grant distribution system- eg:
- fairness in the way in which local authorities are assessed, or graded
- fairness in the distribution of resources from one part of the country to another
- fairness in the treatment of otherwise comparable local authorities
There is also a potential trade-off between fairness to different parts of the country and also between individual local authorities. For example, would the Government need to ensure that over time each part of the country received its 'fair' - needs-based - share of the total government grant? Alternatively, would it be reasonable for the Government to allow the pattern of the grant distribution to change in order to fully reflect their assessment of individual local authorities' plans, even if this were to mean over time that grant would drift away from 'high need' to 'lower need' areas?
Copies of the discussion paper are available from CIPFA's Publications Unit, 3 Robert Street, London, WC2N 6BH, price£25 per copy, including p&p.
Effect of Judgement on Distribution of Housing ACG for 2000-01
Local AuthorityGovernment Office Assessment of PerformanceShare of England Total Local Authority Housing Need %Housing
Based on Needs Score
£m.Effect of Judgement on ACG Distribution
Tower HamletsAbove average1.54734.3331.063.27
Richmond upon ThamesAverage0.3005.336.03-0.70
Kingston upon ThamesAverage0.2354.234.73-0.50
(1) Actual Housing ACG for 2000-01 excludes Coalfields Adjustment.
(2) A (-) in the column headed 'Effect of Judgement' means that the authority loses Housing ACG as a result of the way in which the Government Offices exercise their judgement