Communities Committee, 09 Mar 2005

Meeting date: Wednesday, March 9, 2005

Official Report 254KB pdf

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Subordinate Legislation

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Housing Support Grant (Scotland) Order 2005 (draft)

I welcome Johann Lamont, the Deputy Minister for Communities, who has joined us for our consideration of the draft Housing Support Grant (Scotland) Order 2005. Accompanying her is John Ritchie, who is from the social housing strategy and finance division of the Scottish Executive.

As members are probably aware, the draft order is an affirmative instrument, so the deputy minister is required, under rule 10.6.2 of the standing orders of the Scottish Parliament, to propose, by motion, that the draft order be approved.

Committee members have received copies of the draft order and the accompanying documentation. I invite the minister to speak briefly to the draft order, but not to move the motion at this point.

The draft Housing Support Grant (Scotland) Order 2005 sets out the amount of housing support grant that is payable to local authorities in 2005-06. As has been the case for a number of years, only the two councils with the highest debt per house, Shetland Islands Council and Comhairle nan Eilean Siar, will qualify for grant. The total grant payable to those two councils in 2004-05 is around £4.9 million. The housing support grant remains a substantial proportion of total housing revenue account income for those councils. Without that subsidy, rent levels in those areas would have to increase substantially.

As it appears that members of the committee have no questions to ask, I ask you to move motion S2M-2404.

Motion moved,

That the Communities Committee recommends that the draft Housing Support Grant (Scotland) Order 2005 be approved.—[Johann Lamont.]

Motion agreed to.

I thank the minister for her presentation and remind her that she is not yet released, as we will be asking her questions with regard to planning guidance on opencast coal mining later.

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Housing Revenue Account General Fund Contribution Limits (Scotland) Order 2005 (SSI 2005/62)

Members have been provided with a copy of the Housing Revenue Account General Fund Contribution Limits (Scotland) Order 2005 (SSI 2005/62) and the accompanying documentation. Do members have any comments to make?

I am not challenging the order; I just want to make an observation. If members agree with my observation, perhaps that might influence our future activity. I am not sure that it is reasonable and fair that the whole of the cost of past transactions in councils' housing activity, especially the sale of a lot of houses with a heavy discount, should fall on the existing tenants. Is it right that the community at large—whether through council tax or in some other way—should pick up that deficit? In some councils, the cumulative loss that has occurred as a result of the sales is quite considerable and has an impact on rents.

I appreciate your concerns on that matter, but I am not sure that they relate to the order that is before us. However, members will be aware that the Scottish Executive gave a commitment to this committee to review the right-to-buy policy, and it will produce a report on the issue when it concludes that review. Perhaps the issues that Mr Gorrie raises could be considered by the committee when we consider the Executive's report on the matter.

I have no wish to speak against the order. However, I note that paragraph 2 of our briefing paper states:

"The Executive's intention is that the instrument should ensure that there are no additional pressures on council tax payers as a result of a cross subsidy from councils' general funds to the HRA."

I support Donald Gorrie in the line that he takes. Perhaps we can ask the Scottish Executive to gather information on how much subsidy goes from the rent payer to the general account—that happens and has done so for many years. That is not fair to rent payers because they are paying their council tax and then paying a subsidy to the general account for a number of reasons—whether for maintenance of open spaces or whatever.

If there is a consensus that the committee is concerned about this area, based on the substance of the points raised by Mr Gorrie and Mrs Craigie, there is no reason why we should not write to the minister to ask for his comments. Any response would be furnished to committee members for their further consideration.

Is the committee content with the order?

Members indicated agreement.

Therefore, the committee will not make any recommendation on the order in its report to the Parliament. I ask members to agree that we report to the Parliament on our decision on the two orders that we have considered today. Are we agreed?

Members indicated agreement.