Further supplementary memorandum from CLG (HCC 02B)

 

Question 1

The Government's response to the Committee's original report on housing & the credit crunch referred to "the £1bn package announced in the 2009 Budget". That same figure is used in the press release issued from CLG at the time of the Budget and in the undated letter from Margaret Beckett to the Chair.

 

We can identify an extra £600m for housing from the Budget. The figures given in the letter add up to £705m. Please can you clarify the difference between these figures and the figure of £1bn used elsewhere?

 

Answer

 

At Budget 2009, a number of housing initiatives were announced totalling around £1 billion. These included:

 

· £400 million for Kickstart;

· £100 million for local authority build (split 50/50 between capital grants and prudential borrowing);

· £80 million for an extension to Mortgage Rescue; and

· £20 million for a preventing repossessions fund

· £135 million to maintain the Standard Interest Rate to calculate Support for Mortgage Interest (SMI);

· £90 million to support an extension of the stamp duty holiday for all houses costing up to £175,000 until 31 December 2009; and

· £110 million for the effects of Barnett consequentials (not separately identified in the Budget Report)

 

In addition the Budget Report identified £105 million for social housing energy efficiency and community energy schemes.

 

The following table sets out these figures:

 

£m

Programme

Budget Report Ref.

400

Kickstart Programme

Para 5.76, pp 104-5

100

Local Authority New Build1

Para 5.76, pp 104-5

80

Extension to Mortgage Rescue Scheme

Para 5.69, pp 103-04

20

LA preventing repossessions fund

Para 5.69, pp 103-04

135

To maintain the Standard Interest Rate used to calculate Support for Mortgage Interest (SMI)

Para 5.69, pp 103-04

90

Stamp Duty Holiday Extension

Para 5.74, pp 104

110

Barnett consequentials

Not separately identified in the Budget Report

945

HOUSING PACKAGE TOTAL

84

Social housing energy saving programme (cavity wall insulation)2

Para 7.17, pg 140

21

Community Energy Schemes3

Para 7.17, pg 140

105

HOUSING ENVIRONMENT PACKAGE TOTAL

Notes

1

Capital grants and borrowing cover (Local Authority Self Financed Expenditure) split evenly

2

£100 million in Budget Report is UK figure not England as stated in the Budget Report

3

£25 million in Budget Report is UK figure not England as stated in the Budget Report

 

Question 2

 

The Budget announced a £600 million fund, and section 5.76 explains how £500 of it is going to be spent. We need to know what the remaining £100 million will be spent on.

 

Answer

 

The £600m in the Budget relates to the £400m Kickstart and £100m LA build programmes in England and £87m for the effects of the Barnett consequentials (for England) with totals rounded.