Housing Finance Act 1972

JurisdictionUK Non-devolved
Citation1972 c. 47


Housing Finance Act 1972

1972 CHAPTER 47

An Act to introduce a new system of housing subsidies for housing authorities, to provide for rent rebate and rent allowance schemes administered by housing authorities, to amend the law about rents of dwellings and in particular those subject to the Rent Act 1968 or provided by housing authorities, and to make other provision as to housing finance.

[27th July 1972]

Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—

I Housing Subsidies

Part I

Housing Subsidies

S-1 Introduction of Part I.

1 Introduction of Part I.

(1) The eight subsidies set out in subsection (2) below shall be payable to local authorities in the circumstances, and subject to the conditions, set out in this Part of this Act.

(2) The said eight subsidies are—

Subsidy to be credited to Housing Revenue Account

1. The residual subsidy.

Subsidies to be credited to Housing Revenue Account, and subject to limitation by reference to state of the account

2. The transition subsidy.

3. The rising costs subsidy.

4. The operational deficit subsidy.

Subsidy to be credited to general rate fund, and subject to limitation by reference to state of Housing Revenue Account

5. The rent rebate subsidy.

Subsidies to be credited to general rate fund

6. The rent allowance subsidy.

7. The town development subsidy.

8. The slum clearance subsidy.

(3) The subsidies set out in this subsection shall be payable to new town corporations in the circumstances, and subject to the conditions, set out in this Part of this Act.

The said subsidies are—

Subsidy to be credited to housing account

1. The residual subsidy.

Subsidies to be credited to housing account, and subject to limitation by reference to state of the account

2. The transition subsidy.

3. The rising costs subsidy.

Subsidy to be credited to general revenue account, and subject to limitation by reference to state of the housing account

4. The rent rebate subsidy.

(4) None of the eight subsidies shall be payable, whether to a local authority or to a new town corporation, for the year 1971-72, or for an earlier year, except that, in the circumstances, and subject to the conditions, set out in this Part of this Act, the slum clearance subsidy shall be payable to a local authority for the year 1971-72.

(5) The subsidies so receivable by local authorities or new town corporations shall be paid by the Secretary of State out of money provided by Parliament.

S-2 The residual subsidy.

2 The residual subsidy.

(1) This section has effect as to the circumstances in which residual subsidy is payable to a local authority.

(2) A local authority shall be entitled to residual subsidy for any year if the authority's subsidies for the year 1971-72 exceed the sum specified for the year in column 2 of the following Table, and the amount of the residual subsidy shall be equal to the excess.

Table

1. 2.
Year Sum to be deducted from the authority's subsidies for the year 1971-72
1972-73 The withdrawal factor.
1973-74 Twice the withdrawal factor.
1974-75 Two and a half times the withdrawal factor.
1975-76 Three times the withdrawal factor,

and so on, so that the amount of the residual subsidy for any subsequent year is the amount, if any, produced by deducting half the withdrawal factor from the amount of the residual subsidy for the immediately preceding year.

(3) In this section ‘the withdrawal factor’, in relation to a local authority, means the sum produced by multiplying 20 by the number of the local authority's Housing Revenue Account dwellings at the end of the year 1971-72, excluding any temporary dwellings made available under the Housing (Temporary Accommodation) Act 1944 .

(4) In this section ‘the authority's subsidies for the year 1971-72’ means payments made or to be made to the authority for the year 1971-72 in respect of property within their Housing Revenue Account, being payments made under any of the enactments described in Part I or Part II of Schedule 7 to this Act:

Provided that the said expression shall not include—

(a ) any payment, as being one made to a local authority, if, whether or not under any enactment described in Part III of Schedule 7 to this Act, the local authority on receipt of the payment is to make a payment of the same or a greater amount to any other person, or

(b ) any payment under section 11 of the Housing Subsidies Act 1967 (advances on account of expensive site subsidies) made on or after 1st December 1971 which is the first payment as respects the site or part of a site in question.

(5) For the purposes of this section, any question whether all or any part of any payment under any of the enactments described in Part I or Part II of Schedule 7 to this Act is to be regarded as made for the year 1971-72, or as made in respect of property within the authority's Housing Revenue Account, shall be determined by the Secretary of State.

(6) The provisions of this section shall apply to a new town corporation as they apply to a local authority.

S-3 The transition subsidy, and associated rate fund contribution.

3 The transition subsidy, and associated rate fund contribution.

(1) This section has effect as to the circumstances in which—

(a ) transition subsidy is payable to a local authority, and

(b ) the rate fund contribution associated with transition subsidy is to be made by the local authority.

(2) A local authority shall be entitled to transition subsidy if for the year 1972-73, or for any subsequent year, there is a shortfall in the local authority's rent increases.

(3) If there is such a shortfall for any such year (in this Act called, in relation to the shortfall, ‘the base year’) then for the base year and for each subsequent year—

(a ) transition subsidy shall be payable to the local authority of an amount equal to the percentage of the amount of the shortfall specified, in relation to the base year, in column 2 of the Table below, and

(b ) the local authority shall make an associated rate fund contribution of an amount equal to the percentage of that shortfall specified, in relation to that base year, in column 3 of the said Table,

and, accordingly, transition subsidy, and the associated rate fund contribution, for any year (later than 1972-73) may comprise elements by reference to shortfalls for two or more different base years.

Table

Base year for which there is a shortfall in the local authority's rent increases

Amount of transition subsidy by reference to shortfall for the base year to be the following percentage of the amount of the shortfall

Amount of associated rate fund contribution by reference to shortfall for the base year to be the following percentage of the amount of the shortfall

1. 2. 3.
1972-73 90 per cent. 10 per cent.
1973-74 85 per cent. 15 per cent.
1974-75 80 per cent. 20 per cent.
1975-76 to 1981-82 75 per cent. 25 per cent.

1982-83 and subsequent years.

75 per cent., or such other percentage as may be substituted for 75 per cent. for the year in question by an order under subsection (4) below.

The percentage which, with the relevant percentage in column 2, adds up to 100 per cent.

(4) The Secretary of State may from time to time by order, for such years after 1981-82 as may be specified in the order, in column 2 of the Table above for 75 per cent. substitute such other percentage, not being less than 6623 per cent., as may be specified in the order.

Section 16 of this Act shall apply to orders under this subsection.

(5) For the purposes of this section the amount of a local authority's ‘rent increases’ for any year means the amount by which the income from rents (exclusive of any amounts included in the rents in respect of rates or water rates or charges, and exclusive of any rent remitted by way of rebate) in respect of Housing Revenue Account dwellings for the year exceeds such income from rents for the immediately preceding year, and if there is no such excess the amount shall be taken as zero.

(6) For the purposes of this section there is a shortfall in a local authority's rent increases for any year if the amount of those increases is less than the local authority's standard amount for that year as defined below, and the amount of the shortfall shall be equal to the difference (or, if the amount of those increases is zero, of an amount equal to the local authority's standard amount for the year).

(7) For the purposes of this section a local authority's standard amount is—

(a ) for the year 1972-73, the withdrawal factor or the authority's subsidies for the year 1971-72 (as ascertained for the purposes of section 2 above) whichever is the less,

(b ) for the year 1973-74, the residual subsidy payable to the local authority for the year 1972-73, or the withdrawal factor, whichever is the less,

(c ) for the year 1974-75 and subsequent years, the amount of the residual subsidy payable to the local authority for the immediately preceding year, or half the withdrawal factor, whichever is the less.

(8) The preceding provisions of this section shall apply to a new town corporation as they apply to a local authority.

(9) The provisions of this section as to the circumstances in which any subsidy or rate fund contribution is to be paid or made, and as to the amount of the subsidy or contribution, have effect subject to Part III of Schedule 1, and to Schedule 2 to this Act.

S-4 The rising costs subsidy, and associated rate fund contribution.

4 The rising costs subsidy, and associated rate fund contribution.

(1) This section has effect as to the circumstances in which—

(a ) rising costs subsidy is payable to a local authority, and

(b ) the rate fund contribution associated with...

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