Thank you for your letter requesting follow-up information relating to the evidence of 27 April 2004.

  Please see our response to the issues in the order requested.

  1.  I agreed to provide a note on the percentage of capital receipts retained from House Sales in recent years which was retained by the Housing Executive (Question 135). Please see Question 1 attached.

  2.  I agreed to let the sub-committee have the Housing Executive's views on suggested changes to the house sales scheme put forward by the Chartered Institute of Housing (Question 137). Please see Question 2 attached.

  3.  You asked for a copy of the research referred to Question 138. A copy of the research report is attached.

  4.  I agreed to provide a copy of the private rented sector strategy. A copy of this is attached.

  5.  I indicated that in relation to the reasons for the increasing cost of Housing Benefit that I would check the detail of our response to the sub committee (Questions 155-160). Please see Question 5 attached.

QUESTION 1

  I agreed to provide a note on the percentage of capital receipts retained from House Sales in recent years which was retained by the Housing Executive (Question 135).

  The figures below reflect the total Capital Receipts for each of the last five years, the original Capital expenditure in each of the years and the additional funding provided to support additional Capital expenditure. The additional Capital expenditure was funded from additional Capital Receipts in year except for 1999-2000.

  The percentage of receipts retained over the five year period is 54%.

	Capital Receipts	Captial Expenditure (Original)	Additional Capital Expenditure	SPED related
1999-2000	£81.0 million	£88.7 million	£2.5 million	£2.5 million
2000-01	£107.6 million	£77.2 million	£14.5 million	£5.0 million
2001-02	£106.9 million	£84.9 million	£14.0 million	£10.5 million
2002-03	£160.0 million	£91.5 million	£32.1 million	£28.0 million
2003-04	£181.2 million	£100.5 million	£42.0 million	£42.0 million
TOTAL	£636.7 million	£442.8 million	£105.1 million	£88.0 million

  In total, £105 million additional funds were allocated to Capital Expenditure over the five years sourced from Capital Receipts (exception being 1999-2000). Of the £105 million some £88 million was used specifically to support the SPED scheme.

QUESTION 2

  I agreed to let the sub-committee have the Housing Executive's views on suggested changes to the house sales scheme put forward by the Chartered Institute of Housing (Question 137).

Ending the obligation on the NIHE to sell under the House Sales Scheme

  The right-to-buy makes positive contributes to the effective working of the housing market and meets the wishes of many tenants. Modification of the scheme to suit changing conditions is readily achievable within its statutory framework.

  Allow house purchase pollcies for NIHE and housing associations to be decided according to local strategies.

  Allow discounts to be determined locally to reflect housing stress and demand.

  Whilst there is merit in this idea, there are also many potential difficulties. Firstly, research has demonstrated that in the normal stock tenant households that purchase could have been expected to have remained as tenant households on a long-term basis. This means that denying the right to buy in high need areas such as west or north Belfast would not automatically translate into relet opportunities in that if a household cannot buy, then most probably would remain as a tenant, as opposed to move to a low need area where the right to buy may apply. Secondly, it is expected that the standard of proof of need required to deny the right to buy would potentially be open to challenge. There would also be major questions over the scale at which such an exclusion would apply: eg street level, sub-estate, estate, local housing area, district. Such area-based exclusions are always problematic in that there will be households living cheek-by-jowl with one another that will enjoy different rights based on a fairly arbitrary geographical boundary. Thirdly, an assessment of the nature of housing stress under the current Common Selection Scheme indicates that such an exclusion would have a disproportionate impact on a number of the categories under Section 75 of the Northern Ireland Act 1998. As a result, it is likely to be the subject of frequent challenge on grounds of equality. Accordingly, whilst there is some sympathy for the concept of a need-based exclusion, the practical difficulties of implementation are judged to outweigh the benefits.

  Allow Northern Ireland Housing Executive to retain all future capital receipts for housing purposes.

  This is not a matter for decision by Northern .lreland Housing Executive.

  Introduce Quota selling to preserve a certain percentage of homes or particular types of stock.

  Protect rural areas through exempting settlements of population of less than 3,000.

  Quotas in the opinion of the Northem Ireland Housing Executive are unworkable—the exclusion of specific property types to safeguard future supply is already part of the policy. A blanket exclusion of rural settlements could not be justified.

  Condition of sale that property offered back to former landlord.

  Such a proposal is within the terms of the current review by the Department of Social Development.

  Ensure financial viability of existing associations by allowing exemptions for a specified number of years.

  This is not a matter of decision by NIHE but we note it was taken into account in the current review.

  Introduce transferable discounts for tenants in areas of high demand wishing to buy, allowing social housing property to be retained.

  NIHE has evaluated such a policy on several occasions and continues to conclude it does not represent value for money.

  Cost floor rule to include repair and maintenance in addition to capital costs.

  The cost floor is intended to reflect works which could affect the market value of the property; do not relate to the normal repairs/maintenance; and as such are not a "normal" cost to the landlord. It is also a point-in-time cost—taking account of recurrent costs would be problematic.

  Extend the three year clawback rule.

  This is considered within the current review.

QUESTION 5

  I indicated that in relation to the reasons for the increasing cost of Housing Benefit that I would check the detail of our response to the sub-committee (Questions 155-160).

  The relevant facts are:

1  Total housing benefit expenditure increased from £311.8 million in 1999-2000 to £347 million in 2003-04. (The figures are not strictly comparable because of the cessation of Transitional Housing Benefit and introduction of Supporting People in April 2003).

2.  The number of NIHE housing benefit claimants fell from 96,426 in March 2000 to 75,322 in March 2004 (A decease of 22%).

3.  The number of private sector housing benefit claimants rose from 37,470 in March 2000 to 50,702 in March 2004 (An increase of 35%).

4.  Between March 1999 and March 2004 average NIHE housing benefit rent awards rose by 21%.

5.  Between March 1999 and March 2004 average private sector housing benefit rent awards rose by 18%.

6.  The main reason for the increase in housing benefit costs has been the growth in private renting and rent increases in both sectors.

14 June 2004