Distributed to
All registered social landlords, (excluding co- ownership societies) local authorities.

Summary
Announces the new Determinations required under sections 18, 20, 21, 24, 25, 27 and 28 of the housing Act 1996. Also describes each Determination and its principles with a short summary. A booklet of eight determinations accompanies this circular.

1 Introduction

1.1 The Housing Act 1996 introduces a number of changes in the way in which registered social landlords (RSLs) are funded. As a result of these changes, new statutory Determinations are necessary which set out some of the principles governing the activity of RSLs and the Housing Corporation's role as investor of capital and revenue grants. They set out the principles in accordance with which the Corporation will formulate and operate the arrangements in respect of applying for capital and revenue grants with effect from 1 April 1997 and reinvesting the proceeds of disposal.

1.2 Before the Housing Corporation can exercise its powers to invest capital or revenue grants, it is required by the 1996 Act to determine the principles on which it will base the detailed procedural arrangements and criteria. Some of the general Determinations require the approval of the Secretary of State, others do not. The Corporation is also required to consult such bodies representative of RSLs as it considers appropriate. The Corporation has complied with these requirements. There is also a statutory obligation for the Corporation to publish these Determinations.

1.3 These Determinations do not constitute full guidance and procedures. New procedure guides and forms, based upon the principles set out in the Determinations have been, or will shortly be, published by the Corporation for each of the relevant Determinations, effective from 1 April 1997. These will be indicated below.

1.4 Brief accounts of the Determinations are given below:

2 The Social Housing Grant (Capital) General Determination 1997

2.1 Section 18 of the Housing Act 1996 replaces Housing Association Grant (HAG) with Social Housing Grant (SHG) for all capital projects given grant confirmation from 1 April 1997. This Determination sets out the principles for calculation and payment of grant. They broadly follow those which governed payments of HAG. One change is that leaseback finance is now expressly permitted.

2.2 Section 18 of the Act enables the Corporation to pay grants for capital purposes and management for revenue purposes. We attach two Determinations to separate the policy on each, and a third one for policy on recovering of Capital SHG under section 27 and 28 of the Act.

2.3 The working guide for this Determination is the Capital Funding Procedure Guide announced in circular F2 - 14/97.

3 The Social Housing Grant (Recovery of Capital Grant) General Determination 1997

3.1 Section 27 of the Housing Act 1996 enables the Housing Corporation to either collect recoverable SHG or to direct an RSL to apply it to a particular purpose. This Determination sets out the events which make SHG recoverable and the calculation of the amount to be collected or applied to a particular purpose. In general terms, it continues the principles introduced in the Recovery of Housing Association Grant General Determination 1996 issued with Corporation circular F2- 48/96. The working procedures are described in paragraph 4.2 below.

4 Recovery of Housing Association Grant (Extension of powers) General Determination 1997

4.1 Section 52 of the Housing Act 1988 is amended by Section 28(3) of the Housing Act 1996, enabling the Corporation to direct when and how RSLs may recycle HAG within their own finances instead of repaying it to the Corporation. This determination puts into effect this change, amending the Recovery of Housing Association Grant General Determination 1996.

4.2 A circular and a guide to recovery and recycling of capital grant will be issued in May. Three new forms replacing STG, RG, ROD and an annual return on recycling capital grant will follow soon after.

5 Social Housing Grant (Management Grants) General Determination 1997

5.1 Sections 18 and 27 of the Housing Act 1996 enable the Corporation to pay management grants for revenue purposes. This Determination sets out the principles for paying, calculating and recovering such grants. Supported Housing Management Grant (SHMG) is the new name for Special Needs Management Allowances (SNMA), transitional SNMA and Move-on allowances. Also, this Determination enables the Corporation to continue to pay and recover Supplementary Management Grant (SMG) for small RSL management supplements currently contained in the Special needs Procedure Guide.

5.2 A Supported Housing Procedure Guide will be published later this year updating the procedures for SHMG.

6 The Statutory Purchase Grant General Determination 1997

6.1 This Determination introduces a new grant under Section 20 of the Housing Act 1996. Section 16 gives certain tenants the right to acquire the dwelling in which they live, and a discount on the purchase price. If they exercise that right, their discount is calculated according to regulations prescribed by the Secretary of State. Statutory Purchase Grant (SPG) reimburses the RSL for the discount given to its tenant. The Corporation is required to determine only the manner of applying for SPG, not the method of calculation.

6.2 The Corporation will issue in May or June, a circular and guidance on SPG and Right To Acquire. Guidance on the Disposal Proceeds Fund (see below) will also be included.

7 The Voluntary Purchase Grant General Determination 1997

7.1 Section 21 of the Housing Act 1996 enables the Corporation to pay grant to an RSL in respect of discount paid to a tenant who bought the dwelling in which he/she lives. VPG is voluntary, cash limited and tenants have no statutory right to acquire their dwelling.

7.2 F2 - 06/96, issued in March 1996, provided guidance on Voluntary Purchase Grant.

8 The Disposal Proceeds Fund General Determination 1997

8.1. Sections 24 and 25 of the Housing Act 1996 obliges an RSL to transfer the net proceeds of VPG and SPG sales into a Disposal Proceeds Fund. All moneys in the fund must be used to provide replacement properties or paid to the Corporation under certain circumstances.

9 The Revenue Deficit Grant General Determination 1997

9.1 This Determination implements Section 28 of the Housing Act 1996, restricting the availability of Revenue Deficit Grant (RDG). The only RSLs who now qualify are those who incurred an eligible deficit for an accounting period ending after 31 March 1994 and before 1 April 1997. It follows the principles in the Revenue Deficit Grant General Determination 1993, but updates some references and deletes other paragraphs which had become obsolete.

9.2 The Corporation will write to RSLs who have claimed RDG in recent years enclosing a set of RDG specifications, a more detailed account of how to calculate and claim RDG.

10 Enquiries

10.1 Enquiries should be addressed as follows: