§ Mr. Purchase
To ask the Deputy Prime Minister (1) what proportion of capital expenditure invested in local authority owned homes is supported by direct Government grant, where the homes are managed by(a) the local authority and (b) an arm's length management organisation: 
(2) on what basis he has calculated Government-funded remission of interest charges on capital investment made to improve local authority homes managed by (a) the local authority and (b) an arm's length management organisation. 
§ Keith Hill
Housing Revenue Account (HRA) subsidy is calculated for each authority taking account of actual interest costs incurred on borrowing to finance approved capital investment in housing, plus an amount that each authority currently has to set aside to repay the principal. Nationally, the average amount met by HRA subsidy in 2002–03 was some £1.6 billion, 10 per cent. of outstanding borrowing. Arms length management organisations (ALMOs) in Rounds 1 and 2 of the programme are also eligible for additional HRA subsidy, currently calculated at a flat rate of 10 per cent. of assumed additional capital investment by the ALMO. The Office of the Deputy Prime Minister has proposed506W that these flat rate arrangements, which were designed to provide incentives to authorities setting up the first ALMOs, will be harmonised for future years and brought into line with the normal arrangements for supporting capital investment in housing, based on actual interest rates.