Free at last? Not quite. But council housing may be closer to freedom now than at any time since Labour took power in 1997.
That’s the hope after housing minister John Healey’s announcement of a new deal to dismantle the housing revenue account (HRA) even if it was mixed with some disappointment that it will involve yet another round of consultation Supporters of the change had hoped for a deal that would allow local authorities to sign up in principle, putting pressure on the next government to follow through.
Now the whole package could be contingent on what happens in the next spending review on grants for the decent homes backlog and the existing programme of major repairs. Severe cuts might dissuade many local authorities from signing up.
However, that aside, there is little doubt that John Healey’s package is the closest Labour has come to fulfilling the hopes raised by deputy prime minister John Prescott. In opposition he had argued for council housing to be freed from restrictive rules on public borrowing . In power, the Treasury blocked any prospect of that.
The release of accumulated capital receipts meant the decent homes programme could get going but it soon became clear that the government remained as pro-stock transfer as its Conservative predecessor.
The position gradually thawed under successive housing ministers until the government finally conceded that there could be a fourth option (stock retention) for council housing and began to see that there might be a role for councils in new development. Even then, there seemed little appetite for HRA reform.
Campaigners give John Healey a lot of the credit for pushing the reform through, alongside other changes giving councils a role in new development. ‘Earlier ministers did not appreciate the significance of the change to local authorities,’ said one. ‘It was in the political doldrums and it’s down to Healey that it’s come to life.’
There’s still a long way to go. There is concern about the level of extra debt involved for local authorities, there’s the election and then there’s the spending review.
Meanwhile, as the CIH points out, council housing will never be totally free until the government removes those restrictions on public borrowing. That may still be a step too far for Labour and the Conservatives but it is the official policy of the party that could end up holding the balance of power in a hung parliament, the Liberal Democrats.
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