Date set for move to self financing
Councils will buy their way out of the existing housing finance system on 28 March 2012, the government has said.
A paper published by the Department for Communities and Local Government yesterday said councils would either make payments to the government or have some of the debts paid off so that they can leave the housing revenue account subsidy system and begin self financing on 1 April 2012.
The paper, Self financing: Planning the transition, outlines the timetable and steps to be taken for the implementation of self financing and clarify some areas of the policy.
Councils will submit information in August to enable the government to calculate the amount of debt they will take on or have written off when the new system begins.
The government will consult on these final figures in November and publish the final settlements in January 2012. A model for how the government will calculate the settlement was published in February and the new figures will update this model.
The government will also publish a consultation this summer proposing that councils no longer have to get the permission of the communities secretary when selling housing at less than market value except when selling homes rented by secure tenants to private landlords or subsidiaries of the council.
They would also consult on allowing councils to keep all proceeds from sales of homes at market value that are not right to buy deals. The government has already said that 75 per cent of money from right to buy sales must be handed to the Treasury.
Steve Partridge, the Chartered Institute of Housing’s director of financial policy and development, said: ‘With every document that CLG publishes on the journey to self financing, this major financial change seems ever more real.
‘We welcome the clarity with which the government has laid out its plans, determinations and timetables and this should give those who work in council housing the confidence to actively continue their preparations for next year, focusing on the key decisions that need to be made and involving their tenants in making them.’