Whitehall urged to tear up subsidy rules
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A huge coalition of housing organisations has called for the government to rip up its current housing finance regime and start again.
The Local Government Association has joined with the Chartered Institute of Housing, the National Federation of Arm’s-Length Management Organisations, Councils with ALMOs and the Association of Retained Council Housing to present a united front on the issue. Umbrella group London Councils and the Chartered Institute of Public Finance and Accountancy have also backed the move.
The groups say that up to £1 billion of tenants’ rent could be used to build new council homes if it was not siphoned off by the Treasury.
The government is carrying out a review of its housing revenue account subsidy system. CIH chief executive Sarah Webb said: ‘We firmly believe that in the interests of fairness, accountability, and local responsiveness, the HRA subsidy system must be scrapped.’
The LGA published a paper this week saying that the current system, which also redistributes rents to other councils who have greater needs, was ‘unfair and unjust’.
‘The rent tenants pay to their council landlords should be entirely spent on their housing needs and the needs of the community,’ the paper said.
Paul Bettison, housing spokesperson for the LGA, said that tenants would be shocked that their rents were ‘sitting in a Treasury vault’.
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