Thursday, 02 September 2010

Nationalising debt to repay tenants

03/04/2009

While housing minister Margaret Beckett deserves credit for halving the rent rise imposed on councils, she shouldn’t claim to be ‘giving’ councils £175 million of taxpayers’ money (Inside Housing, 20 March).

The truth is that in the 2009/10 housing revenue account subsidy settlement, council tenants are giving taxpayers their money.

Most people accept that this ‘robbery’ from low-income households to subsidise taxpayers who are better off is wrong and will be ended by the HRA review. But the key issue of the review will be finding the estimated £2.35 billion extra needed for allowances.

Mrs Beckett can only get close to providing the resources needed by nationalising the HRA debt (estimated at £17 billion), which would also free up the £1.5 billion that currently services it. This proposal has support. Seventy-eight per cent of tenants consulted in the HRA review felt it was wrong that their rents should continue to service this debt, but the investment income from right to buy sales is not paid back into the HRA. Council tenants already paid the full debt off under the previous system.

So were Mrs Beckett to repay tenants by nationalising the debt, the foundations of a sustainable future for council housing based on addressing researched need would be laid. How about it, Mrs Beckett?

David Gibson, consultant

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