Cast off your shackles

It appears that the government has finally seen sense. After long, hard lobbying to overthrow the housing revenue account subsidy system,
it seems to have buckled.

Housing minister John Healey’s announcement last week that he intends to dismantle the HRA and allow local authorities to retain all right to buy receipts, together with the introduction of a self-financing regime for local authority housing provision, is long overdue.

Perhaps it has dawned on the government that local authorities can play a key role in helping the struggling housing market find its feet again. It’s no coincidence that the U-turn comes at a time of economic turmoil, as financing for registered social landlords and private developers becomes harder and the demand for affordable housing remains unmet.

Yet local authorities still face challenges. The proposals for debt redistribution are potentially very difficult and the transfer of existing housing resources to pay for it presents risks. We still need to see the finer details of these plans. I hope the consultation paper Mr Healey announced will address these points in some detail.

Funding is another matter that needs to be addressed and in particular the need to compensate local authorities that used prudential borrowing to deliver decent homes. What is needed is a more equitable financial framework and access to resources. Councils must be given the same freedoms as other social housing providers to borrow money to invest in new homes, and the government needs to stop setting tenants’ rents and allow rents to reflect local circumstances. It should recognise that it cannot micro-manage councils and housing, which it has been doing for too long.

Of course, the changes to the HRA will take some years to implement (they are expected in 2012/13). In the meantime, social housing is needed more than ever. The National Housing Federation has already warned that one in 10 people in England will be on social housing waiting lists by 2020 unless urgent action is taken to build more homes.

Here in Birmingham, as in so many parts of the country, the waiting list for homes gets longer by the day - the most recent figures put it at 35,000. That’s why we will build up to 500 council homes per year by 2012 through the Birmingham Municipal Housing Trust. Birmingham Council, alongside other councils, will continue to push for a level playing field. If Birmingham was able to invest the HRA cash that it collects, almost £57 million would be taken this year (2009/10) in addition to £180 million paid back to the government through right to buy receipts since 2004/05.

Then we wouldn’t need to bid for government grants to build homes.

Let’s just hope the government’s signal to create a devolved system of council house finance is followed through and that Mr Healey is a man of his word.

John Lines is cabinet member for housing at Birmingham Council

Have your say

You must sign in to make a comment