Len White

• Comment on: Think tank labels HCA cuts 'desirable'

  Len White's comment | 20/10/2010 9:51 am

  I recommend reading this report if you want a clearer view of the drivel some think tanks come up with. They seem to know nothing about how housing projects are appraised and the role of grant in creating viability for individual schemes. There is an extraordinary assumption that more social housing can be delivered from planning agreements - 5 years ago maybe, but not now. How the authors dare to call themselves 'economists' I do not know - this is pure spin designed to dress up the coalition's cuts, which eberyone knows will be devastating for the future of affordable housing.

• Comment on: Minister confirms HRA will be scrapped

  Len White's comment | 06/10/2010 11:45 pm

  Gavin - yes I am saying that council housing (different arguments apply for housing associations) is self-financing, rents cover all the costs nationally including the cost of debt. The debt itself is held by councils, always has been, not by central government, but the cost of that debt is charged to the HRA and not to council tax (General Fund). Funds are transferred from HRAs deemed to be in surplus by government to those deemed to be in deficit. Government has in the past treated council housing efefctively as a national service delivered locally, within a single super-HRA.
  
  Labour's proposal, now supported by the Tories, would permanently redistribute the debt between councils and then free them from the national system enabling them to make all the key decisions at a local level in future. But they still will not be allowed to subsidise rents from council tax or vice versa.
  
  It looks like the government is going to proceed more slowly than Labour planned to, which is a pity, but this has to be the right policy to give council housing a sustainable future and take the service closer to tenants.

• Comment on: Minister confirms HRA will be scrapped

  Len White's comment | 05/10/2010 10:00 am

  Sorry Gavin but you are not right. The HRA ring fence prevents subsidy going in either direction - introduced by a Tory government which felt that the then rates should not be used to subsidise council rents. So council tax does not pay for the costs of council housing, and the cost of debt is charged to the housing revenue account. Nationally, council housing breaks even but there is an extremely complex system of cross-subsidy between areas (ie between HRAs) which both Labour and the Tories agree is not fit for purpose any longer.
  
  However council housing buys services from the rest of the council through a wide range of service agreements - for finance or personnel or grounds maintenance or whatever - and is charged a share of the council's overheads such as the cost of democratic services. This is where, in my experience of many councils, the HRA is often grossly overcharged. Council tenants often pay twice for the same service - for example, they often pay for street lighting on estate roads through their rents but also pay the general charge for street lighting through their council tax. There are dozens of examples like this.
  
  The ring fence around the HRA should be tight and it should be monitored. Then council housing becomes a genuine local business, meeting its costs through the rents it charges. Then it really will have a sustainable future.

• Comment on: Minister confirms HRA will be scrapped

  Len White's comment | 05/10/2010 9:10 am

  This is very good news and shows that Labour was on the right track in trying to localise the HRA and deal with the debt issue once and for all. But the devil will be in the detail, and in particular:
  
  - how much debt will be redistributed and to whom and on what basis - there is a suspicion that Shapps, as a very political politician, will seek to benefit traditional Tory councils and to overburden Labour ones;
  
  - what rent and service charge assumptions are built into the deal - they can only say that the deal is sustainable in the long term if they also set out the policies on which rents will be set to be included in the business plan;
  
  - how tight the 'ring fence' will be around the local HRA to prevent councils from effectively cross-subsidising their council tax through unjustifiable charges and support service agreements;
  
  - how councils' future behaviour in relation to their HRA will be monitored and supervised - it is an area where there has been poor practice historically and they are about to remove the TSA's role in supervising what council landlords are up to.
  
  - whether the scheme will be voluntary - meaning that councils can opt out of the national HRA if they wish - or compulsory. A voluntary scheme will mean two systems running in parallel but some councils do not wish to come out of the current system and might not do so if they have the choice.
  
  - what they say about councils using their future HRA surpluses and capital receipts to support the building of new council houses - of course they should be encouraged to do so but this is ideologically distasteful to many Tory councils.
  
  So tenants will need to watch out for the detail and make sure the new system works for their benefit.

• Comment on: Financial freedoms to aid council building

  Len White's comment | 20/09/2010 6:13 pm

  What an astonishing contradiction on Clegg's speech. He went on and on about how bad it was for Labour to have borrowed - even when it was needed to avert the worst recession since the 30s - then pulled the rabbit out of the hat to great applause that they will allow councils to borrow against future income to fund investment. Which is it to be? - is borrowing good or bad, it can't be both at the same time!

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