Government vows to continue with reform of council housing finance

The coalition government is to press ahead with the review of the council house finance system, promising a devolved system putting local authorities firmly in control, the Housing Minister has confirmed.

Grant Shapps said the government would continue with the consultation on changes that would see the “unfair” housing revenue account system move to a self-financing system.

The consultation proposes replacing the existing system with a model which would see councils keep all the rent they collect from their homes and all receipts from sales of houses or land. However, local authorities would take on some additional debt in return.

Shapps said: “The council house finance system is a mess. For far too many years this unfair system has tied the hands of councils, stopping them from best meeting the housing needs of the communities they serve.

“I want to see a new devolved system that puts councils firmly in control and gives them the financial freedom they need to make the best long terms decisions about their housing.”

The minister urged councils and other experts to respond to the consultation, saying it was important he hears that the proposal genuinely allows them this freedom. “In these tough economic times I need to be convinced this approach offers the best possible value for money.”

The consultation is open until 6 July 2010. It can be downloaded here.