New council house deal to benefit four million tenants

A new deal allowing councils to fund and run their council homes without central Government subsidy will see four million council house tenants get better housing services.

The deal will release at least ten per cent more money in every council for maintaining and managing their homes and will create the funding capacity to build over 10,000 new council homes a year.

Tenants whose homes have been upgraded through the Government’s Decent Homes programme will have the guarantee that their homes will be funded and maintained to this standard for the future, backed by the Tenant Services Authority.

Under this new self-financing system councils will keep all the rent they collect from their homes and all the receipts from any sales of houses or land, with no money going to Whitehall and or to subsidise other councils as the current system dictates.

Councils will in return accept a share of an additional £3.65 billion debt but no council will take on a level of debt that is not sustainable for the long term.

There has also been removal of the annual round of cross-subsidy decisions, making the funding system clearer and fairer and also devolves from Whitehall the funding, management and standards of council housing in future to elected local councils.

Plans have also been set out to dismantle the current HRA subsidy system of funding council housing in 177 local authority areas.

Housing Minister John Healey said: "This is a once and for all settlement between central and local government."

"This is a change which councils have been calling for, and which has cross party support. This is an opportunity for radical change which will allow councils to do much more to provide better services and better meet the needs of local people."

Further information:
Communities and Local Government