GOVERNMENT CONSULTATION: ‘Reform of council housing finance’

LATUC SUBMISSION

We do not agree with the Government's proposal to replace the current national system for funding council housing with a self-financing scheme. There are too many risks in such a scheme. We support a reformed national system based on changes in the way public borrowing for council housing is calculated and substantially increased central government funding.

The private housing market, which includes housing provided through housing associations, is in crisis. It cannot provide the numbers of affordable homes which are needed. There is a massive demand and a massive need for council housing. Affordable, secure, decent and accountable council housing is the most efficient way of meeting the current shortfall in housing.

Alomost all districts in Lancashire have already lost their municipally owned housing as a result of the Government's promotion of stock transfer, ALMOs and other forms of privatisation. The present Government's continuation of Conservative policy preventing local authorities from building new council homes has seriously increased the shortage of decent, affordable rented housing in Lancashire. Many people are forced into private, rented accommodation which can be either over-priced or not properly maintained.

We endorse the following recommendations made by the House of Commons Council Housing Group in their report, 'Council Housing: Time to Invest - fair funding, investment and building council housing':

1. Ring fence the national Housing Revenue Account and ensure that, as a principle, all council tenants’ rents are spent on their homes.

2. Raise allowances. Management and maintenance allowance and the major repairs allowance to be set at a level that meets need as determined by independent research and by negotiated agreement to ensure that local authorities are able to maintain these

improvements in future years.

3. Long-term stability. Ensure that any formula for allowances is based on a 30-year settlement for long-term stability, while keeping economic risks with government, not councils.

4. Receipts. Ring-fence all right to buy receipts to be used to improve existing and build new council housing.

5. Debt. Write off or take direct responsibility for the cost of historic debt and remove this element from the housing subsidy system altogether, making housing finance fairer and much simpler.

6. Gap funding. The government must fulfil its promise to provide capital grants to meet the backlog of work for both Decent Homes and other elements, quickly.

7. Local ring-fencing. Introduce and enforce a set of accounting rules and standards to ensure that the costs of all shared services are correctly apportioned between the Housing Revenue Account and the general fund. Tenants should decide on incurring any extra charges for enhanced services.

8. Safeguards. Provide a public-sector safety net as part of any self-financing agreement.

9. Enable a massive programme of new-build council housing to make a meaningful contribution to solving the housing crisis and ending the recession in Britain by:

i) Free up councils to borrow by changing the calculation of public sector borrowing rules;

ii) Allocate unspent funds from Affordable Homes Budget to councils for new council house building;

iii) Support councils to re-acquire the skills, knowledge and capacity they need to commission building projects, acquire land, and where necessary set up direct labour organisations to build new council housing;

iv) In the short-term, where councils lack skills and capacity to engage in new-build directly, fund them to acquire and refurbish suitable empty properties, and to commission building companies to build council housing;

v) If RSLs are failing, councils to take ownership and management of homes;

vi) Provide development funding for a major programme of council-house building of at least one million homes over five years;

vii) Change planning law to ensure that 50% of all development land and 100% of all publicly owned land is used to build council housing – to be applicable in each area until council waiting lists drop to the level of voids occurring in one year.

10. Moratorium on stock transfer, partial transfers and other privatisation of council housing assets and land until Review outcome and implications are fully implemented.

11. Protect secure, affordable and democratically accountable council housing – no undermining, means-testing or time limiting secure tenancies.

12. Improve the guidance on stock transfer ballots to ensure a fair and balanced debate, to include the following:

a) extend the code to cover all proposals for a major change in management;

b) public access to all relevant information;

c) equal access to meeting halls and other facilities for tenants groups who oppose the transfer;

d) one clear month’s advance notice of the start and end date of the ballot;

e) not exceed spending limits for these consultations as may be determined by the Secretary of State / District Auditor;

e) ensure that information regarding who has voted at any point in time is treated in confidence.