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Council housing finance defended

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Five of the UK’s most prominent housing experts have called on ministers not to mothball reform of the council housing finance system.

The five, who have all advised government on reforming the troubled housing revenue account (HRA) subsidy system, are worried ministers will duck wholesale change because it perceives it to be too difficult.  

They are:

  • Chartered Institute of Housing policy advisor John Perry
  • Consultant Steve Hilditch
  • Housing Quality Network director Steve Partridge
  • York University’s Steve Wilcox
  • David Hall, director of consultants Tribal

In a submission to a government review, they have called for local authorities to become self financing and be allowed to borrow against future rental income to give them more flexibility.

Under the current centralised system, councils have restricted borrowing powers while around 75% of councils pay more into the pot then they get back, the Local Government Association claims.     

 “At local level there is considerable frustration and concern about how long this [the reform process] has taken, with doubts about what may finally emerge,” the submission said.     

Despite Prime Minister Gordon Brown recently pledging to “put aside any barriers that stand in the way” of councils building houses, momentum around HRA reform has waned.

Mr Perry said councils will not be able to build in any significant capacity unless there is fundamental reform of the current system.

He added: “We have become concerned that the review might go off the boil… We do not want the government to put it in the box marked ‘too difficult’.”

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