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LORDS TOLD WHY ACCOUNTING RULES CAUSE DIRE HOUSING PROBLEMS

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Britain's local authorities are being denied the chance to remedy dire housing problems because of antiquated accou...
Britain's local authorities are being denied the chance to remedy dire housing problems because of antiquated accounting rules and lack of coordination with central government.

This is the message the Chartered Institute of Housing is giving today, urging a new accountancy regime in the public sector, as part of its presentation to the House of Lords committee on relations between central and local government.

The CIH said that housing expenditure would have to be doubled to deal with a £20m national repairs backlog over a ten year period. Locals authorities were seeing the major part of their stock going into decline, exacerbated by the sale of their better properties and the virtual impossibility of replacing them.

However, amending public accounting rules to allow local housing authorities to fund new investment by raising private finance - without affecting the public sector borrowing requirement - could start the repairs process and enable new building. Similar flexibility in the voluntary sector has brought some £8bn of private funding into housing association projects since 1988.

In the institute's submission, CIH director of policy John Perry says: 'Council housing largely pays its own way and makes a notional profit at national level. Rent paid by tenants account for about two-thirds of expenditure.

'Housing is not simply an example of a service which is under-resourced, but one which could largely fund its own much needed investment - if only it were given the freedom to do so.'

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