Healey signals Labour’s moves to put council housing at the heart of radical fourth term agenda

By Alex Smith / @alexsmith1982

Housing minister John Healey has just announced a “far reaching and radical new deal” on housing, setting out plans to offer local authorities the freedom to fund and run their council stocks without central government subsidy.

The deal will replace the current HRA subsidy arrangement, which currently funds 177 local authorities’ housing.

The plans also promise to release at least 10% more money in every council for maintaining and managing homes, and will create the funding capacity to build over 10,000 new council homes a year.

The new plans aim to:

* Remove the complex annual round of cross-subsidy decisions, making the funding system clearer and fairer.

* Devolve from Whitehall the funding, management and standards of council housing in future to elected local councils.

* Ensure 4 million people living in 1.8 million homes will get better homes and better housing services from their council.

* Offer guarantees to tenants whose homes have been upgraded through the government’s Decent Homes programme that their homes will be funded and maintained to this standard for the future, backed by the new national regulator, the Tenant Services Authority.

* Allow councils to keep all the rent they collect from their homes and all the receipts from any sales of houses or land.

Healey said not a single penny will go to Whitehall and not a single penny will subsidise other councils, as the current system dictates.

In return, councils will be expected to accept a share of an additional £3.65bn debt, though no council will take on a level of debt that is not sustainable for them in the long term.

Local government has long criticised the HRA subsidy system and long called for reform.

Healey said:

“This is a once and for all settlement between central and local government. It will bring council house funding up to date – replacing a system which was introduced before the Second World War.

“This is a change which councils have been calling for, and which has cross party support. It’s 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.”

During Healey’s ten months as housing minister, he has overseen the largest council house building programme in two decades – 2,000 this year and 2,000 more next year. Healey has also been lobbying Number 10 and the Treasury that this sort of devolution is a good way to deliver affordable homes for rent on a major scale.

Responding to today’s announcements, Councillor Tony Newman, LGA Labour Group’s leader on housing, said:

“Today’s announcement shows that only Labour is taking the initiative on housing and making sure extra money goes into building much needed homes for the future. This deal lets councils get on with the job by providing more freedom and capacity to deliver.

“Councils are well placed to respond to the needs of their communities and Labour Groups across the country are committed to providing more homes, which are affordable and of a high quality. The LGA Labour Group has long argued for greater flexibility and autonomy for local government, and we applaud John Healey for rolling up his sleeves and initiating radical reform that enables councils to deliver for their communities.”