London Councils welcome Government plans to reform council housing finance

The Government’s radical shake-up of the way boroughs receive funding to manage and maintain their housing stocks, alongside support for councils to build new affordable homes, has been welcomed by London Councils.

Under new government proposals, boroughs would keep all of the money they collect in rents and through house sales and use it to meet the needs of their tenants, instead of giving a proportion to the government for national redistribution.

These proposals follow a year-long review of council housing finance by the government, which has seen housing finance experts and local authorities united in their calls for enhanced local freedom and control.

London Councils’ Executive Member for Housing, Councillor Steve Reed, said: “A fundamental overhaul of the way local authorities receive funding for managing and maintaining their housing is long overdue and it is something for which London Councils and the boroughs have been lobbying for many years.

“I am delighted that the government has responded to our calls by promising to replace the Housing Revenue Account Subsidy System with a devolved system of responsibility and funding.

“London boroughs have consistently been at the forefront of the devolution debate, ably demonstrating that increasing local financial freedom ensures better results for Londoners and a better deal for Britain.

“Being able to ensure locally raised rents deliver housing services for local people is an important first step, but just as important is a fair deal on housing debt.

“We await further details on these proposals with interest and will continue to work with the government to ensure that this once in a generation opportunity has a positive impact on the lives of our residents.”