| Published | 30 June 2009 |
|---|
Councils will be able to keep all their rental income and gain the freedom to manage their housing to meet local need under plans unveiled by John Healey today.
Announcing the outcome of the Review of Council Housing Finance, conducted by a wide range of housing experts and organisations, Mr Healey announced his intention to dismantle the Housing Revenue Subsidy System, replacing it with a system that will give councils greater independence and freedom to manage their own housing resources.
The Housing Minister confirmed he would consult before the summer on proposals for councils to become self-financing and free to manage the needs of their housing stock as well as provide more efficient services for their tenants.
Responses to the review showed strong support for a more devolved approach to financing council housing.
John Healey said:
"A fully self-financing locally devolved system cannot be implemented in a single step but I want to move as rapidly as possible to put these reforms in place and the consultation document will set out my proposed timetable.
"However, there are steps we can take without delay so I am announcing that from today we will exclude all new build council housing from the HRA subsidy system which means that councils will retain in full the rent and capital receipts from these homes."
This announcement comes after the Prime Minister announced a £1.5 billion additional funding package to enable councils and housing associations to build more homes across the country, part of an ongoing drive to support the housing industry, reduce waiting lists and make sure young families and those seeking to buy their first home get the affordable housing they need.
Mr Healey added:
"I want to provide more flexibility in finances and more transparency in the operation of the system. I want to devolve control from central to local government.
"And, in return, I want to increase local responsibility and accountability for long term planning, asset management, and for meeting the housing needs of local people. The current system makes this difficult to achieve."
1. Today's announcement was made in a Written Ministerial Statement by Housing Minister John Healey and can be found at: http://www.communities.gov.uk/statements/corporate/reviewcouncilhousingfinance.
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