Charlotte MacKenzie today welcomed Labour’s shake up of funding for
council homes.

Housing Minister John Healey MP announced Labour will give Councils
new freedoms to fund and run their local housing stock. Cornwall
Council already has some Labour Government funding to build new
Council homes. The new system will release at least 10 per cent more
money to build new council homes.

Tenants – like those in Carrick Housing – whose homes have been
upgraded through the decent homes programme will have guaranteed
future funding to maintain high standards backed by a new national
regulator, the Tenant Services Authority.

Charlotte MacKenzie said:

“These proposals are exactly what Cornwall Council needs to make the
most of its existing housing stock and to invest in more new homes to
meet local housing need. I hope Cornwall Council will respond
positively to the opportunity to start working in this way from next
year, it will help speed up delivery of new homes for local people in
housing need; and keep the revenue from Council housing stock in
Cornwall.”

Sarah Webb, Chief Executive of the Chartered Institute of Housing said:
“We are delighted at the Government’s clear commitment to new council
house building and are also very pleased that our work to help shape a
new self-financing future for councils has been taken on board.”

The plans mean dismantling the old ’Housing Revenue Account’ system
which has long been criticised by local government. Established
initially in the 1930s, the HRA system was reinforced by Margaret
Thatcher in the 1980s as a way of discouraging authorities from
building new council housing.

Under the new system, councils will keep all rent collected as well as
all receipts from sales of housing or land. Not a single penny will go
elsewhere. Councils will have to accept a share of an additional £3.65
billion debt, but none would take on debt that was not sustainable in
the long term.

The consultation document, Council Housing: A real future seeks the
views of councils on implementing the new system. Responses are
required by 6 July 2010. More information and the consultation
document can be found at:

http://www.communities.gov.uk/housing/decenthomes/councilhousingfinance/

The new system would be implemented voluntarily where Councils agree
from 2011-12, and addresses concerns raised by local government about
the current HRA system. The need to reform the HRA has cross-party
support.

However, other housing plans under consideration by the Tories could
make council tenancies less secure.