Reform of Council Housing Finance

The joint CLG / HMT review of council housing finance was announced in a written statement to the House of Commons on 12 December 2007 by the then Minister for Housing and Planning, Yvette Cooper MP. It was formally launched by Ministers in March 2008 at a stakeholder event in the House of Commons.

Aims and objectives

The aims of the Review were to identify options for a sustainable, long term system for financing council housing that were consistent with wider housing policy and fair to both tenant and taxpayer.

The new system should:

Be fair and affordable for both tenants and taxpayers
Be transparent, giving a clear and accurate picture of the balance of support from local and central government
Have agreed minimum standards of service and accommodation.
Support social rents which can provide a platform for social and economic mobility to tenants
Encourage landlords to continue to improve the quality and efficiency of services
Not expose Government to unacceptable fiscal risks
Have more certainty and less volatility in the funding of council housing.

Principles underpinning the Review are greater tenant involvement, more local devolution, supporting the cross domain role of the regulator, compatibility with similar rents for similar properties, and the continuing role of the LA as landlord.

Outcome

On 30 June 2009, following receipt of the report on the Review of Council Housing Finance, the Minister for Housing and Planning, John Healey announced his intention to dismantle the HRA Subsidy system and replace it with a devolved system of funding and responsibility - 'self-financing'. This would remove the need to redistribute revenue between landlords by means of a one-off reallocation of housing debt.

A consultation on the proposals was held between 21 July and 27 October 2009.