The problem with Paul Cook’s sustained metaphor for the proposed housing finance reform as flogging a dead horse is that just as he expects his horse to be sleek and glamorous, he’s clearly expecting only the most ideal of reforms (‘Saddled with debt?’).
The real point is that the proposals on offer are the best deal local government is likely to get. Housing minister John Healey’s view that those hoping ministers can simply write off £18bn of debt are ‘whistling in the dark’ and need to ‘get real’ is – unfortunately – not some kind of negotiating starting point but more likely the bald truth, given the current and future state of the public finances.
Self-financing plus debt redistribution offers – at a time when it is badly needed – a feasible long-term and sustainable future for council housing. New-build under the proposals could stimulate real and dynamic growth, potentially capable of kick-starting the sector as a whole. The conclusion that self-financing is the future was the culmination of a considerable body of work, including four workstreams, consultation and bilaterals, research work, modelling and options and expert submissions.
Yes, there are details that need further work. And debt redistribution is not an easy concept to sell. Yet in real terms, millions – soon billions – of pounds are currently redistributed through the housing revenue account subsidy.
The big advance is that redistributed debt will be under local control. And yes, there will be a few authorities for which self-financing won’t work without further support. What needs to happen now is for authorities and other consultees to pinpoint what the difficulties might be. Then government departments, councils, their organisations and the advisers and professional bodies involved in the working groups, can work on solutions for the few authorities that need it.
The proposed reform isn’t perfect. But it is fit for purpose.
Lesley Lodge
Finance & policy manager, local government, CIPFA
The views expressed are those of the writer and not necessarily those of CIPFA itself
