Changes to the Public Works Loan Board rates, announced by Danny Alexander at the LibDem conference, could help housing become a driving force for local regeneration
Why, oh why, do some in local authorities believe that just because one part is under pressure, the whole organisation has to feel the same pain? Is this some sort of Kamikaze approach to strategic management - or is it political dogma, to make an egalitarian point? Or just a view of fairness that cannot see past the service provider’s angle rather than looking at things from the user of the service's point of view?
Currently, local authorities are under the cosh as the government –rightly or wrongly – tries to reduce public expenditure to a level that it believes can be sustained. The angst that this is causing to residents and the pain that is being felt by local authority staff is something that is far greater than we have ever faced in my 40-odd years working career. The only saving grace for the residents is that their council tax in many authorities has not increased.
However, the tenants of the 160 or so authorities who still have council houses are not so lucky when it comes to their rents. Most of these are increasing by RPI (note not CPI) plus 0.5%. For next year this looks as if it is going to be around 6% (about £20 per month!). And some will face even larger rises due to rent restructuring.
Yet despite this increase in resources these rent rises bring into the Housing Revenue Account, authorities across the country are insisting that the budgets of those who provide the services to the tenants must be cut in line with their colleagues’ budgets.
Is this out of some misguided belief that savings in the HRA can in some way mean that those in the General Fund can be reduced? Hopefully not, as the HRA is a 'ring-fenced' account, so this can only happen in certain circumstances. (As tenants also pay council tax, ring-fencing aims to ensure that they are not paying twice for services, once through their council tax and then through their rents.)
Or is it out of a misunderstanding of the role housing local authorities are about to take on with the new self-financing HRA?
When it comes to housing, local authorities need to be bold and move on from the old ways of thinking. No longer is the watchword 'what is good for the goose is good the gander'. It now needs to be tempered by 'he who pays the piper calls the tune'. Tenants are not going to stand for seeing their rents spiralling upwards whilst their services are cut.
Local authorities need to be thinking how they can expand the services in the HRA so that they bring a wider benefit to the community - and the good news is that they can now do this on a longer time horizon than the annual budget round.
So come on local authorities – stop the dogma of the past and start planning for the future! For too long, housing has been the Aunt Sally, hemmed in by central government controls. Now there is the opportunity for it to be a driving force for regeneration.
This has been strengthened this week by the chief secretary to the Treasury's announcement, at the LibDem conference, that Public Works Loan Board rates will be reduced for the HRA changes, providing some extra resources to take this forward .
But all this is not going to happen if tenants see that local authorities can’t be trusted with their money and are just using it to prop up the same old same old - or that their services are being cut. So let’s step up to the challenge and show that we can deal with the bigger issues. Housing is the vital first step to stopping this nonsense of 'cuts all round then!'.
Ken Lee is director of resources at Wigan and Leigh Housing Company and chair of Cipfa's housing panel
