Cash boost for council house repairs

29 Oct 98
Council house repairs in England and Wales are in line for a £1.2bn cash boost from 2000/2001, according to a briefing note from Local Government Association chief executive Brian Briscoe.

30 October 1998

The planned Major Repairs Allowance, which would be brought in as part of the move to resource accounting, could be phased in from 1999/2000 and paid to some councils the following year. It will follow on from the £3.6bn provided this summer under the Comprehensive Spending Review for the repair and maintenance of council housing. This runs out in 2000/2001.

Details of the allowance will be included in the government's consultation document on resource accounting for the housing revenue account, which is expected in November. The amount allocated to the allowance will probably be based on a percentage of the stock value of English and Welsh authorities.

Discussions between the Local Government Association and the DETR have suggested a figure of 1%, amounting to £1.2 billion in total. Councils are likely to have to meet strict targets set by the new housing inspectorate to be awarded the money.

Most local authorities are waiting to see the details in the consultation document before commenting on the allowance plans. Some are concerned that the cash may not be 'new money' but funds redistributed from housing's capital budgets, or basic credit approvals.

But Peter O'Kane, housing spokesman of the London Housing Unit, a policy and research body, has cautiously welcomed the allowance. 'While resource accounting of itself may not guarantee additional cash, at least the extra transparency will enable us to see how far short of the minimum requirement the resources are,' he said.

The allowance is designed to pay for catch-up repairs, rather than major capital works or day-to-day maintenance, he said. It could be seen as a council version of the 'sinking funds' kept by registered social landlords such as housing associations. These are often calculated at 1% of stock value.

A DETR official told Public Finance that the allowance would represent a shift towards revenue funding for repairs rather than capital funding. When their disrepairs are dealt with, favoured councils will have more freedom than now to spend their rent income.

An LGA working party has been meeting with DETR officials to discuss the implications of resource accounting. The working party also includes representatives from CIPFA, the Royal Institution of Chartered Surveyors and the Audit Commission.

The council housing disrepair backlog now stands at £10bn for English and Welsh authorities.


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