Town hall capital allocations threaten housing finance

16 Sep 99
Housing could lose out to other local authority services once all council capital allocations are thrown into a single pot, according to an expert on housing finance.

17 September 1999

Alan Westwood, director of corporate services at Salford Council, told last week's CIPFA housing finance seminar that government priority areas such as schools and roads will be ring-fenced under the new system for allocating capital spending, due to start in 2001/2002.

Although housing has been promised a 94% increase over the next two years, much of this could be lost to other spending departments once the single pot comes into effect. 'If we are flexible and the others are straitjacketed, then where are the resources going to end up?' Westwood said.

Under the Comprehensive Spending Review, local authority capital spending on housing is due to rise from £1.2bn this year to £1.8bn in 2000/2001 and £2.3bn the following year.

Prior to the introduction of the single local authority pot, housing will receive a single allocation next year in place of the current system of capital guidelines, grants and allowances. The single pot, explained Westwood, was meant to give councils greater discretion, reduce bureaucracy and lead to better targeting of resources.

'Most of us would agree that's a good aim – even if we are adversely affected by it,' he added. 'But I've a concern that flexibility is being increased in one area and not others.'

PFsep1999

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