23 August 2002
Admitting that the current system of local authority housing finance is too complicated for most people to understand, the Office of the Deputy Prime Minister has called for a 'blue skies' debate on capital funding and the future of the housing revenue account.
Under the proposals, set out in the paper, The way forward for housing capital finance, councils could be given greater freedom to invest in housing so that they operate on a similar footing to registered social landlords.
Options include allowing councils to retain money raised through rent increases and abolishing the current system of housing subsidy once local authority debts have been restructured.
Further changes are likely to lead to a new system for pooling capital receipts, including money raised through the Right to Buy scheme. Debt-free councils, which do not currently pay receipts into the pool, would in future be required to contribute towards the redistribution of funds to needier areas.
The paper also calls for the local authority social housing grant to be replaced. Consultations continue until October 18.
PFaug2002
