By Neil Merrick
16 October 2009
Local authorities are stepping up pressure on ministers to write off £18bn of historic debt as part of a major shake-up of housing finance.
More than 30 councils from the Campaign for Fair and Local Housing Finance have rejected a suggestion by housing minister John Healey that debt built up by councils over the past 75 years should be redistributed.
Healey warned that the discredited housing revenue account system will remain in place until at least 2012/13 unless councils agree debt reallocation among themselves.
About a quarter of the 205 councils in the HRA system are debt-free, while others owe the equivalent of up to £30,000 per property. Healey dismissed a call from the Local Government Association for the debt to be cancelled.
Mary Orton, chief executive of Waverley Borough Council in Surrey and co-ordinator of the campaign, said it was unfair that local authorities that had managed their budgets responsibly over many years should take on extra debt.
She accused the government of giving to councils with one hand and taking with the other. ‘Housing finance reform is long overdue,’ she said. ‘If it is to work properly to give local authorities the freedom to invest in local housing, then ministers need to think again on debt transfer.’
John Bibby, secretary of the Association for Retained Council Housing and director of housing at Lincoln City Council, said Arch would prefer debt to be written off but such a move was unlikely. ‘A more pragmatic approach is required in discussions about debt reallocation.’
16 October 2009
Local authorities are stepping up pressure on ministers to write off £18bn of historic debt as part of a major shake-up of housing finance.
More than 30 councils from the Campaign for Fair and Local Housing Finance have rejected a suggestion by housing minister John Healey that debt built up by councils over the past 75 years should be redistributed.
Healey warned that the discredited housing revenue account system will remain in place until at least 2012/13 unless councils agree debt reallocation among themselves.
About a quarter of the 205 councils in the HRA system are debt-free, while others owe the equivalent of up to £30,000 per property. Healey dismissed a call from the Local Government Association for the debt to be cancelled.
Mary Orton, chief executive of Waverley Borough Council in Surrey and co-ordinator of the campaign, said it was unfair that local authorities that had managed their budgets responsibly over many years should take on extra debt.
She accused the government of giving to councils with one hand and taking with the other. ‘Housing finance reform is long overdue,’ she said. ‘If it is to work properly to give local authorities the freedom to invest in local housing, then ministers need to think again on debt transfer.’
John Bibby, secretary of the Association for Retained Council Housing and director of housing at Lincoln City Council, said Arch would prefer debt to be written off but such a move was unlikely. ‘A more pragmatic approach is required in discussions about debt reallocation.’
