Councils and collective punishment

6 Nov 13

Don’t judge all local authorities by the small minority that have misused their housing funds. Borrowing caps should still be removed to allow councils to provide appropriate accommodation for their citizens

Lifting ‘borrowing caps’ imposed on council housing budgets is being widely backed, but, after uncovering several local authorities transferring money from their housing fund, Keith Cooper writing in Inside Housing thinks it’s an unwise idea. I think this is too simplistic and misses the point about the need for debt financing.

Cooper has undertaken an excellent bit of investigative journalism to highlight the actions – verging on unethical – of a small number of errant local authorities. They chose to take advice that suggested there might be a loophole allowing breaches of the Housing Revenue Account ring fence. But it is clearly wrong to assume that, given extra resources, all authorities would do this.

This sort of ‘collective punishment’ has hindered local government for too long, from the days of stopping all capital expenditure last century right through to current times.

It appears prevalent in the current administration, which says it is intent on reducing regulation and then brings out advice to stop deviation by a few from what it thinks is right – such as filming council meetings, the flying of flags and 50 money-saving ideas.

I would just remind everyone that Collective Punishment was outlawed by article 33 of the Geneva Convention!

No, what we need is the removal of the cap on councils’ HRA capital spending.

We need homes for individuals and, as Lord Freud has pointed out, this is not being delivered at the present time. Local authorities are well placed to know the demand – and, in most of the country, this is not for four-bedroomed properties that provide the best return for the private builder.

Councils have demonstrated a common-sense approach to providing extra accommodation within the resources they have available. But this work is not allowed to flourish because of fears (or is it dogma?) over national debt.

It’s an extremely sad situation when the issue coming over the horizon is an ageing population that is certainly costing far more in welfare benefits than housing support and is going to cost the nation far more in care costs in the future if we don’t act now.

Allowing local authority housing to address the issues of lack of right-size accommodation and the provision of homes that are suitable to provide the elderly with a comfortable, non-institutionalised living space, could be a major part of the answer. However, to fund it means the well tested and proven Prudential Borrowing has to apply in the HRA, and we should not be constrained by an arbitrary cap on spending.

We need to recognise that investment now will save costs in the future. Ignoring it just means extra hardship as many feel the impact of welfare reforms, plus local authority and health budgets are being exposed to a future spiralling of cost as the demographic time bomb explodes. (Growing evidence shows these reforms are in any case not delivering savings and are certainly threatening the stability of HRAs)

So local authorities are not a homogeneous bunch. However, they do need the freedom and resources to solve what are national problems but which impact at local level and need to be solved at a local level. This freedom should include the ability to utilise future income streams to try to stem nationally rising costs.

And any who do abuse the powers should be dealt with on an individual basis, rather than punishing everyone.

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