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A crucial part of freeing up local government is to reduce the ring fencing of such vast chunks of the Town Hall budgets.

The Government's policy statement says:

We will phase out the ring-fencing of grants to local government and review the unfair Housing Revenue Account.

Last year the Housing Minister Grant Shapps, when in opposition, told a Inside Housing conference:

 ‘Tenants are sick and tired of paying 47 per cent of their rent over to the government, only to be redistributed, sometimes to areas that have been much more reckless with their housing management’.

The government is proposing to reallocate £18 billion of housing debt between the 202 English local authorities in the HRA system, including those which are in the black, as part of moves to allow councils to keep the money they generate from their stock.

But ‘unwinding the situation is extremely complex’, Mr Shapps said, using his own constituency, Welwyn Hatfield in Hertfordshire, as an example. ‘I understand that my authority doesn’t really want to pay £2 million to buy its way out of a problem,’ he said. ‘I’m going to try to be as supportive to John Healey as possible with this.’

He has also said he has:

"…grave concerns over the suggestion that responsible councils should be punished for being prudent, and will be burdened with other people’s debt. He added: ‘I fear that this is an excuse for partisan Labour ministers to transfer funds from efficient Conservative councils to badly run Labour councils."

6 comments for: What should happen to the Housing Revenue Account?

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