Response - Reform of Council Housing Finance

By: Deborah Garvie  Published: October 2009

Shelter supports any measure that will lead to investment in new council homes and the maintenance and modernisation of existing homes. With nearly 1.8 million households on council waiting lists, it is vital that Britain builds more affordable housing. Council tenants, quite rightly, expect their rent to be spent on the management, maintenance and modernisation of their homes. For too long, the revenue and capital receipts from council housing have not been properly ring fenced. The council housing finance system has prevented all the rents collected by local housing authorities from being reinvested in maintaining and managing their housing stock.


Shelter welcomes the Government’s intention to dismantle the current Housing Revenue Account Subsidy System.  We urge the Government to introduce a system that:


  • allows all revenue and capital receipts to be reinvested in maintaining existing council stock and building a new generation of council homes in the areas where these are most needed;


  • ensures low rents and protects tenants from the risk of future rent hikes – the consultation paper (paragraph 2.28) is not proposing any changes to rent policy, but says the Government expects to deal with future council rent policy separately, in the context of the HRA subsidy determination for 2010-11 and a future direction from the Secretary of State to the Tenants’ Services Authority;


  • ensures that enough money is available to bring all council homes up to the Decent Homes standard and for the future management, maintenance and modernisation of council homes.


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