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Councils to keep council rents - not hand them over to Whitehall

An important speech by the Housing Minister Grant Shapps today. The Housing Revenue Account Subsidy System is being scrapped in a huge breakthrough for localism. Instead of councils collecting rent from their tenants and then handing the money to central government and then being handed a load of money back there will be a settlement where in future central Government keeps out of it.

Shapps says:

Councils collect rents from their tenants - then every year they wait patiently to hear Whitehall's decision about what they are allowed to keep.

Bureaucracy at its bonkers best.

Authorities that have more tenants and collect millions in social rent only keep a fraction of the cash.

A tax on millions of council tenants - because as far as they are concerned, their rent just disappears into a Treasury a black hole.

The Localism Act paved the way for the long-awaited and sorely needed removal of this system.

And now, just two months after the Act achieved Royal Assent, I'm confirming today the details of an historic settlement that puts councils back in charge.

The new system will level the playing field.

Council landlords will keep the rent they collect - giving them an average 15 per cent more to spend on maintaining homes.

Less fun for bureaucrats - but at last a direct link between the rent councils charge and the money they spend.

They will have the financial tools to plan their budgets more effectively.

Modernising and improving the homes of existing tenants - and making it easier to build new affordable houses.

This £19 billion deal may not hit the front pages tomorrow - but it is one of the most substantial and significant steps towards localism in years.

Also included was a progress report on selling surplus state owned land for housing. This is an excellent policy both to reduce by £10 billion the National Debt (or rather slow its increase by that amount) and to increase the supply of housing.

Shapps said:

Today I can confirm that we've identified surplus public land with enough capacity for over 80,000 new homes.

Putting ourselves well on track to release enough land for 100,000 homes by 2015.

But I want to move even faster.

So I'm working with another six Government departments together with other large organisations including the BBC, Network Rail and the Royal Mail to identify further disused land.

The MOD owns land the size of Surrey. I am pleased the Government is going further. I think they should go very much further. Hundreds of billions rather than £10 billion. Selling state land to provide the housing we need could dwarf the privatisation measures of the 1980s.


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