The cost of running council housing varies across the country, and so we have a system which redistributes surpluses in some authorities to deficits in others. We have this system to ensure that rents remain affordable.
In recent years the system of council housing subsidy has been in deficit throughout the country, with the Treasury making up the shortfall. It is only from 2008-09 that the position has reversed with the overall system moving into surplus. In this financial year the Treasury plans to allocate around £5.9 billion in total for housing expenditure, considerably more than the resources flowing back to Treasury.
Communities and Local Government, jointly with the Treasury, is currently conducting a Review of Council Housing Finance, including looking in depth at key issues such as the cost of running council house stock, rents, management and maintenance costs, redistribution and the use of surpluses. The Review will report to Ministers in spring 2009, and will inform the next spending review with consultation thereafter .