Skip to main content

Council Housing: Rents

Volume 488: debated on Friday 27 February 2009

To ask the Secretary of State for Communities and Local Government if she will make it her policy to allow local authorities to retain all their receipts from council tenants' rent. (258973)

The current system of local authority housing finance is based on a system of surplus authorities (where assumed income exceeds assumed costs) making payment to central Government and deficit authorities (where assumed income is less than assumed costs) receiving subsidy. In the current year approximately £550 million will be paid to deficit authorities in aggregate. So a change to enable all local authorities in surplus to keep their receipts would entail a considerable increase in public expenditure.

However, CLG and HM Treasury are holding a Review of Council Housing Finance and Rents Policy. Our aim is to have a long term solution to financing council housing that is sustainable and fair to both tenant and taxpayer. The issue of councils retaining all rental receipts is closely bound up with a number of other key policy decisions, including what rents should pay for and how these receipts would be used in a local area. It would be premature to reach conclusions specifically on this matter until the Review reports to Ministers later this year, when it will be considered as part of the overall structure for a new or improved system.