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Volume 502: debated on Wednesday 16 December 2009

On my written ministerial statement, 30 June 2009, Official Report, column 7WS, I announced proposals to reform the current system of council house finance and replace it with a devolved system of responsibility and funding.

In my statement, I confirmed that transferring council-owned stock to a registered social landlord remained an option for local authorities. However, I was clear that there should be equity in the terms of public funding whether council homes are transferred or retained in the future under self-financing.

I also said that those local authorities who had existing places on the Housing Stock Transfer programme at 30 June should continue with their transfer proposals. Those local authorities were Plymouth, Rutland, Lambeth (Ashmole), Lewisham (Excalibur) Lambeth (Latmos), Manchester (West Gorton), Merton, Harrow (Mill Farm Estate) Lewisham (Forest Hill), Lewisham (Catford) and Lewisham (Rushey Green). They should ensure that their housing transfer is completed within the requisite two-year period. In my statement, I also undertook to continue to work with councils whose tenants had voted for transfer at that date. Plymouth and Rutland have now transferred their housing stock to a registered social landlord.

At the date of my statement at 30 June, the following local authorities, Warrington, Oldham, Bolton, Stockton, Dacorum and Hull (North Bransholme), had significant contact and developed discussions with the Department or the Homes and Communities Agency (HCA) or both. These authorities had also undertaken preliminary consultation with their tenants.

These councils have continued to develop their options including for council stock transfer and by today, December 16, all had submitted a full transfer application. I can confirm that I am instructing the HCA to offer the option of a place on the Housing Stock Transfer programme to these authorities. From this date the transfer process, if it is pursued, should be completed within the required two-year period.

On 21 July, I published a consultation document on the reform of Council Housing Finance which proposed the dismantling of the Housing Revenue Account subsidy system and replacing it with a devolved system of responsibility and funding.

Consultation closed on these proposals on the 27 October. We are carefully considering all the detailed responses received, but there was overwhelming support for the principle of self-financing. Local authorities will retain all their rental income, all their capital receipts, and have a sustainable level of debt based on a significant increase in the scope to spend on housing services and standards. Self-financing will increase local responsibility for long-term planning, asset management, and for meeting the needs of local people. It will enable local authorities to improve the management of their homes and services to tenants, to continue to deliver Decent Homes, and to secure greater efficiencies through being able to plan ahead with greater confidence.

Our work on establishing the structure and detail of a self-financing offer to local authorities with social housing and a housing revenue account is progressing well. In February I expect to be able to confirm the progress we have made and set out in detail the parameters of the changes we plan. This should enable local authorities to make a more informed assessment about what self-financing might mean for future financing, sustainability and housing standards with the continued ownership of their housing stock.

Self-financing will offer an affordable retention option for all local authorities. If it is generally accepted by local government then I would expect that self-financing could be in place for authorities for 2011-12. This would offer a clear alternative to stock transfer within a clear time scale that is comparable to the two-year period allowed for concluding stock transfer.

The six local authorities offered the option of a place on the Housing Stock Transfer programme should fully consider the self-financing proposals and assess all of the options carefully. They should spell out the options available, in clear terms, as part of any consultation with their tenants.

The HCA in approving the offer document for the six authorities for the stage 1 consultation exercise will ensure that the terms of both the full consultation and any subsequent ballot are balanced, neutral and factual, and that the options available to local authorities, and more importantly their tenants, which have been considered, include the potential for self-financing.

The underlying principle is that tenants and others in the local authority area concerned must have accurate and full information on the clear options available in order to be fully consulted and be in a position to make their views known.

In the light of my statement of 30 June, I am now minded to announce a change in policy for all other local authorities who may currently be developing transfer proposals, but do not have a place on the Housing Stock Transfer programme.

I am proposing that those local authorities who had not met the above criteria by today will not be considered for a place on the Housing Stock Transfer programme until we publish the self-financing offer and as a consequence, they should reconsider their transfer proposals in the light of the outline for this new self-financing system.

This will be a very significant opportunity for local authorities to consider. Most importantly, it will be an opportunity for tenants to consider and they should have all the options in front of them when they are asked for their views.

I invite the views of local authorities on the proposed changes to the Housing Stock Transfer programme. I expect to receive representations by 15 January 2010 which I will consider fully. And, I will report to the House further on these matters.