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Tenants to benefit form new housing ruling

PUBLISHED: 07:13 06 July 2009 | UPDATED: 10:38 06 July 2010

Thousands of council house tenants could see their homes improved after the government moved to scrap rules allowing Whitehall to pocket some of the cash from rents.

Thousands of council house tenants could see their homes improved after the government moved to scrap rules allowing Whitehall to pocket some of the cash from rents.

Housing minister John Healey has proposed the change as part of a review of council house finance. As a first step, any newly built houses will be exempt - in practice a small number as most social housing is built in partnership with housing associations.

Later, that will be extended to all properties, which could yield more than £7m for Norwich City Council alone as well as millions for Yarmouth and Waveney councils.

The three authorities are the only ones locally still to manage council homes, with housing associations taking on the stock of the other districts.

The move follows a £1.5bn funding package by the prime minister to help councils and housing associations build more homes.

But critics feel that cash is being raided from other parts of the public sector and want to see more detailed proposals.

Mr Healey said the current scheme was aimed at helping ensure an equal funding spread nationally. But this was being scrapped to give more control and accountability locally.

“I want to provide more flexibility in finances and more transparency in the operation of the system,” he said. “I want to devolve control from central to local government.

“And, in return, I want to increase local responsibility and accountability for long-term planning, asset management, and for meeting the housing needs of local people. The current system makes this difficult to achieve.”

Steve Morphew, leader of Norwich City Council, welcomed the move.

City Hall's housing revenue account is nearly £5m in the red because of a combination of falling interest rates and commercial income, and shifting £2.76m to help pay for the rising costs of a windows replacement programme.

Earlier this year, the government backed down on plans to force up council house rents by around 6pc, part of a move to bring them in line with other social housing properties, after lobbying about the pain it could cause during the downturn.

“It would mean we can tackle the problems that we have with an ageing stock,” said Mr Morphew. “It means we could finish the upgrades to the kitchens and bathrooms and bring forward the window replacement programme, tackle front doors and improve insulation. The list is almost endless.

“It's what we have been lobbying the government about for a number of years,” he said. “It's always felt unreasonable that the government should skim something off the top.”

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