Wear Valley has become the first council to state publicly that it could retain ownership of its housing because of a government shake-up of management and maintenance grant
Councils all over the country are reassessing their housing services in light of the proposed reforms, which will benefit Northern councils at the expense of London boroughs.

According to figures compiled by the Association of London Government and revealed last week by Housing Today, the net shift in resources from London to the north of England is expected to top £1.1bn (HT 3 October, page 7).

Management and maintenance grant is paid to councils by the ODPM to be used for day-to-day management of council stock as a supplement to the rental income they receive. The government commissioned research body BRE to review the formula in 2002 and its recommendations are now out for consultation until 15 October.

Wear Valley, which is in County Durham and has 5500 homes, will get an extra £1.5m a year under the new system, a 63% increase on its current government funding.

But director of housing Michael Laing said this increase simply redressed a previous imbalance.

He claims he was asked to make £400,000 in cuts every year as the housing revenue account – the money the council gets from rents combined with the grant it gets from the government – was squeezed. This led directly to 20 redundancies.

Laing said: "We were facing a revenue crisis. If this goes through it'll make a massive difference for tenants."

Wear Valley is now able to bid for arm's-length management status. Previously, its only financially viable option was stock transfer.

However, Northern councils fear lobbying from London authorities will change the government's mind. London councils say the proposals ignore the extra cost of managing high-rise flats.

Francis Mapstone, chief housing officer for Westminster, said: "Cuts would have to be found from services or staff. This would have a real impact on our ability to meet the decent homes target."

Martin Johnson, cabinet member for housing at Wandsworth council, said: "Having a fairer system is one thing. Simply diverting money to the North is something else."

Camden council is so concerned it has written to the ODPM. The letter, seen by Housing Today and signed by director of housing Neil Litherland, said: "In effect we have six months' notice to identify savings of £5.2m. Such a level of saving could not be achieved without a severe impact on repair budgets."

Source

Housing Today