Tenants say council should be allowed to keep control of homes and still get extra funding
A london council with an "excellent" housing service is to go head-to-head with the government over the rule that gives local authorities only three options for their stock if they wish to access extra funding.

On Tuesday, tenants in Hammersmith & Fulham launched a report setting out the case for keeping the borough's 14,000 houses under council management. Tenants and the council hope the report will back their claim that they should still be eligible for subsidies to improve their stock. They are now set to take the case to housing minister Lord Rooker.

The council needs £70m on top of available funding if it is to meet the decent homes standard in 2010. As the rules stand, it can only access this money by transferring stock to a housing association, using the private finance initiative or setting up an arm's-length management organisation.

Council members are understood to be overwhelmingly in favour of keeping control of housing stock if possible.

A council spokesperson said: "We cannot see why the government is taking such a single-minded approach to the stock transfer and ALMO policies. It just doesn't make sense.

"We've won awards for how we manage our housing. We're good at it."

Hammersmith & Fulham is the only authority in the country to achieve a four-out-of-four rating in the government's comprehensive performance assessment and three stars from Audit Commission inspectors.

The report was drawn up by the Housing Commission, an independent, tenant-led body set up in September 2002. The commission's independent chair, Steve Hilditch, said: "We don't see why we shouldn't get the same investment as a three-star ALMO.

"It's as if the Communities Plan has moved the goalposts and if tenants don't vote the way the government wants them to, it doesn't want to hear from them. It's perverse and illogical."

Calls for a more individual approach to housing policy have been supported by the Local Government Association in the past.

If the council's challenge is unsuccessful, its fallback plan is to try to set up an ALMO.

A formal response from the government is expected in July.

But a spokesperson for the Office of the Deputy Prime Minister said. "They have to take one of the routes. There are absolutely no exceptions."