Councils are to get a financial boost for repairs, but will face a freeze on maintenance spending this year, the government announced this week
Housing minister Nick Raynsford said an extra £67m had been injected into the maintenance allowance given to councils for improvements to their stock.

Announcing details of the housing revenue account and HRA subsidy, Raynsford said the new Major Repairs Allowance would provide some £1.6 billion to enable authorities to maintain their stock over the longer term.

He also announced a £15m budget to help councils introduce the new resource accounting system, with another £6m - the same as this year - set aside for involving tenants through tenant participation compacts.

But money set aside for management allowances will remain frozen in cash terms for 2001-2, although it will increase by 2 per cent a year in real terms in both of the following two years.

Roughly £4.4 billion will be allocated in England in 2001/02 as subsidy to support rent rebates and for authorities in deficit on their landlord functions.

Rents are to increase nationally by 2 per cent in real terms next year, with a 1 per cent increase in real terms in the two subsequent years.

John Perry, policy director at the Chartered Institute of Housing said; "Whilst the overall announcement is welcome, the government is still not fully recognising the importance of spending money on housing management called for in the social exclusion unit's policy action team report."

Raynsford told a conference last week that increased housing resources, and the advent of the Major Repairs Allowance, meant that those councils which decided to retain their stock would not face financial melt-down.

"For local authorities that retain ownership and management of their housing in the long or the short term, the new financial framework will provide for their proper asset management and investment within their housing revenue account," he said.

But Perry added: "Local authorities will have to work with the allocation for their area. It will vary as to whether councils are enabled to retain their stock without resorting to stock transfer, PFI or arms-length management companies."

"I don't know of any authority who has said that they can [hold on to their stock] yet. I don't know if there are any who believe that they will, although there are some that might, if the amount they get from the MRA combines sufficiently with capital expenditure. It's too soon to see whether this will be borne out."

Source

Housing Today