Councils call for major reform of social housing finance

Council leaders have called for a radical overhaul of the council housing finance system.

Sir Simon Milton, chair of council lobbying organisation the Local Government Association, called for an end to the housing revenue account system which means that some councils have to hand back part of their tenants' rents to government to subsidise other local authorities.

Speaking at the Chartered Institute of Housing's (CIH) annual conference in Harrogate, Milton said: "We need a system that ensures that money raised from tenants is spent on council housing and their neighbourhoods, and not allocated elsewhere. That is why we are calling for the end of the 'housing revenue account' to provide funding streams at the local level, which will lead to better outcomes for local residents."

He also told central government to "stop micro managing" the housing sector.

Richard Capie, CIH director of policy and practice, said: "We support the call for an end to the current local authority housing finance system. The challenge now is for LGA and CIH to develop viable alternatives that not only deal with providing fair solutions for current tenants but also address issues around existing debt."