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Government proposals to kick-start the social housing sector have been dismissed as ‘insufficient'. The Chartered Institute of Housing this week claimed housing minister Margaret Beckett's proposal to allow councils to retain rental income from new-build social housing and properties sold under ‘right-to-buy' would not deliver the volume of new homes needed across England and Wales. What was required instead, the CIH claimed, was fundamental reform of the Housing Revenue Account, the current mechanism used to fund council housing. CIH officials are lobbying hard for HRA reforms to emerge from an ongoing review of housing finance. Richard Capie, CIH director of policy and practice, said: ‘While we welcome measures to increase the provision of good-quality affordable housing, councils will need access to additional forms of income in order to balance the cost of new build. ‘The Government has announced plans to allow councils to bid for social housing grant, and we await the details. This announcement is an important step in the right direction, but any significant progress will depend on the outcome of the overall review of council housing finance, which is expected later this year.' The Government calculates that allowing councils to keep rents from new house-building without impacting on their annual subsidy will increase the sector's income by 28%. A CIH briefing note on the proposal states: ‘On a typical rent of £65 a week, this would be extra income of about £18 over and above management and maintenance costs. [That] will only finance a small proportion of the cost of a new unit. Other forms of subsidy will be required.' A senior CLG source told The MJ: ‘While this proposal will not in itself help all councils meet the entirety of their housing demand, it should help the sector significantly. It is merely one mechanism which is designed to stimulate house-building.'

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WHITEHALL

CIH urges housing fund reform

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