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Local government has been put centre-stage in building homes and the economy – but it is as yet unclear where the cash is coming from. The prime minister announced an extra £1.5bn for building new homes this week, with half the money coming from underspends in the Home Office and Transport budgets. The other half – or about £700m – is due to come from the CLG, from ‘repriotitisation and underspends'. A Treasury spokesman said details would be set out by CLG ‘in due course'. Fears the cash would come from other council budgets, including the Decent Homes fund, were dismissed. Director of planning at CLG, Bernadette Kelly, said councils ‘shouldn't see any change to their funding allocations'. ‘We will have to look at our own capital expenditure programme with a view to minimising the impact this year and next year.' Housing minister, John Healey, also announced changes to the finance system this week, in a bid to free up cash and boost the building industry. Under the long-awaited review of the housing finance system, councils will be allowed to keep cash from rents and council house sales. That cash will be available for funding extra homes and improving current stock. Chairman of the LGA's environment board, Paul Bettison, said: ‘Allowing councils to spend the rent they collect and the proceeds from council house sales would be a huge boost to the economy.' Sutton LBC chief executive Paul Martin, who has campaigned to retain rents, told The MJ the move was ‘encouraging'. ‘This is money we need to provide more and better homes for local people.' * Opposition politicians have thrown cold water over the plans, claiming the policy will be scuppered by Harriet Harman's new equality laws.

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FINANCE

Questions over cash for housing

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