Council Plans To Build 500,000 Homes Thwarted By Government

A plan with potential to build more than 500,000 new homes over thirty years has been undermined by successive government policies, a report published by the Chartered Institute of Public Finance and Accountancy (CIPFA) and the Chartered Institute of Housing (CIH), claims. The report, 'Investing in council housing: The impact on HRA business plans', examines the 2012 'self-financing settlement' that put in place a robust long-term plan for council house building. The settlement encouraged councils to take on £13bn extra debt to finance building against the promise of future rental income. However, successive policy changes have cut rental income so that today, just 45,000 new homes are expected, no more than were planned before the settlement was made. Read more on the CIH website.

CIPFA Warns Of Right To Buy 'Asset Stripping'

Plans by the Government to extend the Right to Buy scheme could effectively strip local authorities of their assets and drive a wedge between councils and the housing association sector, public finance experts have warned . The Chartered Institute of Public Finance and Accountancy (CIPFA) said that extending Right to Buy would only deepen the country’s housing crisis and result in less social housing being built.  In a report examining the impact of extending Right to Buy, CIPFA said that as local authorities would have to sell high value authority housing to pay for the scheme it would greatly reduce their ability to retain local social housing provision. This problem would only intensify unless the Government guarantees at least one for one replacement for every house sold in the areas of highest need. Read more on the CIPFA website.

Council Spending ‘Cut By Nearly One-Third since 2010’

Council spending will have fallen by nearly 30% by the end of the current parliament as a result of government funding reductions, an analysis of expenditure by CIPFA has found. The data, compiled by CIPFA and the CLG as part of the 2014/15 Revenue Account Budget Estimates return, means council spending will have fallen back to the level of 2005/06 in cash terms. The cash reduction in per capita spending between 2009/10 – the last year of the previous Parliament – and 2014/15 will be 14.5%. However, this rises to 29.1% when adjusted to take account of inflation over the period. Read more on the Public Finance website.

Voluntary Code for a Self-Financed HRA

The introduction of Housing Revenue Account (HRA) self-financing has given local authorities the freedom to develop and deliver a more positive, less constrained, vision for council housing. The Chartered Institute of Public Finance and Accountancy and the Chartered Institute of Housing believe that it is vital that local authorities have effective governance and financial management frameworks in place in order for self-financing to be a success. In order to support local authorities in assessing and developing these frameworks the two institutes have worked together to produce a voluntary code of practice for the sector.  Download a copy of the code from the CIH website.