Councils have raised concerns over plans to allow the settlement that will give them freedom on housing finance to be revisited after the initial payment. Members of the Association of Retained Council Housing have called on the government to clarify the circumstances in which the settlements can be reopened. Under the plans councils will have to take on a share of £21.5 billion of housing debt currently held nationally. In exchange they will get freedom to manage their own finances, rather than having to transfer housing revenue to the Treasury. The transaction is intended to be a one-off payment, to give councils a stable base on which to manage their debt. But the details leave room for the settlement to be reopened ‘where there has been a change in one of the factors taken into account in calculating the previous payment’. The payment calculation will be based on the existing level of debt a council has, compared with the value of its housing stock. The association also raised concerns about rules on right to buy. Treasurer Paul Price said: ‘We are dismayed at the news that 75 per cent of receipts from right to buy sales will have to be handed to the Treasury.’ Proposals issued by the Labour government in March last year said councils would keep all right to buy receipts, as well as rental income. Mr Price said the change in policy ‘flies in the face of localism.
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