Rent will pay for homes

UTTLESFORD District Council has pledged to use new Government legislation to provide more low-cost homes.

Cllr Julie Redfern, the Conservative-controlled authority’s portfolio holder for housing, said: “This reform is a major opportunity to bring forward exciting projects that will benefit council tenants and Uttlesford residents for generations to come.”

Under current rules, known as “housing subsidy”, debt-free UDC has to pay more than 40 per cent of the rent collected from council tenants to the Government, which then gives it to local authorities who cannot manage their debt.

Uttlesford hands over more than £5.2m to Westminster each year, but the Government plans to abolish the housing subsidy system from next April, allowing the council to keep the rent cash it collects.

The Government has also decided that to make the new scheme affordable, all councils which own housing must take on a share of the historic national debt.

Uttlesford’s debt figure, to be announced by the Government next week, is expected to be around £93m, but the cost of managing this debt – estimated at £4m – will be substantially less than the amount currently paid to the Government, leaving a surplus of around £1m to invest in housing stock improvements.

The authority believes this will mean new and significant financial flexibility to fund better social housing. There will be no impact on the council’s general budget or council tax level as all council housing costs must be met from a separate budget called the Housing Revenue Account.

Cllr Robert Chambers, UDC’s portfolio holder for finance, said: “The council has long campaigned against the present unfair housing subsidy system and we are delighted that the Government has listened.

“As a debt-free council we are somewhat cautious about having to take on a substantial amount of borrowing, but we have no choice. We shall, however, embrace this opportunity and manage this robustly and prudently to deliver maximum financial benefit to the district.”

The council is drawing up a 30-year business plan that will see investments in improving council housing stock, the redevelopment of social housing sites in poor condition and potential funding for new social housing.