The unpopular “Tenant Tax” will be scrapped, with local authorities being allowed to keep all council house rents and sales receipts they collect to reinvest in social housing, under plans announced today by the coalition government.
The proposal, which sees the coalition delivering on a major Liberal Democrat manifesto commitment, will result in the Housing Revenue Account subsidy being scrapped in favour of greater financial freedom for councils. Under the previous system, all council tenant rent was paid into a local housing pot, from which the government was allowed to make deductions to fund subsidies for other local authorities. The government also retained some of the money centrally.
The new proposals will see this Housing Revenue Account subsidy scrapped. Instead councils will be able to retain all of the money from rents and sales receipts to invest in the repair, maintenance and construction of social housing in their area.
Full details of the new system will be announced as part of the Spending Review on 20 October and will be introduced as part of the Localism Bill this autumn.
Commenting, Communities and Local Government Minister Andrew Stunell MP said:
I’m delighted that we are able to announce the end of the unpopular “Tenant Tax”. Council tenants are invariably on low incomes, and should not be subjected to an additional tax to fund social housing improvements in other parts of the country.
Our proposals will allow local authorities to invest in the repair and maintenance of the social housing stock in their area, and even invest in more social houses if they wish.
Liberal Democrats have long campaigned to reform the Housing Revenue Account subsidy and replace it with a fairer system. We’ve now been able to deliver on that pledge in government.
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8 Comments
And what about the promises broken – like universality of benefits – promised by messers Clegg + Cable on April 12th 2010?
I’m pleased by this but I do think quoting the manifesto is a bit, how should I put it …tongue in cheek? I thought we threw that away months ago, May 6th to be exact.
This is absolutely superb news. The current housing finance arrangements were crippling local councils that had resisted the Labour governments pressure to off-load their housing stock. To be fair, at 30 seconds to midnight when John Healey was installed as Labour housing chief, he did finally “get it”, but never had enough time to do anything about it. 13 years wasted by Labour. Coalition delivers on this quickly.
Good news for Councils that are subject to the “negative subsidy”. What will happen to Councils that still get subsidy? Are they to be left hanging high and dry?
The state of the HRA (housing finances) in different councils are due to historic decisions and events and should not penalise existing tenants under either the old or new system.
Tony Greaves
Tony surely it was wrong that tennents in places like Sutton or Norwich both areas where tennents (mainly some of the poor people in those communities) are subsidising tenents in other authorities. This shceme of Labours was taking from poor areas to give to poor areas which had largly been run by terrible Labour councils in the 1980s.
its the right decision, but the issue will be that each council takes on its share of “housing debt” to cover. how much that is, and what the repayments are, will effect how much difference this makes on the ground. nevertheless its less blatently unfair for many tenants, who had their rents robbed for years in many places.
Oh, Simon, what are you doing to me? Perhaps unsurprisingly the nuanced spellings of Tenant, Tennant and Tennent and close to my heart – why are you forsaking me?
Oooh, irony…