Housing Minister frees councils to spend on housing

Housing Minister Grant Shapps has today committed to giving councils the financial freedom they need to build more housing for their local communities.

Under the current system, councils are required to pay council house rents and the majority of receipts from any sales of land or homes to Whitehall, who then decide how best to redistribute it back to councils.

But under the proposed new rules, rather than the current Housing Revenue Account subsidy system councils would instead keep all the rents and sales receipts they collect.

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 being introduced this autumn.

Shapps said: “For far too long councils have been left hamstrung in their efforts to meet the housing needs of their residents by a council house finance system that is outdated and no longer fit for purpose.

“Subject to the Comprehensive Spending Review we will offer councils the opportunity to keep the rents they collect and the receipts from any house or land sales. This is a key step to transfer powers to councils and communities, so they are free to improve their local services in a way that best meets the needs of local people.”