星空传媒

A report on Decent Homes from the ODPM housing, planning, local government and the regions committee has raised the concern that 鈥渁 lack of funding [and] delays caused by lengthy options appraisals procedures and tenant ballots may result in local authorities being unable to meet the 2010 target [for decent homes]鈥�.

The committee went on to recommend that the government 鈥渞evisit its dogmatic pursuit of the separation of stock management and strategic management of housing鈥�. And so the debate over decent homes funding continues.

The government maintains its view that local authorities should use one of three options 鈥� stock transfer, arm鈥檚-length management or the private finance initiative 鈥� to attain the decent homes targets. It has set out this view most recently in its official response to the committee鈥檚 report on decent homes.

The response, published on the ODPM website, states: 鈥淭here is evidence that separation improves the landlord service 鈥� The three options available are all flexible enough to be tailored to suit individual circumstances, while still delivering decent homes.鈥�

Meanwhile, several MPs and some local authority representatives, particularly since tenants in Birmingham and Camden rejected the option of stock transfer and ALMO respectively, are continuing to call for a fourth option. This is generally defined as allowing councils to borrow in order to spend to bring their council housing stock up to the decent homes standard. Proponents of the fourth way call for the government to channel some of the resources currently directed to the three other options directly to local authorities.

The Chartered Institute of Public Finance and Accountancy鈥檚 technical enquiry service 鈥� which provides information, guidance and advice on professional issues to members and students 鈥� has received several enquiries about the so-called fourth way, which seems to suggest that more than a few local authority housing finance professionals may be unsure of the current position.

What isn鈥檛 always realised is that the option for local authorities to borrow to spend on housing standards improvements is already available. It is, of course, severely limited in the absence of additional resources, but it is there.

The new prudential framework for local authority capital investment, developed by the CIPFA, came into effect on 1 April 2004 in England and Wales. Since the major repairs allowance reserve (MRAR) can now be used to repay debt, and not only for financing capital expenditure immediately, it can be taken into consideration when determining an authority鈥檚 affordable borrowing.

The extent of borrowing enabled in this way will depend, of course, on the size of the authority鈥檚 MRAR. The cost of any such borrowing would fall against the housing revenue account and not the general fund, therefore not affecting council tax levels.

The CIPFA has published supplementary guidance on the application of the prudential code based on the final indicators for the impact on council tax and housing rents. This can be downloaded free of charge from the CIPFA website.