Leicester and Camden want prudential borrowing without arm's-length management
Two top-performing councils have fired the opening shot in a battle to break free of government financial control.

In the wake of the Queen's Speech, which gave the go-ahead for prudential borrowing, Camden and Leicester councils want the government to allow them prudential borrowing without setting up arm's-length management. Both councils have three-star housing services.

Camden has a £270m funding gap in its efforts to reach the decent homes standard.

It has written to housing minister Lord Rooker asking for the right to be treated on the same footing as a registered social landlord.

That would mean being able to borrow what it could afford for stock investment without setting up arm's-length management.

Charlie Hedges, executive member for housing, said forcing the council to set up a new employer offered no reward or motivation to staff who had delivered excellent services.

Hedges, himself a tenant, added: "Council tenants have suffered from stop-go programmes, a lack of investment, a lack of long-term planning and one funding model after another. The commitment to decent homes could put an end to this but the resources and terms of delivery have to be as clear as possible."

Leicester council corporate housing director Michael Forrester said Leicester expected to reach the decent homes standard before 2010 but needed extra money to help housing associations build homes.

He said: "We don't want arm's-length management unless our existing funding comes under threat. We would feel the need to ballot tenants but are fearful they would interpret it as transfer and vote against."

The government is proposing prudential borrowing for councils in its Local Government Bill. It wants to reserve the extra cash for top performers as measured by Audit Commission performance assessments. But councils that have already set up arm's-length management to get borrowing power could resent others winning freedoms without that necessity.

Chartered Institute of Housing policy director John Perry said: "It is unclear what the government will do if councils could transfer or set up arm's-length management to achieve decent homes but don't want to."

Three-star councils

CAMDEN
for housing management and the capital programme LEICESTER
for housing repairs and maintenance DERBY
for front-line housing services and private sector; has already set up arm’s-length management WIGAN
for urban renewal; has already set up arm’s-length management WESTMINSTER
for lessee services and home ownership; setting up arm’s-length management HEREFORDSHIRE
for homelessness and housing advice; transferring its entire stock after successful ballot in March

Source

Housing Today