Upload
meara
View
22
Download
0
Tags:
Embed Size (px)
DESCRIPTION
Review of Council Housing Finance National or Local: a key debate. 25 th November 2008 Steve Partridge. Introduction. Self financing: getting to the review Review parameters: big picture A national system or self financing?. Self financing pilot project: summary. - PowerPoint PPT Presentation
Citation preview
Review of Council Housing FinanceNational or Local: a key debate
25th November 2008
Steve Partridge
Introduction
Self financing: getting to the review
Review parameters: big picture
A national system or self financing?
Self financing pilot project: summary
Way forward for Housing Capital Finance 2002
ALMOs: A new future for council housing 2005
Self financing pilot project 2006+
Reported March 2008 with the launch of the HRA Review
Tested…Options for and implications of individual LAs coming out of the subsidy system to better plan and avoid the unpredictability of a national system
One off adjustment to debt equivalent to what would have happened in the subsidy system
Technical and financial issues
Self financing: key outcomes
Two big issues emerge near the startThe future path of subsidy nationally and the impact locally
Rental surpluses build up as rents outpace allowances - not necessarily to be spent on council housing
Maintenance and investment needs are likely to outstrip allowances for major repairs and capital investment
Significantly over the longer term – perhaps around average 40%
The Subsidy and Self Financing ConundrumTo make self financing viable, need subsidy system better funded
But if the settlement could be ‘got right’…Efficiencies and potentially enormous benefits from local control
Review issues: four questions
Two big areas of debate
1. The system is under-funded Evidence for both service costs and long term major repairs costs
2. National versus local control Context of widespread ‘localism’ in public services
FUNDING NATIONAL vs LOCAL
Transition A new systemUse of RentsM&M and
major repairs
GENERAL FUND
Council house income for council housing?
Mismatch of treatment between Local HRA: ring fenced, no cross-subsidisation
National HRA: no ‘hypothecation’ and therefore no ring fence
Ring fencing rents for council housing a priority
Income
Expend-iture
HRA
OTHER CLG BUDGETS
Rents
Expend-iture
HRASUBSIDY
Addressing the issues of under-funding
Services need boosting and the stock needs investment
Over the long term, rental surpluses represent…
-2500
-2000
-1500
-1000
-500
01 3 5 7 9 11 13 15 17 19 21 23 25 27 29
Subsidy surplus £m
?
NPV: £9.5-13billion
…40-50% increase in MRA…15-20% increase in combined M&M allowances…Opportunity for additional borrowing for investment
Big picture options
What are the barriers to greater devolution?
Borrowing and the fact of a ‘national system’
National system with
tweaked allowances, increased to
use up some of the surpluses?
National system with scope to leave to
become self financing on the basis of some criteria to be applied
Local control and abolition of the system: a
one off adjustment for
all
NATIONAL PROGRAMME LOCAL DECISIONS
National vs local
Self financingDebt revised ‘on day one’: all future rents, income and capital receipts are available for spending locally
Requires a different form of ‘control’ or regulation
More efficient because more predictable
Generates more value as resources are not restricted to central instruction
Better local engagement with tenants
NationalCentral control of resource distribution
Allows targeting of resources to where they are needed
Requires method of distribution of surpluses – would this always be controversial?
Options for the transition
Two dimensions: ‘all in one go’ or ‘a bit at a time’Really the same thing but over a different timeframe
If all in one go… a NATIONAL SETTLEMENTCould redistribute debt between authorities
Or Government takes over existing debt and reissues new borrowing (could this be lower?)
Redistribution between HRAs ‘the day before’ the settlement
If a few at a time… SELF FINANCINGWould need criteria for which
Impact on those left in the system
Questions for discussion
Has a national redistributive system had its day?
Efficiencies and benefits of a new locally based systemBUT… Loss of control in targeting of resources centrally and…Disengagement could have consequences
Order of investigationRing fencing the system: developing the mechanism?More resources: where from?A local system: comfort to Government?A mechanism to get there: no major losers?
And finally…
Two Birmingham council houses
What is the key difference between them?