Norwich in line for multi-million pound homes windfall?
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Cash-strapped Norwich City Council could be in for a multi-million pound windfall which could pave the way for the first council homes to be built in the city for more than 20 years.
Cash-strapped Norwich City Council might be in for a multi-million pound windfall which would pave the way for the first council homes to be built in the city for more than 20 years.
Proposed changes could mean City Hall will no longer lose out on around £5m a year through having to pass on the rent it collects from tenants to the government and it could free up cash to build new homes.
At the Conservative party conference this week it was announced the government wanted to press ahead with a proposal puut forward by the previous Labour government which will mean councils get to keep all the rents and sales from council homes, of which there are around 17,000 in Norwich.
The government says changes to the housing revenue account will give local councils greater freedom to decide how to redistribute that money - which could lead to the building of more council homes.
But the catch is that some council would have to take an additional housing debt - although the government says no council will have to take on a level of debt which is not sustainable in the long-term.
Brenda Arthur, cabinet member for housing and deputy leader of the city council, said that could prove crucial as to whether Norwich benefits from the changes.
And she said a delay in the introduction of the changes meant that the city council would still be out of pocket for the year ahead.
She said: “They still haven’t made clear what the level of debt they will ask all the councils to share will be. It was going to be £3.5bn, of which Norwich was going to take on £125m.
“We had consulted with tenants and had a very good business model which showed if we took on that level of debt and kept the money we had been giving to the government we would have up to £9m to invest in new council properties.
“What we still don’t know is whether that level of debt will remain the same under the new government or if they will ask for more debt to be taken on this time around, which would just cancel out any benefits it would bring. As ever, the devil will be in the detail.”
She said she it was also frustrating that the time frame for the bill to pass through Parliament meant Labour’s plans to bring the changes in next year would be delayed by at least 12 months.
If the council does benefit from the changes then it could yet see the first council homes built in Norwich for more than two decades.
That will be a welcome boost after the Homes and Communities Agency (HCA) had to tell City Hall the plug was being pulled on £600,000 which would have seen council homes built because the government had cut funding.
The city council had been set to get the cash to build 11 homes ton two garage sites in Stafford Street and Bowers Avenue.
Norwich South MP Simon Wright welcomed the plans. He said: “Council tenants in Norwich have been penalised by the reverse subsidy, which has sucked millions of pounds out of Norwich every single year to be spent elsewhere.
“The current system has imposed an effective ‘tenants tax’ on thousands of households in Norwich, who have seen nothing in return.
“The government’s proposals to reform the system will allow Norwich City Council to invest in the repair and maintenance of stock, and potentially to invest in more local homes.
“This is good news for tenants, and potentially good news for the thousands of people locally on housing waiting lists too.
“I campaigned against the unfairness of the current system in the run-up to the election, and I’m very pleased that the Liberal Democrats are able to end the tenants tax in government.”
The government’s proposals will allow local councils to keep all council housing rents and sales receipts they collect to reinvest in social housing.
Full details will be announced as part of the spending review later this month, and will be introduced as part of the Localism Bill this autumn.
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