Magazine article Public Finance

Local Leaders Admit Defeat on Housing Debt

Magazine article Public Finance

Local Leaders Admit Defeat on Housing Debt

Article excerpt

An appeal for ministers to write off £16bn of council debt as part of major changes to the housing finance system has failed, town hall representatives have admitted.

Gary Porter, chair of the Local Government Association's environment board, told Public Finance that councils would need to agree to redistribute the debt among themselves once housing minister John Healey announces firm proposals for reforming the system.

A write-off of the historic debt remains the LGA's ideal position and 'morally the only position that should be taken', said Porter. But he accepted that the argument had been lost during last year's consultations. 'Practically, [Healey] is not going to get it through the Treasury,' Porter added.

Healey told an LGA conference in October that councils should 'wake up' and work with him so the housing revenue account system could be reformed without primary legislation. …

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