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Should the Government return £6bn to Councils?

Last week saw the publishing of the Welfare Reform and Work Bill setting out plans to force social landlords to lower their rents by 1% over four years.  In effect wiping out self-financing for council housing agreed three years ago and effectively meaning that by 2020/2021 councils could lose £2.4bn in revenue and a further £30bn over the coming 30 years.

So we read with interest Heather Spurr’s piece in Inside Housing and the comments made by the Association of Retained Council Housing (ARCH) stating that if changes had been anticipated in the self-financing settlement, council housing would have been valued at £6bn less than the £29bn it was.  

According to ARCH, the policy could also end plans for 20,000 new homes, compounded by a potential 20% reduction in maintenance and management of council properties. Perhaps most concerning, TPAS cites ‘tenants’ concerns around the negative effect of rent reductions on the services received which ‘far outweigh happiness about any personal financial gain’.

Is there a point that Councils now have a legitimate case to argue that the government should now return this £6bn to them?

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