Families to benefit after tenants' tax scrapped

October 8, 2010 12:54 PM
Catherine Smart

Catherine Smart

Cambridge City Council is to be allowed to keep money it collects in council house rents and spend it in the city.

The decision to scrap the current system which required the council to send £11 million to Whitehall, has been welcomed by the city's Liberal Democrats.

But in return, the council will be forced to pick up some of the historic debt run up by other councils across the country to build social housing. The decision on the size of Cambridge's bill will not be known until after the government's Spending Review on October 20.

Cambridge City Executive Councillor for Housing, Catherine Smart said: "This decision to abolish this tenants' tax and allow us to keep the money collected for the benefit of the city is welcome and long overdue.

"We desperately need to provide affordable homes for families on our waiting list; but this has been difficult in the past because the rents we have collected have been claimed by the government.

"Now we can plan for the future and hopefully start to close the council housing hole left by the right-to-buy scheme."

The decision to scrap the present scheme was announced by Housing Minister, Grant Shapps who said it was "outdated".

"For far too long, councils have been left hamstrung in their efforts to meet the housing needs of their residents by a council house finance system that is outdated and no longer fit for purpose," he said. "The Housing Revenue Account subsidy is in urgent need of reform."

Cambridge MP Julian Huppert said: "This is a welcome step forward. It gives local authorities across the country the power to make their own decisions on how their money is spent for the benefit of their people.

"In Cambridge, we have a waiting list of families desperate for affordable homes. Hopefully, now we can start to spend some of the city's money on helping those families."

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