Hills comments spark fresh confusion over funding review

The proposed review of council funding, which could result in local authorities having greater flexibility when raising funds to meet the decent homes standard, took a further twist this week.

Speaking last Thursday at a Housing Today-sponsored social cohesion event, housing minister Keith Hill appeared to change tack once again when he revealed that smaller councils may benefit from “some flexibility” identified through the review but that larger ones should expect nothing.

He stressed again that the so-called “fourth option” – where the government would release extra funds to councils whose tenants have voted against arm’s length management, private finance and stock transfer as means of meeting the decent homes standard – was “not on the table”. He said: “We will look at possible flexibilities that may be available to certain councils – specifically smaller councils. But I don’t think there’ll be a tremendous amount out of this process for the majority of councils. There remain only the three funding options.”

However, moments later Hill added that there “may be some room for manoeuvre”.

He went on: “People ought not to be confused by this. Our expectation is that any examination of the financial framework will yield only marginal flexibilities in small cases.”

These latest comments follow mounting speculation and confusion since the Labour party conference about what the government intends to do .

Speaking immediately after party members supported a motion backing the “fourth option”, deputy prime minister John Prescott said: “Public financing of housing does not treat local authorities on a level playing field and I want that changed” (HT 1 October).

Councillor Richard Kemp, deputy chair of the Local Government Association’s environment committee and a councillor in Liverpool, said: “I’m bemused by all this. It is very difficult for [councils] to plan when you have to react to whatever it is that the minister has said most recently.

“Different carrots seem to be being dangled for different people. It is very frustrating.”

Sarah Webb, policy director at the Chartered Institute of Housing, said: “If something is right for small councils with small funding gaps – ie, if flexibilities are allowable in another situation – then why would the same principle not be applicable to larger local authorities?

“There will be a minority of councils who will think this is helpful, but overall it is not.”