Let councils go fourth and invest in their own stock

There are three theories as to why the government is refusing to allow councils to invest in their own stock. Pure dogma is one. But Labour has, at least in theory, always wanted to expand the role of councils, so why oppose that in this case?

The thinking may also be that councils are not as good at running housing as registered social landlords. There is some truth in this, but not a lot: RSLs have mostly had better stock and higher management allowances than councils, so it's not surprising they would get better results. Anyway, many of them are running into difficulty with issues of governance – just look at the record numbers that have recently been supervised by the Housing Corporation.

The third theory is that the definition of the public sector borrowing requirement can't be changed to deal with housing investment outside these criteria. Rubbish. Most other European states don't deal with it this way.

In the face of no other explanations, I can only assume that the ODPM is, as usual, doing what the Treasury tells it to do.

The ODPM is commonly viewed as one of the weakest central departments, where ministers carry little weight with the Treasury. This government, like the one before it, thinks it can micro-manage the public sector with a plethora of outputs and targets. Far too much money given to local government is ring-fenced to specific initiatives that are not necessarily relevant to local communities.

I challenged Keith Hill to look at a range of options apart from PFI, ALMO and transfer. He didn’t beat about the bush – he just said: ‘No’

The Treasury has a naive belief that the private sector is best. Doggedly ignoring the fact that many of its own initiatives with the commercial sector, such as procurement of IT systems and PFI, come in over-contract and under-specification, it presses ahead with neo-Thatcherite policies without really scrutinising the results. Clearly, the Treasury believes RSLs to be of the private sector and thus imbued with skills and talents unavailable to the public sector.

That's just not true. Let's take Camden. The Audit Commission has rated this an "excellent" council and I agree with it. It knows what its people need; it has a good long-term vision and a holistic approach to regeneration. So, can anyone give me one good reason why it shouldn't be able to borrow money to invest in its own stock?

Perhaps someone could also tell me why the government says one thing and does another. It has said that councils should be the strategic housing authority and that they should take the lead in regeneration.

Yet when they put forward ideas that are based on government policy, such as the development of neighbourhood trusts and the integration of housing management with other services to improve service delivery, they are rebuffed.

Councils are not the dogmatic places they once were. Most of them, and the Local Government Association too, are pragmatic. We believe PFI, transfer and ALMOs can be a way forward in some circumstances. But they shouldn't be the only items on the menu.