Tuesday, 9 March 2010

Why are Wrecsam tenants subsidising London councils?

London councils are being subsidised through the Treasury clawing money from Welsh council tenants.

The Housing Revenue subsidy system was originally designed to prevent council housing accounts making a loss but has now spiralled into a money-making machine for the UK Treasury, which then pays out surpluses to 50 councils, all but one of which is situated in England.

Hackney got over £48 million in 2009, Islington received £58 million and Manchester got £34 million while only one out of 18 councils in Wales were paid - Merthyr got £293,000.

Wrecsam Council, by contrast, lost £11.2m from its housing revenue account. That £11.2m is a third of all the money Wrecsam Council has to spend on housing in the borough. This amount could easily pay for repairs and renovations to get our housing up to a decent standard for tenants.

The system is currently being reviewed by deputy housing minister Jocelyn Davies but, let's be clear, this is a UK fiddle and we have no say in the Treasury's decision.

Scottish local authorities are not part of this subsidy regime but Welsh councils pay nearly £100m to the Treasury, which in turn is paid to various boroughs in London and other metropolitan areas in England.

At a time when some Wrecsam councillors want to push for another vote on stock transfer, we must push for an urgent reform of this disgraceful situation.

1 comment:

Peter Black said...

Actually the money is paid as part of a deal between WAG and the Treasury that enabled Wales to opt out of the housing subsidy system. It is a farce and should be stopped.