Wednesday, 17 November 2010

Housing revenue injustice could end soon

Jonathan Edwards's Westminster campaign to right the Housing Revenue Subsidy injustice of the last decade seems to be bearing fruit.
The Plaid MP's campaign would certainly benefit Wrecsam, which has lost £100 million in the past 10 years to this madcap scheme. Money that should have gone on improving our housing stock has flowed into the UK Treasury to subsidise councils in England.

Housing cash ‘injustice’ may end soon

An “injustice” that has resulted in Wales losing £2bn in housing revenue over the last 20 years could end soon, a UK Government Minister has hinted.

Plaid Cymru MP Jonathan Edwards secured a House of Commons debate about the anomaly under which most Welsh councils have been forced to pay millions of pounds a year in council rents to the Treasury.

Under the little-understood arrangements, local authorities that got more money in council rents than they were allowed to spend on maintenance had to pay the excess to Treasury.

The system is due to be scrapped in England, but no announcement has yet been made about the future of the scheme in Wales.


Now, however, Treasury Minister David Gauke has confirmed that his Department will be discussing the matter with the Assembly Government.

Meanwhile Mr Edwards, who represents Carmarthen East and Dinefwr, has identified a further anomaly under which part of the surplus housing cash has been given back to English councils but not to those in Wales. Mr Edwards has estimated that in the last five years, Wales has lost £443.1m because local authorities here have had none of the excess cash returned.

Mr Edwards said: “The whole history of the Housing Revenue Account (HRA), set up by the Thatcher Government in 1989 as part of its assault on public housing, is one of systemic injustice as far as Wales is concerned.

“In 2000 in order to negate the effects of the HRA, the Labour UK Government introduced a new budget line called the Major Repairs Allowance. In an act of gross incompetence by Labour, critically it only applied to England. The Welsh Government introduced its own MRA in 2004 but as all devolved policies must be neutral on its impact on the Treasury, the funds had to come out of the Welsh government’s budget.

“The impact on housing in Wales is staggering.

“In response to my debate on this issue I’m glad that the UK Government has agreed to discuss reform of the iniquitous scheme with the Welsh government.”



The Major Repairs Allowance for Wrecsam is £7.8m, whereas we lose £11.3m to the UK Treasury.

4 comments:

Royston Jones said...

The question remains: why did Labour in Wales allow this to happen, and for so long?

Is it the usual answer, that Labourites in Wales are more loyal to the party than to their country andf their constituents?

Or could it be something (marginally) less damning - that they simply didn't understand how it worked and were therefore ignorant of the scam?

Either way, Labour - especially when coupled with the party's 13-year refusal to remedy the shortcomings of the Barnett Formula - is unfit to rule Wales because it has consistently failed us.

Plaid Whitegate said...

Cock-up more likely than conspiracy, but Labour is guilty of letting millions of pounds of cash leave Wales for more than a decade.
Think of it as the Barnett Formula in reverse!

Plaid Gwersyllt said...

Bear in mind that Lib Dems in Wales were aware of this housing rip off, Peter Black having blogged about it and Aled Roberts being the WLGA lead on Housing for the last 2 years. Jonathan Edwards has done more about it in 6 months than Lib Dem MP's have ever done.

Peter Black's tie said...

Lib Dem politicians - less use than a chocolate teacup. OFFICIAL.