Westminster Government Admits Housing System is Unfair on Wales

Plaid MP Jonathan Edwards has called for action to be taken on ending the Housing Revenue Account Subsidy Scheme after his questioning led to the coalition government’s Housing Minister having to admit that the current set up was unfair. In response to accusations by Mr Edwards that there wasn’t a current level playing field, quoting the example of his home county of Carmarthenshire alone returning £5.5 million in 2008-09, Housing Minister Grant Shapps MP agreed that money should be retained locally and that the current system is unfair. This indicates a significant shift in the position of the UK government which could lead to millions of pounds being made available for affordable housing projects across Wales.

After raising the issue in the House of Commons, Mr Edwards said:

“The fact the Housing Minister for the UK government has admitted that he believes the current system is unfair and that money should be retained locally is a sea change in the approach of the Westminster government to this issue. Millions are lost from the Welsh budget every year as a result of this money being sent back to the treasury rather than used in Wales to provide much needed affordable housing stocks.

You only need look at my home county of Carmarthenshire that have sent £5.5m back recently to see the impact that this money could have locally. I have spoken to many constituents who are having serious problems getting on the housing ladder at the same time money that could be used for affordable housing is being diverted back to London.

I expect given the Ministers response that action is now taken to ensure this money is retained by Welsh local authorities. I will be writing to the Minister for Housing, Jocelyn Davies, at the Welsh government, who I know will be eager to chase this matter up. I only hope that following the Grant Shapps admission that the current system is unfair on Wales he isn’t slapped down by Treasury Ministers who want to continue to take money out of the pockets of Welsh Local Authorities.”

DIWEDD / ENDS

Nodiadau / Notes:

Jonathan Edwards (Carmarthen East and Dinefwr) (PC): What plans he has for the future of the housing revenue account. [1545]

The Minister for Housing (Grant Shapps): The Government are committed to reviewing the unfair housing revenue account in England, and want a funding system that gives local communities more power and responsibility. I can therefore announce that I intend to continue with the review that was undertaken by my predecessor, which reports back to me on 6 July.

Jonathan Edwards: Is the Minister aware that Welsh local authorities returned more than £80 million to the Treasury as a consequence of the scheme last year, and that my home local authority, Carmarthenshire county council, which has retained its stock, returned £5.5 million in 2008-09? Does he agree therefore that the scheme does not provide a level playing field between local authorities and housing associations, and that it would be far fairer for moneys to be retained locally to increase investment in public housing, help Welsh local authorities to achieve the Welsh housing quality standards and help to create jobs in the local economy?

Grant Shapps: The hon. Gentleman is absolutely right that there are numerous problems with how the housing revenue account operates at the moment, in England as well as in Wales. The simplest answer that I can give him is that I agree, and we will continue the review.

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